Note 4: Investment in Equity Interest

As of September 30, 2025, the Company owned 5,009,005 shares of YFE. At the time of the initial investment in 2021, it was determined that based on the Company’s 28.7% ownership in YFE, the Company had significant influence over the entity. Therefore, under the equity method of accounting, the Company elected to account for the investment at fair value under the fair value option. Under the fair value option, the investment is remeasured and recorded at fair value each reporting period, with the change recorded through earnings.

On July 14, 2025, the Company sold 1,500,000 YFE shares to a single foreign investor for total proceeds of €750,000 ($0.8 million) as part of its ongoing strategy to optimize its portfolio of assets. Subsequently, the Company’s ownership in YFE decreased from 44.8% to 35.0%. Before the transaction, the Company owned 6,857,132 shares of YFE.

On September 25, 2025, the Company executed a share exchange agreement with F&M Film und Medien Beteiligungs GmbH (“F&M”), pursuant to which the Company agreed to transfer 348,127 shares of Your Family Entertainment AG previously held by the Company, to F&M, in exchange for 348,127 shares of the Company’s common stock previously held by F&M, on a one-for-one basis. Subsequently, the Company’s ownership in YFE decreased from 35.0% to 32.7%. Management concluded that the Company continues to exercise significant influence over the investee.

As of September 30, 2025, the fair value of the investment was determined to be $6.7 million recorded within noncurrent assets on the Company’s condensed consolidated balance sheet. The fair value as of September 30, 2025 decreased by net $9.7 million, as compared to December 31, 2024. The net decrease is comprised of the net impact of a decrease in YFE’s stock price, the share sale and exchange transactions completed in the quarter, and the effect of foreign currency remeasurement from EURO to USD. The total change in fair value is recorded within Other Income (Expense), net on the Company’s condensed consolidated statements of operations.

As of September 30, 2025 and December 31, 2024, the Company’s ownership in YFE was 32.7% and 44.8%, respectively.