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Balance Sheet Components

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

3. Balance Sheet Components

The components of certain balance sheet amounts are as follows:

Accounts Receivable – The Company receives payments from advertising customers based upon contractual payment terms; accounts receivable is recorded when the right to consideration becomes unconditional and are generally collected within 90 days. The Company generally receives payments from digital and print subscription customers at the time of sign up for each subscription; accounts receivable from merchant credit card processors are recorded when the right to consideration becomes unconditional and are generally collected weekly. Accounts receivable have been reduced by an allowance for doubtful accounts. The Company maintains the allowance for estimated losses resulting from the inability of the Company’s customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectibility, customer creditworthiness, historical levels of credit losses, and future expectations. Accounts receivable are written off when deemed uncollectible and collection of the receivable is no longer being actively pursued. Accounts receivable as of March 31, 2023 and December 31, 2022 of $23,561 and $33,950, respectively, are presented net of allowance for doubtful accounts. The following table summarizes the allowance for doubtful accounts activity:

	Three Months Ended March 31, 2023 (unaudited)			Year Ended December 31, 2022
Allowance for doubtful accounts beginning of period	$	2,236		$	1,578
Additions		64			980
Deductions – write-offs		(28	)		(322	)
Allowance for doubtful accounts end of period	$	2,272		$	2,236

Subscription Acquisition Costs – Subscription acquisition costs include the incremental costs of obtaining a contract with a customer, paid to external parties, if the Company expects to recover those costs. The Company has determined that sales commissions paid on all third-party agent sales of subscriptions are direct and incremental and, therefore, meet the capitalization criteria. The Company has elected to apply the practical expedient to account for these costs at the portfolio level. The sales commissions paid to third-party agents are amortized as magazines are sent to the subscriber on an issue-by-issue basis. Subscription acquisition costs are included within selling and marketing expenses on the condensed consolidated statements of operations.

The current portion of the subscription acquisition costs as of March 31, 2023 and December 31, 2022 was $31,908 and $25,931, respectively. The noncurrent portion of the subscription acquisition costs as of March 31, 2023 and December 31, 2022 was $12,460 and $14,133, respectively. Subscription acquisition costs as of March 31, 2023 presented as current assets of $31,908 are expected to be amortized over a one-year period, or through March 31, 2024, and $12,460 presented as long-term assets are expected to be amortized after the one-year period ending March 31, 2024.

Amortization of subscription acquisition costs of $10,005 and $9,723 for the three months ended March 31, 2023 and 2022, respectively, are included in selling and marketing expenses on the condensed consolidated statements of operations. No impairment losses have been recognized for subscription acquisition costs for the three months ended March 31, 2023 and 2022.

Prepayments and other current assets – Prepayments and other current assets are summarized as follows:

	March 31, 2023 (unaudited)		December 31, 2022
	As of
	March 31, 2023 (unaudited)		December 31, 2022
Prepaid expenses	$	3,840	$	2,321
Prepaid supplies		923		927
Refundable income and franchise taxes		157		957
Unamortized debt costs		216		216
Employee retention credits		6,868		-
Other receivables		33		20
Total prepayments and other current assets	$	12,037	$	4,441

Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the subsequent extensions of the Cares Act, the Company is eligible for refundable employee retention credits subject to certain criteria. The Company determined that it qualifies for the tax credit under the CARES Act. In connection with the CARES Act, the Company adopted a policy to recognize the employee retention credits when earned and to offset the credit against the related expenditure. For the three months ended March 31, 2023, the Company recorded the employee retention credits as a reduction to payroll and related expenses of $6,868 in operating expenses on the condensed consolidated statements of operations with a corresponding receivable included in prepaid expenses and other current assets on the condensed consolidated balance sheets.

Property and Equipment – Property and equipment are summarized as follows:

Schedule of Property and Equipment

	March 31, 2023 (unaudited)			December 31, 2022
	As of
	March 31, 2023 (unaudited)			December 31, 2022
Office equipment and computers	$	1,777		$	1,744
Furniture and fixtures		133			240
Property and equipment, Gross		1,910			1,984
Less accumulated depreciation and amortization		(1,345	)		(1,249	)
Net property and equipment	$	565		$	735

Depreciation and amortization expense for the three months ended March 31, 2023 and 2022 was $114 and $114, respectively. For the three months ended March 31, 2023 and 2022, impairment charges of $55 and $0, respectively, have been recorded for property and equipment on the condensed consolidated statements of operations.

Platform Development – Platform development costs are summarized as follows:

Summary of Platform Development Costs

	March 31, 2023 (unaudited)			December 31, 2022
	As of
	March 31, 2023 (unaudited)			December 31, 2022
Platform development	$	22,764		$	21,493
Less accumulated amortization		(12,575	)		(11,163	)
Net platform development	$	10,189		$	10,330

A summary of platform development activity for the three months ended March 31, 2023 is as follows:


Platform development beginning of period	$	21,493
Payroll-based costs capitalized		1,188
Less dispositions		(160	)
Total capitalized costs		22,521
Stock-based compensation		307
Impairments		(64	)
Platform development end of period	$	22,764

Amortization expense for the three months ended March 31, 2023 and 2022, was $1,573 and $1,344, respectively. Amortization expense for platform development is included in cost of revenues on the condensed consolidated statements of operations. For the three months ended March 31, 2023 and 2022, impairment charges of $64 and $210, respectively, have been record for platform development on the condensed consolidated statements of operations.

Intangible Assets – Intangible assets subject to amortization consisted of the following:

	As of March 31, 2023 (unaudited)							As of December 31, 2022
	Carrying Amount		Accumulated Amortization			Net Carrying Amount		Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed technology	$	17,333	$	(15,679	)	$	1,654	$	17,333	$	(14,883	)	$	2,450
Trade name		5,380		(1,287	)		4,093		5,380		(1,180	)		4,200
Brand name		12,774		(1,274	)		11,500		12,115		(908	)		11,207
Subscriber relationships		73,459		(50,769	)		22,690		73,459		(47,146	)		26,313
Advertiser relationships		15,965		(1,776	)		14,189		15,302		(1,368	)		13,934
Database		2,397		(1,856	)		541		2,397		(1,753	)		644
Digital content		355		(178	)		177		355		(133	)		222
Total intangible assets	$	127,663	$	(72,819	)	$	54,844	$	126,341	$	(67,371	)	$	58,970

Intangible assets subject to amortization were recorded as part of the Company’s business acquisitions. Amortization expense for the three months ended March 31, 2023 and 2022 was $5,448 and $5,055, respectively, of which amortization expense for developed technology of $796 and $967, respectively, is included in cost of revenues on the condensed consolidated statements of operations. For the three months ended March 31, 2023 and 2022, impairment charges of $0 and $47, respectively, have been recorded for the intangible assets on the condensed consolidated statements of operations.