EXHIBIT 99.4
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(In thousands, except for share and per share data)
The following selected unaudited financial data should be read in conjunction with the historical consolidated financial statements of Cinedigm Corp. ("Cinedigm") and GVE Newco, LLC (“GVE”), including the notes thereto. The unaudited pro forma condensed combined information is presented for illustrative purposes only and is not necessarily indicative of the results of operations or financial position that would have occurred if the transactions had been actually completed at the dates indicated, nor is it necessarily indicative of future results of operations or financial position of the combined companies. The unaudited pro forma condensed combined balance sheets have been prepared to reflect the acquisition of GVE (the "Acquisition") by Cinedigm as if the acquisition had occurred as of September 30, 2013 by combining the separate balance sheets of Cinedigm and GVE as of that date. The unaudited pro forma condensed combined statement of operations for the year ended March 31, 2013 has been prepared to reflect the acquisition of GVE as if the transaction had occurred as of April 1, 2012 by combining the separate historical statements of operations of GVE for the fiscal year ended December 31, 2012 and Cinedigm for the fiscal year ended March 31, 2013. The unaudited pro forma condensed combined statement of operations for the six months ended September 30, 2013 has been prepared to reflect the acquisition of GVE as if the acquisition had occurred as of April 1, 2012 by combining the separate historical statements of operations of GVE for the six months ended September 30, 2013 and Cinedigm for the six months ended September 30, 2013.
Credit Facility
As previously disclosed via Form 8-K on October 23, 2013, on October 17, 2013, Cinedigm entered into a credit agreement (the “CEH Credit Agreement”) with Société Générale, New York Branch, as administrative agent and collateral agent for the lenders party thereto and certain other secured parties. Under the CEH Credit Agreement and subject to the terms and conditions thereof, the Company may borrow an aggregate principal amount of $55,000, including term loans of $25,000 (the “CEH Term Loans”) and revolving loans of $30,000 (the “CEH Revolving Loans”). All of the CEH Term Loans and $15,000 of the CEH Revolving Loans were drawn at closing in connection with funding of the Acquisition.
Securities Purchase Agreements
As previously disclosed via Form 8-K on October 23, 2013, on October 17, 2013 and October 21, 2013, the Company entered into securities purchase agreements (the “Securities Purchase Agreements”) with certain investors party thereto (the “Investors”) pursuant to which the Company agreed to sell to the Investors notes in the aggregate principal amount of $5,000 (the “2013 Notes”) and warrants to purchase an aggregate of 1,500,000 shares of Class A Common Stock (the “2013 Warrants”). The sales were consummated on October 21, 2013. The proceeds of the sales of the 2013 Notes and 2013 Warrants were used for working capital and general corporate purposes, including to finance, in part, the Acquisition.
As previously disclosed via Form 8-K on October 23, 2013, on October 21, 2013, Cinedigm completed the acquisition of GVE. Cinedigm agreed to an aggregate purchase price of $51,500, subject to a working capital adjustment, with (i) $47,500 payable in cash and 666,978 shares of Class A Common Stock valued at $1,000, subject to certain transfer restrictions, in each case upon the closing of the Acquisition, and (ii) $3,000 payable in cash on a deferred basis.
The acquisition of GVE will be accounted for using the purchase method of accounting and, accordingly, the assets, liabilities and results of operations of GVE will be included in Cinedigm’s consolidated financial statements subsequent to the acquisition date. The unaudited pro forma condensed combined financial statements include adjustments, which are based upon preliminary estimates, to reflect the allocation of the purchase price to the acquired assets and assumed liabilities of GVE.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2013
(In thousands, except for share and per share data)
| | Historical | | Pro Forma |
| | Cinedigm | | GVE | | Acquisition Adjustment | | Combined |
| ASSETS | | | | | | | |
| Current assets | | | | | | | |
| Cash and cash equivalents | $ | 12,389 | | | $ | — | | | $ | (1,140 | ) | (1) | $ | 11,249 | |
| Accounts receivable, net | 36,322 | | | 32,513 | | | — | | | 68,835 | |
| Deferred costs, current portion | 1,309 | | | — | | | — | | | 1,309 | |
| Unbilled revenue, current portion | 4,894 | | | — | | | — | | | 4,894 | |
| Advances, net | — | | | 19,558 | | | — | | | 19,558 | |
| Prepaid and other current assets | 7,784 | | | 6,389 | | | (933 | ) | (2) | 13,240 | |
| Note receivable, current portion | 324 | | | — | | | — | | | 324 | |
| Total current assets | 63,022 | | | 58,460 | | | (2,073 | ) | | 119,409 | |
| | | | | | | | |
| Restricted cash | 6,751 | | | — | | | — | | | 6,751 | |
| Security deposits | 218 | | | — | | | — | | | 218 | |
| Property and equipment, net | 152,563 | | | — | | | — | | | 152,563 | |
| Media library, net | — | | | 762 | | | 37,157 | | (3) | 37,919 | |
| Intangible assets, net | 12,006 | | | 3,685 | | | (3,685 | ) | (3) | 12,006 | |
| Capitalized software costs, net | 7,509 | | | — | | | — | | | 7,509 | |
| Goodwill | 12,739 | | | 6,731 | | | (6,731 | ) | (3) | 12,739 | |
| Deferred tax assets | — | | | 1,830 | | | (1,830 | ) | (2) | — | |
| Deferred costs, net of current portion | 7,131 | | | — | | | 1,101 | | | 8,232 | |
| Unbilled revenue, net of current portion | 460 | | | — | | | — | | | 460 | |
| Accounts receivable, long-term | 1,505 | | | — | | | — | | | 1,505 | |
| Note receivable, net of current portion | 123 | | | — | | | — | | | 123 | |
| Total assets | $ | 264,027 | | | $ | 71,468 | | | $ | 23,939 | | | $ | 359,434 | |
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2013
(In thousands, except for share and per share data)
| | Historical | | Pro Forma |
| | Cinedigm | | GVE | | Acquisition
Adjustment | | Combined |
| LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | | | | | | | |
| Current liabilities | | | | | | | |
| Accounts payable and accrued expenses | $ | 49,387 | | | $ | 26,851 | | | $ | 19,030 | | (4) | $ | 95,268 | |
| Line of credit | — | | | 15,422 | | | (15,422 | ) | | — | |
| Current portion of notes payable, non-recourse | 33,992 | | | — | | | 15,000 | | (5) | 48,992 | |
| Current portion of capital leases | 151 | | | — | | | — | | | 151 | |
| Current portion of deferred revenue | 3,699 | | | — | | | — | | | 3,699 | |
| Total current liabilities | 87,229 | | | 42,273 | | | 18,608 | | | 148,110 | |
| | | | | | | | — | |
| Notes payable, non-recourse, net of current portion | 183,342 | | | — | | | 29,711 | | (5) | 213,053 | |
| Capital leases, net of current portion | 4,385 | | | — | | | — | | | 4,385 | |
| Deferred revenue, net of current portion | 10,196 | | | — | | | — | | | 10,196 | |
| Contingent consideration, net of current portion | 1,846 | | | — | | | — | | | 1,846 | |
| Total liabilities | 286,998 | | | 42,273 | | | 48,319 | | | 377,590 | |
| | | | | | | | — | |
| Stockholders’ (Deficit) Equity | | | | | | | — | |
| Preferred stock, 15,000,000 shares authorized; Series A 10% - $0.001 par value per share; 20 shares authorized; 7 shares issued and outstanding at September 30, 2013. Liquidation preference of $3,609 | 3,520 | | | — | | | — | | | 3,520 | |
| Class A common stock, $0.001 par value per share; 118,759,000 shares authorized; 53,077,216 shares issued and 53,025,776 shares outstanding at September 30, 2013 | 53 | | | — | | | 11 | | (6) | 64 | |
| Class B common stock, $0.001 par value per share; 1,241,000 shares authorized and issued, 0 shares outstanding at September 30, 2013 | — | | | — | | | — | | | — | |
| Additional paid-in capital | 228,427 | | | 29,195 | | | (14,629 | ) | (2) (6) | 242,993 | |
| Treasury stock, at cost; 51,440 Class A shares | (172 | ) | | — | | | — | | | (172 | ) |
| Accumulated deficit | (254,799 | ) | | — | | | (9,762 | ) | (2) | (264,561 | ) |
| Total stockholders’ (deficit) equity | (22,971 | ) | | 29,195 | | | (24,380 | ) | | (18,156 | ) |
| Total liabilities and stockholders’ (deficit) equity | $ | 264,027 | | | $ | 71,468 | | | $ | 23,939 | | | $ | 359,434 | |
1) Represents net cash raised via debt and equity offerings, offset by cash paid to the sellers of GVE and transaction fees paid by Cinedigm in connection with the Acquisition.
2) Represents GVE amounts written-off and costs incurred in connection with the Acquisition for pro forma presentation.
3) Represents preliminary allocation of purchase price to the media library of approximately $44.6 million, less adjustments for amounts written-off in connection with the Acquisition for pro forma presentation.
4) Represents liability to the sellers of GVE to be paid in cash on a deferred basis and working capital adjustment.
5) Represents amounts raised via the CEH Credit Agreement and Securities Purchase Agreements.
6) Represents the issuance 9,089,990 shares of Class A common stock in connection with a public offering, 1,398,601 shares to an individual investor and 666,978 shares to the sellers of GVE, offset by GVE historical amounts written-off in connection with the Acquisition.
