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Item 1. Financial Statements

2024-11-12 compared with 2024-08-09 · 209 added, 128 removed, 499 unchanged (40% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(In thousands, except share and per share data) (Unaudited)

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Total assets $ 412,462 $ 491,295

Liabilities, Convertible Redeemable Preferred Stock and Stockholders' Equity

Liabilities, Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit)

Current liabilities:

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Convertible redeemable preferred stock, $ 0.001 par value;

100,000,000 shares authorized and 82,527,609 shares issued and outstanding as of June 30, 2024 and December 31, 2023;

aggregate liquidation preference of $ 236,616 as of June 30, 2024, and $ 228,132 as of December 31, 2023 (related parties)

100,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

95,784,903 shares and 82,527,609 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively;

aggregate liquidation preference of $ 241,194 as of September 30, 2024, and $ 228,132 as of December 31, 2023 (related parties)

207,470 187,885

Stockholders' equity:

Stockholders' equity (deficit):

Preferred stock, $ 0.001 par value;

5,000,000 shares authorized as of June 30, 2024 and December 31, 2023;

no shares issued or outstanding as of June 30, 2024 or December 31, 2023

5,000,000 shares authorized as of September 30, 2024 and December 31, 2023;

no shares issued or outstanding as of September 30, 2024 or December 31, 2023

Common stock, $ 0.001 par value;

13,750,000 shares authorized as of June 30, 2024 and December 31, 2023;

5,227,876 shares issued and 4,889,637 shares outstanding as of June 30, 2024, and 5,093,380 shares issued and 4,755,141 shares outstanding as of December 31, 2023

13,750,000 shares authorized as of September 30, 2024 and December 31, 2023;

5,228,787 shares issued and 4,890,548 shares outstanding as of September 30, 2024, and 5,093,380 shares issued and 4,755,141 shares outstanding as of December 31, 2023

Additional paid-in capital 1,713,399 1,696,612

1 unchanged sentence

Accumulated deficit ( 1,472,874 ) ( 1,396,420 )

Treasury stock, at cost, 338,239 shares as of June 30, 2024 and December 31, 2023

Treasury stock, at cost, 338,239 shares as of September 30, 2024 and December 31, 2023

( 229,984 ) ( 229,984 )

Total stockholders' equity 45,837 56,103

Total liabilities, convertible redeemable preferred stock and stockholders' equity $ 474,142 $ 491,295

Total stockholders' equity (deficit) ( 2,736 ) 56,103

Total liabilities, convertible redeemable preferred stock and stockholders' equity (deficit) $ 412,462 $ 491,295

See accompanying Notes to Condensed Consolidated Financial Statements.

COMSCORE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except share and per share data) 2024 2023 2024 2023

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Amortization of intangible assets 764 800 2,365 4,412

Restructuring 493 4,104 953 5,102

Impairment of goodwill 63,000 — 63,000 44,100

Impairment of right-of-use and long-lived assets 1,397 1,502 1,397 1,502

Restructuring 15 353 968 5,455

Total expenses from operations 148,084 88,933 324,521 325,381

Loss from operations ( 1,928 ) ( 47,379 ) ( 3,805 ) ( 51,206 )

Other income (expense), net 376 1,609 651 ( 203 )

(Loss) income from operations ( 59,605 ) 2,067 ( 63,410 ) ( 49,139 )

Other income, net — 628 651 425

(Loss) gain from foreign currency transactions ( 2,223 ) 1,090 ( 1,508 ) ( 544 )

Interest expense, net ( 424 ) ( 426 ) ( 1,440 ) ( 1,141 )

Loss before income taxes ( 2,244 ) ( 46,301 ) ( 3,455 ) ( 53,758 )

Income tax benefit 536 1,392 693 178

Net loss $ ( 1,708 ) $ ( 44,909 ) $ ( 2,762 ) $ ( 53,580 )

(Loss) income before income taxes ( 62,252 ) 3,359 ( 65,707 ) ( 50,399 )

Income tax benefit (provision) 1,622 ( 741 ) 2,315 ( 563 )

Net (loss) income $ ( 60,630 ) $ 2,618 $ ( 63,392 ) $ ( 50,962 )

Net loss available to common stockholders:

Net loss $ ( 1,708 ) $ ( 44,909 ) $ ( 2,762 ) $ ( 53,580 )

Net (loss) income $ ( 60,630 ) $ 2,618 $ ( 63,392 ) $ ( 50,962 )

Convertible redeemable preferred stock dividends (1)

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Basic and diluted 5,098,415 4,885,459 4,986,746 4,785,205

Comprehensive loss:

Net loss $ ( 1,708 ) $ ( 44,909 ) $ ( 2,762 ) $ ( 53,580 )

Other comprehensive (loss) income:

Comprehensive (loss) income:

Net (loss) income $ ( 60,630 ) $ 2,618 $ ( 63,392 ) $ ( 50,962 )

Other comprehensive income (loss):

Foreign currency cumulative translation adjustment 2,925 ( 2,267 ) 828 ( 869 )

Total comprehensive loss $ ( 1,818 ) $ ( 45,028 ) $ ( 4,859 ) $ ( 52,182 )

(1) Transactions with related parties are included in the line items above as follows (refer to Footnote 9 , Related Party Transactions , of the Notes to Condensed Consolidated Financial Statements for additional information):

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

Total comprehensive (loss) income $ ( 57,705 ) $ 351 $ ( 62,564 ) $ ( 51,831 )

(1) Transactions with related parties are included in the line items above as follows.

Refer to Footnote 9 , Related Party Transactions.

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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(2) Excludes amortization of intangible assets, which is presented as a separate line item.

(3) Stock-based compensation expense is included in the line items above as follows:

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

(3) Stock-based compensation (benefit) expense is included in the line items above as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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General and administrative 560 747 1,986 2,640

Total stock-based compensation expense $ 1,011 $ 1,661 $ 2,389 $ 2,778

Total stock-based compensation (benefit) expense $ ( 122 ) $ 1,041 $ 2,267 $ 3,819

(4) Adjusted retroactively for the Reverse Stock Split, refer to Footnote 2 , Summary of Significant Accounting Policies .

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COMSCORE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

(In thousands, except share data) Convertible Redeemable Preferred Stock Common Stock Additional

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Stockholders'

Equity (Deficit)

Shares Amount Shares Amount

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Balance as of June 30, 2024 82,527,609 $ 187,885 4,889,637 $ 5 $ 1,699,689 $ ( 16,207 ) $ ( 1,407,666 ) $ ( 229,984 ) $ 45,837

Net loss — — — — — — ( 60,630 ) — ( 60,630 )

Convertible redeemable preferred stock, net of issuance costs (1)

13,257,294 19,585 — — 13,017 — — — 13,017

Convertible redeemable preferred stock dividends (1)

— — — — — — ( 4,578 ) — ( 4,578 )

Restricted stock units distributed — — 1,277 — — — — — —

Payments for taxes related to net share settlement of equity awards — — ( 366 ) — ( 2 ) — — — ( 2 )

Amortization of stock-based compensation — — — — 695 — — — 695

Foreign currency translation adjustment — — — — — 2,925 — — 2,925

Balance as of September 30, 2024 95,784,903 $ 207,470 4,890,548 $ 5 $ 1,713,399 $ ( 13,282 ) $ ( 1,472,874 ) $ ( 229,984 ) $ ( 2,736 )

(In thousands, except share data) Convertible Redeemable Preferred Stock Common Stock (2)

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Balance as of June 30, 2023 82,527,609 $ 187,885 4,754,316 $ 5 $ 1,695,371 $ ( 14,542 ) $ ( 1,362,066 ) $ ( 229,984 ) $ 88,784

(1) Transactions for these line items were exclusively with related parties (refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity and Footnote 9 , Related Party Transactions , of the Notes to Condensed Consolidated Financial Statements for additional information).

Net income — — — — — — 2,618 — 2,618

Convertible redeemable preferred stock dividends (1)

— — — — — — ( 4,286 ) — ( 4,286 )

Amortization of stock-based compensation — — — — 717 — — — 717

Foreign currency translation adjustment — — — — — ( 2,267 ) — — ( 2,267 )

Balance as of September 30, 2023 82,527,609 $ 187,885 4,754,316 $ 5 $ 1,696,088 $ ( 16,809 ) $ ( 1,363,734 ) $ ( 229,984 ) $ 85,566

(1) Transactions for these line items were exclusively with related parties.

Refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit) and Footnote 9 , Related Party Transactions.

(2) Adjusted retroactively for the Reverse Stock Split, refer to Footnote 2 , Summary of Significant Accounting Policies .

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2024 2023

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

Impairment of goodwill 63,000 44,100

Depreciation 16,194 14,613

Non-cash operating lease expense 4,031 4,196

Stock-based compensation expense 2,389 2,778

Amortization expense of finance leases 2,691 1,268

Amortization of intangible assets 2,365 4,412

Impairment of goodwill — 44,100

Stock-based compensation expense 2,267 3,819

Impairment of right-of-use and long-lived assets 1,397 1,502

Deferred tax benefit ( 2,182 ) ( 61 )

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Cash, cash equivalents and restricted cash at end of period $ 20,185 $ 30,253

As of June 30,

As of September 30,

Cash and cash equivalents $ 19,996 $ 30,067

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Total cash, cash equivalents and restricted cash $ 20,185 $ 30,253

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental disclosures of non-cash investing and financing activities :

Convertible redeemable preferred stock dividends accrued but not yet paid (related parties) $ 8,484 $ 7,697

Issuance of convertible redeemable preferred stock (related parties) (1)

Right-of-use assets obtained in exchange for finance lease liabilities 7,861 3,048

Convertible redeemable preferred stock dividends accrued but not yet paid (related parties) 4,424 11,983

Settlement of restricted stock unit liability 1,895 2,761

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Right-of-use assets obtained in exchange for operating lease liabilities — 1,211

(1) The preferred stock issuance was initially recognized at fair value.

The Company recorded the initial fair value, net of issuance costs, of $ 19.6 million within

mezzanine equity and the remaining $ 13.0 million within additional paid-in capital on the Condensed Consolidated Balance Sheet as of September 30, 2024.

Refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit).

See accompanying Notes to Condensed Consolidated Financial Statements.

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These interim Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 10-K").

The Condensed Consolidated Results of Operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2024 or thereafter.

All references to June 30, 2024 and 2023 in the Notes to Condensed Consolidated Financial Statements are unaudited.

The Condensed Consolidated Results of Operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be anticipated for the entire year ending December 31, 2024 or thereafter.

All references to September 30, 2024 and 2023 in the Notes to Condensed Consolidated Financial Statements are unaudited.

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

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 standalone selling price, 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.

Significant estimates and judgments are inherent in the analysis and the measurement of management's standalone selling price, 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, the initial fair value determination of the 2024 Preferred Stock (as defined below), 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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The Company monitors for events and circumstances that could negatively impact the key assumptions in determining fair value, including long-term revenue growth projections, profitability, discount rates, volatility in the Company's market capitalization, and general industry, market and macroeconomic conditions.

In the third quarter of 2024, 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 changes in the Company's stock price, market and equity capitalization, operating results and projections.

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 $ 63.0 million non-cash impairment charge during the three and nine months ended September 30, 2024.

In the second quarter of 2023, 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 $ 44.1 million non-cash impairment charge during the three and six months ended June 30, 2023.

The Company's reporting unit did not pass the goodwill impairment test, and as a result, the Company recorded a $ 44.1 million non-cash impairment charge during the nine months ended September 30, 2023.

For further information refer to Footnote 4 , Goodwill .

Recoverability of Other Long-Lived Assets

The Company's other long-lived assets consist primarily of property and equipment and right-of-use ("ROU") assets.

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

In the third quarter of 2024, the Company performed an analysis related to the execution of a sublease for an office space for which expected cash receipts are less than the disbursements for the primary lease.

The Company recorded a $ 1.4 million non-cash impairment charge related to the ROU asset and associated leasehold improvements for the three and nine months ended September 30, 2024.

The fair value of the ROU asset was estimated using an income approach and a discount rate of 9.3 %.

In the third quarter of 2023, the Company performed an analysis related to the abandonment of two leased office spaces, which changed the extent and manner for which the ROU assets and related long-lived assets were being used.

The Company recorded a non-cash impairment charge of $ 1.5 million related to the ROU assets for the three and nine months ended September 30, 2023.

Preferred Stock

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

(together with its affiliate Qurate SCOR, LLC, "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") 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.

On May 16, 2023, Qurate sold 27,509,203 shares of Preferred Stock to Liberty Broadband Corporation ("Liberty") in a privately negotiated transaction.

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

On July 24, 2024, the Company issued 13,257,294 additional shares of Preferred Stock (the "2024 Preferred Stock") to the existing holders of Preferred Stock in exchange for cancellation of the Company's obligation to pay accrued dividends totaling $ 32.8 million to such holders for annual dividend periods ended in 2023 and 2024.

Shares of the 2024 Preferred Stock have the same terms and conditions as the Preferred Stock previously issued by the Company.

In connection with the issuance of the 2024 Preferred Stock, the Company and the holders of the Preferred Stock also entered into an amendment to the Stockholders Agreement between the parties.

Among other things, the amendment reduced the $ 100.0 million special dividend threshold set forth in the Stockholders Agreement by an amount equal to the liquidation preference of the additional Preferred Stock ($ 32.8 million).

After further reducing the threshold by annual dividends paid in prior years, the current special dividend threshold is $ 47.0 million.

The Preferred Stock (including the 2024 Preferred Stock) is contingently redeemable upon certain deemed liquidation events, such as a change in control.

Because a deemed liquidation event could constitute a redemption event outside of the Company's control, all shares of Preferred Stock have been presented outside of permanent equity in mezzanine equity on the Condensed Consolidated Balance Sheets.

The instrument was initially recognized at fair value net of issuance costs.

The Company reassesses whether the Preferred Stock is currently redeemable, or probable to become redeemable in the

future, as of each reporting date.

The Company reassesses whether the Preferred Stock is currently redeemable, or probable to become redeemable in the future, as of each reporting date.

If the instrument meets either of these criteria, the Company will accrete the carrying value to the redemption value.

The Preferred Stock has not been adjusted to its redemption amount as of June 30, 2024 because a deemed liquidation event is not considered probable.

The Preferred Stock has not been adjusted to its redemption amount as of September 30, 2024 because a deemed liquidation event is not considered probable.

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.

As of June 30, 2024, 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.

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:

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

As of September 30, 2024, 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.

Other Income, Net

Other 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 income, net:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2024 2023 2024 2023

1 unchanged sentence

Other — ( 6 ) ( 18 ) 18

Total other income (expense), net

Total other income, net

$ — $ 628 $ 651 $ 425

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The following is a summary of the Common Stock equivalents for the securities outstanding during the respective periods that have been excluded from the computation of diluted net loss per common share, as their effect would be anti-dilutive:

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

1 unchanged sentence

4,805,301 4,441,099 4,661,642 4,285,418

Warrants 260,858 272,851 266,854 272,851

Stock options and restricted stock units 280,598 290,841 301,595 296,337

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175,552 401,311 175,552 401,311

Warrants — 272,851 177,254 272,851

Total 5,261,451 5,406,102 5,316,043 5,255,917

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The Company paid the first installment of $ 3.7 million in cash in 2023 and the second installment of $ 3.7 million in cash in the first quarter of 2024.

The Company calculated a potential anti-dilutive share count for the three and six months ended June 30, 2024 based on the remaining expected payments totaling $ 1.2 million and the $ 14.19 per share closing price of the Company's Common Stock on the Nasdaq Global Select Market on June 28, 2024.

The Company calculated a potential anti-dilutive share count for the three and six months ended June 30, 2023 based on the expected payments totaling $ 4.9 million and the $ 16.20 per share closing price of the Company's Common Stock on the Nasdaq Global Select Market on June 30, 2023.

The Company calculated a potential anti-dilutive share count for the three and nine months ended September 30, 2024 based on the remaining expected payments totaling $ 1.2 million and the $ 6.79 per share closing price of the Company's Common Stock on the Nasdaq Global Select Market on September 30, 2024.

The Company calculated a potential anti-dilutive share count for the three and nine months ended September 30, 2023 based on the expected payments totaling $ 4.9 million and the $ 12.20 per share closing price of the Company's Common Stock on the Nasdaq Global Select Market on September 29, 2023.

The Company's net operating loss carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code.

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however, the same analysis for the Company's state net operating loss carryforwards has not yet been completed.

Due to the Company's valuation allowance position in the United States, the required revaluation of its deferred tax asset

related to these limited U.S.

Due to the Company's valuation allowance position in the United States, the required revaluation of its deferred tax asset related to these limited U.S.

state net operating loss carryforwards is not expected to have a material impact on the Condensed Consolidated Financial Statements or related disclosures.

Recent Accounting Guidance Issued But Not Adopted at June 30, 2024

Recent Accounting Guidance Issued But Not Adopted at September 30, 2024

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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Early adoption is permitted.

The Company is currently evaluating the impact that this standard will have on its Consolidated Financial Statements or related disclosures, but the Company does not believe that the adoption of this standard will have a significant impact to its Consolidated Financial Statements or related disclosures.

The Company is currently evaluating the impact that this standard will have on its Consolidated Financial Statements and related disclosures .

Revenue Recognition

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The following table presents the Company's revenue disaggregated by solution group.

(In thousands) Three Months Ended June 30, Six Months Ended June 30,

(In thousands) Three Months Ended September 30, Nine Months Ended September 30,

By solution group:

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Total $ 88,479 .

$ 91,000 $ 261,111 $ 276,242

The following table presents the Company's revenue disaggregated by geographical market and timing of transfer of products and services.

The Company attributes revenue to geographical markets based on the location of the customer.

(In thousands) Three Months Ended June 30, Six Months Ended June 30,

(In thousands) Three Months Ended September 30, Nine Months Ended September 30,

By geographical market:

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The following table provides information about receivables, contract assets, contract liabilities and customer advances from contracts with customers:

(In thousands) June 30, 2024 December 31, 2023

(In thousands) September 30, 2024 December 31, 2023

Accounts receivable, net $ 55,165 $ 63,826

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

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2024 2023

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Remaining Performance Obligations

As of June 30, 2024, 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.

As of September 30, 2024, approximately $ 200 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 17 % of these remaining performance obligations during the remainder of 2024, approximately 48 % in 2025, and approximately 23 % in 2026, with the remainder recognized thereafter.

The Company tests goodwill for impairment annually during the fourth quarter as of October 1, or more frequently when events or changes in circumstances indicate that fair value is below carrying value.

In the third quarter of 2024, 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 changes in the

Company's stock price, market and equity capitalization, operating results and projections.

The Company performed quantitative testing on its reporting unit using a discounted cash flow model (a form of the income approach) utilizing Level 3 unobservable inputs, supported by a market approach.

The Company relied 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 Company's reporting unit did not pass the goodwill impairment test, and as a result the Company recorded a $ 63.0 million non-cash impairment charge for the three and nine months ended September 30, 2024.

In the second quarter of 2023, 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's reporting unit did not pass the goodwill impairment test, and as a result the Company recorded a $ 44.1 million non-cash impairment charge for the nine months ended September 30, 2023.

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

1 unchanged sentence

Balance as of December 31, 2022

Translation adjustments 587

Impairment charge ( 78,200 )

Translation adjustments 587

Balance as of December 31, 2023

Impairment charge ( 63,000 )

Translation adjustments 100

Balance as of June 30, 2024 $ 309,649

Convertible Redeemable Preferred Stock and Stockholders' Equity

Balance as of September 30, 2024 $ 247,460

Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit)

2021 Issuance of Preferred Stock

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

The Preferred Stock is convertible at the option of the holders at any time into a number of shares of Common Stock based on a conversion rate set in accordance with the Certificate of Designations of the Preferred Stock.

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

Due to the Reverse Stock Split effected on December 20, 2023, the conversion factor was adjusted to 0.05 pursuant to the Certificate of Designations of the Preferred Stock.

As of June 30, 2024, each share of Preferred Stock was convertible into 0.057994 shares of Common Stock, with such assumed conversion rate scheduled to return to 0.05 upon payment of accrued dividends.

As of June 30, 2024, no shares of Preferred Stock have been converted into Common Stock.

The holders of Preferred Stock are entitled to participate in all dividends declared on the Common Stock on an as-converted basis and are also entitled to a cumulative dividend at the rate of 7.5 % per annum, payable annually in arrears (on June 30 of each year) and subject to increase under certain specified circumstances.

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In the event the annual dividends are not paid 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, 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 March 10, 2021 (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.

At the annual meeting of stockholders of the Company held on June 15, 2023 (the "Annual Meeting"), the Company's stockholders approved proposals permitting the payment of annual dividends on the Preferred Stock in the form of cash, shares of Common Stock, additional shares of Preferred Stock, or a combination thereof, subject to conditions set forth in the Certificate of Designations.

On the same date, each holder of Preferred Stock waived its right to receive on June 30, 2023 the annual dividends otherwise payable by the Company on that date (the "June 2023 Waivers").

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In addition, each holder waived its right to receive on June 30, 2024 the annual dividends otherwise payable on that date for the dividend period ending June 29, 2024.

Under the June 2024 Waivers and the Certificate of Designations, the deferred dividends for both periods (2023 and 2024) would continue to accrue and accumulate at a rate of 9.5 % per year until declared and paid, with payment to occur on or before July 31, 2024, subject to certain conditions.

As of June 30, 2024, accrued dividends for the Preferred Stock totaled $ 32.6 million.

On July 24, 2024, the Company issued additional shares of Preferred Stock to the existing holders in exchange for cancellation of the Company's obligation to pay the deferred dividends described above.

For further information about this issuance, refer to Footnote 12 , Subsequent Events .

2024 Issuance of Preferred Stock

On July 24, 2024 (the "2024 Issuance Date"), the Company issued 13,257,294 shares of Preferred Stock (the "2024 Preferred Stock") to the existing holders of Preferred Stock in exchange for cancellation of the Company's obligation to pay the deferred dividends totaling $ 32.8 million to such holders for annual dividend periods ended in 2023 and 2024.

As of the 2024 Issuance Date, shares of 2024 Preferred Stock were convertible into 662,862 shares of the Company's Common Stock, representing an effective conversion price of $ 49.438 per share for the canceled dividend obligation.

Shares of 2024 Preferred Stock have the same terms and conditions as the Preferred Stock previously issued by the Company, including that holders are entitled to cumulative dividends at a rate of 7.5 % per annum, payable annually in arrears and subject to increase under certain circumstances.

In connection with the issuance, the Company and the holders of Preferred Stock also entered into an amendment to the Stockholders Agreement.

Among other things, the amendment reduced the $ 100.0 million Special Dividend threshold set forth in the Stockholders Agreement by an amount equal to the liquidation preference of the 2024 Preferred Stock ($ 32.8 million).

After further reducing the threshold by annual dividends paid in prior years, the current Special Dividend threshold is $ 47.0 million.

For purposes of the Condensed Consolidated Financial Statements, the 2024 Preferred Stock issuance was deemed to be a payment of the deferred dividends in the form of Preferred Stock, and the cancellation of the deferred dividend balance constituted an extinguishment of the liability.

For extinguishments of a liability, the difference between the requisition price and the net carrying amount of the liability being extinguished should be recognized as a gain or loss when the liability is extinguished.

Therefore, the Company estimated the fair value using a binomial lattice model, a form of the income approach, utilizing Level 3 unobservable inputs.

The Company used significant inputs and assumptions which included the price and expected volatility of the Common Stock, risk-adjusted discount rate, risk-free rate, expected term, deferred dividends and the timing and probability of a Special Dividend being called and paid as of the 2024 Issuance Date.

The Company recorded the fair value of the 2024 Preferred Stock, net of issuance costs of $ 19.6 million within mezzanine equity.

The remaining $ 13.0 million of the cancelled dividend balance was recognized in additional paid-in capital on the Condensed Consolidated Balance Sheet as of September 30, 2024, because gains in transactions with related parties are recognized as equity contributions.

The Preferred Stock (including the 2024 Preferred Stock) is convertible at the option of the holders at any time into a number of shares of Common Stock based on a conversion rate set in accordance with the Certificate of Designations of the Preferred Stock.

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

Due to the Reverse Stock Split effected on December 20, 2023, the conversion factor was adjusted to 0.05 pursuant to the Certificate of Designations of the Preferred Stock.

As of September 30, 2024, each share of Preferred Stock (including each share of 2024 Preferred Stock) was convertible into 0.050934 shares of Common Stock, with such assumed conversion rate scheduled to return to 0.05 upon payment of accrued dividends.

As of September 30, 2024, no shares of Preferred Stock had been converted into Common Stock, and accrued dividends for the Preferred Stock totaled $ 4.4 million.

2019 Issuance and Sale of Common Stock and Warrants

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

The facility originally had 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 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 %.

Finally, the 2022 Amendment modified certain financial covenants under the Revolving Credit Agreement.

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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 %.

On May 3, 2024, the Company entered into a third amendment (the "2024 Amendment") to the Revolving Credit Agreement.

Among other things, the 2024 Amendment (i) extended the maturity date of the facility from May 5, 2024 to November 5, 2024;

On May 3, 2024, the Company entered into a third amendment (the "May 2024 Amendment") to the Revolving Credit Agreement.

Among other things, the May 2024 Amendment (i) extended the maturity date of the facility from May 5, 2024 to November 5, 2024;

(ii) reduced the Company's aggregate borrowing capacity under the facility from $ 40.0 million to $ 25.0 million;

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(vii) updated certain defined terms in the Revolving Credit Agreement to reflect the May 2023 transfer of shares of Preferred Stock from Qurate to Liberty;

and (viii) provided for certain amendment fees, including a fee of 2.0 % of aggregate commitments due on the maturity date (November 5, 2024) unless all obligations are paid in full prior to such date.

As of June 30, 2024, the Revolving Credit Agreement requires the Company to maintain:

and (viii) provided for certain amendment fees, including a fee of 2.0 % of aggregate commitments due on the maturity date (November 5, 2024) unless all obligations were paid in full prior to such date.

As of September 30, 2024, the Revolving Credit Agreement required the Company to maintain:

• a minimum Consolidated Asset Coverage Ratio (as defined in the Revolving Credit Agreement) of not less than 2.5 to 1.0, tested as of the last day of each calendar month from and after the calendar month ending May 31, 2024;

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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 June 30, 2024.

The Company was in compliance with the covenants under the Revolving Credit Agreement as of September 30, 2024.

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.

In May 2024, the Company paid $ 6.0 million of the principal amount outstanding under the Revolving Credit Agreement in connection with the 2024 Amendment.

As of June 30, 2024, the Company had outstanding borrowings of $ 10.0 million, and issued and outstanding letters of credit of $ 3.2 million, under the amended Revolving Credit Agreement, with remaining borrowing capacity of $ 11.8 million.

As of September 30, 2024, the Company had outstanding borrowings of $ 10.0 million, and issued and outstanding letters of credit of $ 3.2 million, under the amended Revolving Credit Agreement, with remaining borrowing capacity of $ 11.8 million.

The outstanding borrowings are classified within current liabilities based on the maturity date of the facility.

On November 1, 2024, the Company repaid the outstanding borrowings under the Revolving Credit Agreement.

On November 5, 2024, the Company entered into a fourth amendment (the "November 2024 Amendment") to the Revolving Credit Agreement.

Among other things, the November 2024 Amendment extended the maturity date with respect to the outstanding letters of credit and reduced the aggregate commitments to equal the outstanding letters of credit ($ 3.2 million).

For additional information about the November 2024 Amendment, refer to Footnote 12 , Subsequent Events .

Fair Value Measurements

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(In thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

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Total liabilities $ — $ 1,191 $ — $ 1,191 $ — $ 4,806 $ 669 $ 5,475

(1) The fair value of this liability as of June 30, 2024 and December 31, 2023 is derived from a technique which utilizes market-corroborated inputs that result in classification as a Level 2 fair value measurement as of such date.

The contingent consideration liability is classified as current on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023.

(1) The fair value of this liability as of September 30, 2024 and December 31, 2023 is derived from a technique which utilizes market-corroborated inputs that result in classification as a Level 2 fair value measurement as of such date.

The contingent consideration liability is classified as current on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023.

(2) The fair value of this liability was derived from a technique which utilized inputs, certain of which were significant and unobservable, that resulted in classification as a Level 3 fair value measurement.

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Warrants liability was classified within other current liabilities on the Condensed Consolidated Balance Sheets.

The Series A Warrants expired on June 26, 2024 and there are no warrants outstanding as of June 30, 2024.

There were no changes to the Company's valuation techniques or methodologies during the three and six months ended June 30, 2024 and 2023.

The following tables present the changes in the Company's recurring Level 3 fair valued instruments for the six months ended June 30, 2024 and 2023, respectively:

The Series A Warrants expired on June 26, 2024 and there are no warrants outstanding as of September 30, 2024.

There were no changes to the Company's valuation techniques or methodologies during the three and nine months ended September 30, 2024 and 2023.

The following tables present the changes in the Company's recurring Level 3 fair valued instruments for the nine months ended September 30, 2024 and 2023, respectively:

(In thousands) Warrants Liability

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Total gain recognized due to remeasurement and expiration of warrants (1)

Balance as of June 30, 2024 $ —

(1) The gain due to remeasurement and expiration of warrants was recorded in other income (expense), net, in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Balance as of September 30, 2024 $ —

(1) The gain due to remeasurement and expiration of warrants was recorded in other income, net, in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.

The Series A warrants expired unexercised on June 26, 2024.

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Balance as of December 31, 2022 $ 718

Total loss recognized due to remeasurement (1)

Balance as of June 30, 2023 $ 945

(1) The loss due to remeasurement of the warrants liability was recorded in other income (expense), net, in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Total gain recognized due to remeasurement (1)

Balance as of September 30, 2023 $ 311

(1) The gain due to remeasurement of the warrants liability was recorded in other income, net, in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.

The following table displays the valuation technique and the significant inputs, certain of which were unobservable, for the Company's Level 3 liabilities that existed as of December 31, 2023:

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Fair Value Measurements on a Nonrecurring Basis

For the three months ended June 30, 2023, the Company recorded a goodwill impairment charge of $ 44.1 million.

The Company recorded a non-cash goodwill impairment charge of $ 63.0 million for the three and nine months ended September 30, 2024 and $ 44.1 million for the nine months ended September 30, 2023.

Refer to Footnote 4 , Goodwill for further details.

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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 additional non-cash impairment charges.

The Company recorded the 2024 Preferred Stock of $ 19.6 million within mezzanine equity and $ 13.0 million within additional paid-in capital as of September 30, 2024, which was based on the calculated fair value net of issuance costs.

Refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit) for further details.

The initial measurement of the 2024 Preferred Stock issuance 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 binomial lattice model, a form of the income approach, to determine the fair value of the 2024 Preferred Stock at the 2024 Issuance Date.

Accrued Expenses

(In thousands) June 30, 2024 December 31, 2023

(In thousands) September 30, 2024 December 31, 2023

Accrued data costs $ 17,543 $ 15,529

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Transactions with WPP

As of June 30, 2024 (based on public filings), WPP plc and its affiliates ("WPP") owned 565,968 shares of the Company's outstanding Common Stock, representing 11.6 % of the outstanding Common Stock.

As of September 30, 2024 (based on public filings), WPP plc and its affiliates ("WPP") owned 565,968 shares of the Company's outstanding Common Stock, representing 11.6 % of the outstanding Common Stock.

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

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

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

The Company's results from transactions with WPP, as reflected in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income, are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2024 2023 2024 2023

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

(In thousands) June 30, 2024 December 31, 2023

(In thousands) September 30, 2024 December 31, 2023

Accounts receivable, net $ 705 $ 525

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Through May 15, 2023, Charter, Qurate, and Pine each held 33.3 % of the outstanding shares of Preferred Stock.

On May 16, 2023, Qurate sold its Preferred Stock to Liberty, and as of June 30, 2024, Charter, Liberty and Pine each hold 33.3 % of the outstanding shares of Preferred Stock.

On May 16, 2023, Qurate sold its Preferred Stock to Liberty, and as of September 30, 2024, Charter, Liberty and Pine each hold 33.3 % of the outstanding shares of Preferred Stock.

Charter, Liberty and Pine are entitled to convert the Preferred Stock into shares of Common Stock and to vote as a single class with the holders of the Common Stock as set forth in the Certificate of Designations.

As of June 30, 2024 (based on public filings), Pine also owned 109,654 shares of the Company's outstanding Common Stock, representing 2.2 % of the outstanding Common Stock.

As of September 30, 2024 (based on public filings), Pine also owned 109,654 shares of the Company's outstanding Common Stock, representing 2.2 % of the outstanding Common Stock.

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

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As of June 30, 2024 and December 31, 2023, Charter, Liberty and Pine each owned 27,509,203 shares of Preferred Stock.

Accrued dividends to the holders of Preferred Stock as of June 30, 2024 and December 31, 2023 were $ 32.6 million and $ 24.1 million, respectively.

On July 24, 2024, the Company issued 13,257,294 additional shares of Preferred Stock to the existing holders of Preferred Stock in exchange for cancellation of the Company's obligation to pay the deferred dividends totaling $ 32.8 million to such holders for annual dividend periods ended in 2023 and 2024.

For further information refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity (Deficit) .

As of September 30, 2024 and December 31, 2023, Charter, Liberty and Pine each owned 31,928,301 and 27,509,203 shares of Preferred Stock, respectively.

Accrued dividends to the holders of Preferred Stock as of September 30, 2024 and December 31, 2023 were $ 4.4 million and $ 24.1 million, respectively.

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.

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To date, however, neither party has indicated that it intends to terminate the DLA, and the parties are discussing a resolution to the matter.

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

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2024 2023 2024 2023

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

(In thousands) June 30, 2024 December 31, 2023

(In thousands) September 30, 2024 December 31, 2023

Accounts payable $ 15,879 $ 10,323

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Non-current portion of accrued data costs 24,756 21,908

The Company had no transactions with Pine and Liberty for the three and six months ended June 30, 2024 and 2023.

The Company recognized revenues of $ 0.2 million during the three months ended June 30, 2024 and 2023, and $ 0.4 million during the six months ended June 30, 2024 and 2023 from transactions with Qurate and its affiliates in the normal course of business as reflected in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The Company had no transactions with Pine and Liberty, other than the 2024 Preferred Stock issuance for the three and nine months ended September 30, 2024.

In the third quarter of 2023, the Company entered into a finance lease with a third-party vendor that is not a related party.

In conjunction with this transaction, the third-party vendor purchased equipment for $ 2.5 million from a Pine affiliate (related party).

The Company had no additional transactions with Pine and no transactions with Liberty for the three and nine months ended September 30, 2023.

The Company recognized revenues of $ 0.2 million during the three months ended September 30, 2024 and 2023, and $ 0.6 million during the nine months ended September 30, 2024 and 2023 from transactions with Qurate and its affiliates in the normal course of business as reflected in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.

Organizational Restructuring

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The Company believes that the Restructuring Plan, including cash payments, will be substantially complete in 2024.

The following table summarizes costs incurred related to the Restructuring Plan for the three and six months ended June 30, 2024 and 2023.

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

The following table summarizes costs incurred related to the Restructuring Plan for the three and nine months ended September 30, 2024 and 2023.

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands) 2024 2023 2024 2023

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Total restructuring $ 15 $ 353 $ 968 $ 5,455

The table below summarizes the balance of restructuring liability as of June 30, 2024 and December 31, 2023, which is recorded in accrued expenses in the Condensed Consolidated Balance Sheets:

The table below summarizes the balance of restructuring liability as of September 30, 2024 and December 31, 2023, which is recorded in accrued expenses in the Condensed Consolidated Balance Sheets:

(In thousands) Severance and Related Costs Other Total Restructuring

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Other 345 ( 171 ) 174

Balance as of June 30, 2024

Balance as of September 30, 2024

$ 533 $ 18 $ 551

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These agreements have remaining terms of less than one year to seven years .

As of June 30, 2024, the total fixed payment obligations related to set-top box and connected television data agreements are $ 301.8 million and $ 28.2 million, respectively.

The information set forth below summarizes the contractual obligations, by year, as of June 30, 2024:

As of September 30, 2024, the total fixed payment obligations related to set-top box and connected television data agreements are $ 294.9 million and $ 25.4 million, respectively.

The information set forth below summarizes the contractual obligations, by year, as of September 30, 2024:

(In thousands)

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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 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.

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.

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Subsequent Events

On July 24, 2024, the Company issued 13,257,294 additional shares of Preferred Stock to the existing holders of Preferred Stock in exchange for cancellation of the Company's obligation to pay accrued dividends totaling $ 32.8 million to such holders for annual dividend periods ended in 2023 and 2024.

As of the issuance date, the additional shares of Preferred Stock were convertible into 662,862 shares of the Company's Common Stock, representing an effective conversion price of $ 49.438 per share for the canceled dividend obligation.

The additional shares of Preferred Stock have the same terms and conditions as the Preferred Stock previously issued by the Company, including that holders are entitled to cumulative dividends at a rate of 7.5 % per annum, payable annually in arrears and subject to increase under certain circumstances.

In connection with the issuance, the Company and the holders of Preferred Stock also entered into an amendment to the Stockholders Agreement between the parties.

After further reducing the threshold by annual dividends paid in prior years, the current Special Dividend threshold is $ 47.0 million.

On November 1, 2024, the Company repaid the outstanding principal balance of $ 10.0 million under the Revolving Credit Agreement.

On November 5, 2024, the Company entered into a fourth amendment (the "November 2024 Amendment") to the Revolving Credit Agreement to extend the maturity date with respect to the outstanding letters of credit under the facility to January 31, 2025.

The November 2024 Amendment reduced the aggregate lender commitments under the Revolving Credit Agreement to equal the outstanding letters of credit (totaling $ 3.2 million) and limited the purpose of, and use of proceeds under, the Revolving Credit Agreement to the issuance of letters of credit.

Additionally, the November 2024 Amendment terminated the following financial covenants:

(i) the minimum Consolidated Fixed Charge Coverage Ratio, (ii) the minimum Consolidated Asset Coverage Ratio, and (iii) the minimum Liquidity requirement, each as defined in the Revolving Credit Agreement.

The November 2024 Amendment maintained the same non-financial covenants, security interest and interest rate as in effect immediately prior to the November 2024 Amendment, each as described in Footnote 6 , Debt .

Finally, the November 2024 Amendment provided for certain amendment fees, including a fee of $ 250,000 due on the new maturity date (January 31, 2025) unless all letters of credit are terminated or cash collateralized on or prior to such date.

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

What changed 10-Q

Item 1. Financial Statements