What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-02 compared with 2022-03-02 · 323 added, 396 removed, 1167 unchanged (38% of the section changed)

14 unchanged sentences

We have audited the accompanying consolidated balance sheets of comScore, Inc.

and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, changes in convertible redeemable preferred stock and stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, convertible redeemable preferred stock and stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenues – Refer to Notes 2 and 4 to the financial statements

Revenues – Certain Complex Contracts – Refer to Notes 2 and 4 to the financial statements

Critical Audit Matter Description

The Company applies the provisions of ASC 606, Revenue from Contracts with Customers , and all related applicable guidance.

The Company recognizes revenue under the core principle to depict the transfer of control to its customers in an amount reflecting the consideration to which it expects to be entitled.

The Company's contracts with customers may include multiple promised goods and services.

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Once the Company elects one of the methods to estimate variable consideration for a particular type of performance obligation, the Company will apply that method consistently.

Estimates of variable consideration are subject to constraint based on expected recovery from the customer.

The Company allocates the transaction price to each performance obligation based on relative standalone selling price ("SSP").

Judgment is exercised to determine the SSP of each distinct performance obligation.

The Company will constrain estimates of variable consideration based on its expectation of recovery from the customer.

The Company recognizes revenue when (or as) it satisfies a performance obligation by transferring promised goods or services to a customer.

Customers may obtain the control of promised goods or services over time or at a point in time.

Given the complexity of certain of the Company's contracts, we concluded that revenue recognition from these contracts represents a critical audit matter because of the judgments necessary for management to identify performance obligations, determine the transaction price, allocate

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transaction price to the performance obligations and recognize revenue when performance obligations are satisfied.

Performing audit procedures related to revenue recognition for these contracts required more extensive audit effort and a higher degree of auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to evaluating the significant estimates and judgments used by management in the determination of the accounting for certain revenue contracts, including the identification of performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue when performance obligations are satisfied, included the following, among others:

Our audit procedures related to evaluating the significant estimates and judgments used by management in the determination of the accounting for certain more complex revenue contracts, including the identification of performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue when performance obligations are satisfied, included the following, among others:

• We tested the effectiveness of controls, including controls over the identification of performance obligations, determination of the transaction price, allocation of the transaction price, and determination of when performance obligations are satisfied.

• For a selection of revenue contracts identified as having more complex terms, we performed the following:

◦ Analysed the contract to determine if all arrangement terms that may have an impact on revenue recognition were identified and independently evaluated management's accounting for the contract.

◦ Analyzed the contract to determine if all arrangement terms that may have an impact on revenue recognition were identified and independently evaluated management's accounting for the contract.

◦ Tested management's identification of distinct performance obligations by evaluating whether the underlying goods, services, or both were capable of being distinct and distinct within the context of the contract.

◦ Tested the relative stand-alone selling prices by recalculating the stand-alone selling prices of the performance obligations and evaluating the assumptions used by the Company to determine the standalone selling price for each distinct performance obligation.

We evaluated the methodology used to determine the standalone selling price by comparison to historical analyses prepared by the Company and practices observed in the industry.

We also tested the data used in the analysis.

◦ Tested the contract value allocation based on the Company's standalone selling price (SSP) through the performance of our revenue testing.

We also evaluated the risks related to the Company's SSP determination.

◦ Tested the timing of revenue recognition by evaluating whether revenue should be recognized over time or at a point in time, and whether the revenue was recognized in the appropriate period by examining evidence of delivery or access to support the timing of revenue recognition based on the product or service type.

◦ Tested the mathematical accuracy of management's calculation of revenue.

◦ Obtained external confirmations evidencing the delivery of the performance obligation(s) and confirming there are no side agreements.

◦ With the assistance of professionals in our firm having expertise in the recognition of revenue, we evaluated revenue recognition in accordance with ASC 606.

Goodwill – Goodwill Impairment Analysis – Refer to Notes 2 and 10 to the financial statements

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The carrying value of the reporting unit is reviewed utilizing a combination of the discounted cash flow model and a market value approach.

The estimated fair value of a reporting unit is determined based on assumptions regarding estimated future cash flows, discount rates, long-term growth rates and market values.

The estimated fair value of a reporting unit is determined based on assumptions regarding estimated future cash flows, discount rate, long-term growth rates and market values.

The Company monitors for events and circumstances that could negatively impact the key assumptions in determining fair value, including long-term growth rates, profitability, discount rates, volatility in the Company's market capitalization, general industry, and market and macro-economic conditions.

The Company completed its annual assessment on October 1, 2021, and there was no impairment of goodwill at the assessment date.

The goodwill balance was $435.7 million as of December 31, 2021.

As of September 30, 2022, the Company concluded that it was more likely than not that the estimated fair value of its reporting unit was less than its carrying value.

Accordingly, in conjunction with its annual test as of October 1, 2022, the Company completed its assessment, and concluded that it was more likely than not that the estimated fair value of its reporting unit was less than its carrying value.

In its assessment, the Company considered the decline in the Company's stock price and market capitalization among other factors.

The Company performed a quantitative goodwill impairment test using a discounted cash flow model, supported by a market approach.

The Company's reporting unit did not pass the goodwill impairment test, and as a result the Company recorded a $46.3 million non-cash impairment charge during the three months ended September 30, 2022 and year ended December 31, 2022.

We identified goodwill for the Company as a critical audit matter because of the significant judgments made by management to estimate the fair value of the reporting unit, specifically related to the selection of the discount rate and forecasts of future revenue.

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• We tested the effectiveness of controls over management's goodwill impairment evaluations, including those over the forecasts of future revenue and management's selection of the discount rate.

• We evaluated management's ability to accurately forecast revenue by comparing the actual results to management's historical projections from 2020.

• We evaluated whether the internal specialists used by the Company to perform the goodwill valuation analysis had the necessary competence, capabilities, and objectivity.

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• We evaluated management's ability to accurately forecast revenue by comparing the actual results to management's historical projections.

• We sensitized management projections to determine areas of audit focus.

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◦ Public information related to addressable market opportunities.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rates by:

◦ Corroborative inquiries with management regarding the projected revenue growth.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by:

◦ Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.

◦ Developing a range of independent estimates and comparing those to the discount rates selected by management.

◦ Developing a range of independent estimates and comparing those to the discount rate selected by management.

• We evaluated the impact of changes in management's revenue forecasts from the October 1, 2022 annual measurement date to December 31, 2022.

Preferred Stock – Accounting for preferred stock agreements in connection with investment transaction – Refer to Notes 2 and 5 to the financial statements

Critical Audit Matter Description

On January 7, 2021, the Company entered into separate Securities Purchase Agreements with each of Charter Communications Holding Company, LLC ("Charter"), Qurate Retail, Inc.

("Qurate") and Pine Investor, LLC ("Pine") (the "Securities Purchase Agreements").

The issuance of securities pursuant to the Securities Purchase Agreements (the "Transactions") and related matters were approved by the Company's stockholders on March 9, 2021 and completed on March 10, 2021.

At the closing of the Transactions, the Company issued and sold (a) to Charter, 27,509,203 shares of Series B Convertible Preferred Stock ("Preferred Stock") in exchange for $68.0 million, (b) to Qurate, 27,509,203 shares of Preferred Stock in exchange for $68.0 million and (c) to Pine, 27,509,203 shares of Preferred Stock in exchange for $68.0 million.

The shares were issued at par value of $0.001.

Net proceeds from the Transactions totaled $187.9 million after deducting issuance costs.

The Preferred Stock includes a change of control put option which allows the holders of the Preferred Stock to require the Company to repurchase such holders' shares in cash in an amount equal to the initial purchase price plus accrued dividends.

The change of control put option was determined to be a derivative liability under ASC 815, Derivatives and Hedging .

Additionally, all financial instruments that are classified as mezzanine equity are evaluated for embedded derivative features by evaluating each feature against the nature of the host instrument (e.g., more equity-like or debt-like).

Features identified as embedded derivatives that are material are recognized separately as a derivative asset or liability in the consolidated financial statements.

We identified the preferred stock transaction for the Company as a critical audit matter because auditing the appropriate accounting treatment for material preferred stock contracts required a complex accounting analysis, including considerations around embedded derivative features and the classification of financial instruments.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the preferred stock transaction included the following, among others:

• We tested the effectiveness of controls over management's evaluation of the preferred stock transaction.

• We read the preferred stock agreements and, with the assistance of professionals in our firm having expertise in the accounting for complex financial instruments, we analyzed the contracts to determine if all arrangement terms that may have an impact on accounting treatment were identified and independently evaluated management's accounting for the preferred stock agreements, including an evaluation of the embedded derivative features.

• We evaluated management's assessment related to the probability of a change of control.

• We tested the cash proceeds from the transaction.

• We analyzed and performed test of details over issuance costs, including the assessment of the proper accounting for such costs.

/s/ Deloitte & Touche LLP

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68,457 72,059

Prepaid expenses and other current assets ($ 333 and $ 1,496 attributable to related parties, respectively)

14,769 16,910

Prepaid expenses and other current assets 15,922 14,769

Total current assets 104,821 109,107

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Customer advances 11,527 11,613

Warrants liability 10,520 2,831

Current operating lease liabilities 7,639 7,538

Secured term note — 12,644

Warrants liability 718 10,520

Current portion of contingent consideration 7,134 1,037

Other current liabilities ($ 7,863 and $ 7,863 attributable to related parties, respectively)

12,646 11,813

Total current liabilities 165,091 165,371

Non-current operating lease liabilities 29,588 36,055

Non-current portion of accrued data costs ($ 7,843 attributable to related party)

Non-current portion of accrued data costs ($ 15,471 and $ 7,843 attributable to related parties, respectively)

25,106 16,005

Revolving line of credit 16,000 16,000

Deferred tax liabilities 2,127 2,103

Senior secured convertible notes (related party) — 192,895

Financing derivatives (related party) — 11,300

Other non-current liabilities ($ 159 and $ 1,582 attributable to related parties, respectively)

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Convertible redeemable preferred stock, $ 0.001 par value;

82,527,609 and zero shares authorized, issued and outstanding as of December 31, 2021 and 2020, respectively;

aggregate liquidation preference of $ 211,863 as of December 31, 2021 (related parties)

82,527,609 shares authorized, issued and outstanding as of December 31, 2022 and 2021;

aggregate liquidation preference of $ 211,863 as of December 31, 2022 and 2021 (related parties)

187,885 187,885

Stockholders' equity:

Preferred stock, $ 0.001 par value;

7,472,391 and 5,000,000 shares authorized as of December 31, 2021 and 2020, respectively;

7,472,391 shares authorized as of December 31, 2022 and 2021;

no shares issued or outstanding as of December 31, 2022 or 2021

Common stock, $ 0.001 par value;

275,000,000 and 150,000,000 shares authorized as of December 31, 2021 and 2020, respectively;

275,000,000 shares authorized as of December 31, 2022 and 2021;

98,869,738 shares issued and 92,104,942 shares outstanding as of December 31, 2022, and 97,172,086 shares issued and 90,407,290 shares outstanding as of December 31, 2021

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Amortization of intangible assets 27,096 25,038 27,219

Impairment of right-of-use and long-lived assets — 4,671 —

Impairment of goodwill 46,300 — —

Impairment of intangible asset — — 17,308

Investigation and audit related — — 4,305

Restructuring 5,810 — —

Settlement of litigation, net — — 2,900

Impairment of right-of-use and long-lived assets 156 — 4,671

Total expenses from operations 451,296 395,878 377,311

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( 915 ) ( 7,801 ) ( 35,805 )

Other (expense) income, net ( 5,778 ) 14,554 1,654

Other income (expense), net 9,785 ( 5,778 ) 14,554

Gain (loss) from foreign currency transactions 1,166 2,895 ( 4,490 )

Loss before income taxes ( 64,837 ) ( 49,178 ) ( 47,016 )

Income tax (provision) benefit ( 859 ) ( 902 ) 1,007

Income tax provision ( 1,724 ) ( 859 ) ( 902 )

Net loss $ ( 66,561 ) $ ( 50,037 ) $ ( 47,918 )

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General and administrative 5,186 9,375 5,673

Restructuring — — ( 137 )

Total stock-based compensation expense $ 8,178 $ 13,848 $ 10,073

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Balance as of December 31, 2019 — $ — 70,065,130 $ 70 $ 1,609,358 $ ( 12,333 ) $ ( 1,108,137 ) $ ( 229,984 ) $ 258,974

Adoption of ASC 842 — — — — — — ( 46 ) — ( 46 )

Net loss — — — — — — ( 47,918 ) — ( 47,918 )

Foreign currency translation adjustment — — — — — 5,303 — — 5,303

Issuance of Common Stock - CVI — — 2,728,513 3 8,159 — — — 8,162

Common Stock warrants exercised - Starboard (1)

— — 323,448 — — — — — —

Common Stock warrants exercised - CVI — — 2,728,513 3 5,482 — — — 5,485

Exercise of Common Stock options, net — — 75,000 — 143 — — — 143

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— — 1,474,201 2 3,058 — — — 3,060

Restricted stock units vested — — 854,998 1 4,610 — — — 4,611

Payments for taxes related to net share settlement of equity awards — — ( 85,560 ) — ( 1,267 ) — — — ( 1,267 )

Stock-based compensation expense — — — — 12,605 — — — 12,605

Balance as of December 31, 2019 — $ — 70,065,130 $ 70 $ 1,609,358 $ ( 12,333 ) $ ( 1,108,137 ) $ ( 229,984 ) $ 258,974

Net loss — — — — — — ( 47,918 ) — ( 47,918 )

Foreign currency translation adjustment — — — — — 5,303 — — 5,303

Exercise of Common Stock options, net — — 75,000 — 143 — — — 143

Interest paid in Common Stock (1)

— — 1,474,201 2 3,058 — — — 3,060

Restricted stock units vested — — 1,363,152 1 3,064 — — — 3,065

Restricted stock units distributed — — 1,363,152 1 3,064 — — — 3,065

Payments for taxes related to net share settlement of equity awards — — ( 38,937 ) — ( 117 ) — — — ( 117 )

Stock-based compensation expense — — — — 6,480 — — — 6,480

Amortization of stock-based compensation — — — — 6,480 — — — 6,480

Balance as of December 31, 2020 — $ — 72,938,546 $ 73 $ 1,621,986 $ ( 7,030 ) $ ( 1,156,055 ) $ ( 229,984 ) $ 228,990

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— — — — — — ( 12,623 ) — ( 12,623 )

Restricted stock units vested — — 2,362,963 2 7,117 — — — 7,119

Stock-based compensation expense — — — — 9,123 — — — 9,123

Restricted stock units distributed — — 2,362,963 2 7,117 — — — 7,119

Foreign currency translation adjustment — — — — — ( 5,068 ) — — ( 5,068 )

Payments for taxes related to net share settlement of equity awards — — ( 155,519 ) — ( 522 ) — — — ( 522 )

Amortization of stock-based compensation — — — — 9,123 — — — 9,123

Balance as of December 31, 2021 82,527,609 $ 187,885 90,407,290 $ 90 $ 1,683,883 $ ( 12,098 ) $ ( 1,218,715 ) $ ( 229,984 ) $ 223,176

(1) Transactions for these line items were exclusively with related parties (refer to Foo tnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity , Footnot e 6 , Debt , and Footnote 14 , Related Party Transactions , of the Notes to Consolidated Financial Statements for additional information).

Net loss — — — — — — ( 66,561 ) — ( 66,561 )

Convertible redeemable preferred stock dividends (1)

— — — — — — ( 15,513 ) — ( 15,513 )

Restricted stock units distributed — — 1,493,121 1 1,717 — — — 1,718

Exercise of Common Stock options, net — — 96,955 1 103 — — — 104

Payments for taxes related to net share settlement of equity awards — — ( 13,120 ) — ( 23 ) — — — ( 23 )

Amortization of stock-based compensation — — — — 5,106 — — — 5,106

Other — — 120,696 — ( 3 ) — — — ( 3 )

Foreign currency translation adjustment — — — — — ( 3,842 ) — — ( 3,842 )

Balance as of December 31, 2022 82,527,609 $ 187,885 92,104,942 $ 92 $ 1,690,783 $ ( 15,940 ) $ ( 1,300,789 ) $ ( 229,984 ) $ 144,162

(1) Transactions for these line items were exclusively with related parties (refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity , Footnote 6 , Debt , and Footnote 14 , Related Party Transactions , of the Notes to Consolidated Financial Statements for additional information).

Gross proceeds from related parties for the issuance of convertible redeemable preferred stock were $ 204.0 million.

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Net loss $ ( 66,561 ) $ ( 50,037 ) $ ( 47,918 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Impairment of goodwill 46,300 — —

Amortization of intangible assets 27,096 25,038 27,219

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Stock-based compensation expense 8,178 13,848 10,073

Loss on extinguishment of debt 9,629 — —

Change in fair value of warrant liability 7,689 ( 4,894 ) 2,411

Non-cash operating lease expense 6,060 5,345 5,555

Non-cash interest expense on senior secured convertible notes (1)

4,692 9,180 17,374

Change in fair value of contingent consideration liability 2,558 — —

Amortization expense of finance leases 2,364 2,188 1,652

Accretion of debt discount 1,620 7,571 6,242

Bad debt expense (benefit) 312 ( 80 ) 1,693

Amortization of deferred financing costs 163 378 1,560

Bad debt (benefit) expense ( 80 ) 1,693 727

Impairment of right-of-use and long-lived assets 156 — 4,671

Deferred tax (benefit) provision ( 475 ) ( 1,719 ) 10

Change in fair value of warrant liability ( 9,802 ) 7,689 ( 4,894 )

Loss on extinguishment of debt — 9,629 —

Non-cash interest expense on senior secured convertible notes (1)

— 4,692 9,180

Accretion of debt discount — 1,620 7,571

Change in fair value of financing derivatives — ( 1,800 ) ( 10,287 )

Impairment of right-of-use and long-lived assets — 4,671 —

Impairment of goodwill — — 224,272

Impairment of intangible asset — — 17,308

Change in fair value of investment in equity securities — — 2,324

Other 1,435 1,082 908

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Contract liability and customer advances ( 1,587 ) ( 10,777 ) 7,341

Current operating lease liability ( 5,597 ) ( 6,327 ) ( 7,638 )

Net cash provided by (used in) operating activities 9,856 717 ( 4,636 )

Operating lease liabilities ( 7,275 ) ( 5,597 ) ( 6,327 )

Net cash provided by operating activities 34,937 9,856 717

Investing activities :

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Cash and restricted cash acquired from acquisition — 902 —

Proceeds from sale of investment in equity securities — — 3,776

Net cash used in investing activities ( 17,822 ) ( 14,648 ) ( 15,555 )

Financing activities :

Principal payment and extinguishment costs on senior secured convertible notes (1)

( 204,014 ) — —

Principal payment and extinguishment costs on secured term note ( 14,031 ) — —

Payments for dividends on convertible redeemable preferred stock (1)

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Principal payments on finance leases ( 2,519 ) ( 2,138 ) ( 1,754 )

Payments for taxes related to net share settlement of equity awards ( 522 ) ( 117 ) ( 1,267 )

Principal payments on capital lease and software license arrangements ( 329 ) ( 367 ) ( 2,070 )

Proceeds from the exercise of stock options — 142 1,191

Proceeds from private placement, net of issuance costs paid — — 19,752

Proceeds from secured term note — — 13,000

Proceeds from sale-leaseback financing transaction — — 4,252

Principal payment and extinguishment costs on senior secured convertible notes (1)

— ( 204,014 ) —

Principal payment and extinguishment costs on secured term note — ( 14,031 ) —

Proceeds from borrowings on revolving line of credit — 16,000 —

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Other ( 101 ) ( 1,394 ) ( 342 )

Net cash (used in) provided by financing activities ( 22,452 ) ( 2,096 ) 31,973

Net cash used in financing activities ( 18,132 ) ( 22,452 ) ( 2,096 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 820 ) ( 1,218 ) 902

Net (decrease) increase in cash, cash equivalents and restricted cash ( 28,462 ) ( 16,032 ) 16,575

Net decrease in cash, cash equivalents and restricted cash ( 1,837 ) ( 28,462 ) ( 16,032 )

Cash, cash equivalents and restricted cash at beginning of period 22,279 50,741 66,773

Cash, cash equivalents and restricted cash at end of period $ 20,442 $ 22,279 $ 50,741

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As of December 31,

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Total cash, cash equivalents and restricted cash $ 20,442 $ 22,279 $ 50,741

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Years Ended December 31,

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Supplemental non-cash activities :

Convertible redeemable preferred stock dividends accrued but not yet paid (1)

7,863 7,863 —

Settlement of restricted stock unit liability 1,718 7,117 3,065

Change in accounts payable and accrued expenses related to capital expenditures 1,162 479 395

Right-of-use assets obtained in exchange for finance lease liabilities 1,106 3,345 754

Right-of-use assets obtained in exchange for new operating lease liabilities 908 5,211 669

Fair value of Common Stock issued in connection with acquisition — 25,774 —

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Conversion shares issued as extinguishment cost on senior secured convertible notes (1)

Convertible redeemable preferred stock dividends accrued but not yet paid (1)

Settlement of restricted stock unit liability 7,117 3,065 4,611

Fair value of contingent consideration recognized upon closing of acquisition — 5,600 —

Right-of-use assets obtained in exchange for operating lease liabilities 5,211 669 397

Right-of-use assets obtained in exchange for finance lease liabilities 3,345 754 4,049

Leasehold improvements acquired through lease incentives — 394 2,050

Fair value of warrants issued in private placement — — 10,798

(1) Transactions for these line items were exclusively with related parties (refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity , Footnot e 6 , Debt , and Footnote 14 , Related Party Transactions , of the Notes to Consolidated Financial Statements for additional information).

(1) Transactions for these line items were exclusively with related parties (refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity , Footnote 6 , Debt , and Footnote 14 , Related Party Transactions , of the Notes to Consolidated Financial Statements for additional information).

Gross proceeds from related parties for the issuance of convertible redeemable preferred stock were $ 204.0 million.

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("Shareablee"), to acquire Shareablee in exchange for shares of the Company's Common Stock and contingent consideration payable subject to the achievement of certain conditions set forth in the Merger Agreement.

Refer to Footno t e 3 , Business Combination.

Refer to Footnote 3 , Business Combination.

Operating segments are defined as components of a business that can earn revenues and incur expenses for which discrete financial information is available that is evaluated on a regular basis by the chief operating decision maker ("CODM").

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Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation.

Specifically, non-current contract liabilities have been aggregated within other non-current liabilities on the Consolidated Balance Sheets.

Specifically, principal payments on capital lease and software license arrangements, payments for taxes related to net share settlement of equity awards, and proceeds from the exercise of stock options have been aggregated within other financing activities on the Consolidated Statements of Cash Flows.

Use of Estimates and Judgments in the Preparation of the Consolidated Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the reporting periods.

Significant estimates and judgments are inherent in the analysis and the measurement of:

management's standalone selling price ("SSP"), principal versus agent revenue recognition, determination of performance obligations, determination of transaction price, including the determination of variable consideration and allocation of transaction price to performance obligations, deferred tax assets and liabilities, including the identification and quantification of income tax liabilities due to uncertain tax positions, the valuation and recoverability of goodwill and intangible assets, the determination of appropriate discount rates for lease accounting, the probability of exercising either lease renewal or termination clauses, the assessment of potential loss from contingencies, the fair value determination of contingent consideration from business combinations, financing-related liabilities and warrants, and the valuation of options, performance-based and market-based stock awards.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the reporting periods.

Significant estimates and judgments are inherent in the analysis and the measurement of management's SSP, principal versus agent revenue recognition, determination of performance obligations, determination of transaction price, including the determination of variable consideration and allocation of transaction price to performance obligations, deferred tax assets and liabilities, including the identification and quantification of income tax liabilities due to uncertain tax positions, the valuation and recoverability of goodwill, intangible and other long-lived assets, the determination of appropriate discount rates for lease accounting, the probability of exercising either lease renewal or termination clauses, the assessment of potential loss from contingencies, the fair value determination of contingent consideration from business combinations, financing-related liabilities and warrants, and the valuation of options, performance-based and market-based stock awards.

Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances.

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Preferred Stock

In 2021, the Company issued shares of Series B Convertible Preferred Stock ("Preferred Stock") as described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity .

The change of control put option was determined to be a derivative liability.

As of December 31, 2021, the probability of a change of control was determined to be remote, and the fair value of the change of control derivative was determined to be negligible.

In 2021, the Company entered into separate Securities Purchase Agreements with each of Charter Communications Holding Company, LLC ("Charter"), Qurate Retail, Inc.

("Qurate") and Pine Investor, LLC ("Pine") (the "Securities Purchase Agreements") for the issuance and sale of shares of Series B Convertible Preferred Stock, par value $ 0.001 ("Preferred Stock") as described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity .

The issuance of the Preferred Stock pursuant to the Securities Purchase Agreements (the "Transactions") and related matters were approved by the Company's stockholders on March 9, 2021 and completed on March 10, 2021.

The Preferred Stock is contingently redeemable upon certain deemed liquidation events, such as a change in control.

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The Company's derivative financial instruments are not hedges and do not qualify for hedge accounting.

Changes in the fair value of these instruments are recorded in other (expense) income, net in the Consolidated Statements of Operations and Comprehensive Loss.

Changes in the fair value of these instruments are recorded in other income (expense), net in the Consolidated Statements of Operations and Comprehensive Loss.

The fair values of the financing derivatives were estimated using forward projections and were discounted back at rates commensurate with the remaining term of the related derivatives.

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The Company considers highly liquid investments with an original maturity of three months or less at the time of purchase and qualifying money-market funds as cash equivalents.

As of December 31, 2021, restricted cash represents security deposits for subleased office space.

As of December 31, 2020, restricted cash primarily represents the Company's requirement to collateralize the Secured Term Note and outstanding letters of credit.

As of December 31, 2022 and December 31, 2021, restricted cash represents security deposits for subleased office space.

Allowance for Doubtful Accounts

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Beginning Balance $ ( 1,173 ) $ ( 2,757 ) $ ( 1,919 )

Bad debt benefit (expense) 80 ( 1,693 ) ( 727 )

Bad debt (expense) benefit ( 312 ) 80 ( 1,693 )

Recoveries ( 126 ) ( 161 ) ( 300 )

11 unchanged sentences

Once this software is ready for use in the Company's products, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is typically assessed to be 2 to 3 years.

During the years ended December 31, 2021, 2020 and 2019, the Company capitalized $ 18.9 million (including $ 4.6 million recorded as part of the acquisition of Shareablee), $ 15.0 million, and $ 11.9 million in internal-use software costs, respectively.

During the years ended December 31, 2022, 2021 and 2020, the Company capitalized $ 17.2 million, $ 18.9 million (including $ 4.6 million recorded as part of the acquisition of Shareablee), and $ 15.0 million in internal-use software costs, respectively.

The Company depreciated $ 15.1 million, $ 12.8 million and $ 9.1 million in capitalized internal-use software costs during the years ended December 31, 2022, 2021 and 2020, respectively.

Business Combination

In 2021, the Company acquired Shareablee as described in Footnote 3 , Business Combination .

The purchase consideration was allocated to all tangible and intangible assets acquired, and liabilities assumed, based upon their acquisition-date fair values.

Contract assets and liabilities were measured in accordance with revenue recognition principles.

Any excess purchase consideration was recorded as goodwill.

Acquisition-related costs were expensed as incurred.

Definite-lived intangible assets were recognized for acquired methodologies and technology, as well as customer relationships.

The fair value of the acquired methodologies and technology was estimated using the multi-period excess earnings method of the income approach.

This technique is based on projected financial information for the useful life of the asset, adjusted for technological obsolescence rates and a contributory asset charge, to determine the cash flows attributable to the asset.

These cash flows are then discounted back to the acquisition date using an appropriate rate of return.

The selected discount rate was 26.0 %.

The fair value of the customer relationships was estimated using a "with and without" method of the income approach.

This technique compares the cash flows from the existing customer relationship revenues

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to cash flows in a scenario where the Company would have to re-create those customer relationship revenues using cash from its business.

These cash flows are then discounted back to the acquisition date using an appropriate rate of return.

The selected discount rate was 24.0 %.

A component of the purchase consideration is payable contingent on the achievement of certain contractual milestones or future revenue performance.

This contingent consideration is classified as a liability due to the fact it will be settled in cash or a variable number of shares (or a combination thereof), and the amount of the payment is not dependent upon the fair value of the Company's Common Stock.

In December 2021, the Company and two newly formed, wholly owned subsidiaries of the Company entered into the Merger Agreement with Shareablee, pursuant to which the Company acquired Shareablee (the "Merger") as described in Footnote 3 , Business Combination .

Total consideration paid or payable by the Company related to the Merger (valued as of the closing date of the Merger) was $ 31.4 million, which included $ 5.6 million for the fair value of contingent consideration payable based on the achievement of certain contractual milestones or future revenue performance.

The maximum amount of contingent consideration payable under the Merger is $ 8.6 million.

The contingent consideration is classified as a liability due to the fact it will be settled in cash or a variable number of shares of the Company's common stock, par value $ 0.001 (the "Common Stock") (or a combination thereof), and the amount of the payment is not dependent upon the fair value of the Common Stock.

The contingent consideration liability is measured at fair value on a recurring basis until the contingency is resolved.

The fair value of the contingent consideration liability is estimated using a combination of valuation techniques.

The primary technique is an option pricing model within a Monte Carlo simulation that determines an average projected payment value across numerous iterations.

This technique determines projected payments based on simulated revenues derived from an internal forecast, adjusted for a selected revenue volatility and risk premium based on market data for comparable guideline public companies.

The secondary technique is a discounted cash flow model that assumes achievement of the contractual milestones, resulting in payment of the full deferred amount.

One technique is an option pricing model within a Monte Carlo simulation that determines an average projected payment value across numerous iterations.

This technique

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determines projected payments based on simulated revenues derived from an internal forecast, adjusted for a selected revenue volatility and risk premium based on market data for comparable guideline public companies.

The other technique is a discounted cash flow model that assumes achievement of the contractual milestones, resulting in payment of the full deferred amount.

In both techniques, the projected payments are then discounted back to the valuation date at the Company's cost of debt using a term commensurate with the contractual payment dates.

The contingent consideration liability will be measured at fair value on a recurring basis until the contingency is resolved.

Changes in the estimated fair value of the contingent consideration liability will be reflected in operating income or expense in the Consolidated Statements of Operations and Comprehensive Loss, and could have a material impact on our operating results.

In April 2022, the contingency was resolved and the full amount was deemed payable, subject to reduction for any pending indemnification claims and other terms set forth in the Merger Agreement.

The resolution of this contingency eliminated the option pricing model as a valuation technique, and the fair value was remeasured using only the discounted cash flow model.

In December 2022, the Company elected to settle the first installment of $ 3.7 million in cash.

This amount remained outstanding as of December 31, 2022 and is scheduled to be paid in the first quarter of 2023.

The Company expects to settle the remaining liability in two additional installments of $ 3.7 million and $ 1.2 million payable in any combination of cash and Common Stock (at the Company's election) in December 2023 and 2024, respectively.

The estimated fair value of the contingent consideration liability as of December 31, 2022 was $ 8.2 million.

The loss due to change in fair value of $ 2.6 million for the year ended December 31, 2022 was classified within general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss.

Refer to Footnote 7 , Fair Value Measurements , for additional information on the fair value of the contingent consideration.

Cloud Computing Implementation Costs

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Amortization costs are classified within general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss.

The Company recorded $ 0.7 million of amortization expense for the year ended December 31, 2021.

The Company recorded $ 1.4 million and $ 0.7 million of amortization expense for the years ended December 31, 2022 and 2021, respectively.

Goodwill and Intangible Assets

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It is possible that future changes in such circumstances, or in the variables associated with the judgments, assumptions and estimates used in assessing the fair value of the reporting unit, would require the Company to record a material non-cash impairment charge.

The Company completed its annual assessment on October 1, 2021, and there was no impairment of goodwill at the assessment date.

No goodwill impairment charges were recognized during the years ended December 31, 2021 and 2020.

The Company performed an interim analysis as of June 30, 2019, and determined that goodwill was then impaired.

Refer to Footnote 10 , Goodwill and Intangible Assets for further information.

The Company completed its annual assessment on October 1, 2019, and there was no additional impairment of goodwill at the assessment date.

As of September 30, 2022, the Company concluded that it was more likely than not that the estimated fair value of its reporting unit was less than its carrying value.

In its assessment, the Company considered the decline in the Company's stock price and market capitalization among other factors.

The Company performed a quantitative goodwill impairment test using a discounted cash flow model, supported by a market approach.

The Company's reporting unit did not pass the goodwill impairment test, and as a result the Company recorded a $ 46.3 million non-cash impairment charge during the three

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months ended September 30, 2022 and year ended December 31, 2022.

Refer to Footnote 10 , Goodwill and Intangible Assets for further information.

No goodwill impairment charges were recognized during the years ended December 31, 2021 and 2020.

Intangible assets with finite lives are generally amortized using the straight-line method over the following useful lives:

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Customer relationships 6 to 11

Intellectual property 2 to 13

Trade Names 2 to 6

Intellectual property 16

The Company evaluates its definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of such assets may not be recoverable.

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The fair value is determined based on valuation techniques such as a comparison to fair values of similar assets or using a discounted cash flow analysis.

The Company performed an interim analysis as of June 30, 2019, as events or changes in circumstances indicated the carrying value of certain intangible assets may not be recoverable, and determined that the Company's strategic alliance (the "strategic alliance") with WPP plc and its affiliates ("WPP") was impaired.

Refer to Footnote 10 , Goodwill and Intangible Assets for further information.

Although the Company believes that the carrying values of its goodwill and definite-lived intangible assets are appropriately stated as of December 31, 2022, changes in strategy or market conditions, significant technological developments or significant changes in legal or regulatory factors could significantly impact these judgments and require adjustments to recorded asset balances.

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The Company performed an interim analysis as of March 31, 2020, as changes in market conditions indicated the carrying value of certain facility lease ROU and other long-lived assets may not be recoverable, and determined that certain ROU assets, and related leasehold improvements, were impaired.

The Company recorded a $ 4.7 million non-cash impairment charge related to its ROU assets and related leasehold improvements.

The Company recorded a $ 4.7 million non-cash impairment charge related to its ROU assets and related leasehold improvements in 2020.

The impairment charge was driven by changes in the Company's projected undiscounted cash flows for certain properties, primarily as a result of changes in the real estate market related to the COVID-19 pandemic, that led to an increase in the estimated marketing time, and a reduction of expected receipts, for properties on the market for sublease.

The fair value of these ROU assets, and related leasehold improvements, was estimated using an income approach and a discount rate of 12.0 %.

The Company performed an analysis in the fourth quarter of 2022 related to the execution of a sublease for a property for which expected cash receipts were less than the disbursements for the lease.

The Company recorded a $ 0.2 million non-cash impairment charge related to the ROU asset in 2022.

The fair value of the ROU asset was estimated using an income approach and a discount rate of 7.4 %.

Although the Company believes that the carrying values of its other long-lived assets are appropriately stated as of December 31, 2022, changes in strategy or market conditions, significant technological developments or significant changes in legal or regulatory factors could significantly impact these judgments and require adjustments to recorded asset balances.

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The warrants were determined to be freestanding financial instruments that qualify for liability treatment as a result of net cash settlement features associated with a cap on the issuance of shares, under certain circumstances, or upon a change of control.

Changes in the fair value of these instruments are recorded in other (expense) income, net in the Consolidated Statements of Operations and Comprehensive Loss.

Changes in the fair value of these instruments are recorded in other income (expense), net in the Consolidated Statements of Operations and Comprehensive Loss.

The fair value of each warrant is estimated utilizing an option pricing model supplemented with a Monte Carlo simulation in periods with multiple warrants outstanding where certain features resulted in additional valuation complexity.

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An ROU asset and lease liability are not recorded for short-term leases with an initial term of 12 months of less.

The Company has elected to combine lease and non-lease payments and account for them together as a single lease component, which increases the carrying amount of the ROU assets and lease liabilities.

The Company has elected to combine lease and non-lease components and account for them together as a single lease component, which increases the carrying amount of the ROU assets and lease liabilities.

Non-lease components primarily include payments for common-area maintenance, utilities and other pass-through charges.

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Customers may obtain the control of promised goods or services over time or at a point in time.

Subscription-based revenues, and other products delivered continuously through a user interface, are recognized on a straight-line basis over an access period that can range from three months to five years .

Subscription-based revenues, and other products delivered continuously through a user interface, are recognized on a straight-line basis over an access period specified within the respective contract.

Revenues for impression-based products are typically recognized over time, on a time-elapsed basis, as the customer is continuously consuming and receiving the benefits of campaign measurement, or an output method, such as volume of impressions processed during a discrete period.

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In these arrangements, the Company assesses which party controls the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment, inventory risk, and discretion in establishing price.

The Company enters into a limited number of monetary contracts with multichannel video programming distributors ("MVPDs") that involve both the purchase and sale of services with a single counterparty.

The Company enters into a limited number of monetary contracts with MVPDs that involve both the purchase and sale of services with a single counterparty.

Each contract is assessed to determine if the revenue and expense should be presented gross or net.

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Any excess consideration above the established SSP of services is presented as a reduction to cost of revenues in the Consolidated Statements of Operations and Comprehensive Loss.

The fair value of non-cash consideration included in revenues during the years ended December 31, 2021 and 2020 totaled $ 4.0 million and $ 0.9 million, respectively.

The fair value of non-cash consideration included in cost of revenues during the years ended December 31, 2021 and 2020 totaled $ 3.9 million and $ 1.6 million, respectively.

No non-cash consideration was included in revenues or cost of revenues during the year ended December 31, 2019.

The fair value of non-cash consideration included in revenues during the years ended December 31, 2022, 2021and 2020 totaled $ 3.9 million, $ 4.0 million, and $ 0.9 million, respectively.

The fair value of non-cash consideration included in cost of revenues during the years ended December 31, 2022, 2021 and 2020 totaled $ 4.1 million, $ 3.9 million and $ 1.6 million, respectively.

Contract Balances

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Capitalized costs are assessed for recoverability at each reporting period.

These costs are included in

These costs are included in cost of revenues and are recognized in the same manner as the corresponding performance obligation.

For the years ended December 31, 2022, 2021 and 2020, amortized and expensed contract costs were zero , $ 2.7 million and $ 1.4 million, respectively.

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cost of revenues and are recognized in the same manner as the corresponding performance obligation.

For the years ended December 31, 2021, 2020 and 2019, amortized and expensed contract costs were $ 2.7 million, $ 1.4 million and $ 1.9 million, respectively.

Cost of Revenues

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Research and development expenses consist primarily of salaries, stock-based compensation, benefits and related costs for personnel associated with research and development activities, as well as allocated overhead, including rent and other facilities related costs, and depreciation.

Investigation and Audit Related

Investigation expenses are professional fees associated with legal and forensic accounting services rendered as a result of an internal Audit Committee investigation into matters related to the Company's revenue recognition practices, disclosures, internal controls, corporate culture and employment practices prior to 2017.

Audit related expenses consist of professional fees associated with accounting related consulting services and external auditor fees associated with the audit of the Company's prior-year financial statements.

Also included are litigation related expenses, which include legal fees associated with various lawsuits or investigations that were initiated either directly or indirectly as a result of the Audit Committee's investigation.

Other (Expense) Income, Net

Other (expense) income, net represents income and expenses incurred that are generally not recurring in nature or are not part of the Company's normal operations.

The following is a summary of the significant components of other (expense) income, net:

Other Income (Expense), Net

Other income (expense), net represents income and expenses incurred that are generally not recurring in nature or are not part of the Company's normal operations.

The following is a summary of the significant components of other income (expense), net:

Years Ended December 31,

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Change in fair value of warrants liability 9,802 ( 7,689 ) 4,894

Change in fair value of investment in equity securities — — ( 2,324 )

Other ( 17 ) 111 ( 627 )

Total other (expense) income, net $ ( 5,778 ) $ 14,554 $ 1,654

Total other income (expense), net $ 9,785 $ ( 5,778 ) $ 14,554

Debt Issuance Costs

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The fair value of restricted stock units ("RSUs") is based on the closing price of the Company's Common Stock on the grant date.

The Company amortizes the fair value of awards expected to vest on a straight-line basis over the

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requisite service periods of the awards, which is generally the period from the grant date to the end of the vesting period.

The Company amortizes the fair value of awards expected to vest on a straight-line basis over the requisite service periods of the awards, which is generally the period from the grant date to the end of the vesting period.

The determination of the fair value of the Company's stock option awards is based on a variety of factors, including, but not limited to, the Company's Common Stock price, risk-free rate, expected stock price volatility over the expected life of awards, and the expected term of the option.

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Stock awards that contain performance vesting conditions are excluded from diluted earnings per share ("EPS") computations until the contingency is met as of the end of that reporting period.

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For awards with both service and market conditions, the Company recognizes compensation cost over the remaining service period, with the effect of the market condition reflected in the determination of the award's fair value at the grant date.

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net deferred tax assets, these provisions have not had a material impact on the Company's consolidated financial statements.

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Beginning in 2022, the TCJA eliminated the option to immediately deduct research and experiment ("R&E") expenditures in the year incurred pursuant to Internal Revenue Code Section 174 ("Section 174").

The amended provision under Section 174 requires taxpayers to capitalize and amortize these expenditures over five years for research performed in the U.S.

and over 15 years for research performed outside the U.S.

While it is possible that Congress may defer, modify or repeal this provision, potentially with retroactive effect, it was not deferred, modified or repealed as of December 31, 2022.

Due to the Company's federal and state net operating loss ("NOL") carryforwards, the amended provision under Section 174 only increased the Company's state cash taxes payable and reduced its cash flow from operating activities by an immaterial amount in 2022.

The capitalized R&E expenditure merely caused a reclassification between the NOL deferred tax asset and capitalized R&E deferred tax asset as of December 31, 2022.

Because the Company's deferred tax assets have a full valuation allowance against them, the amended provision under Section 174 did not impact the Company's tax rate or results of operations.

Loss Per Share

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Under the two-class method, earnings for the period are allocated between common stockholders and participating security holders based on their respective rights to receive dividends as if all undistributed book earnings for the period were distributed.

Basic loss per share is computed by dividing net loss attributable to only the common stockholders by the weighted-average number of common shares outstanding for the period.

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Basic loss per share is computed by dividing net loss available to only the common stockholders by the weighted-average number of common shares outstanding for the period.

Diluted loss per share includes the effect of potential common shares, such as the Company's Preferred Stock, Notes, warrants, stock options, restricted stock units and deferred stock units, to the extent the effect is dilutive.

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Years Ended December 31,

2022 2021 2020

Preferred stock (1)

85,708,360 66,926,499 —

Warrants 5,457,026 5,457,026 6,306,964

Stock options, restricted stock units and deferred stock units 4,981,624 5,073,980 3,898,327

Contingent Consideration (2)

4,220,690 — —

Senior secured convertible notes — 1,232,483 6,519,655

Total 100,367,700 78,689,988 16,724,946

(1) Includes the effect of potential Common Stock that would be issued to settle unpaid dividends accrued to holders of the Preferred Stock if they elected to convert their shares at the beginning of the period (or at the time of issuance, if later).

(2) A contingent consideration liability was recognized as part of the acquisition described in Footnote 3 , Business Combination.

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Settlement of this liability in Common Stock could potentially dilute basic earnings per share in future periods.

The Company calculated a potential anti-dilutive share count based on the maximum potential payments of $ 8.6 million and the $ 3.34 per share closing price of the Company's Common Stock on the Nasdaq Global Select Market on December 31, 2021.

The Company calculated a potential anti-dilutive share count based on the maximum contingent consideration as of December 31, 2022 of $ 4.9 million and the $ 1.16 per share closing price of the Company's Common Stock on the Nasdaq Global Select Market on December 30, 2022.

The impact was determined to be negligible for 2021 based on the period the liability was outstanding.

For the year ended December 31, 2021, dividends to holders of the Preferred Stock, including those both paid and accrued, totaled $ 12.6 million.

For the year ended December 31, 2022, dividends paid to holders of the Preferred Stock totaled $ 15.5 million.

These dividends have been included in calculating the total loss available to common stockholders used in the calculation of basic and diluted loss per share.

Other Accounting Standards Recently Adopted

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which simplifies the accounting for income taxes primarily by eliminating certain exemptions.

The amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

An entity is permitted to early adopt any removed or modified disclosures upon issuance of the update and to delay adoption of the additional disclosures until their effective date.

The Company adopted the new standard effective January 1, 2021, which had no impact on the Consolidated Financial Statements or related disclosures.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), which addresses the accounting for contract assets and liabilities from revenue contracts with customers in a business combination.

The amendments require acquiring entities to apply Accounting Standards Codification ("ASC") 606 to recognize and measure contract assets and contract liabilities in a business combination.

The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

An entity is permitted to early adopt.

The Company adopted the new standard effective January 1, 2021, which did not have a material impact on the Consolidated Financial Statements or related disclosures.

Business Combination

On December 16, 2021, the Company and two newly formed, wholly owned subsidiaries of the Company entered into the Merger Agreement (the "Merger") with Shareablee.

On December 16, 2021, the Company and two newly formed, wholly owned subsidiaries of the Company entered into the Merger Agreement with Shareablee, pursuant to which the Company acquired Shareablee.

Total consideration payable to the former holders of Shareablee's capital stock and warrant, and certain underlying equity awards that were assumed by the Company, totaled 9,128,964 shares of Common Stock.

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Lastly, the Merger Agreement required a portion of cash held in escrow at closing to be paid to the former holders of Shareablee securities.

Itzhak Fisher, a member of the Company's Board of Directors ("Board"), is a former director, stockholder and equity award holder of Shareablee.

Itzhak Fisher, a member of the Company's Board, is a former director, stockholder and equity award holder of Shareablee.

The fair value of Mr.

Fisher's issuable Common Stock and replacement stock options totaled $ 0.7 million at closing, of which $ 0.4

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million was recognized immediately as stock-based compensation expense and $ 0.3 million was classified as purchase consideration.

Fisher is also eligible to earn up to an additional $ 0.3 million in contingent consideration subject to the performance criteria described above.

Fisher's issuable Common Stock and replacement stock options totaled $ 0.7 million at closing, of which $ 0.4 million was recognized immediately as stock-based compensation expense and $ 0.3 million was classified as purchase consideration.

Fisher is also eligible to receive $ 0.3 million in contingent consideration pursuant to the terms described above.

The total consideration paid or payable by the Company related to the Merger was $ 31.4 million.

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The Company concluded any change in fair value between December 16, 2021 and December 31, 2021 was negligible.

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A summary of the total purchase consideration for Shareablee that was allocated to the acquired assets and liabilities based on their fair value as of the date of the Merger is as follows:

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By solution group :

Ratings and Planning (1)

$ 255,073 $ 253,652 $ 271,623

Analytics and Optimization (1)

81,306 69,080 74,725

Movies Reporting and Analytics 30,634 33,304 42,297

Digital Ad Solutions $ 212,510 $ 221,979 $ 213,504

Cross Platform Solutions 163,913 145,034 142,532

Total $ 376,423 $ 367,013 $ 356,036

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Total $ 376,423 $ 367,013 $ 356,036

(1) In the second quarter of 2020, the Company began classifying revenue from certain new and extended custom agreements for services that utilize its syndicated data set, previously classified under Analytics and Optimization, as Ratings and Planning.

The impact was not material to either solution group.

Contract Balances

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Current and non-current contract assets as of December 31, 2022 increased from the prior year due primarily to up-front recognition of revenue pertaining to license fees in connection with a multi-year agreement that will be billed over the contract term.

Non-current contract liabilities as of December 31, 2021 decreased from the prior year as revenue was recognized on a multi-year contract that had a large upfront payment received in 2020.

Significant changes in the current contract liabilities balances are as follows:

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Remaining Performance Obligations

As of December 31, 2021, approximately $ 210 million of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied) under long-term contracts.

As of December 31, 2022, approximately $ 220 million of revenue is expected to be recognized from remaining performance obligations that are unsatisfied (or partially unsatisfied) for non-cancelable contracts with an original expected duration of longer than one year.

The Company expects to recognize revenue on approximately 50 % of these remaining performance obligations in 2023, and approximately 25 % in 2024, with the remainder recognized thereafter.

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The conversion right is subject to certain anti-dilution adjustments and customary provisions related to partial dividend periods.

As of December 31, 2021, each share of Preferred Stock was convertible into 1.038542 shares of Common Stock.

As of December 31, 2022, each share of Preferred Stock was convertible into 1.038542 shares of Common Stock, with such assumed conversion rate scheduled to return to 1.00 upon payment of accrued dividends on June 30, 2023.

At any time after the fifth anniversary of the Closing Date, the Company may elect to convert all of the outstanding shares of Preferred Stock into shares of Common Stock if (i) the closing sale price of the Company's Common Stock is greater than 140 % of the conversion price as of such time, as may be adjusted pursuant to the Certificate of Designations, for certain periods, and (ii) the pro rata share of an aggregate of $ 100.0 million in dividends has been paid with respect to each share of Preferred Stock that was outstanding on the Closing Date and remains outstanding.

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In the event the annual dividends are not paid in cash on the annual payment date, the dividends otherwise payable on such date shall continue to accrue and cumulate at a rate of 9.5 % per annum, until such failure is cured.

In addition, after January 1, 2022, the holders of Preferred Stock are entitled to request, and the Company will take all actions reasonably necessary to pay, a one-time dividend ("Special Dividend") equal to the highest dividend that the Company's Board determines can be paid at the applicable time (or a lesser amount agreed upon by the holders), subject to additional conditions and limitations set forth in a Stockholders Agreement entered into by the Company and the holders on the Closing Date (the "Stockholders Agreement").

In addition, the holders of Preferred Stock are entitled to request, and the Company will take all actions reasonably necessary to pay, a one-time dividend ("Special Dividend") equal to the highest dividend that the Company's Board determines can be paid at the applicable time (or a lesser amount agreed upon by the holders), subject to additional conditions and limitations set forth in a Stockholders Agreement entered into by the Company and the holders on the Closing Date (the "Stockholders Agreement").

As set forth in the Stockholders Agreement, the Company may be obligated to obtain debt financing in order to effectuate the Special Dividend.

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On June 30, 2021, in accordance with the Certificate of Designations of the Preferred Stock, the Company paid cash dividends totaling $ 4.8 million to the holders of the Preferred Stock, representing dividends accrued for the period from the Closing Date through June 29, 2021.

On June 30, 2022, in accordance with the Certificate of Designations of the Preferred Stock, the Company paid cash dividends 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.

For the year ended December 31, 2021, dividends to holders of the Preferred Stock, including those both paid and accrued, totaled $ 12.6 million.

As of December 31, 2022, accrued dividends to holders of the Preferred Stock totaled $ 7.9 million.

Anti-Dilution Adjustments

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The Private Placement closed on June 26, 2019 (the "CVI Closing Date").

The Series B-1 Warrants and Series B-2 Warrants expired during 2020.

The Series B-1 Warrants and Series B-2 Warrants expired in 2020.

The Series C Warrants were exercised on October 10, 2019.

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2018 Equity and Incentive Compensation Plan

The Company's stockholders approved the 2018 Equity and Incentive Compensation Plan (the "2018 Plan") at the Company's 2018 Annual Meeting and approved an amendment and restatement of the 2018 Plan at the Company's 2020 Annual Meeting.

Under the 2018 Plan, as amended and restated, the Company may grant option rights, appreciation rights, restricted stock awards, restricted stock units, performance shares and performance units up to 20,250,000 shares of Common Stock.

The Company's stockholders approved the 2018 Equity and Incentive Compensation Plan (the "2018 Plan") at the Company's 2018 Annual Meeting, approved an amendment and restatement of the 2018 Plan at the Company's 2020 Annual Meeting, and approved a further amendment of the 2018 Plan at the Company's 2022 Annual Meeting.

Under the 2018 Plan, as amended, the Company may grant option rights, appreciation rights, restricted stock awards, restricted stock units, performance shares and performance units up to 27,850,000 shares of Common Stock.

The aggregate number of shares of Common Stock available will be reduced by:

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No options were approved and awarded for the year ended December 31, 2021 under the 2018 Plan.

On December 16, 2021, the Company assumed all outstanding stock options to purchase shares of Shareablee common stock as part of the Merger.

Each assumed Shareablee stock option was converted into 0.330437 stock options of the Company, rounded up to the nearest whole option, resulting in 1,006,383 stock options of the Company.

The as-converted exercise price per share for assumed Shareablee stock options is equal to the original exercise price per share of the Shareablee options divided by 0.330437 , with such quotient rounded up to the nearest whole cent.

Each assumed Shareablee stock option is otherwise subject to the same terms and conditions (including vesting and exercisability) as were applicable under the respective Shareablee stock option immediately prior to the Merger.

The fair values of options at the date of grant, or when assumed by the Company, were estimated using the Black-Scholes option pricing model utilizing the following assumptions:

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Expected life of options (in years) (4)

6.00 5.21 - 10.00

(1) The Company has never declared or paid a cash dividend on its Common Stock and has no plans to pay cash dividends on Common Stock in the foreseeable future.

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Options forfeited ( 60,000 ) 5.38

Options expired ( 456,775 ) 15.92

Options outstanding as of December 31, 2020 997,192 $ 9.82

Options assumed (1)

Options expired ( 203,006 ) 14.83

Options outstanding as of December 31, 2021 1,783,055 $ 4.45

Options granted 948,000 2.50

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Options outstanding as of December 31, 2022 2,283,987 $ 2.42

Options assumed (1)

Options expired ( 203,006 ) 14.83

Options outstanding as of December 31, 2021 1,783,055 $ 4.45

Options exercisable as of December 31, 2022 1,131,404 $ 2.59

(1) Excludes 17,514 stock options which will be settled in cash in lieu of the issuance of Common Stock of the Company.

(1) Excludes 17,514 stock options settled in cash in lieu of the issuance of Common Stock of the Company.

The following table summarizes information about options outstanding, and exercisable, as of December 31, 2022:

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2,283,987 $ 2.42 7.62 1,131,404 $ 2.59 5.96

6,057 40.80 2.62 6,057 40.80 2.62

1,783,055 $ 4.45 6.57 778,790 $ 7.29 5.46

The intrinsic value of exercised stock options is calculated based on the difference between the exercise price and the quoted market price of the Company's Common Stock as of the close of the exercise date.

The aggregate intrinsic value for options exercised was zero , $ 0.1 million and $ 0.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The aggregate intrinsic value for all options exercisable was $ 0.5 million, zero and $ 0.2 million under the Company's stock plans as of December 31, 2021, 2020 and 2019, respectively.

The aggregate intrinsic value for all options outstanding was $ 2.2 million, zero and $ 0.9 million under the Company's stock plans as of December 31, 2021, 2020 and 2019, respectively.

The aggregate intrinsic value for options exercised was $ 0.1 million, zero and $ 0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The aggregate intrinsic value for all options exercisable was $ 0.1 million, $ 0.5 million and zero under the Company's stock plans as of December 31, 2022, 2021 and 2020, respectively.

The aggregate intrinsic value for all options outstanding was $ 0.1 million, $ 2.2 million and zero under the Company's stock plans as of December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, the total unrecognized compensation expense related to outstanding, but not yet exercisable, options is $ 1.7 million, which the Company expects to recognize over a weighted-average vesting period of approximately 3.4 years.

The Company's outstanding stock awards are comprised of RSUs, including time-based, performance-based and market-based RSUs.

During 2022, the Company's Compensation Committee (or Board of Directors, as applicable) approved and awarded 1,738,592 time-based RSUs (of which 679,304 RSUs related to the settlement of an accrued 2021 annual incentive plan liability and vested immediately) and 620,000 market-based RSUs under the 2018 Plan to employees of the Company.

The market-based RSUs vest over 10 years and are contingent on certain stock-price hurdles.

During 2021, the Company's Compensation Committee (or Board of Directors, as applicable) approved and awarded 2,464,694 time-based RSUs (of which 1,413,290 RSUs related to the settlement of an accrued 2020 annual incentive plan liability and vested immediately) and 2,127,920 performance-based RSUs under the 2018 Plan to employees and directors of the Company.

The performance-based RSUs pertained to awards approved by our Board of Directors as part of the Transactions on January 7, 2021, which awards included the closing of the Transactions as an implied performance condition.

The performance-based RSUs pertained to awards approved by the Company's Board of Directors as part of the Transactions on January 7, 2021, which awards included the closing of the Transactions as an implied performance condition.

Of these performance-based RSUs, 772,686 vested immediately upon the closing of the Transactions.

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On December 16, 2021, the Company assumed all outstanding RSUs representing the right to receive shares of Shareablee common stock as part of the Merger.

Each assumed Shareablee RSU was converted into 0.330437 RSUs of the Company, resulting in 55,702 RSUs of the Company.

Each assumed Shareablee RSU was converted into 0.330437 RSUs of the Company, resulting in 55,702 RSUs of the

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Each assumed Shareablee RSU is otherwise subject to the same terms and conditions (including as to vesting and issuance) as were applicable under the respective Shareablee RSU immediately prior to the Merger.

During 2020, the Company's Compensation Committee approved and awarded 634,570 time-based RSUs (of which 610,590 RSUs related to the settlement of an accrued 2019 annual incentive plan liability and vested immediately).

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During 2019, the Company's Compensation Committee approved and awarded 1,603,866 time-based RSUs (of which 206,108 RSUs related to the settlement of an accrued 2018 annual incentive plan liability) and 975,000 market-based RSUs, which were valued using a Monte Carlo simulation analysis, to employees, directors and consultants of the Company.

Of the time-based RSUs, 581,491 vested immediately upon grant.

The remaining time-based RSUs generally vest after one to three years contingent on continued service.

Market-based awards generally vest over up to ten years based on the achievement of certain stock-price hurdles.

A summary of the stock awards granted, vested and forfeited during the years ended December 31, 2022, 2021 and 2020 is presented as follows.

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Granted 4,592,614 3.13

Assumed 55,702 3.14

Vested ( 2,362,963 ) 4.68

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Granted 2,358,592 2.04

Assumed 55,702 3.14

Vested ( 1,493,121 ) 4.01

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As of December 31, 2022, total unrecognized compensation expense related to unvested RSUs was $ 3.6 million, which the Company expects to recognize over a weighted-average vesting period of approximately 3.9 years.

Revolving Credit Agreement

On May 5, 2021, the Company entered into a senior secured revolving credit agreement (the "Revolving Credit Agreement") among the Company, as borrower, certain subsidiaries of the Company, as guarantors, Bank of America N.A., as administrative agent (in such capacity, the "Agent"), and the lenders from time to time party thereto.

The Revolving Credit Agreement had an original borrowing capacity equal to $ 25.0 million and bore interest on borrowings at a Eurodollar Rate (as defined in the Revolving Credit Agreement) that was based on LIBOR.

The Company may also request the issuance of letters of credit under the Revolving Credit Agreement in an aggregate amount up to $ 5.0 million, which reduces the amount of available borrowings by the amount of such issued and outstanding letters of credit.

The facility has a maturity of three years from the closing date of the agreement.

On February 25, 2022, the Company entered into an amendment (the "2022 Amendment") to the Revolving Credit Agreement to expand its aggregate borrowing capacity from $ 25.0 million to $ 40.0 million.

The 2022 Amendment also replaced the Eurodollar Rate with a SOFR-based interest rate and modified the Applicable Rate definition in the Revolving Credit Agreement to increase the Applicable Rate payable on SOFR-based loans to 2.50 % .

The 2022 Amendment also modified certain financial covenants under the Revolving Credit Agreement.

As of December 31, 2022, the Revolving Credit Agreement required the Company to maintain:

• minimum Consolidated EBITDA (as defined in the Revolving Credit Agreement) of not less than $ 20.0 million for the most recently ended four fiscal quarter period, tested as of the last day of each fiscal quarter ending on or before December 31, 2022;

• a minimum Consolidated Asset Coverage Ratio (as defined in the Revolving Credit Agreement) of not less than 1.5 to 1.0, tested as of the last day of each fiscal quarter ending on or before December 31, 2022;

• a minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Revolving Credit Agreement) of not less than 1.25 to 1.0 for the most recently ended four fiscal quarter period, tested as of the last day of each fiscal quarter ending on or after March 31, 2023.

On February 24, 2023, the Company entered into an additional amendment (the "2023 Amendment") to the Revolving Credit Agreement that modified the financial covenants set forth above, introduced a minimum liquidity covenant, and increased the Applicable Rate payable on SOFR-based loans.

Refer to Footnote 16 , Subsequent Events for additional information about the 2023 Amendment.

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The Revolving Credit Agreement contains restrictive covenants that limit the Company's ability to, among other things, incur additional indebtedness or liens, make investments and loans, enter into mergers and acquisitions, make or declare dividends and other payments, enter into certain contracts, sell assets and engage in transactions with affiliates.

The Revolving Credit Agreement is also subject to customary events of default, including a change in control.

If an event of default occurs and is continuing, the Agent or the Required Lenders may accelerate any amounts outstanding and terminate lender commitments.

The Company was in compliance with the covenants under the Revolving Credit Agreement as of December 31, 2022.

The Revolving Credit Agreement is guaranteed by the Company and its domestic subsidiaries (other than Excluded Subsidiaries (as defined in the Revolving Credit Agreement)) and is secured by a first lien security interest in substantially all assets of the Company and its domestic subsidiaries (other than Excluded Subsidiaries), subject to certain customary exclusions.

As of December 31, 2022, the Company had outstanding borrowings of $ 16.0 million, and issued and outstanding letters of credit of $ 3.4 million, under the amended Revolving Credit Agreement, with remaining borrowing capacity of $ 20.6 million.

Senior Secured Convertible Notes and Financing Derivatives

During 2018, the Company entered into certain agreements with funds affiliated with or managed by Starboard Value LP (collectively, "Starboard"), pursuant to which the Company issued and sold to Starboard a total of $ 204.0 million in Notes, which initially accrued interest at 6.0 %, as well as warrants to purchase shares of the Company's Common Stock, par value $ 0.001 per share, in exchange for $ 100.0 million in cash and 4,000,000 shares of Common Stock.

The warrants were exercised in full by Starboard on April 3, 2019 for 323,448 shares of Common Stock.

The warrants were exercised in full by Starboard in 2019.

The Notes contained, among other features, an interest rate reset feature which the Company determined represented an embedded derivative that must be bifurcated and accounted for separately from the Notes.

This feature reset the interest rate on the Notes based on the trading price of the Company's Common Stock.

In January 2019, the interest rate reset to 12.0 % where it was scheduled to remain through the contractual maturity of the Notes on January 16, 2022.

Interest on the Notes was payable on a quarterly basis in arrears, at the option of the Company, in cash, or, subject to certain conditions, through the issuance by the Company of additional shares of Common Stock ("PIK Interest Shares").

On January 25, 2021, the Company paid quarterly accrued interest of $ 6.1 million through the issuance of 2,802,454 PIK Interest Shares.

The interest paid was classified within other non-current liabilities in the Consolidated Balance Sheets as of December 31, 2020.

In connection with the Transactions described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity , the Company used cash proceeds of $ 204.0 million from the issuance of shares of its Preferred Stock to extinguish the Notes and related financing derivatives on March 10, 2021.

The Company also issued 3,150,000 additional shares to Starboard (the "Conversion Shares"), as additional creditor consideration, which were valued at $ 9.6 million based on the $ 3.05 closing price of the Company's Common Stock on March 9, 2021.

The Company also issued 3,150,000 additional shares to Starboard (the "Conversion Shares"), as additional creditor consideration, which were valued at $ 9.6 million.

Lastly, the Company paid interest accrued of $ 4.7 million for the period from January 1, 2021 to March 10, 2021 through the issuance of 1,363,327 PIK Interest Shares.

The Company adjusted the interest rate reset feature to its fair value on March 10, 2021 immediately prior to extinguishment.

The fair value of the interest reset derivative was estimated to be $ 9.5 million using a discounted cash flow method based on projected incremental cash flows

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through contractual maturity of the Notes and a credit-adjusted discount rate of 20.0 %.

The fair value of other financing derivatives embedded within the Notes was determined to be negligible.

The Company recorded a loss on extinguishment of the Notes of $ 9.3 million for the three months ended March 31, 2021.

The loss was comprised of a write-off of unamortized deferred financing costs and issuance discount of $ 9.2 million and issuance of Conversion Shares of $ 9.6 million, offset by the derecognition of the interest rate reset derivative liability valued at $ 9.5 million.

Secured Term Note

On December 31, 2019, the Company's wholly owned subsidiary, Rentrak B.V., entered into an agreement with several third parties for the Secured Term Note in exchange for gross proceeds of $ 13.0 million.

The Secured Term Note was scheduled to mature on December 31, 2021, was cash collateralized, and had an annual interest rate of 9.75 % that was payable monthly in arrears.

The Secured Term Note included a redemption feature which, upon the occurrence of certain fundamental transactions, would require the Company to redeem the Secured Term Note in full, plus accrued interest, and remit a prepayment premium equal to the remaining contractual interest cash flows (the "interest make-whole redemption").

The Company determined this feature represented an embedded derivative that must be bifurcated and accounted for separately from the Secured Term Note.

In connection with the Transactions described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity , the Company used restricted cash from its balance sheet to extinguish the Secured Term Note and interest make-whole redemption on March 10, 2021, of which $ 13.0 million and $ 1.0 million were for principal repayments and settlement of the interest make-whole redemption, respectively.

The Company recorded a loss on extinguishment of the Secured Term Note of $ 0.3 million for the three months ended March 31, 2021.

The loss was due to the write-off of unamortized deferred financing costs.

Changes in the fair value of the interest make-whole redemption were recorded to other (expense) income, net and settlement did not impact loss on debt extinguishment.

Revolving Credit Agreement

The Revolving Credit Agreement has a maturity of three years from the closing date of the agreement.

As of December 31, 2021, the Revolving Credit Agreement provided a borrowing capacity equal to $ 25.0 million.

The amount the Company is able to borrow is subject to compliance with the financial covenants, satisfaction of various conditions precedent to borrowing and other provisions of the Revolving Credit Agreement.

During the year ended December 31, 2021, borrowings under the Revolving Credit Agreement were made at the Eurodollar Rate and bore interest at a rate per annum equal to the Eurodollar Rate (as defined in the Revolving Credit Agreement) plus an applicable rate equal to 2.25 %.

The Revolving Credit Agreement also provides for an unused commitment fee equal to 0.25 % of the unused commitments at such time.

To the extent that a payment default exists and is continuing, at the election of the Required Lenders (as defined in the Revolving Credit Agreement), all amounts outstanding under the Revolving Credit Agreement will bear interest at 2.00 % per annum above the rate and margin otherwise applicable thereto.

The Company is able to repay any amounts borrowed prior to the maturity date without any premium or penalty other than customary breakage costs.

As of December 31, 2021, the Revolving Credit Agreement contained the following financial covenants, including the maintenance of certain financial ratios:

• a minimum Consolidated EBITDA (as defined in the Revolving Credit Agreement) of not less than $ 20.0 million for the most recently ended four fiscal quarter period, tested as of the last day of each fiscal quarter ending before June 30, 2022;

Additionally, the Revolving Credit Agreement contains restrictive covenants that limit the Company's ability to, among other things, incur additional indebtedness, incur additional liens, make investments and loans, enter into mergers and acquisitions, make or declare dividends and other payments, enter into certain contracts, sell assets and engage in transactions with affiliates.

The Revolving Credit Agreement is also subject to customary events of default, including a change in control.

If an event of default occurs and is continuing, the Agent or the Required Lenders may accelerate any amounts outstanding and terminate lender commitments.

The Company is in compliance with the covenants under the Revolving Credit Agreement as of December 31, 2021.

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As of December 31, 2021, the Company had outstanding borrowings of $ 16.0 million, and issued and outstanding letters of credit of $ 3.3 million, under the Revolving Credit Agreement, with remaining borrowing capacity of $ 5.7 million as of December 31, 2021.

On February 25, 2022, the Company amended the Revolving Credit Agreement to expand its aggregate borrowing capacity to $ 40.0 million, which increased the Company's remaining borrowing capacity to $ 20.7 million, and to revise the financial covenants described above.

See Footnote 15 , Subsequent Events for further discussion of this amendment.

Failed Sale-Leaseback Transaction

In June 2019, the Company entered into a sale-leaseback arrangement with a vendor to provide $ 4.3 million in cash proceeds for previously acquired computer and other equipment.

The arrangement is repayable over a 24-month term for total consideration of $ 4.8 million, with control of the equipment transferring to the vendor at the end of the leaseback term.

The arrangement was repayable over a 24-month term for total consideration of $ 4.8 million, with control of the equipment transferring to the vendor at the end of the leaseback term.

The leaseback would have been classified as a financing lease.

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The fair value of the new financing liability as of June 30, 2021 was $ 0.9 million, which was estimated using an income approach and a discount rate of 7.5 %.

The financing liability is included within other current and other non-current liabilities on the Consolidated Balance Sheet as of December 31, 2021, with $ 0.4 million classified as current and $ 0.3 million classified as non-current.

The financing liability is included within other current and other non-current liabilities on the Consolidated Balance Sheet as of December 31, 2022, with $ 0.3 million classified as current and no ne classified as non-current.

Remaining future cash payments related to the financing liability under the failed sale-leaseback transaction total $ 0.3 million as of December 31, 2022, and are scheduled to be paid in monthly installments through June 2023.

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Fair Value Measurements

Fair Value Measurements on a Recurring Basis

The Company's financial instruments measured at fair value in its Consolidated Balance Sheets on a recurring basis consist of the following:

3 unchanged sentences

$ 2,455 $ — $ — $ 2,455 $ 2,429 $ — $ — $ 2,429

Liabilities (2)

Warrants liability (2)

2 unchanged sentences

— 8,158 — 8,158 — — 5,600 $ 5,600

Financing derivatives (5)

— — — — — — 11,300 11,300

Interest make-whole derivative (6)

— — — — — — 871 871

Total $ — $ 8,158 $ 718 $ 8,876 $ — $ — $ 16,120 $ 16,120

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Dollar-denominated money market instruments with maturities less than three months.

(2) The fair values of these liabilities are derived from techniques which utilize inputs, certain of which are significant and unobservable, that result in classification as Level 3 fair value measurements.

(2) Warrants liability includes only the Series A warrants as of December 31, 2022 and 2021.

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The current and non-current portions of the contingent consideration are $ 7.1 million and $ 1.0 million, respectively, and are classified within other current and non-current liabilities in the Consolidated Balance Sheets.

(5) Financing derivatives include only the interest rate reset derivative as of December 31, 2020.

The fair value of the make-whole change of control derivative was estimated to be negligible as of December 31, 2020.

Extinguishment of the Notes on March 10, 2021 resulted in derecognition of the interest rate reset and make-whole change of control derivatives.

(6) The interest make-whole derivative is classified within other current liabilities in the Consolidated Balance Sheets.

Extinguishment of the Secured Term Note on March 10, 2021 resulted in settlement of the interest make-whole derivative liability.

The Company did not have any transfers between fair value measurement levels during the periods presented.

There were no changes to the Company's valuation techniques during the years ended December 31, 2021 or 2020, respectively.

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The elimination of the option pricing model used to value the contingent consideration liability reflected a change in the Company's valuation technique during the three months ended June 30, 2022.

There were no other changes to the Company's valuation techniques or methodologies during the years ended December 31, 2022 or 2021, respectively.

The following tables present the changes in the Company's recurring Level 3 fair value measurements for the warrants liability, contingent consideration, financing derivatives and interest make-whole derivative for the years ended December 31, 2022 and 2021:

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Balance as of December 31, 2020 $ 2,831 $ — $ 11,300 $ 871

Total (gain) loss included in other (expense) income, net (1) (2)

( 4,894 ) — ( 10,287 ) 871

Balance as of December 31, 2020 2,831 — 11,300 871

Total loss (gain) included in other (expense) income, net (2)

Total (gain) loss included in other income (expense), net (1)

7,689 — ( 1,800 ) 150

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Balance as of December 31, 2021 $ 10,520 $ 5,600 $ — $ —

(1) Represents $ 7.5 million gain due to change in fair value of interest rate reset derivative liability, $ 1.6 million gain due to change in fair value of the make-whole change of control redemption derivative liability and $ 1.2 million gain due to change in fair value of the qualifying change of control redemption derivative liability.

Represents $ 4.7 million gain due to change in fair value of the Series A Warrants and $ 0.2 million gain due to change in fair value of the Series B-2 Warrants.

(2) All losses and gains were recorded in other (expense) income, net in the Consolidated Statements of Operations and Comprehensive Loss.

Total gain included in other income (expense), net (1)

( 9,802 ) — — —

Total loss recognized due to remeasurement (1)

Transfer to Level 2 (2)

— ( 7,948 ) — —

Balance as of December 31, 2022 $ 718 $ — $ — $ —

(1) All gains and losses were recorded in other income (expense), net in the Consolidated Statements of Operations and Comprehensive Loss.

(2) The transfer was due to the resolution of the contingency regarding the amount of consideration payable during the three months ended June 30, 2022.

Transfers between levels of the fair value hierarchy are recognized at the beginning of the reporting period.

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The following table displays the valuation technique and the significant inputs, certain of which are unobservable, for the Company's Level 3 liabilities that existed as of December 31, 2022 and 2021 that are measured at fair value on a recurring basis.

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(1) The selected weightings for the option pricing model and discounted cash flow model outcomes were 70.0 % and 30.0 % respectively, as of December 31, 2021.

The contingent consideration liability was transferred to Level 2 in 2022 and therefore, input and weightings are not applicable as of December 31, 2022.

Refer to Footnote 2 , Summary of Significant Accounting Policies for further information on the valuation technique.

The primary sensitivities in the valuation of the warrants liability are driven by the price and expected volatility of the Company's Common Stock at the valuation date.

The primary sensitivities in the option pricing model are driven by forecasted performance and the selected weighting of the model.

The primary sensitivities in the valuation of contingent consideration model are driven by forecasted performance and the selected weighting of the model.

The primary sensitivities in the discounted cash flow model are the cost of debt and the selected weighting of the model.

Fair Value Measurements on a Nonrecurring Basis

For the year ended December 31, 2022, the Company recorded a goodwill impairment charge of $ 46.3 million.

Refer to Footnote 10 , Goodwill for further details.

The remeasurement of goodwill is classified as a non-recurring Level 3 fair value assessment due to the significance of unobservable inputs developed in the determination of the fair value.

The Company used a discounted cash flow model to determine the estimated fair value of the reporting unit.

The Company made estimates and assumptions regarding future cash flows, discount rates, long-term growth rates and market values to determine the reporting unit's estimated fair value.

Property and Equipment

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In addition, amortization expense from finance leases was $ 2.4 million, $ 2.2 million and $ 1.7 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Of the Company's property and equipment, net, 98 % was located in the United States as of December 31, 2022 and 2021.

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Of the Company's property and equipment, net, 98 % and 97 % was located in the United States as of December 31, 2021 and 2020, respectively.

The Company has operating leases for real estate and finance leases for computer equipment and automobiles.

These leases have remaining lease terms of one year to six years , some of which include options to extend the leases for up to five years , and some of which include options to terminate the leases within one year .

These leases have remaining lease terms of one year to five years , some of which include options to extend the leases for up to five years , and some of which include options to terminate the leases within one year .

As of December 31, 2022, the weighted average remaining lease term for the Company's finance leases and operating leases was 1.6 years and 4.4 years, respectively.

32 unchanged sentences

2024 10,291 1,153

2024 10,059 926

Thereafter 80 —

4 unchanged sentences

Total non-current lease liabilities $ 29,588 $ 1,044

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As of December 31, 2022, the Company subleases six real estate properties.

Two subleases have a non-cancelable term of less than one year.

The remaining four subleases are non-cancelable and have remaining lease terms of two years to six years .

None of these subleases contain any options to renew or terminate the sublease agreement.

One sublease has a non-cancelable term of less than one year.

The remaining five subleases are non-cancelable and have remaining lease terms of one year to five years .

None of these subleases contain any

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options to renew or terminate the sublease agreement.

Future expected cash receipts from these subleases as of December 31, 2022 were as follows:

(In thousands) Sublease Receipts

Thereafter 487

Total expected sublease receipts $ 7,405

Goodwill and Intangible Assets

In 2019, the Company concluded it was more likely than not that the estimated fair value of its reporting unit was less than its carrying value.

In its assessment, the Company considered the sustained decline in the Company's stock price and market capitalization, changes in management, and lower revenue, among other factors.

Accordingly, the Company performed a quantitative goodwill impairment test as of June 30, 2019, relying in part on the work of an independent valuation firm engaged by the Company to provide inputs as to the fair value of the reporting unit and to assist in the related calculations and analysis.

The fair value of the reporting unit was determined using a combination of the discounted cash flow model and market value approach.

The Company's reporting unit failed the goodwill impairment test;

and as a result, the Company recorded a $ 224.3 million impairment charge.

In 2022, the Company concluded that it was more likely than not that the estimated fair value of its reporting unit was less than its carrying value.

In its assessment, the Company considered the decline in the Company's stock price and market capitalization, among other factors.

Accordingly, in conjunction with its annual test as of October 1, 2022, the Company performed a quantitative goodwill impairment test as of September 30, 2022, relying in part on the work of an independent valuation firm engaged by the Company to provide inputs as to the fair value of the reporting unit and to assist in the related calculations and analysis.

The fair value of the reporting unit was determined using a discounted cash flow model, supported by a market value approach.

The Company's reporting unit failed the goodwill impairment test and as a result, the Company recorded a $ 46.3 million impairment charge.

The change in the carrying value of goodwill is as follows:

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Balance as of December 31, 2020 $ 418,327

Goodwill recognized from acquisition 19,202

Translation adjustments ( 1,818 )

Balance as of December 31, 2021 $ 435,711

Goodwill recognized from acquisition 19,202

Translation adjustments ( 1,438 )

Impairment charge ( 46,300 )

Balance as of December 31, 2022 $ 387,973

Goodwill 659,983

Accumulated impairment ( 224,272 )

Total $ 435,711

The Company also recorded a $ 17.3 million impairment charge related to its strategic alliance intangible asset during 2019.

Changes in the Company's projected revenue in certain non-U.S.

geographic markets due to the changing international competitive landscape as well as significant reductions in international staffing, resulted in a change in the Company's long-term view of the viability of the intangible asset.

As such, the Company's assessment yielded that the benefit of the strategic alliance would not be realized.

The fair value of the strategic alliance intangible asset was estimated using an income approach resulting in an impairment charge for the full carrying value of the long-lived asset of $ 17.3 million.

The carrying values of the Company's definite-lived intangible assets are as follows:

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Total intangible assets $ 229,503 $ ( 216,176 ) $ 13,327 $ 229,267 $ ( 189,322 ) $ 39,945

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Amortization expense related to intangible assets was $ 27.1 million, $ 25.0 million, and $ 27.2 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Of the Company's definite-lived intangible assets, net, substantially all were generated by or located in the United States as of December 31, 2021 and 2020, respectively.

Of the Company's definite-lived intangible assets, net, substantially all were generated by or located in the United States as of December 31, 2022 and 2021.

The weighted-average remaining amortization period by major asset class as of December 31, 2022 is as follows:

Acquired methodologies and technology 3.0

Acquired software 2.0

Customer relationships 3.8

Intellectual property 1.7

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The estimated future amortization of intangible assets is as follows:

(In thousands)

2022 $ 27,096

Total $ 13,327

5 unchanged sentences

Professional fees 2,410 2,978

Restructuring accrual 1,288 —

Other 6,062 7,898

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Commitments and Contingencies

The Company has certain long-term contractual arrangements that have fixed and determinable payment obligations including unconditional purchase obligations with MVPDs and other providers for set-top box and connected (Smart) television data.

These agreements have remaining terms from one to eight years .

As of December 31, 2022, the total fixed payment obligations related to set-top box and connected television data agreements are $ 299.7 million and $ 8.3 million, respectively.

The information set forth below summarizes the contractual obligations, by year, as of December 31, 2022:

(In thousands)

2023 $ 36,111

Thereafter 137,699

Total $ 308,044

In addition, the Company expects to make variable payments related to a set-top box data agreement totaling an estimated $ 8.8 million by the end of 2023.

Contingencies

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The outcomes of legal proceedings are inherently unpredictable, subject to significant uncertainties, and could be material to the Company's operating results and cash flows for a particular period.

Privacy Class Action Litigation

On September 11, 2017, the Company and a wholly owned subsidiary, Full Circle Studies, Inc.

("Full Circle"), received demand letters on behalf of named plaintiffs and all others similarly situated alleging that the Company and Full Circle collected personal information from users under the age of 13 without verifiable parental consent in violation of Massachusetts law and the federal Children's Online Privacy Protection Act.

The letters alleged that the Company and Full Circle collected such personal information by embedding advertising software development kits in applications created or developed by The Walt Disney Company.

The letters sought monetary damages, attorneys' fees and damages under Massachusetts law.

On June 4, 2018, the plaintiffs filed amended complaints with the U.S.

District Court for the Northern District of California adding the Company and Full Circle as defendants in a purported class action (captioned Rushing, et al v.

The Walt Disney Company, et al., Case No.

3:17-cv-04419-JD) against Disney, Twitter and other defendants, alleging violations of California's constitutional right to privacy and intrusion upon seclusion law, New York's deceptive trade practices statute, and Massachusetts' deceptive trade practices and right to privacy statutes.

The complaints alleged damages in excess of $ 5.0 million, with any award to be apportioned among the defendants.

On February 26, 2020, the Company and Full Circle reached an agreement with the plaintiffs to settle the complaints in full, with no admission of liability, in return for injunctive relief and payment of the plaintiffs' attorneys' fees, to be covered by the Company's insurance.

The settlement received preliminary court approval on September 24, 2020.

The settlement received final court approval on April 12, 2021.

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Other Matters

In addition to the matters described above, the Company is, and may become, a party to a variety of legal proceedings from time to time that arise in the normal course of the Company's business.

Current Matters

The Company is, and may become, a party to a variety of legal proceedings from time to time that arise in the normal course of the Company's business.

While the results of such legal proceedings cannot be predicted with certainty, management believes that, based on current knowledge, the final outcome of any such current pending matters will not have a material adverse effect on the Company's financial position, results of operations or cash flows.

Regardless of the outcome, legal proceedings can have an adverse effect on the Company because of defense costs, diversion of management resources and other factors.

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Indemnification

The Company has entered into indemnification agreements with each of the Company's directors and certain officers, and the Company's amended and restated certificate of incorporation requires it to indemnify each of its officers and directors, to the fullest extent permitted by Delaware law, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director or officer of the Company.

The Company has entered into indemnification agreements with each of the Company's directors and certain officers, and the Company's amended and restated certificate of incorporation requires it to indemnify each of its directors and officers, to the fullest extent permitted by Delaware law, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director or officer of the Company.

The Company has paid and may in the future pay legal counsel fees incurred by current and former directors and officers who are involved in legal proceedings that require indemnification.

Similarly, certain of the Company's commercial contracts require it to indemnify contract counterparties under specified circumstances, and the Company may incur legal counsel fees and other costs in connection with these obligations.

The components of loss before income tax provision (benefit) are as follows:

The components of loss before income tax provision are as follows:

Years Ended December 31,

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Total $ ( 64,837 ) $ ( 49,178 ) $ ( 47,016 )

Income tax provision (benefit) is as follows:

Income tax provision is as follows:

Years Ended December 31,

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Total $ ( 475 ) $ ( 1,719 ) $ 10

Income tax provision (benefit) $ 859 $ 902 $ ( 1,007 )

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Income tax provision $ 1,724 $ 859 $ 902

A reconciliation of the statutory U.S.

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State taxes ( 0.3 ) % ( 1.5 ) % ( 0.5 ) %

Other nondeductible items ( 3.6 ) % — % ( 0.7 ) %

Other nondeductible/nontaxable items 3.7 % ( 3.6 ) % — %

Nondeductible interest and derivatives — % ( 5.9 ) % ( 9.7 ) %

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Goodwill impairment ( 11.8 ) % — % — %

US tax impact of restructuring 10.3 % ( 14.4 ) % — %

tax impact of restructuring — % 10.3 % ( 14.4 ) %

Other adjustments ( 1.7 ) % ( 0.2 ) % 1.1 %

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Effective tax rate ( 2.7 ) % ( 1.7 ) % ( 1.9 ) %

Income Tax (Provision) Benefit

Income Tax Provision

The Company recognized income tax expense of $ 1.7 million during the year ended December 31, 2022, which is primarily comprised of current tax expense of $ 2.2 million related to foreign taxes and state taxes and a deferred tax benefit of $ 0.5 million related to temporary differences between the tax treatment and GAAP accounting treatment for certain items.

Included in total tax expense is income tax benefit of $ 2.6 million for permanent differences in the book and tax treatment of nontaxable gain on fair market value adjustment of stock warrants, offset by certain nondeductible stock-based compensation and executive compensation.

Also included in the total tax expense is income tax

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adjustment of $ 12.7 million related to the impairment of goodwill.

Income tax expense of $ 18.5 million has also been included for an increase in the valuation allowance recorded against the Company's deferred tax assets to offset the tax benefit of the Company's operating losses in the U.S.

and certain foreign jurisdictions.

These tax adjustments, along with state and local taxes and book losses in foreign jurisdictions where the income tax rate is substantially lower than the U.S.

federal statutory rate, are the primary drivers of the annual effective income tax rate.

The Company recognized income tax expense of $ 0.9 million during the year ended December 31, 2021, which is primarily comprised of current tax expense of $ 2.2 million related to foreign taxes and a federal deferred tax benefit of $ 1.5 million related to temporary differences between the tax treatment and GAAP accounting treatment for certain items.

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federal statutory rate, are the primary drivers of the annual effective income tax rate.

The Company recognized an income tax benefit of $ 1.0 million during the year ended December 31, 2019, which is comprised of current tax expense of $ 2.7 million primarily related to foreign taxes and a deferred tax benefit of $ 3.7 million related to temporary differences between the tax treatment and GAAP accounting treatment for certain items.

Included within the total tax benefit is income tax expense of $ 17.3 million related to the increase in valuation allowance recorded against the Company's deferred tax assets to offset the tax benefit of the Company's operating losses in the U.S.

and certain foreign jurisdictions.

Also included in the total tax benefit are income tax adjustments of $ 58.6 million related to the impairment of goodwill and $ 15.2 million for permanent differences in the book and tax treatment of certain stock-based compensation, limitations on the deductibility of certain executive compensation, nondeductible interest expense on debt instruments and associated derivatives, and other nondeductible expenses.

These tax adjustments, along with state and local taxes and book losses in foreign jurisdictions where the income tax rate is substantially lower than the U.S.

federal statutory rate, are the primary drivers of the annual effective income tax rate.

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Deferred Income Taxes

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Capital loss carryforwards 271 269

Intangible assets 3,640 —

Capitalized research and development expense 14,490 —

Other 2,665 2,307

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Net deferred tax asset $ 1,155 $ 708

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Tax Valuation Allowance

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entities, including federal and state tax attributes and timing differences, as well as the deferred tax assets of certain foreign subsidiaries.

The increase in the valuation allowance during 2022 is primarily related to capitalized R&E expenditures under Section 174.

The increase in the valuation allowance during 2021 is primarily related to the pre-tax losses generated in the U.S., offset by the valuation allowance release as a result of the Shareablee acquisition mentioned above.

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Net Operating Loss and Credit Carryforwards

As of December 31, 2021, the Company had federal and state net operating loss carryforwards for tax purposes of $ 620.0 million and $ 1,403.0 million, respectively.

As of December 31, 2022, the Company had federal and state net operating loss carryforwards for tax purposes of $ 584.8 million and $ 1.4 billion, respectively.

These net operating loss carryforwards will begin to expire in 2031 for federal income tax purposes and 2023 for state income tax purposes.

The federal and certain state net operating losses generated after December 31, 2017 have an indefinite carryforward

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The federal and certain state net operating losses generated after December 31, 2017 have an indefinite carryforward period.

As of December 31, 2022, the Company had an aggregate net operating loss carryforward for tax purposes related to its foreign subsidiaries of $ 9.8 million, which will begin to expire in 2024.

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The Company has unrecognized tax benefits, which are tax benefits related to uncertain tax positions which have been or will be reflected in income tax filings that have not been recognized in the financial statements due to potential adjustments by taxing authorities in the applicable jurisdictions.

The Company's liabilities for unrecognized tax benefits, which include interest and penalties, were $ 0.6 million and $ 0.7 million as of December 31, 2021 and 2020, respectively.

The Company's liability for unrecognized tax benefits, which include interest and penalties, was $ 0.6 million for the years ended December 31, 2022 and 2021.

The remaining unrecognized tax benefits have reduced deferred tax balances.

The amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate are $ 2.0 million, $ 2.0 million and $ 2.3 million as of December 31, 2021, 2020 and 2019, respectively, and include the federal tax benefit of state deductions.

The amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate is $ 2.0 million as of December 31, 2022, 2021 and 2020 and includes the federal tax benefit of state deductions.

The Company anticipates a negligible amount of unrecognized tax benefits will reverse during the next year due to the expiration of statutes of limitation.

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Changes in the Company's unrecognized income tax benefits are as follows:

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The Company recognizes interest and penalties related to income tax matters in income tax expense.

As of December 31, 2021 and 2020, accrued interest and penalties on unrecognized tax benefits were $ 0.1 million.

As of December 31, 2022 and 2021, accrued interest and penalties on unrecognized tax benefits were $ 0.2 million and $ 0.1 million, respectively.

The Company or one of its subsidiaries files income tax returns in the U.S.

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The Company provides WPP, in the normal course of business, services amongst its different products and receives various services from WPP supporting the Company's data collection efforts.

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The Company's results from transactions with WPP, as reflected in the Consolidated Statements of Operations and Comprehensive Loss, are detailed below:

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Cost of revenues 9,391 12,537 10,094

General and administrative 155 316 539

The Company has the following balances related to transactions with WPP, as reflected in the Consolidated Balance Sheets:

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Accounts receivable, net $ 825 $ 3,506

Prepaid expenses and other current assets 333 1,496

Accounts payable $ 2,398 $ 1,395

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Transactions with Charter, Qurate and Pine

Charter, Qurate and Pine each hold 33.3 % of the outstanding shares of Preferred Stock, which are entitled to convert into shares of Common Stock and to vote as a single class with the holders of the Common Stock as described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity .

In addition, Charter, Qurate and Pine each designated two directors to the Company's Board in accordance with the Stockholders Agreement.

As of December 31, 2021, Charter, Qurate and Pine each owned 27,509,203 shares of the Company's outstanding Preferred Stock.

On June 30, 2021, in accordance with the Certificate of Designations of the Preferred Stock, the Company made cash dividend payments totaling $ 4.8 million to the holders of the Preferred Stock, representing dividends accrued for the period from the Closing Date through June 29, 2021.

As of December 31, 2021, accrued dividends to the holders of Preferred Stock totaled $ 7.9 million.

As of December 31, 2022 (based on public filings), Pine also owned 2,193,088 shares of the Company's outstanding Common Stock, representing 2.4 % of the outstanding Common Stock.

In addition, Charter, Qurate and Pine each designated two members of the Company's Board in accordance with the Stockholders Agreement.

As of December 31, 2022 and December 31, 2021, Charter, Qurate and Pine each owned 27,509,203 shares of the Company's outstanding Preferred Stock.

On June 30, 2022, in accordance with the Certificate of Designations of the Preferred Stock, the Company 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.

Accrued dividends to the holders of Preferred Stock as of December 31, 2022 totaled $ 7.9 million.

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

Concurrent with the closing of the Transactions on March 10, 2021, the Company entered into a ten-year Data License Agreement ("DLA") with Charter Communications Operating, LLC ("Charter Operating"), an affiliate of Charter.

Under the DLA, Charter Operating will bill the Company for license fees according to a payment schedule that gradually increases from $ 10.0 million in the first year of the term to $ 32.3 million in the tenth year of the term.

Under the DLA, Charter Operating will bill the Company for license fees according to a payment schedule that gradually increases from $ 10.0 million in the first year of the term to $ 32.3

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million in the tenth year of the term.

The Company recognizes expense for the license fees ratably over the term.

A portion of the annual license fees is allocated to a base license comparable to the Company's prior license with Charter Operating.

The remaining fees are allocated to the additional data sets contemplated by the DLA and the designation and related endorsement of the Company as Charter Operating's preferred data measurement partner for the term.

On November 6, 2022, the Company and Charter Operating entered into an amendment to the DLA, pursuant to which the Company will receive license fee credits totaling $ 7.0 million.

The Company's results from transactions with Charter and its affiliates, as reflected in the Consolidated Statements of Operations and Comprehensive Loss, are detailed below:

(In thousands) Year Ended December 31, 2021

(In thousands) Year Ended December 31, 2022 Year Ended December 31, 2021

Revenues $ 2,262 $ 1,849

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The Company has the following liability balances related to transactions with Charter and its affiliates, as reflected in the Consolidated Balance Sheet:

(In thousands) December 31, 2021

(In thousands) December 31, 2022 December 31, 2021

Accounts payable $ 9,693 $ 5,180

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Non-current portion of accrued data costs 15,471 7,843

The Company recognized revenues of $ 0.8 million from transactions with Qurate and its affiliates in the normal course of business during the year ended December 31, 2021 as reflected in the Consolidated Statements of Operations and Comprehensive Loss.

The Company had no transactions, other than the issuance of shares of Preferred Stock and related matters, with Pine for the year ended December 31, 2021.

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The Company recognized revenues of $ 0.9 million and $ 0.8 million from transactions with Qurate and its affiliates in the normal course of business during the years ended December 31, 2022 and December 31, 2021, respectively, as reflected in the Consolidated Statements of Operations and Comprehensive Loss.

The Company had no transactions, other than the issuance of shares of Preferred Stock and related matters, with Pine for the years ended December 31, 2022 and December 31, 2021.

Transactions with Starboard

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As of December 31, 2018, Starboard had no remaining right to designate any directors to the Board.

As of December 31, 2021, there were no directors remaining on the Board who were designated by Starboard.

In the Consolidated Statements of Operations and Comprehensive Loss, the Company recorded interest expense, inclusive of non-cash accretion of issuance discount and deferred financing costs, related to the Notes of $ 6.6 million, $ 33.3 million and $ 30.8 million during the years ended December 31, 2021, 2020 and 2019, respectively.

The Notes and related financing derivatives were extinguished on March 10, 2021.

In the Consolidated Statements of Operations and Comprehensive Loss, the Company recorded interest expense, inclusive of non-cash accretion of issuance discount and deferred financing costs, related to the Notes of $ 6.6 million and $ 33.3 million during the year ended December 31, 2021 and 2020, respectively.

In connection with the extinguishment of the Notes on March 10, 2021, the Company issued 3,150,000 Conversion Shares to Starboard valued at $ 9.6 million as discussed in Footnote 6 , Debt , which amount was included as a component of loss on extinguishment of debt in the Consolidated Statements of Operations and Comprehensive Loss.

The Company had no outstanding balances related to Starboard as of December 31, 2021.

The Company had no outstanding balances related to Starboard as of December 31, 2022 or 2021.

The outstanding balances for the Notes, related financing derivatives, and other non-current liabilities as of December 31, 2020 are reflected in the Consolidated Balance Sheet.

Organizational Restructuring

On September 29, 2022, the Company communicated a workforce reduction as part of its broader efforts to improve cost efficiency and better align its operating structure and resources with strategic priorities (collectively, the "Restructuring Plan").

In addition to employee terminations, the Restructuring Plan is expected to include the reallocation of commercial and product development resources;

reinvestment in and modernization of key technology platforms;

consolidation of data storage and processing activities to reduce the Company's data center footprint;

and reduction of other operating expenses, including software and facility costs.

The Company may also determine to exit certain activities in certain geographic regions in order to more effectively align resources with business priorities.

In connection with the Restructuring Plan, which was authorized by the Board on September 19, 2022, the Company will incur certain exit-related costs.

These costs are estimated to range between $ 13 million and $ 18 million.

The Company expects implementation of the Restructuring Plan, including cash payments, to be substantially complete in the fourth quarter of 2023.

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The table below summarizes the balance of the restructuring liability as of December 31, 2022, which is recorded in accrued expenses in the Consolidated Balance Sheets, and the changes in the accrued amounts for the year ended December 31, 2022:

(In thousands) Severance and Related Costs Other Total Restructuring Expense

Restructuring expense $ 4,578 $ 1,232 $ 5,810

Payments ( 3,357 ) ( 1,232 ) ( 4,589 )

Foreign exchange 67 — 67

Accrued balance as of December 31, 2022

$ 1,288 $ — $ 1,288

Subsequent Events

Amendment to Revolving Credit Agreement

On February 25, 2022, the Company entered into an amendment (the "Amendment") to the Revolving Credit Agreement.

In addition to expanding the Company's aggregate borrowing capacity under the Revolving Credit Agreement from $ 25.0 million to $ 40.0 million, the Amendment modified certain financial covenants and interest rates under the Revolving Credit Agreement.

The amended Revolving Credit Agreement requires the Company to maintain:

• a minimum Consolidated Asset Coverage Ratio (as defined in the Revolving Credit Agreement) of not less than 1.5 to 1.0 for the most recently ended four fiscal quarter period, tested as of the last day of each fiscal quarter ending on or before December 31, 2022;

On February 24, 2023, the Company entered into the 2023 Amendment to its Revolving Credit Agreement.

Among other things, the 2023 Amendment (i) increased the minimum Consolidated EBITDA and Consolidated Asset Coverage Ratio financial covenant requirements under the Revolving Credit Agreement, (ii) modified the measurement periods for certain financial covenants contained in the Revolving Credit Agreement, (iii) introduced a minimum liquidity covenant, and (iv) modified the Applicable Rate definition in the Revolving Credit Agreement to increase the Applicable Rate payable on SOFR-based loans to 3.50 %.

As modified, the Revolving Credit Agreement requires the Company to maintain:

• minimum Consolidated EBITDA (as defined in the Revolving Credit Agreement) of not less than $ 22.0 million, $ 24.0 million, $ 32.0 million and $ 35.0 million for the most recently ended four fiscal quarter period, tested as of the last day of the fiscal quarters ending on March 31, June 30, September 30 and December 31, 2023, respectively;

• a minimum Consolidated Asset Coverage Ratio (as defined in the Revolving Credit Agreement) of not less than 2.0 to 1.0, tested as of the last day of each calendar month through maturity of the Revolving Credit Agreement;

The Amendment also replaced the Eurodollar Rate (as defined in the Revolving Credit Agreement) with a SOFR-based interest rate and modified the Applicable Rate definition in the Revolving Credit Agreement to increase the Applicable Rate payable on SOFR-based loans to 2.50 % until the date a compliance certificate is received for the quarter ending March 31, 2023, with such Applicable Rate thereafter reducing to 2.25 %.

CEO Transition

On February 28, 2022, the Company's Chief Executive Officer ("CEO") and Executive Vice Chairman, William Livek, announced his intention to retire as the Company's CEO and transition to a non-executive Vice Chairman role after his successor as CEO is named.

Livek plans to serve as non-executive Vice Chairman of the Company's Board of Directors through the completion of his Board term in 2024.

• minimum Liquidity (as defined in the Revolving Credit Agreement) of $ 28.0 million, tested as of the last business day of each calendar month through maturity of the Revolving Credit Agreement.

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What changed 10-K

Item 8. Financial Statements and Supplementary Data