UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal period ended: September 30, 2022

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-31810

Cinedigm Corp.

(Exact name of registrant as specified in its charter)

Delaware		22-3720962
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

244 Fifth Avenue, Suite M289, New York, N.Y.		10001
(Address of principal executive offices)		(Zip Code)

(212) 206-8600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
CLASS A COMMON STOCK, PAR VALUE $0.001 PER SHARE		CIDM		NASDAQ CAPITAL MARKET

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Smaller reporting company ☒

Emerging Growth Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

As of November 10, 2022, 178,184,058 shares of Class A Common Stock, $0.001 par value, were outstanding.

CINEDIGM CORP.

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets at September 30, 2022 (Unaudited) and March 31, 2022	1
	Unaudited Condensed Consolidated Statements of Operations for the Three Months and Six Months ended September 30, 2022 and 2021	2
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months and Six Months ended September 30, 2022 and 2021	3
	Unaudited Condensed Consolidated Statements of Equity for the Three Months and Six Months ended September 30, 2022 and 2021	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months ended September 30, 2022 and 2021	6
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 4.	Controls and Procedures	46

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	48
Exhibit Index		48
Signatures		49

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CINEDIGM CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

	September 30, 2022			March 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	9,676		$	13,062
Accounts receivable, net of allowance of $2,726 and $2,921, respectively		24,939			30,843
Inventory		157			116
Unbilled revenue		2,647			2,349
Prepaid and other current assets		8,080			5,793

Total current assets		45,499			52,163
Equity investment in A Metaverse Company, a related party, at fair value		5,200			7,028
Property and equipment, net		1,756			1,980
Operating lease right-of use assets, net		612			749
Intangible assets, net		18,554			20,034
Goodwill		21,025			21,084
Other long-term assets		1,610			1,598
Total assets	$	94,256		$	104,636
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	47,268		$	52,025
Line of credit, including unamortized debt issuance costs of $165 and $0, respectively (see Note 5)		3,622			-
Current portion of deferred consideration on purchase of business		3,523			3,432
Current portion of earnout consideration on purchase of business		741			1,081
Operating lease liabilities		127			258
Deferred revenue		270			196

Total current liabilities		55,551			56,992
Deferred consideration on purchase – net of current portion		5,615			5,600
Earnout consideration on purchase – net of current portion		651			603
Operating lease liabilities, net of current portion		489			491
Other long-term liabilities		74			-

Total liabilities		62,380			63,686
Commitments and contingencies (see Note 6)
Stockholders’ Equity
Preferred stock, 15,000,000 shares authorized; Series A 10% - $0.001 par value per share; 20 shares authorized; 7 shares issued and 7 shares outstanding at September 30, 2022 and March 31, 2022. Liquidation preference of $3,648		3,559			3,559
Common stock, $0.001 par value; Class A stock 275,000,000 and 275,000,000 shares authorized at September 30, 2022 and March 31, 2022, respectively, 179,316,947 and 176,629,435 shares issued and 178,001,096 and 175,313,584 shares outstanding at September 30, 2022 and March 31, 2022, respectively		176			174
Additional paid-in capital		525,657			522,601
Treasury stock, at cost; 1,315,851 and 1,315,851 Class A common shares at September 30, 2022 and March 31, 2022, respectively		(11,608	)		(11,608	)
Accumulated deficit		(484,155	)		(472,310	)
Accumulated other comprehensive loss		(477	)		(163	)
Total stockholders’ equity of Cinedigm Corp.		33,152			42,253
Deficit attributable to noncontrolling interest		(1,276	)		(1,303	)
Total equity		31,876			40,950
Total liabilities and equity	$	94,256		$	104,636

See accompanying Notes to Condensed Consolidated Financial Statements

CINEDIGM CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except for share and per share data)

	Three Months Ended September 30,						Six Months Ended September 30,
	2022			2021			2022			2021
Revenues	$	14,006		$	10,103		$	27,596		$	25,118
Costs and expenses:
Direct operating (excludes depreciation and amortization shown below)		8,092			3,333			15,448			7,964
Selling, general and administrative		9,597			7,159			19,412			13,202
Provision (recovery) for doubtful accounts		44			(111	)		47			(40	)
Depreciation and amortization of property and equipment		248			440			504			1,089
Amortization of intangible assets		736			696			1,480			1,543
Total operating expenses		18,717			11,517			36,891			23,758
Income (loss) from operations		(4,711	)		(1,414	)		(9,295	)		1,360
Interest expense, net		(380	)		(36	)		(513	)		(180	)
Gain on forgiveness of PPP loan		-			-						2,178
Change in fair value of equity investment in Metaverse, a related party		(572	)		666			(1,828	)		1,000
Other (income) expense, net		8			102			(6	)		91
Income (loss) before income taxes		(5,655	)		(682	)		(11,642	)		4,449
Income tax benefit (expense)		-			487			-			550
Net income (loss)		(5,655	)		(195	)		(11,642	)		4,999
Net (income) loss attributable to noncontrolling interest		(9	)		11			(27	)		4
Net income (loss) attributable to controlling interests		(5,664	)		(184	)		(11,669	)		5,003
Preferred stock dividends		(88	)		(89	)		(176	)		(178	)
Net income (loss) attributable to common stockholders	$	(5,752	)	$	(273	)	$	(11,845	)	$	4,825
Net income (loss) per Class A common stock attributable to common stockholders - basic:	$	(0.03	)	$	(0.00	)	$	(0.07	)	$	0.03
Weighted average number of Class A common stock outstanding: basic		176,895,367			168,275,139			176,161,924			167,524,744
Net income (loss) per Class A common stock attributable to common stockholders - diluted:	$	(0.03	)	$	(0.00	)	$	(0.07	)	$	0.03
Weighted average number of Class A common stock outstanding: diluted		176,895,367			168,275,139			176,161,924			170,743,885

See accompanying Notes to Condensed Consolidated Financial Statements

CINEDIGM CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands)

	Three Months Ended September 30,						Six Months Ended September 30,
	2022			2021			2022			2021
Net income (loss)	$	(5,655	)	$	(195	)	$	(11,642	)	$	4,999
Other comprehensive (loss) income: foreign exchange translation		(362	)		35			(314	)		(19	)
Comprehensive income (loss)		(6,017	)		(160	)		(11,956	)		4,980
Less: comprehensive income (loss) attributable to noncontrolling interest		(9	)		11			(27	)		4
Comprehensive income (loss) attributable to controlling interests	$	(6,026	)	$	(149	)	$	(11,983	)	$	4,984

See accompanying Notes to Condensed Consolidated Financial Statements

CINEDIGM CORP.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands, except share data)

	Series A Preferred Stock				Class A Common Stock					Treasury					Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Total Stockholders’ Equity			Non-Controlling			Total Equity
	Shares		Amount		Shares			Amount		Shares		Amount			Capital		Deficit			Loss			(Deficit)			Interest			(Deficit)
Balances as of March 31, 2021		7	$	3,559		166,228,568		$	164		1,313,836	$	(11,603	)	$	499,272	$	(474,080	)	$	(68	)	$	17,244		$	(1,362	)	$	15,882
Foreign exchange translation		—		—		—			—		—		—			—		—			(54	)		(54	)		—			(54	)
Stock-based compensation		—		—		35,714			—		—		—			983		—			—			983			—			983
Issuance of common stock in connection with a business combination		—		—		1,483,129			2		—		—			2,504		—			—			2,506			—			2,506
Preferred stock dividends paid with common stock		—		—		53,278			—		—		—			89		(89	)		—			—			—			—
Net income		—		—		—			—		—		—			—		5,187			—			5,187			7			5,194
Balances as of June 30, 2021		7		3,559		167,800,689			166		1,313,836		(11,603	)		502,848		(468,982	)		(122	)		25,866			(1,355	)		24,511
Foreign exchange translation		—		—		—			—		—		—			—		—			35			35			—			35
Stock-based compensation		—		—		132,630			—		—		—			946		—			—			946			—			946
Issuance of common stock in connection with business combinations		—		—		1,179,156			1		—		—			2,317		—			—			2,318			—			2,318
Treasury stock in connection with taxes withheld from employees		—		—		(2,015	)		—		2,015		(5	)		—		—			—			(5	)		—			(5	)
Preferred stock dividends		—		—		—			—		—		—			—		(89	)		—			(89	)		—			(89	)
Net loss		—		—		—			—		—		—			—		(184	)		—			(184	)		(11	)		(195	)
Balances as of September 30, 2021		7		3,559		169,110,460			167		1,315,851		(11,608	)		506,111		(469,255	)		(87	)		28,887			(1,366	)		27,521

See accompanying & Notes to Condensed Consolidated Financial Statements

CINEDIGM CORP.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands, except share data)

Series A Preferred Stock

Class A
Common Stock

Treasury

Additional Paid-In

Accumulated

Accumulated
Other
Comprehensive

Total Stockholders’
Equity

Non-Controlling

Total
Equity

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Loss

(Deficit)

Interest

(Deficit)

Balances as of March 31, 2022

3,559

175,313,584

174

1,315,851

(11,608

)

SEC Form 10-Q filed by Cinedigm Corp.