Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2024 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 10 - Commitments and Contingencies Commitments The Company does not have any contractual commitments outside those addressed below. Refer to Note 4 Balance Sheet Components and Note 5 Debt for information related to the Company’s contractual commitments for leasing and financing arrangements. Contingencies Phantom Stock Compensation Plans The Phantom Units granted and outstanding in the Company’s Phantom Stock Compensation Plans are liability-classified awards that may only be settled in cash and are remeasured to fair value at each reporting date through the date of settlement. Cash payment pursuant to the Phantom Units and the associated compensation expense related to these awards are only incurred in the event of a qualifying sale event, and as such, no expense or liability has been recognized as of June 30, 2024. The estimated contingent liability and unrecognized compensation expense related to the outstanding units was $25,745 thousand, and $0 thousand as of June 30, 2024 and December 31, 2023, respectively. Litigation As of October 18, 2022, the Company had entered into a non-exclusive license agreement (“Content License Agreement”) with Angel Studios, Inc.(“Angel”) pursuant to which the Company granted Angel a non-exclusive license to exploit the Series in exchange for a defined share of Angel’s revenues from such exploitation. As described in the Form 8-K filed on April 10, 2023 by the Company, the Company delivered to Angel a Notice of Termination of the Content License Agreement on April 4, 2023 due to Angel’s previously noticed and uncured material breaches of the Content License Agreement. Initially, the Company elected to hold the termination in abeyance pending binding arbitration of the dispute with Angel, which the Company initiated on April 6, 2023. On October 15, 2023, following additional noticed and uncured material breaches by Angel, the Company delivered to Angel a second Notice of Termination, with such termination of the Content License Agreement to be effective as of October 20, 2023. On May 28, 2024, the arbitrator of the dispute issued an interim arbitration award in favor of the Company which, among other things, found multiple material breaches had been committed by Angel Studios and upheld the Company’s termination of the License Agreement. As such, the Company does not believe these proceedings will have a material negative impact on the Company’s financial position, results of operations, or liquidity. |