What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-09 compared with 2022-05-10 · 123 added, 76 removed, 196 unchanged (50% of the section changed)

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In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

Our actual results and timing of selected events in future periods may differ materially from those anticipated or implied in these forward-looking statements as a result of many factors, including those discussed under Item 1A , "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 10-K"), under Item 1A , "Risk Factors" in this 10-Q and elsewhere in this 10-Q.

See also " Cautionary Note Regarding Forward-Looking Statements " at the beginning of this 10-Q.

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The information we analyze crosses geographies, types of content and activities, including websites, mobile and OTT applications ("apps"), video games, television and movie programming, electronic commerce ("e-commerce") and advertising.

Management Changes

On July 5, 2022, our Board of Directors appointed Jonathan Carpenter as our Chief Executive Officer, effective July 6, 2022.

In connection with Mr.

Carpenter's appointment, William Livek retired as our Chief Executive Officer.

Also on July 5, 2022, the Board of Directors appointed Mary Margaret Curry as our Chief Financial Officer and Treasurer, effective July 6, 2022.

Curry continues to serve as our principal accounting officer.

Results of Operations

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Percentages may not add due to rounding.

Three Months Ended March 31,

(In thousands) Dollars % of Revenue Dollars % of Revenue

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

(In thousands) Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue

Revenues $ 91,434 100.0 % $ 87,659 100.0 % $ 185,400 100.0 % $ 177,989 100.0 %

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Other income (expense), net 4,557 5.0 % (6,508) (7.4) % 6,990 3.8 % (14,782) (8.3) %

Gain from foreign currency transactions 420 0.4 % 1,074 1.2 %

Gain (loss) from foreign currency transactions 2,527 2.8 % (370) (0.4) % 2,947 1.6 % 704 0.4 %

Interest expense, net (176) (0.2) % (355) (0.4) % (376) (0.2) % (7,400) (4.2) %

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Net loss $ (5,050) (5.5) % $ (18,545) (21.2) % $ (14,326) (7.7) % $ (54,900) (30.8) %

In the first quarter of 2022, we decided to evaluate future revenue results around solution groups that better represent our evolving business and customer needs.

Beginning with the first quarter of 2022, we evaluate and present revenues in the following two solution groups:

Our products and services are organized around solution groups that address customer needs.

Accordingly, we evaluate revenue around two solution groups:

• Digital Ad Solutions provide measurement of the behavior and characteristics of audiences across digital platforms, including computers, tablets, mobile and other connected devices.

This solution group also includes custom offerings that provide end-to-end solutions for planning, optimization and evaluation of advertising campaigns and brand protection across digital platforms, including transactional outcome-based measurement driven by our Activation and CCR products.

• Cross Platform Solutions provide measurement of content and advertising audiences across local, national and addressable television, including consumption through connected (Smart) televisions, and are designed to help customers find the most relevant viewing

audience whether that viewing is linear, non-linear, online or on-demand.

This solution group also includes custom offerings that provide end-to-end solutions for planning, optimization and evaluation of advertising campaigns across platforms.

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These costs include, but are not limited to, employee costs, purchased data, operational overhead, data storage and technology that supports multiple solution groups.

Revenues for the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended March 31,

Revenues for the three months ended June 30, 2022 and 2021 were as follows:

Three Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Variance % Variance

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Total revenues $ 91,434 100.0 % $ 87,659 100.0 % $ 3,775 4.3 %

Digital Ad Solutions revenue increased primarily due to higher usage of our Activation product, which continued to experience double-digit year-over-year growth as we continued to bring new solutions to market, and higher deliveries of our Lift product and custom digital solutions.

These increases were offset by lower revenue from delivery of our digital measurement products in Europe due to $2.4 million in license revenue recognized under a multi-year contract in the first quarter of 2021.

Digital Ad Solutions revenue decreased primarily due to lower usage of our Activation product, partially offset by higher deliveries of our custom digital solutions.

Cross Platform Solutions revenue increased primarily due to higher TV revenues from new partnerships, higher contract values from renewals and increased agency adoption.

In addition, we recognized $2.0 million of revenue related to cost reimbursements of cloud computing and processing costs attributable to certain custom TV data set deliveries.

Our movies revenue increased by $1.4 million due to the continued return of consumers to theaters in markets worldwide.

We believe revenues from the movies business should continue to experience sequential quarterly increases in 2022 as consumers return to theaters.

As discussed above, we changed the way we evaluate and present our revenues beginning in the first quarter of 2022.

Prior to this change, through the fourth quarter of 2021, our products and services were organized around measurement, planning and optimization in three offerings, as follows:

• Ratings and Planning provided measurement of the behavior and characteristics of audiences of content and advertising across TV and digital platforms.

These products and services were designed to help customers find the most relevant viewing audience, whether that viewing was linear, time shifted/recorded, online or on-demand.

• Analytics and Optimization included Activation, Lift and survey-based products that provided end-to-end solutions for planning, optimization and evaluation of advertising campaigns and brand protection.

• Movies Reporting and Analytics measured movie viewership and box office results by capturing movie ticket sales in real time or near real time and included box office analytics, trend analysis and insights for movie studios and movie theater operators worldwide.

Revenues for the three months ended March 31, 2022 and 2021 based on these three offerings of products and services would have been as follows:

Three Months Ended March 31,

Our movies revenue increased due to the continued return of consumers to theaters in markets worldwide.

Revenues for the six months ended June 30, 2022 and 2021 were as follows:

Six Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Variance % Variance

Ratings and Planning $ 67,458 71.8 % $ 65,806 72.9 % $ 1,652 2.5 %

Analytics and Optimization 18,334 19.5 % 17,701 19.6 % 633 3.6 %

Movies Reporting and Analytics 8,174 8.7 % 6,823 7.5 % 1,351 19.8 %

Digital Ad Solutions $ 104,767 56.5 % $ 105,542 59.3 % $ (775) (0.7) %

Cross Platform Solutions 80,633 43.5 % 72,447 40.7 % 8,186 11.3 %

Total revenues $ 185,400 100.0 % $ 177,989 100.0 % $ 7,411 4.2 %

Digital Ad Solutions revenue decreased primarily due to lower revenue from delivery of our digital measurement products in Europe due to $2.4 million in license revenue recognized under a multi-year contract in the first quarter of 2021.

This decrease was partially offset by higher revenue from deliveries of our custom digital solutions.

Cross Platform Solutions revenue increased primarily due to higher TV revenues from new partnerships, higher contract values from renewals and increased agency adoption.

In addition, we recognized $3.0 million of revenue related to cost reimbursements of cloud computing and processing costs attributable to certain custom TV data set deliveries.

Our movies revenue increased by $2.2 million due to the continued return of consumers to theaters in markets worldwide.

Cost of Revenues

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Additionally, cost of revenues includes allocated overhead, which is comprised of lease expense and other facilities-related costs, and depreciation expense generated by general purpose equipment and software.

Cost of revenues for the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended March 31,

Cost of revenues for the three months ended June 30, 2022 and 2021 were as follows:

Three Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue

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Total cost of revenues $ 51,467 56.3 % $ 51,386 58.6 % $ 81 0.2 %

Systems and bandwidth costs increased primarily due to cloud computing and processing costs attributable to certain custom TV data set deliveries in the first quarter of 2022, including $2.0 million that was recognized as revenue as described above.

Cost of revenues for the six months ended June 30, 2022 and 2021 were as follows:

Six Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue

$ Change % Change

Data costs $ 36,980 19.9 % $ 37,240 20.9 % $ (260) (0.7) %

Employee costs 21,221 11.4 % 20,983 11.8 % 238 1.1 %

Systems and bandwidth costs 16,877 9.1 % 14,175 8.0 % 2,702 19.1 %

Lease expense and depreciation 10,630 5.7 % 9,772 5.5 % 858 8.8 %

Panel costs 7,433 4.0 % 7,679 4.3 % (246) (3.2) %

Sample and survey costs 3,624 2.0 % 3,371 1.9 % 253 7.5 %

Professional fees 2,907 1.6 % 2,759 1.6 % 148 5.4 %

Technology 2,563 1.4 % 2,977 1.7 % (414) (13.9) %

Royalties and resellers 1,626 0.9 % 1,693 1.0 % (67) (4.0) %

Other 524 0.3 % 3,439 1.9 % (2,915) (84.8) %

Total cost of revenues $ 104,385 56.3 % $ 104,088 58.5 % $ 297 0.3 %

Systems and bandwidth costs increased primarily due to cloud computing and processing costs attributable to certain custom TV data set deliveries in the first half of 2022, including $3.0 million that was recognized as revenue as described above.

Other expenses decreased primarily due to the recognition of $2.4 million in license costs associated with the delivery of our digital measurement products in Europe in the first quarter of 2021 in connection with the multi-year contract described above.

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It also includes costs related to online and offline advertising, industry conferences, promotional materials, public relations, other sales and marketing programs and allocated overhead, which is comprised of lease expense and other facilities-related costs, and depreciation expense generated by general purpose equipment and software.

Selling and marketing expenses for the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended March 31,

Selling and marketing expenses for the three months ended June 30, 2022 and 2021 were as follows:

Three Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Change % Change

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Total selling and marketing expenses $ 17,485 19.1 % $ 16,530 18.9 % $ 955 5.8 %

Employee costs decreased primarily due to lower stock-based compensation expense.

Selling and marketing expenses for the six months ended June 30, 2022 and 2021 were as follows:

Six Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Change % Change

Employee costs $ 28,295 15.3 % $ 29,177 16.4 % $ (882) (3.0) %

Lease expense and depreciation 1,901 1.0 % 2,049 1.2 % (148) (7.2) %

Technology 1,697 0.9 % 1,272 0.7 % 425 33.4 %

Professional fees 1,085 0.6 % 1,082 0.6 % 3 0.3 %

Other 1,673 0.9 % 777 0.4 % 896 115.3 %

Total selling and marketing expenses $ 34,651 18.7 % $ 34,357 19.3 % $ 294 0.9 %

Research and Development

Research and development expenses include product development costs, consisting primarily of employee costs for salaries, benefits, stock-based compensation and other related costs for personnel associated with research and development activities, third-party expenses to develop new products and third-party data costs and allocated overhead, which is comprised of lease expense and other facilities-related costs, and depreciation expense related to general purpose equipment and software.

Research and development expenses for the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended March 31,

Research and development expenses for the three months ended June 30, 2022 and 2021 were as follows:

Three Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Change % Change

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Total research and development expenses $ 9,917 10.8 % $ 10,132 11.6 % $ (215) (2.1) %

Research and development expenses for the six months ended June 30, 2022 and 2021 were as follows:

Six Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Change % Change

Employee costs $ 15,131 8.2 % $ 15,272 8.6 % $ (141) (0.9) %

Technology 2,011 1.1 % 2,233 1.3 % (222) (9.9) %

Lease expense and depreciation 1,435 0.8 % 1,697 1.0 % (262) (15.4) %

Professional fees 587 0.3 % 998 0.6 % (411) (41.2) %

Other 285 0.2 % 285 0.2 % — — %

Total research and development expenses $ 19,449 10.5 % $ 20,485 11.5 % $ (1,036) (5.1) %

General and Administrative

General and administrative expenses consist primarily of employee costs for salaries, benefits, stock-based compensation and other related costs, and related expenses for executive management, finance, human capital, legal and other administrative functions, as well as professional fees, overhead, including allocated overhead, which is comprised of lease expense and other facilities-related costs, depreciation expense related to general purpose equipment and software, amortization of cloud-computing implementation costs, changes in the fair value of our contingent consideration liability, Board of Directors compensation and expenses incurred for other general corporate purposes.

General and administrative expenses for the three months ended March 31, 2022 and 2021 were as follows:

Three Months Ended March 31,

General and administrative expenses for the three months ended June 30, 2022 and 2021 were as follows:

Three Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Change % Change

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Total general and administrative expenses $ 17,103 18.7 % $ 14,246 16.3 % $ 2,857 20.1 %

Employee costs increased primarily due to severance expense related to the retirement of our former Chief Executive Officer ("CEO").

General and administrative expenses for the six months ended June 30, 2022 and 2021 were as follows:

Six Months Ended June 30,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Change % Change

Employee costs $ 18,000 9.7 % $ 15,901 8.9 % $ 2,099 13.2 %

Professional fees 8,622 4.7 % 6,566 3.7 % 2,056 31.3 %

Technology 1,679 0.9 % 1,211 0.7 % 468 38.6 %

Lease expense and depreciation 841 0.5 % 891 0.5 % (50) (5.6) %

Other 6,078 3.3 % 4,145 2.3 % 1,933 46.6 %

Total general and administrative expenses $ 35,220 19.0 % $ 28,714 16.1 % $ 6,506 22.7 %

Employee costs increased primarily due to severance expense related to the retirement of our former CEO.

Professional fees increased primarily due to a reclassification of insurance costs from other expenses to better reflect the nature of services provided.

Other expense increased primarily due to a $2.3 million loss resulting from the change in fair value of the contingent consideration recognized as part of the business combination described in Fo otnote 2 , Summary of Significant Accounting Policies .

Other expense increased primarily due to a $2.4 million loss resulting from the change in fair value of the contingent consideration recognized as part of the business combination described in Footnote 2 , Summary of Significant Accounting Policies .

This increase was partially offset by the reclassification of insurance costs to professional fees.

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Other income (expense), net represents income and expenses incurred that are generally not recurring in nature or are not part of our regular operations.

The following is a summary of other income (expense), net for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

The following is a summary of other income (expense), net for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2022 2021 2022 2021

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$ 4,557 $ (6,508) $ 6,990 $ (14,782)

The change in other income (expense), net for the three months ended March 31, 2022 as compared to 2021 was largely driven by changes in the fair value of our warrants liability.

The gain on the warrants liability for the three months ended March 31, 2022 was primarily due to a decrease in the trading price of our Common Stock during the quarter.

The loss on the warrants liability for the three months ended March 31, 2021 was due primarily to the exercise price adjustment described in Footnote 4 , Convertible Redeemable Preferred Stock and Stockholders' Equity , and an increase in the trading price of our Common Stock during the quarter.

The change in other income (expense), net for the three and six months ended June 30, 2022 as compared to 2021 was largely driven by changes in the fair value of our warrants liability.

The gain on the warrants liability for the three and six months ended June 30, 2022 was primarily due to a decrease in the trading price of our Common Stock during the relevant periods.

The loss on the warrants liability for the three and six months ended June 30, 2021 was due primarily to the exercise price adjustment described in Footnote 4 , Convertible Redeemable Preferred Stock and Stockholders' Equity , and an increase in the trading price of our Common Stock during the relevant periods.

Interest Expense, Net

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Interest income primarily consists of interest earned from our cash and cash equivalent balances.

Interest expense relates to interest on our senior secured convertible notes (the "Notes"), foreign secured promissory note (the "Secured Term Note"), our senior secured revolving credit agreement (the "Revolving Credit Agreement"), sale-leaseback agreement, and our finance leases.

During the three months ended March 31, 2022 and 2021, we incurred interest expense, net of $0.2 million and $7.0 million, respectively.

The decrease in interest expense for the three months ended March 31, 2022 as compared to 2021 was primarily due to the extinguishment of the Notes and the Secured Term Note in March 2021, as described in Footnote 5 , Debt.

Gain From Foreign Currency Transactions

We incurred interest expense, net of $0.2 million and $0.4 million during the three months ended June 30, 2022 and 2021, respectively, and $0.4 million and $7.4 million during the six months ended June 30, 2022 and 2021, respectively.

The decrease in interest expense for the six months ended June 30, 2022 as compared to 2021 was primarily due to the extinguishment of the Notes and the Secured Term Note in March 2021, as described in Footnote 5 , Debt.

Gain (Loss) From Foreign Currency Transactions

Our foreign currency transactions are recorded as a result of fluctuations in the exchange rate between the transactional currency and the functional currency of foreign subsidiary transactions.

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Dollars are in a net asset position.

For the three months ended March 31, 2022 and 2021, the gain from foreign currency transactions was $0.4 million and $1.1 million, respectively.

The gain during the three months ended March 31, 2022 was primarily driven by fluctuations between the Chilean Peso, Euro and U.S.

For the three months ended June 30, 2022 and 2021, the gain (loss) from foreign currency transactions was $2.5 million and $(0.4) million, respectively.

For the six months ended June 30, 2022 and 2021, the gain from foreign currency transactions was $2.9 million and $0.7 million, respectively.

The gain during the three and six months ended June 30, 2022 was primarily driven by fluctuations between the Chilean Peso, Euro and U.S.

Dollar exchange rates.

The gain during the three months ended March 31, 2021 was primarily driven by fluctuations in the U.S.

Dollar against the Euro exchange rate.

Loss on Extinguishment of Debt

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In March 2021, we recorded a $9.6 million loss on debt extinguishment related to the payoff of the Notes and the Secured Term Note.

The primary drivers of the extinguishment loss were the write-off of unamortized deferred financing costs and issuance discounts, the issuance of additional shares of Common Stock in connection with the extinguishment, and the derecognition of the interest rate reset derivative liability on the Notes.

The primary drivers of the extinguishment loss were the write-off of unamortized deferred financing costs and issuance discounts, the issuance of

additional shares of Common Stock in connection with the extinguishment, and the derecognition of the interest rate reset derivative liability on the Notes.

These components are described in Footnote 5 , Debt .

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deferred taxes for tax deductible goodwill and other indefinite-lived liabilities.

During the three months ended March 31, 2022 and 2021, we recorded income tax provisions of $1.4 million and $1.0 million, respectively resulting in effective tax rates of 17.5% and 2.9%, respectively.

For the three months ended June 30, 2022 and 2021, we recorded income tax provisions of $0.6 million and $0.4 million, respectively, resulting in effective tax rates of 14.7% and 2.3%, respectively.

For the six months ended June 30, 2022 and 2021, we recorded income tax provisions of $2.0 million and $1.4 million, respectively, resulting in effective tax rates of 16.5% and 2.7%, respectively.

These effective tax rates differ from the U.S.

federal statutory rate primarily due to the effects of certain permanent items, foreign tax rate differences, and increases in the valuation allowance against our domestic deferred tax assets.

The increase in the income tax provision during 2022 as compared to 2021 was primarily due to an increase in estimated foreign tax expense in 2022.

Liquidity and Capital Resources

The following table summarizes our cash flows for each of the periods identified:

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2022 2021

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Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,208) (322)

Net increase (decrease) in cash, cash equivalents and restricted cash 7,775 (16,869)

Net decrease in cash, cash equivalents and restricted cash (2,220) (33,061)

Our principal uses of cash consist of cash paid for data, payroll and other operating expenses, including expenses incurred in prior periods;

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and dividend payment obligations with respect to our Series B Convertible Preferred Stock ("Preferred Stock").

As of March 31, 2022, our principal sources of liquidity consisted of cash, cash equivalents and restricted cash totaling $30.1 million (including $0.4 million in restricted cash), cash flows from our operations, and $20.7 million available to us under our Revolving Credit Agreement, as described below.

As of June 30, 2022, our principal sources of liquidity consisted of cash, cash equivalents and restricted cash totaling $20.1 million (including $0.4 million in restricted cash), cash flows from our operations, and $20.7 million available to us under our Revolving Credit Agreement, as described below.

On March 10, 2021, we entered into separate Securities Purchase Agreements with each of Charter Communications Holding Company, LLC ("Charter"), Qurate Retail, Inc.

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For additional information on the Transactions and the extinguishment of the Notes, refer to Footnote 4 , Convertible Redeemable Preferred Stock and Stockholders' Equity and Footnote 5 , Debt .

As of March 31, 2022, accrued dividends for the Preferred Stock totaled $11.7 million.

These dividends are scheduled to be paid in cash on June 30, 2022.

On May 5, 2021, we entered into the Revolving Credit Agreement, which was subsequently amended in February 2022.

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During 2021, we borrowed $16.0 million under the Revolving Credit Agreement.

In addition to these borrowings, we have issued and outstanding letters of credit totaling $3.3 million under the Revolving Credit Agreement, leaving a remaining borrowing capacity of $20.7 million as of March 31, 2022.

On June 30, 2022, we made cash dividend payments totaling $15.5 million to the holders of the Preferred Stock, representing dividends accrued for the period from June 30, 2021 through June 29, 2022.

The next scheduled dividend payment date for the Preferred Stock is June 30, 2023.

Pandemic Impact

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Shares of Preferred Stock are convertible into Common Stock as described in Footnote 4 , Convertible Redeemable Preferred Stock and Stockholders' Equity .

As of March 31, 2022, each share of Preferred Stock was convertible into 1.057292 shares of Common Stock, with such conversion rate scheduled to return to 1.00 upon payment of accrued dividends on June 30, 2022.

As of June 30, 2022, each share of Preferred Stock would have been convertible into 1.000208 shares of Common Stock, with such assumed conversion rate scheduled to return to 1.00 upon payment of accrued dividends on June 30, 2023.

The holders of Preferred Stock are entitled to participate in all dividends declared on the Common Stock on an as-converted basis and are also entitled to a cumulative dividend at the rate of 7.5% per annum, payable annually in arrears and subject to increase under certain specified circumstances.

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Notably, the Revolving Credit Agreement contains financial covenants that require us to maintain minimum Consolidated EBITDA for periods through December 31, 2022, a minimum Consolidated Asset Coverage Ratio for periods ending March 31, 2022 through December 31, 2022, and a minimum Consolidated Fixed Charge Coverage Ratio for periods after December 31, 2022 (each term as defined in the Revolving Credit Agreement).

As of March 31, 2022, we were in compliance with our covenants under the Revolving Credit Agreement, and based on our current plans, we do not anticipate a breach of these covenants that would result in an event of default under the Revolving Credit Agreement.

As of March 31, 2022, we had outstanding borrowings of $16.0 million and outstanding letters of credit totaling $3.3 million under the Revolving Credit Agreement, leaving a remaining borrowing capacity of $20.7 million.

As of June 30, 2022, we were in compliance with our covenants under the Revolving Credit Agreement, and based on our current plans, we do not anticipate a breach of these covenants that would result in an event of default under the Revolving Credit Agreement.

As of June 30, 2022, we had outstanding borrowings of $16.0 million and outstanding letters of credit totaling $3.3 million under the Revolving Credit Agreement, leaving a remaining borrowing capacity of $20.7 million.

The borrowed funds were used to reduce our accounts payable balances, primarily related to expenses incurred in prior periods, and support our working capital position.

While we continue to take steps to reduce our outstanding trade payables and improve our working capital position, our liquidity could be negatively affected if we are unable to generate sufficient cash from operations to meet our financial obligations as they come due.

While we continue to take steps to reduce our outstanding trade payables and improve our working capital position, our liquidity and operations could be negatively affected if we are unable to generate sufficient cash from operations to satisfy outstanding payables and meet our other financial obligations as they come due.

For additional information on the Revolving Credit Agreement, refer to Footnote 5 , Debt .

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Cash provided by operating activities is calculated by adjusting our net loss for changes in working capital, as well as by excluding non-cash items such as:

depreciation, non-cash operating lease expense, amortization expense of finance leases and intangible assets, impairment of right-of-use assets, stock-based compensation, deferred tax provision, change in the fair value of contingent consideration, financing derivatives and warrants liability, loss on extinguishment of debt, non-cash interest expense on the Notes, accretion of debt discount, and amortization of deferred financing costs.

Net cash provided by operating activities for the three months ended March 31, 2022 was $12.4 million, compared to $17.9 million for the three months ended March 31, 2021.

The decrease in cash provided by operating activities was primarily attributable to a net decrease in cash generated from operating assets and liabilities of $5.1 million for the three months ended March 31, 2022 as compared to $11.9 million for the three months ended March 31, 2021.

The lower amount of cash generated from operating assets and liabilities in 2022 is primarily reflective of larger amounts paid to reduce our outstanding accounts payable and accrued expense balances during 2022 as compared to 2021.

depreciation, non-cash operating lease expense, amortization expense of finance leases and intangible assets, stock-based compensation, deferred tax provision, change in the fair value of contingent consideration, financing derivatives and warrants liability, loss on extinguishment of debt, non-cash interest expense on the Notes, accretion of debt discount, and amortization of deferred financing costs.

Net cash provided by operating activities for the six months ended June 30, 2022 was $24.2 million, compared to $10.9 million for the six months ended June 30, 2021.

The increase in cash provided by operating activities was primarily attributable to a net increase in cash generated from operating assets and liabilities of $9.2 million for the six months ended June 30, 2022 as compared to $1.3 million for the six months ended June 30, 2021.

The higher amount of cash generated from operating assets and liabilities in 2022 is primarily reflective of higher revenues, shorter billing cycles, and improved cash collections during 2022 as compared to 2021.

These increases were partially offset by higher amounts paid to reduce our outstanding accounts payable and accrued expense balances during 2022 as compared to 2021.

Investing Activities

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The extent of these investments will be affected by our ability to expand relationships with existing customers, grow our customer base and introduce new digital formats, as well as constraints on cash expenditures due to our financial position and the current economic environment.

Net cash used in investing activities for the three months ended March 31, 2022 was $3.8 million compared to $3.7 million for the three months ended March 31, 2021.

Net cash used in investing activities for the six months ended June 30, 2022 was $8.3 million compared to $7.7 million for the six months ended June 30, 2021.

Financing Activities

Net cash used in financing activities during the three months ended March 31, 2022 was $0.7 million compared to $30.5 million during the three months ended March 31, 2021.

Net cash used in financing activities during the six months ended June 30, 2022 was $17.0 million compared to $35.9 million during the six months ended June 30, 2021.

The significant decrease in cash used for financing activities was due to repayment of our Notes and the Secured Term Note, which outflows were partially offset by cash proceeds received from the issuance of the Preferred Stock (net of related transaction costs), during 2021.

These decreases were partially offset by a net increase of $10.8 million in cash dividends paid to holders of the Preferred Stock in 2022, reflecting a full annual dividend period, as compared to 2021, which included only a partial dividend period.

Contractual Payment Obligations

We have certain long-term contractual arrangements that have fixed and determinable payment obligations including unconditional purchase obligations with MVPDs, operating and financing leases, and data storage and bandwidth arrangements.

We have data licensing agreements with a number of MVPDs for set-top box data.

We have certain long-term contractual arrangements that have fixed and determinable payment obligations including purchase obligations with MVPDs and connected (Smart) television providers, operating and financing leases, and data storage and bandwidth arrangements.

We have data licensing agreements with a number of MVPDs and other providers for set-top box and connected (Smart) television data.

These agreements have remaining terms from one to nine years.

As of March 31, 2022, the total fixed payment obligation related to these agreements is $318.5 million.

In addition, we expect to make variable payments related to one of these agreements totaling an estimated $19.5 million over the next two years.

As of June 30, 2022, the total fixed payment obligations related to set-top box and connected (Smart) television data agreements are $310.2 million and $11.2 million, respectively.

In addition, we expect to make variable payments related to a set-top box data agreement totaling an estimated $15.3 million over the next two years.

We have both operating and financing leases related to corporate office space and equipment.

Our leases have remaining terms from one to six years.

As of March 31, 2022, the total fixed payment obligation related to these agreements is $58.6 million.

As of June 30, 2022, the total fixed payment obligation related to these agreements is $55.8 million.

We have an agreement for cloud-based data storage and bandwidth to help process and store our data.

The remaining term for this agreement is two years.

As of March 31, 2022, the total fixed payment obligation related to this agreement is $17.2 million.

As of June 30, 2022, the total fixed payment obligation related to this agreement is $14.7 million.

Future Capital Requirements

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Our discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP.

The preparation of these financial statements requires us to make estimates, assumptions

and judgments that affect the amounts reported in our Condensed Consolidated Financial Statements and the accompanying Notes to Condensed Consolidated Financial Statements.

The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the amounts reported in our Condensed Consolidated Financial Statements and the accompanying Notes to Condensed Consolidated Financial Statements.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis