Divestiture of Movies Business

On May 27, 2026 (the "Closing Date"), the Company entered into and closed an Equity Purchase Agreement (the "Purchase Agreement") with an affiliate of Advaya Capital, Flix Buyer Inc. (the "Purchaser"), pursuant to which the Company sold its box office measurement, reporting and analytics business and its Hollywood Software business (collectively, the "Movies Business"), including 100% of the interests of Rentrak, LLC, an Oregon limited liability company and wholly owned subsidiary of the Company, to the Purchaser for an aggregate base purchase price of $70.0 million in cash, subject to customary adjustments and other terms set forth in the Purchase Agreement (the "Movies Transaction"). The adjustments primarily related to cash, working capital balances, indebtedness and other items as defined in the Purchase Agreement. As of June 30, 2026, the estimated adjustments included within the purchase price consideration totaled $7.0 million. However, the final resolution of these adjustments may result in an increase or decrease in the total purchase price consideration for the Movies Transaction. The sale of the Movies Business did not represent a strategic shift that would have a major effect on the Company's operations and financial results in accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, and therefore it is not reported as discontinued operations. The results of operations of the Movies Business through the Closing Date are included within continuing operations in the Company's Condensed Consolidated Statements of Operations and Comprehensive Loss.

On the Closing Date, the Company received initial cash consideration of $58.2 million, which represented the base purchase price net of $7.8 million of estimated adjustments and $4.0 million related to a purchase-price escrow for post-closing adjustments and an indemnification escrow for indemnification obligations as required by the Purchase Agreement. The purchase-price escrow of $1.5 million is classified within prepaid expenses and other current assets and the indemnification escrow of $2.5 million is classified within other non-current assets on the Condensed Consolidated Balance Sheet as of June 30, 2026. As of June 30, 2026, the Company had not recognized any liabilities related to the purchase-price escrow or indemnification escrow, and the full amounts were included within consideration to be received.

The Company recognized a loss on divestiture of $2.7 million, including direct costs to sell, for the three and six months ended June 30, 2026 in its Condensed Consolidated Statements of Operations and Comprehensive Loss. Other transaction costs that are not presented within loss on divestiture of business, net are presented in general and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. For the three and six months ended June 30, 2026, other transaction costs were $1.7 million and $2.2 million, respectively.

The table below summarizes the calculation of the pre-tax loss on divestiture of business, net:


	(In thousands)
Purchase price consideration	$	63,014
Net assets divested (1)	(62,281)
Accumulated other comprehensive loss	445
Pre-tax gain on divestiture of business	1,178
Direct costs to sell	(3,860)
Pre-tax loss on divestiture of business, net	$	(2,682)

(1) The carrying value of net assets sold included goodwill of $62.6 million, which was allocated based on the relative fair value of the Movies Business in comparison to the fair value of the Company's total reporting unit.

Immediately following the divestiture, the Company performed a quantitative impairment test of the Company's remaining goodwill. The estimated fair value of the reporting unit was above the carrying amount, therefore no goodwill impairment was recognized. Refer to Foo tnote 5, Goodwill for additional information.