XML 22 R11.htm IDEA: XBRL DOCUMENT
v3.25.2

Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended
--- | ---
Jun. 30, 2025
Accounting Policies [Abstract] |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2: Basis of Presentation and Summary of Significant Accounting Policies The accompanying interim condensed consolidated financial statements of the Company have been prepared in conformity with U.S. Generally Accepted Accounting Principles (U.S. GAAP”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amount of assets, liabilities, revenue, costs, expenses and other comprehensive income/(loss) that are reported in the condensed consolidated financial statements and accompanying disclosures. These estimates are based on management’s best knowledge of current events, historical experience, actions that the company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates. The accompanying combined interim financial statements are unaudited, but in the opinion of management, contain all adjustments (which include normal recurring adjustments) considered necessary to present fairly the interim financial statements. Interim results are not necessarily indicative of financial results for a full year. The information included in this Form 10-Q should be read in conjunction with the Company’s 2024 Annual Report. The following is provided to update the Company’s significant accounting policies previously described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Foreign Currency Forward Contracts As of June 30, 2025 and December 31, 2024, the gross amounts of FX forwards in an asset and liability position subject to a master netting arrangement resulted in a net liability of $0.1 million and $0.6 million, respectively, recorded within Other Current Liabilities on the condensed consolidated balance sheets. For the three and six months ended June 30, 2025, the Company recorded a realized loss of $24,070 and $0.2 million, respectively, on FX forward contracts within Production Services Revenue on the condensed consolidated statements of operations. For the three and six months ended June 30, 2024, the Company recorded a realized loss of $20,903 and $0.1 million, respectively, on FX forward contracts within Production Services Revenue on the condensed consolidated statements of operations. Trade Accounts Receivable and Allowance for Credit Loss As of June 30, 2025 and December 31, 2024, the Company recorded an allowance for credit loss of $0.1 million and $0.2 million, respectively. The following table summarizes the activity in the allowance for credit losses related to trade accounts receivable as of June 30, 2025 and December 31, 2024 (in thousands):
Schedule of allowance for credit losses trade accounts receivable |  |  |  |
Balance, net as of December 31, 2023 |  | $ | 189 |
Charged to costs and expenses |  |  | 64 |
Recoveries |  |  | (14 | )
Balance, net as of December 31, 2024 |  | $ | 239 |
Charged to costs and expenses |  |  | 28 |
Recoveries |  |  | (35 | )
Write-offs |  |  | (138 | )
Balance, net as of June 30, 2025 |  | $ | 94 |
Tax Credits Receivable The Company classifies the majority of its tax credits receivable as current based on their normal operating cycle. As of June 30, 2025, a portion of the Company’s tax credits receivable is presented as a long-term asset due to uncertainty regarding the timing of obtaining the necessary certifications required to process the tax credits. Management will continue to monitor the status of the outstanding items and reclassify the receivable to current when the timing of collection becomes reasonably estimable. As of June 30, 2025 and December 31, 2024, $14.5 million and $12.7 million in tax credit receivables related to Wow’s film and television productions were recorded, net of $0.7 million and $0.6 million, respectively, recorded as an allowance for credit loss. As of June 30, 2025, $2.2 million in tax credits receivable net of $0.4 million allowance for credit loss was presented as non-current asset. As of December 31, 2024 $2.4 million in tax credits receivable net of $0.4 million allowance for credit loss was presented as non-current asset. Concentration of Risk The Company maintains its cash in bank deposit accounts which, at times, may exceed the Federal Deposit Insurance Corporation’s (“FDIC”) or the Canadian Deposit Insurance Corporation’s (“CDIC”) insured amounts. Balances on interest bearing deposits at banks in the United States are insured by the FDIC up to $250,000 per account and deposits in banks in Canada are insured by the CDIC up to CAD 100,000. As of June 30, 2025 and December 31, 2024, the Company had eight and twelve bank deposit accounts with an aggregate uninsured balance of $0.8 million and $6.7 million, respectively. The Company has a managed account with a financial institution. The managed account maintains its investments in marketable securities of approximately $0.7 million and $2.0 million as of June 30, 2025 and December 31, 2024, respectively. Assets in the managed account are protected by the Securities Investor Protection Corporation (“SIPC”) up to $500,000 (with a limit of $250,000 for cash). In addition, the financial institution provides additional “excess of SIPC” coverage which insures up to $1.0 billion. As of June 30, 2025 and December 31, 2024, the Company did not have account balances held at this financial institution that exceed the insured balances. As of June 30, 2025, the Company’s investment portfolio consists of high-grade, fixed-income U.S. government agency bonds and therefore would not be considered diversified. While this represents a concentration in a single asset class and issuer type, these investments are considered to have minimal credit risk due to the high credit quality of U.S. government agencies. The Company continues to monitor its investment holdings in accordance with its investment policy and believes no significant concentration of credit risk exists with respect to these investments. During the three months ended June 30, 2025, the Company had four customers, whose total revenue exceeded 10% of the total condensed consolidated revenue. These customers accounted for 86.6% of the total revenue. During the three months ended June 30, 2024, the Company had four customers whose total revenue exceeded 10% of the total condensed consolidated revenue. These customers accounted for 80.9% of the total revenue. During the six months ended June 30, 2025, the Company had four customers, whose total revenue exceeded 10% of the total condensed consolidated revenue. These customers accounted for 85.9% of the total revenue. During the six months ended June 30, 2024, the Company had three customers whose total revenue exceeded 10% of the total condensed consolidated revenue. These customers accounted for 66.7% of the total revenue. As of June 30, 2025, the Company had two customers whose total accounts receivable exceeded 10% of the total accounts receivable. These customers accounted for 49.6% of the total accounts receivable as of June 30, 2025. As of December 31, 2024, the Company had three customers whose total accounts receivable exceeded 10% of the total accounts receivable. These customers accounted for 53.2% of the total accounts receivable as of December 31, 2024. There is significant financial risk associated with a dependence upon a small number of customers. The Company periodically assesses the financial strength of these customers and establishes allowances for any anticipated credit losses. Fair Value of Financial Instruments The following table summarizes the marketable securities measured at fair value on a recurring basis by level within the fair value hierarchy as of June 30, 2025 (in thousands):
Schedule of marketable securities measured at fair value on a recurring basis |  |  |  |  |  |  |  |  |  |  |  |
|  | Level 1 |  |  | Level 2 |  |  | Total Fair Value |
Investments in Marketable Securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Agency and Government Sponsored Securities |  | $ | – |  |  | $ | 687 |  |  | $ | 687 |
Total |  | $ | – |  |  | $ | 687 |  |  | $ | 687 |
The following table summarizes the marketable securities measured at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2024 (in thousands):
|  | Level 1 |  |  | Level 2 |  |  | Total Fair Value |
Investments in Marketable Securities: |  |  |  |  |  |  |  |  |  |  |  |
Corporate Bonds |  | $ | 537 |  |  | $ | – |  |  | $ | 537 |
U.S. Agency and Government Sponsored Securities |  |  | – |  |  |  | 1,107 |  |  |  | 1,107 |
U.S. States and Municipalities |  |  | – |  |  |  | 385 |  |  |  | 385 |
Total |  | $ | 537 |  |  | $ | 1,492 |  |  | $ | 2,029 |
Fair values were determined for each individual security in the investment portfolio. The Company’s marketable securities are considered to be available-for-sale investments as defined under FASB ASC 320, Investments – Debt and Equity Securities. An allowance for credit loss was not recorded for the marketable securities as of June 30, 2025 and December 31, 2024. Refer to Note 5 for additional details. New Accounting Standards Issued but Not Yet Adopted In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. The Company is in the process of evaluating the impact that the adoption of this ASU will have to the consolidated financial statements and related disclosures, which is expected to result in enhanced disclosures. In March 2024, the FASB issued ASU 2024-01, Scope Application of Profits Interests and Similar Awards. The ASU is intended to help entities determine whether profits interest and similar awards are in the scope of ASC 718, Stock Compensation. The ASU solely focuses on scope and does not address guidance on recognition, classification, attribution, or measurement. For public business entities, it is effective for annual periods beginning after December 15, 2024 and interim periods within those annual periods. For all other entities, it is effective for annual periods beginning after December 15, 2025. Early adoption is permitted for both interim and annual financial statements. The amendments would be applied either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. The Company is in the process of evaluating the impact that the adoption of this ASU will have to the consolidated financial statements and related disclosures, which is expected to result in enhanced disclosures. In November, 2024 the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense. This update mandates that public companies provide more detailed information about specific expenses in their financial statement notes. The effective date for this guidance is annual reporting periods beginning after December 15, 2026, with interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of evaluating the impact that the adoption of this ASU will have to the consolidated financial statements and related disclosures, which is expected to result in enhanced disclosures.

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/235/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483426/235-10-50-1 + Details
Name: | us-gaap_SignificantAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration