Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Sep. 30, 2021 | Nov. 11, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | Cinedigm Corp. | |
Trading Symbol | CIDM | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --03-31 | |
Entity Common Stock, Shares Outstanding | 174,870,953 | |
Amendment Flag | false | |
Entity Central Index Key | 0001173204 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-31810 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-3720962 | |
Entity Address, Address Line One | 237 West 35th Street | |
Entity Address, Address Line Two | Suite 605 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10001 | |
City Area Code | (212) | |
Local Phone Number | 206-8600 | |
Title of 12(b) Security | CLASS A COMMON STOCK, PAR VALUE $0.001 PER SHARE | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 12,645 | $ 16,849 |
Accounts receivable, net | 24,151 | 21,093 |
Inventory | 122 | 166 |
Unbilled revenue | 2,074 | 1,377 |
Prepaid and other current assets | 3,610 | 3,657 |
Total current assets | 42,602 | 43,142 |
Restricted cash | 1,000 | |
Equity investment in Starrise, a related party, at fair value | 7,443 | 6,443 |
Property and equipment, net | 2,546 | 3,500 |
Right-of-use assets | 31 | 100 |
Intangible assets, net | 16,367 | 9,860 |
Goodwill | 13,527 | 8,701 |
Other long-term assets | 1,385 | 2,700 |
Total assets | 83,901 | 75,446 |
LIABILITIES AND EQUITY | ||
Accounts payable and accrued expenses | 52,741 | 46,627 |
Current portion of notes payable (see Note 5) | 1,956 | |
Current portion of notes payable, non-recourse (see Note 5) | 7,786 | |
Current portion of deferred consideration on purchase of a business | 465 | |
Current portion of earnout consideration on purchase of a business | 277 | |
Operating lease liabilities, current portion | 28 | 87 |
Current portion of deferred revenue | 167 | 924 |
Total current liabilities | 53,678 | 57,380 |
PPP Loan | 2,152 | |
Deferred consideration on purchase of a business, net of current portion | 1,515 | |
Earnout consideration on purchase of a business, net of current portion | 1,184 | |
Operating lease liabilities, net of current portion | 3 | 13 |
Other long-term liabilities | 19 | |
Total liabilities | 56,380 | 59,564 |
Commitments and contingencies (see Note 7) | ||
Preferred stock, 15,000,000 shares authorized; Series A 10% - $0.001 par value per share; 20 shares authorized; and 7 shares issued and outstanding at September 30, 2021 and March 31, 2021. Liquidation preference of $3,737 | 3,559 | 3,559 |
Common stock, $0.001 par value; Class A stock 200,000,000 and 200,000,000 shares authorized at September 30, 2021 and March 31, 2021, respectively; 170,426,311 and 167,542,404 shares issued and 169,110,460 and 166,228,568 shares outstanding at September 30, 2021 and March 31, 2021, respectively | 167 | 164 |
Additional paid-in capital | 506,111 | 499,272 |
Treasury stock, at cost; 1,315,851 and 1,313,836 Class A common shares at September 30, 2021 and March 31, 2021, respectively | (11,608) | (11,603) |
Accumulated deficit | (469,255) | (474,080) |
Accumulated other comprehensive loss | (87) | (68) |
Total stockholders’ equity of Cinedigm Corp. | 28,887 | 17,244 |
Deficit attributable to noncontrolling interest | (1,366) | (1,362) |
Total equity | 27,521 | 15,882 |
Total liabilities and equity | $ 83,901 | $ 75,446 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Treasury stock | 1,315,851 | 1,313,836 |
Series A preferred stock | ||
Preferred stock, shares authorized | 20 | 20 |
Preferred stock, dividend rate | 10.00% | 10.00% |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 7 | 7 |
Preferred stock, shares outstanding | 7 | 7 |
Preferred stock, Liquidation preference Value (in Dollars) | $ 3,737 | $ 3,737 |
Class A Common Stock | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 170,426,311 | 167,542,404 |
Common stock, shares outstanding | 169,110,460 | 166,228,568 |
Treasury stock | 1,315,851 | 1,313,836 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenues | $ 10,103 | $ 7,182 | $ 25,118 | $ 13,200 |
Costs and expenses: | ||||
Direct operating (excludes depreciation and amortization shown below) | 3,333 | 4,330 | 7,964 | 7,009 |
Selling, general and administrative | 7,159 | 6,168 | 13,202 | 10,008 |
Recovery for doubtful accounts | (111) | (193) | (40) | (193) |
Depreciation and amortization of property and equipment | 440 | 1,345 | 1,089 | 2,869 |
Amortization of intangible assets | 696 | 591 | 1,543 | 1,181 |
Total operating expenses | 11,517 | 12,241 | 23,758 | 20,874 |
Income (loss) from operations | (1,414) | (5,059) | 1,360 | (7,674) |
Interest expense, net | (36) | (1,194) | (180) | (2,484) |
Gain (loss) on forgiveness of PPP loan and extinguishment of note payable | (335) | 2,178 | (312) | |
Change in fair value of equity investment in Starrise, a related party | 666 | (19,832) | 1,000 | (35,626) |
Other expense, net | 102 | (327) | 91 | (521) |
Income (loss) before income taxes | (682) | (26,747) | 4,449 | (46,617) |
Income tax benefit | 487 | 181 | 550 | 181 |
Net income (loss) | (195) | (26,566) | 4,999 | (46,436) |
Net income attributable to noncontrolling interest | 11 | 23 | 4 | 37 |
Net income (loss) attributable to controlling interests | (184) | (26,543) | 5,003 | (46,399) |
Preferred stock dividends | (89) | (89) | (178) | (178) |
Net income (loss) attributable to common stockholders | $ (273) | $ (26,632) | $ 4,825 | $ (46,577) |
Net income (loss) per Class A common stock attributable to common stockholders - basic: (in Dollars per share) | $ (0.23) | $ 0.03 | $ (0.45) | |
Weighted average number of Class A common stock outstanding: basic (in Shares) | 168,275,139 | 114,532,217 | 167,524,744 | 104,529,411 |
Net income (loss) per Class A common stock attributable to common stockholders - diluted: (in Dollars per share) | $ (0.23) | $ 0.03 | $ (0.45) | |
Weighted average number of Class A common stock outstanding: diluted (in Shares) | 168,275,139 | 114,532,217 | 170,743,885 | 104,529,411 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (195) | $ (26,566) | $ 4,999 | $ (46,436) |
Other comprehensive (loss) income: foreign exchange translation | 35 | (30) | (19) | (110) |
Comprehensive income (loss) | (160) | (26,596) | 4,980 | (46,546) |
Less: comprehensive income attributable to noncontrolling interest | 11 | 23 | 4 | 37 |
Comprehensive income (loss) attributable to controlling interests | $ (149) | $ (26,573) | $ 4,984 | $ (46,509) |
Consolidated Statements of (Def
Consolidated Statements of (Deficit) Equity (Unaudited) - USD ($) $ in Thousands | Total | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Deficit | Non-Controlling Interest | Series APreferred Stock | Class ACommon Stock |
Balance at Mar. 31, 2020 | $ (19,287) | $ (11,603) | $ 400,784 | $ (410,904) | $ 92 | $ (18,010) | $ (1,277) | $ 3,559 | $ 62 |
Balance (in Shares) at Mar. 31, 2020 | 1,313,836 | 7 | 61,937,593 | ||||||
Foreign exchange translation | (80) | (80) | (80) | ||||||
Stock issued in connection with the SPA with certain investors, net | 7,150 | 7,139 | 7,150 | $ 11 | |||||
Stock issued in connection with the SPA with certain investors, net (in Shares) | 10,666,666 | ||||||||
Issuance of Class A common stock in connection with the Starrise transaction, a related party | 11,046 | 11,016 | 11,046 | $ 30 | |||||
Issuance of Class A common stock in connection with the Starrise transaction, a related party (in Shares) | 29,855,081 | ||||||||
Contributed capital under the Starrise transaction, a related party | 17,187 | 17,187 | 17,187 | ||||||
Issuance of stock in connection with settlement of second lien loan | 757 | 757 | 757 | ||||||
Issuance of stock in connection with settlement of second lien loan (in Shares) | 329,501 | ||||||||
Exercise of warrants for Class A common stock | 301 | 301 | 301 | ||||||
Exercise of warrants for Class A common stock (in Shares) | 236,899 | ||||||||
Stock-based compensation | 177 | 177 | 177 | ||||||
Preferred stock dividends paid with common stock | 89 | (89) | |||||||
Preferred stock dividends paid with common stock (in Shares) | 267,079 | ||||||||
Net income (loss) | (19,870) | (19,856) | (19,856) | (14) | |||||
Balance at Jun. 30, 2020 | (2,619) | $ (11,603) | 437,450 | (430,849) | 12 | (1,328) | (1,291) | $ 3,559 | $ 103 |
Balance (in Shares) at Jun. 30, 2020 | 1,313,836 | 7 | 103,292,819 | ||||||
Balance at Mar. 31, 2020 | (19,287) | $ (11,603) | 400,784 | (410,904) | 92 | (18,010) | (1,277) | $ 3,559 | $ 62 |
Balance (in Shares) at Mar. 31, 2020 | 1,313,836 | 7 | 61,937,593 | ||||||
Net income (loss) | (46,436) | ||||||||
Balance at Sep. 30, 2020 | (2,994) | $ (11,603) | 463,742 | (457,481) | (18) | (1,680) | (1,314) | $ 3,559 | $ 121 |
Balance (in Shares) at Sep. 30, 2020 | 1,313,836 | 7 | 121,727,542 | ||||||
Balance at Jun. 30, 2020 | (2,619) | $ (11,603) | 437,450 | (430,849) | 12 | (1,328) | (1,291) | $ 3,559 | $ 103 |
Balance (in Shares) at Jun. 30, 2020 | 1,313,836 | 7 | 103,292,819 | ||||||
Foreign exchange translation | (30) | (30) | (30) | ||||||
July 2020 issuance of Class A common stock, net of $695 in issuance costs | 10,125 | 10,118 | 10,125 | $ 7 | |||||
July 2020 issuance of Class A common stock, net of $695 in issuance costs (in Shares) | 7,213,334 | ||||||||
Common stock issued in connection with conversion of Convertible Notes | 15,000 | 14,990 | 15,000 | $ 10 | |||||
Common stock issued in connection with conversion of Convertible Notes (in Shares) | 10,000,000 | ||||||||
Issuance of common stock for third party professional service | 71 | 71 | 71 | ||||||
Issuance of common stock for third party professional service (in Shares) | 80,000 | ||||||||
Issuance of Class A common stock to management and employees | 786 | 785 | 786 | $ 1 | |||||
Issuance of Class A common stock to management and employees (in Shares) | 689,364 | ||||||||
Issuance of common stock in connection with performance stock units | |||||||||
Issuance of common stock in connection with performance stock units (in Shares) | 373,647 | ||||||||
Common stock issued to settle second lien loan | 61 | 61 | 61 | ||||||
Common stock issued to settle second lien loan (in Shares) | 33,465 | ||||||||
Stock-based compensation | 178 | 178 | 178 | ||||||
Preferred stock dividends paid with common stock | 89 | (89) | |||||||
Preferred stock dividends paid with common stock (in Shares) | 44,913 | ||||||||
Net income (loss) | (26,566) | (26,543) | (26,543) | (23) | |||||
Balance at Sep. 30, 2020 | (2,994) | $ (11,603) | 463,742 | (457,481) | (18) | (1,680) | (1,314) | $ 3,559 | $ 121 |
Balance (in Shares) at Sep. 30, 2020 | 1,313,836 | 7 | 121,727,542 | ||||||
Balance at Mar. 31, 2021 | 15,882 | $ (11,603) | 499,272 | (474,080) | (68) | 17,244 | (1,362) | $ 3,559 | $ 164 |
Balance (in Shares) at Mar. 31, 2021 | 1,313,836 | 7 | 166,228,568 | ||||||
Foreign exchange translation | (54) | (54) | (54) | ||||||
Stock-based compensation | 983 | 983 | 983 | ||||||
Stock-based compensation (in Shares) | 35,714 | ||||||||
Issuance of common stock in connection with a business combination | 2,506 | 2,504 | 2,506 | $ 2 | |||||
Issuance of common stock in connection with a business combination (in Shares) | 1,483,129 | ||||||||
Preferred stock dividends paid with common stock | 89 | (89) | |||||||
Preferred stock dividends paid with common stock (in Shares) | 53,278 | ||||||||
Net income (loss) | 5,194 | 5,187 | 5,187 | 7 | |||||
Balance at Jun. 30, 2021 | 24,511 | $ (11,603) | 502,848 | (468,982) | (122) | 25,866 | (1,355) | $ 3,559 | $ 166 |
Balance (in Shares) at Jun. 30, 2021 | 1,313,836 | 7 | 167,800,689 | ||||||
Balance at Mar. 31, 2021 | 15,882 | $ (11,603) | 499,272 | (474,080) | (68) | 17,244 | (1,362) | $ 3,559 | $ 164 |
Balance (in Shares) at Mar. 31, 2021 | 1,313,836 | 7 | 166,228,568 | ||||||
Net income (loss) | 4,999 | ||||||||
Balance at Sep. 30, 2021 | 27,521 | $ (11,608) | 506,111 | (469,255) | (87) | 28,887 | (1,366) | $ 3,559 | $ 167 |
Balance (in Shares) at Sep. 30, 2021 | 1,315,851 | 7 | 169,110,460 | ||||||
Balance at Jun. 30, 2021 | 24,511 | $ (11,603) | 502,848 | (468,982) | (122) | 25,866 | (1,355) | $ 3,559 | $ 166 |
Balance (in Shares) at Jun. 30, 2021 | 1,313,836 | 7 | 167,800,689 | ||||||
Foreign exchange translation | 35 | 35 | 35 | ||||||
Treasury stock in connection with taxes withheld from employees | (5) | $ (5) | (5) | ||||||
Treasury stock in connection with taxes withheld from employees (in Shares) | 2,015 | (2,015) | |||||||
Preferred stock dividends | (89) | (89) | (89) | ||||||
Stock-based compensation | 946 | 946 | 946 | ||||||
Stock-based compensation (in Shares) | 132,630 | ||||||||
Issuance of common stock in connection with a business combination | 2,318 | 2,317 | 2,318 | $ 1 | |||||
Issuance of common stock in connection with a business combination (in Shares) | 1,179,156 | ||||||||
Net income (loss) | (195) | (184) | (184) | (11) | |||||
Balance at Sep. 30, 2021 | $ 27,521 | $ (11,608) | $ 506,111 | $ (469,255) | $ (87) | $ 28,887 | $ (1,366) | $ 3,559 | $ 167 |
Balance (in Shares) at Sep. 30, 2021 | 1,315,851 | 7 | 169,110,460 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 4,999 | $ (46,436) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of property and equipment and amortization of intangible assets | 2,632 | 4,050 |
Changes in fair value of equity investment in Starrise | (1,000) | 35,626 |
(Gain) loss from forgiveness of PPP loan and extinguishment of note payable | (2,178) | 312 |
Impairment of advances | 399 | 40 |
Loss from sale of property and equipment | 44 | |
Amortization of debt issuance costs included in interest expense | 139 | |
Provision for doubtful accounts | (40) | (193) |
Recovery for inventory reserve | (26) | (909) |
Stock-based compensation | 1,929 | 1,212 |
Accretion and PIK interest expense added to note payable | 199 | |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (2,887) | 11,733 |
Inventory | 70 | 1,249 |
Unbilled revenue | (697) | (236) |
Prepaids and other current assets, and other long-term assets | 961 | 60 |
Accounts payable, accrued expenses, and other liabilities | 5,953 | (18,909) |
Deferred revenue | (757) | (754) |
Net cash provided by (used in) operating activities | 9,358 | (12,773) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (81) | (111) |
Purchase of businesses | (4,750) | |
Proceeds from the sale of property and equipment | 91 | |
Sale of equity investment in Starrise | 11 | 809 |
Net cash (used in) provided by investing activities | (4,820) | 789 |
Cash flows from financing activities: | ||
Payments of notes payable | (7,786) | (14,004) |
(Payments) proceeds under revolving credit agreement, net | (1,956) | 8,469 |
Proceeds from PPP Loan | 2,152 | |
Proceeds from issuance of Class A common stock, net | 17,576 | |
Net cash (used in) provided by financing activities | (9,742) | 14,193 |
Net change in cash, cash equivalents, and restricted cash | (5,204) | 2,209 |
Cash, cash equivalents, and restricted cash at beginning of period | 17,849 | 15,294 |
Cash, cash equivalents, and restricted cash at end of period | $ 12,645 | $ 17,503 |
Nature of Operations and Liquid
Nature of Operations and Liquidity | 6 Months Ended |
Sep. 30, 2021 | |
Disclosure of Nature of Operations and Liquidity [Abstract] | |
NATURE OF OPERATIONS AND LIQUIDITY | 1. NATURE OF OPERATIONS AND LIQUIDITY Cinedigm Corp. (“Cinedigm,” the “Company,” “we,” “us,” or similar pronouns) was incorporated in Delaware on March 31, 2000. We are (i) a distributor and aggregator of independent movie, television and other short form content managing a library of distribution rights to thousands of titles and episodes released across digital, physical, theatrical, home and mobile entertainment platforms (“Streaming”) and (ii) a servicer of digital cinema assets (“Systems”) for over 4,822 movie screens in both North America and several international countries. We report our financial results in two primary segments as follows: (1) cinema equipment business and (2) media content and entertainment business (“Content & Entertainment” or “CEG”). The cinema equipment business segment consists of the non-recourse, financing vehicles and administrators for our digital cinema equipment (the “Systems”) installed in movie theatres throughout North America and several international countries. It also provides fee-based support to over 4,822 movie screens as well as directly to exhibitors and other third-party customers in the form of monitoring, billing, collection and verification services. Our Content & Entertainment segment operates in: (1) ancillary market aggregation and distribution of entertainment content and (2) branded and curated over-the-top (“OTT”) digital network business providing entertainment channels and applications. Risks and Uncertainties The COVID-19 pandemic and related economic repercussions created significant volatility and uncertainty impacting the Company’s results for the period. As part of our Content & Entertainment business, the Company sells DVDs and Blu-ray discs at brick-and-mortar stores. Due to the lingering effects of the COVID-19 pandemic in the six-month period ended September 30, 2021, the sale of physical discs through our retail partners declined although this was partially offset by digital purchases of physical product and increases in streaming views. As part of our Cinema Equipment business, the Company earns revenue when movies are exhibited in theatres. As vaccines became readily available and COVID-19 cases decreased, major studios began to test consumer confidence by releasing blockbusters in the theatrical venues during the six months ended September 30, 2021. The test period during the prior quarters encouraged theatre re-openings and proved commercial viability for theatrical distribution of tentpole films. Films released during the summer period saw an uptick in box office revenue compared to the previous 12 months; however, box office results remained below pre-COVID expectations due to limited seating capacities and shortened windows for release on streaming platforms such as premium video on demand (“PVOD”) and subscription video on demand (“SVOD”). To the extent films are not shown in theatres, we do not earn revenue. Liquidity We have incurred net losses historically and have an accumulated deficit of $469.3 million and negative working capital of $11.1 million as of September 30, 2021. We may continue to generate net losses for the foreseeable future. In addition, we had debt-related contractual obligations and upon a series of payments between April 30 and July 9, 2021, the Company paid in full the Prospect Loan (as defined below) non-recourse debt amount by paying an aggregate principal amount of $7.8 million. As of September 30, 2021 there was $0 million outstanding and there was no availability under the Credit Facility which expired on September 28, 2021. Net cash provided by operating activities for the six months ended September 30, 2021 was $9.4 million. Based on these conditions, the Company entered into the following transactions described below: Sale of Cinematic Equipment On March 17, 2021, the Company entered into two separate agreements for the sale of cinematic equipment to American Multi-Cinema, Inc. (“AMC”), The agreements included the sale in tranches of a total of 2,369 cinematic projectors starting in March 2021 and continuing through January 2023 for total cash consideration of $10.8 million. Through September 30, 2021, the Company executed the sale of the first two tranches and recognized aggregate revenue for $7.8 million. A portion of the total proceeds were used to paydown the remaining outstanding balance of the Prospect Loan notes payable. Equity Investment in a Related Party On December 27, 2019, the Company entered into, and on February 14, 2020 amended, (see Note 2 - Summary of Significant Accounting Policies On April 10, 2020, the Company entered into another stock purchase agreement (the “April Starrise Stock Purchase Agreement”) with five (5) shareholders of Starrise - Bison Global Investment SPC - Bison Global No. 1 SP, Huatai Investment LP, Antai Investment LP, Mingtai Investment LP and Shangtai Asset Management LP, all of which are related parties to the Company to buy an aggregate of 223,380,000 outstanding Starrise ordinary shares from them and for the Company to issue to them an aggregate of 29,855,081 shares of its Common Stock as consideration therefor (the “April Starrise Share Acquisition”). On April 15, 2020, the April Starrise Share Acquisition was consummated and this transaction was also recorded as an equity investment in Starrise. Starrise’s ordinary shares (HK 1616) are listed on the main board of the Stock Exchange of Hong Kong Limited. Based on the closing price of HKD 0.159 per share on November 11, 2021, calculated at an exchange rate of 7.8 Hong Kong Dollars to 1 US dollar, the market value of Cinedigm’s ownership in Starrise ordinary shares was approximately $7.4 million. Borrowings On June 22, 2021, the maturity date of the East West Credit Facility (as defined in Note 5 - Notes Payable) On April 15, 2020, the Company received $2.2 million from East West Bank, pursuant to the Paycheck Protection Program (the “PPP Loan”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan matures on April 10, 2022 (the “PPP Maturity Date”), accrues interest at 1% per annum and may be prepaid in whole or in part without penalty. No interest payments are due within the initial six months of the PPP Loan. The interest accrued during the initial six-month period is due and payable, together with the principal, on the PPP Maturity Date. The Company used all proceeds from the PPP Loan to retain employees, maintain payroll and make lease and utility payments to support business continuity throughout the COVID-19 pandemic, which amounts were intended to be eligible for forgiveness, subject to the provisions of the CARES Act and could be subject to repayment. On July 7, 2021, the Company received notification from the lender that the U.S. Small Business Administration had approved the Company’s PPP Loan forgiveness application for the entire PPP Loan amount and accrued interest effective as of June 30, 2021. The forgiveness of the PPP Loan was recognized as a gain of $2.2 million during the Company’s fiscal quarter ending June 30, 2021. Upon a series of payments between April 30 and July 9, 2021, the Company paid in full the Prospect loan non-recourse outstanding debt amount by paying an aggregate principal amount of $7.8 million. Pre-payment of the Prospect Loan was permissible without penalty. We believe the combination of: (i) our cash and cash equivalent balances at September 30, 2021, and (ii) expected cash flows from operations as well as liquidity for our operational and capital needs, for twelve months from the filing of this report. Our capital requirements will depend on many factors, and we may need to use capital resources and obtain additional capital. Failure to generate additional revenues, obtain additional capital or manage discretionary spending could have an adverse effect on our financial position, results of operations and liquidity. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND CONSOLIDATION Our consolidated financial statements include the accounts of Cinedigm and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Investments in which we do not have a controlling interest or are not the primary beneficiary, but have the ability to exert significant influence, are accounted for under the equity method of accounting. Noncontrolling interests for which we have been determined to be the primary beneficiary are consolidated and recorded as net loss attributable to noncontrolling interest. See Note 3 - Other Interests USE OF ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include the adequacy of accounts receivable reserves, return reserves, inventory reserves, recovery of advances, assessment of goodwill impairment, long-lived and finite-lived assets impairment and estimated amortization lives, fair value for asset acquisitions and business combinations, valuation allowances for income taxes and stock awards. Actual results could differ from these estimates. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH We consider all highly liquid investments with an original maturity of three months or less to be “cash equivalents.” We maintain bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation’s insured limits. We periodically assess the financial condition of the institutions and believe that the risk of any loss is minimal. Our Prospect Loan required that we maintain specified cash balances that are restricted to repayment of interest thereunder. See Note 5 - Notes Payable Cash, cash equivalents, and restricted cash consisted of the following: As of (in thousands) September 30, September 30, Cash and Cash Equivalents $ 12,645 $ 16,503 Restricted Cash - 1,000 $ 12,645 $ 17,503 EQUITY INVESTMENT IN STARRISE, A RELATED PARTY On February 14, 2020, the Company acquired an approximately 11.5% interest in Starrise, a leading publicly traded Chinese entertainment company whose ordinary shares are listed on the Stock Exchange of Hong Kong. The Company acquired such interest as a strategic investment and in a private transaction from a shareholder of Starrise that is related to our major shareholders. When we acquired the Starrise stock, our then-majority affiliated stockholders also maintained a significant beneficial interest in Starrise. Upon consummation of the transaction on February 14, 2020, the Company recorded an initial investment of approximately $25.1 million, which is the fair market value of the Starrise shares on the transaction date on the Stock Exchange of Hong Kong, in exchange for the Company’s common stock of $11.2 million, valued as of the date of the issuance of the Common Stock. The difference in value of shares received in Starrise and shares issued by the Company was deemed as contributed capital and recorded in additional paid-in capital. On April 10, 2020, the Company purchased an additional 15% interest in Starrise in a private transaction from shareholders of Starrise that are affiliated with the then-major shareholder of the Company. The Company recorded an additional equity investment of approximately $28.2 million, which is the fair market value of the Starrise shares on the transaction date on the Stock Exchange of Hong Kong, in exchange for the Common Stock of $11.0 million, valued at the date of the issuance of the Common Stock. The difference in the value of shares received in Starrise and shares issued by the Company was deemed as contributed capital and recorded in additional paid-in capital. This transaction was also recorded as an equity investment in Starrise. The Company has made an irrevocable election to apply the fair value accounting option under ASC 825-10, Financial Instruments As of September 30, 2021 and March 31, 2021, the value of our equity investment in Starrise, using the readily determinable fair value inputs from the market pricing of the Stock Exchange of Hong Kong, was approximately $7.4 million and $6.4 million, respectively, resulting in a change in fair value of approximately $1.0 million and ($35.6) million for the six months ended September 30, 2021 and 2020 respectively, on our consolidated statement of operations. On April 1 and May 5, 2021, the Company sold 80,000 and 600,000 Starrise’s ordinary shares, respectively for a total amount of $11 thousand. At September 30, 2021 and March 31, 2021, the Company owned 362,307,397 and 362,987,397 ordinary shares or 18% and 26% of Starrise, respectively. NON-MONETARY TRANSACTIONS During the three and six months ended September 30, 2020, the Company entered into agreements with certain vendors to transfer 7,116,100 and 16,122,315 Starrise shares to satisfy outstanding liabilities with these vendors. Upon the sale of the Starrise shares by the vendors, with certain restrictions on sales unless the Company gives consent to sell, if the proceeds do not satisfy the amount due to the vendor, the Company is liable for the balance owed. There were no such transactions during the six months ended September 30, 2021. There was no gain or loss resulting from these transactions for the three and six months ended September 30, 2021 and 2020. ACCOUNTS RECEIVABLE We maintain reserves for potential credit losses on accounts receivable. We review the composition of accounts receivable and analyze historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. We record accounts receivable, long-term in connection with activation fees that we earn from our digital cinema equipment (the “Systems”) deployments that have extended payment terms. Such accounts receivable are discounted to their present value at prevailing market rate. ADVANCES Advances, which are recorded within prepaid and other current assets on the consolidated balance sheets, represent amounts prepaid to studios or content producers for which we provide content distribution services. We evaluate advances regularly for recoverability and record impairment charges for amounts that we expect may not be recoverable as of the consolidated balance sheet date. Impairments and accelerated amortization related to advances were $0.2 million and $0 million, respectively, for the three months ended September 30, 2021 and 2020. Impairments and accelerated amortization related to advances were $0.4 million and $0.04 million, respectively, for the six months ended September 30, 2021 and 2020. PROPERTY AND EQUIPMENT Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation expense is recorded using the straight-line method over the estimated useful lives of the respective assets as follows: Computer equipment and software 3 - 5 years Internal use software 5 years Digital cinema projection systems 10 years Machinery and equipment 3 - 10 years Furniture and fixtures 3 - 6 years We capitalize costs associated with software developed or obtained for internal use when the preliminary project stage is completed, and it is determined that the software will provide significantly enhanced capabilities and modifications. These capitalized costs are included in property and equipment and include external direct cost of services procured in developing or obtaining internal-use software and personnel and related expenses for employees who are directly associated with, and who devote time to internal-use software projects. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended use. Once the software is ready for its intended use, the costs are amortized over the useful life of the software. Post-configuration training and maintenance costs are expensed as incurred. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the leasehold improvements. Repair and maintenance costs are charged to expense as incurred. Major renewals, improvements and additions are capitalized. Upon the sale or other disposition of any property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and the gain or loss on disposal is included in the consolidated statements of operations. FAIR VALUE MEASUREMENTS The fair value measurement disclosures are grouped into three levels based on valuation factors: ● Level 1 – quoted prices in active markets for identical investments ● Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) ● Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments) Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities. The equity investment in Starrise is in Hong Kong dollars and was translated into US dollars as of September 30, 2021 and March 31, 2021 at an exchange rate of 7.8 and 7.8 Hong Kong Dollars to 1 US Dollar, respectively. The fair value of this equity investment is measured by the unadjusted market pricing of Starrise on the Stock Exchange of Hong Kong. The following tables summarize the levels of fair value measurements of our financial assets and liabilities as of September 30, 2021 and March 31, 2021: As of September 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Equity investment in Starrise, at fair value $ 7,443 $ — $ — $ 7,443 $ 7,443 $ — — $ 7,443 As of March 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Restricted cash $ 1,000 $ — $ — $ 1,000 Equity investment in Starrise, at fair value 6,443 — — 6,443 $ 7,443 $ — $ — $ 7,443 Our cash and cash equivalents, accounts receivable, unbilled revenue and accounts payable and accrued expenses are financial instruments and are recorded at cost in the consolidated balance sheets. The estimated fair values of these financial instruments approximate their carrying amounts because of their short-term nature. IMPAIRMENT OF LONG-LIVED AND FINITE-LIVED ASSETS We review the recoverability of our long-lived assets and finite-lived intangible assets, when events or conditions occur that indicate a possible impairment exists. The assessment for recoverability is based primarily on our ability to recover the carrying value of our long-lived and finite-lived assets from expected future undiscounted net cash flows. If the total of expected future undiscounted net cash flows is less than the total carrying value of the asset, the asset is deemed not to be recoverable and possibly impaired. We then estimate the fair value of the asset to determine whether an impairment loss should be recognized. An impairment loss will be recognized if the asset’s fair value is determined to be less than its carrying value. Fair value is determined by computing the expected future discounted cash flows. During the three and six months ended September 30, 2021 and 2020, no impairment charge was recorded from operations for long-lived assets or finite-lived assets. GOODWILL Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. Goodwill is tested for impairment on an annual basis or more often if warranted by events or changes in circumstances indicating that the carrying value may exceed fair value, also known as impairment indicators. Inherent in the fair value determination for each reporting unit are certain judgments and estimates relating to future cash flows, including management’s interpretation of current economic indicators and market conditions, and assumptions about our strategic plans with regard to its operations. To the extent additional information arises, market conditions change, or our strategies change, it is possible that the conclusion regarding whether our remaining goodwill is impaired could change and result in future goodwill impairment charges that will have a material effect on our consolidated financial position or results of operations. The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount or to perform the quantitative impairment test. No goodwill impairment charge was recorded in the six months ended September 30, 2021 and 2020. Gross amounts of goodwill and accumulated impairment charges that we have recorded are as follows: (In thousands) Goodwill at March 31, 2021 $ 8,701 Goodwill from business combinations – see Note 4 4,826 Goodwill at September 30, 2021 $ 13,527 REVENUE RECOGNITION We determine revenue recognition by: ● identifying the contract, or contracts, with the customer; ● identifying the performance obligations in the contract; ● determining the transaction price; ● allocating the transaction price to performance obligations in the contract; and ● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services. We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the services provided, sales of physical products (e.g., DVDs and Blu-ray Discs) or when the content is available for subscription on the digital platform or available on the point-of-sale for transactional and video on demand services which is when the control of the promised products and services is transferred to our customers and our performance obligations under the contract have been satisfied. Revenues that might be subject to various taxes are recorded net of transaction taxes assessed by governmental authorities such as sales value-added taxes and other similar taxes. Payment terms and conditions vary by customer and typically provide net 30 to 90 day terms. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less. Cinema Equipment Business Our Cinema Equipment Business consists of financing vehicles and administrators for 1,813 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 3,009 Systems installed domestically and internationally in our second deployment phase (“Phase II Deployment”). We retain ownership of our digital cinema equipment (the “Systems”) and the residual cash flows related to the Systems in Phase I Deployment after the end of the 10-year deployment payment period. For certain Phase II Deployment Systems, we do not retain ownership of the residual cash flows and digital cinema equipment in Phase II Deployment after the completion of cost recoupment and at the expiration of the exhibitor master license agreements. The Cinema Equipment Business also provides monitoring, data collection, serial data verification and management services to this segment, as well as to exhibitors who purchase their own equipment, in order to collect virtual print fees (“VPFs”) from motion picture studios and distributors and Alternative Content Fees (“ACFs”) from alternative content providers, and to distribute those fees to theatrical exhibitors (collectively, “Services”). VPFs are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Phase I Deployment and to Phase II Deployment when movies distributed by the studio are displayed on screens utilizing our Systems installed in movie theatres. VPFs are earned and payable to Phase I Deployment based on a defined fee schedule until the end of the VPF term. One VPF is payable for every digital title initially displayed per System. The amount of VPF revenue is dependent on the number of movie titles released and displayed using the Systems in any given accounting period. VPF revenue is recognized in the period the title first plays for general audience viewing in a digital projector equipped movie theatre. The Phase 1 Deployment’s and Phase 2 Deployments performance obligations for revenue recognition are met at this time. Phase II Deployment’s agreements with distributors require the payment of VPFs, according to a defined fee schedule, for ten years from the date each system is installed; however, Phase II Deployment may no longer collect VPFs once “cost recoupment,” as defined in the contracts with movie studios and distributors, is achieved. Cost recoupment will occur once the cumulative VPFs and other cash receipts collected by Phase II Deployment have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter. Further, if cost recoupment occurs before the end of the eighth contract year, the studios will pay us a one-time “cost recoupment bonus.” The Company evaluated the constraining estimates related to the variable consideration, i.e., the one-time bonus and determined that it is not probable to conclude at this point in time that a significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is subsequently resolved. Under the terms of our standard cinema equipment licensing agreements, exhibitors will continue to have the right to use our Systems through the end of the term of the licensing agreement, after which time, they have the option to: (1) return the Systems to us; (2) renew their license agreement for successive one-year terms; or (3) purchase the Systems from us at fair market value. As permitted by these agreements, we typically pursue the sale of the Systems to such exhibitors. Cinedigm recognizes revenue once the customer takes possession of the systems and is predicated on Cinedigm’s receipt of sale proceeds. Such sales were as originally contemplated as the conclusion of the digital cinema deployment plan. Total system sales revenue recognized were $2.2 million and $15 thousand, during the three months ended September 30, 2021 and 2020, respectively. Total system sales revenue recognized were $7.8 million and $91 thousand, during the six months ended September 30, 2021 and 2020, respectively. Revenues earned in connection with up front exhibitor contributions are deferred and recognized over the expected cost recoupment period. Exhibitors who purchased and own Systems using their own financing in the Cinema Equipment Business paid us an upfront activation fee of approximately $2.0 thousand per screen (the “Exhibitor-Buyer Structure”). Upfront activation fees were recognized in the period in which these Systems were delivered and ready for content, as we had no further obligations to the customer after that time and collection was reasonably assured. In addition, we recognize activation fee revenue of between $1.0 thousand and $2.0 thousand on Phase II Deployment Systems and for Systems installed by CDF2 Holdings, a related party, (See Note 3 - Other Interests The Cinema Equipment Business earns an administrative fee of approximately 5% of VPFs collected and, in addition, earns an incentive service fee equal to 2.5% of the VPFs earned by Phase 1 DC. This administrative fee is related to the collection and remittance of the VPF’s and the performance obligation is satisfied at that time the related VPF fees are due which is at the time the movies are displayed on screens utilizing our Systems installed in movie theatres. The service fees are recognized as a point in time revenue when the corresponding VPF fees are due from the movie studios and distributors. Content& Entertainment Business CEG earns fees for the distribution of content in the home entertainment markets via several distribution channels, including digital, video on demand (“VOD” or “OTT Streaming and Digital”), and physical goods (e.g., DVDs and Blu-ray Discs) (“Physical Revenue” or “Base Distribution Business”). Fees earned are typically a percentage based on the net amounts received from our customers. Depending upon the nature of the agreements with the platform and content providers, the fee rate that we earn varies. The Company’s performance obligations include the delivery of content for transactional, subscription and ad supported/free ad-supported streaming TV (“FAST”) on the digital platforms, and shipment of DVDs and Blu-ray Discs. Revenue is recognized at the point in time when the performance obligation is satisfied which is when the content is available for subscription on the digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and VOD services as the control over the content or the physical title is transferred to the customer. The Company considers the delivery of content through various distribution channels to be a single performance obligation. Physical revenue is recognized after deducting the reserves for sales returns and other allowances, which are accounted for as variable consideration. Physical goods reserved for sales returns and other allowances are recorded based upon historical experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required. CEG also has contracts for the theatrical distribution of third party feature movies and alternative content. CEG’s distribution fee revenue and CEG’s participation in box office receipts is recognized at the time a feature movie and alternative content are viewed. CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date. Principal Agent Considerations We determine whether revenue should be reported on a gross or net basis for each revenue stream based on the transfer of control of goods and services. Key indicators that we use in evaluating gross versus net treatment include, but are not limited to, the following: ● which party is primarily responsible for fulfilling the promise to provide the specified good or service; and ● which party has discretion in establishing the price for the specified good or service. Shipping and Handling Shipping and handling costs are incurred to move physical goods (e.g., DVDs and Blu-ray Discs) to customers. We recognize all shipping and handling costs as an expense in cost of goods sold because we are responsible for delivery of the product to our customers prior to transfer of control to the customer. Credit Losses We maintain reserves for potential credit losses on accounts receivable. We review the composition of accounts receivable and analyze historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. Our CEG segment recognizes accounts receivable, net of an estimated allowance for product returns and customer chargebacks, at the time that it recognizes revenue from a sale. Reserves for product returns and other allowances is variable consideration as part of the transaction price. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required. We record accounts receivable, long-term in connection with activation fees that we earn from Systems deployments that have extended payment terms. Such accounts receivable are discounted to their present value at prevailing market rates. Contract Liabilities We generally record a receivable related to revenue when we have an unconditional right to invoice and receive payment, and we record deferred revenue (contract liability) when cash payments are received or due in advance of our performance, even if amounts are refundable. Deferred revenue pertaining to our Content & Entertainment Business includes amounts related to the sale of DVDs with future release dates. Deferred revenue relating to our Cinema Equipment Business pertains to revenues earned in connection with up front exhibitor contributions that are deferred and recognized over the expected cost recoupment period. It also includes unamortized balances in connection with activation fees due from the Systems deployments that have extended payment terms. The ending deferred revenue balance as of September 30, 2021 was $0.2 million. For the three and six months ended September 30, 2021 and 2020, respectively, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance of satisfying performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business. During the three months ended September 30, 2021 and 2020, $0.3 million and $0.7 million, respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the period. During the six months ended September 30, 2021 and 2020, $0.8 million and $1.3 million, respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the period. As of September 30, 2021, the aggregate amount of contract revenue allocated to unsatisfied performance obligations was $0.2 million. We recognized this balance in full by October 31, 2021. Participations and royalties payable When we use third parties to distribute company owned content, we record participations payable, which represent amounts owed to the distributor under revenue-sharing arrangements. When we provide content distribution services, we record accounts payable and accrued expenses to studios or content producers for royalties owed under licensing arrangements. We identify and record as a reduction to the liability any expenses that are to be reimbursed to us by such studios or content producers. Disaggregation of Revenue The Company disaggregates revenue into different revenue categories for the Cinema Equipment and CEG Businesses. The Cinema Equipment Business revenue categories are: Phase I Deployment revenue, Phase II Deployment revenue, Services, and Digital System Sales, and the Content & Entertainment Business revenue categories are: Base Distribution Business and OTT Streaming and Digital. The following tables present the Company’s revenue categories for the three and six months ended September 30, 2021 and 2020 (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 Cinema Equipment Business: Phase I Deployment $ 148 $ 112 $ 239 $ 143 Phase II Deployment 375 351 761 749 Services 486 165 665 265 Digital System Sales 2,244 15 7,819 91 Total Cinema Equipment Business revenue $ 3,253 $ 643 $ 9,484 $ 1,248 Content & Entertainment Business: Base Distribution Business $ 922 $ 2,931 $ 2,700 $ 5,088 OTT Streaming and Digital 5,928 3,608 12,934 6,864 Total Content & Entertainment Business revenue $ 6,850 $ 6,536 $ 15,634 $ 11,952 DIRECT OPERATING COSTS Direct operating costs consist of operating costs such as cost of goods sold, fulfillment expenses, shipping costs, property taxes and insurance on Systems, royalty expenses, impairments of advances, and marketing and direct personnel costs. STOCK-BASED COMPENSATION The Company issues stock-based awards to employees and non-employees, generally in the form of restricted stock, restricted stock units, stock appreciation rights and performance stock units. The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation INCOME TAXES The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to operating loss and tax credit carryforwards and for differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Valuation allowances are established when management is unable to conclude that it is more likely than not that some portion, or all, of the deferred tax asset will ultimately be realized. The Company is primarily subject to income taxes in the United States. The Company accounts for uncertain tax positions in accordance with an amendment to ASC Topic 740-10, Income Taxes (Accounting for Uncertainty in Income Taxes) NET INCOME/LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS Basic and diluted net loss per common share has been calculated as follows: Basic and diluted net loss per common share attributable to common stockholders = Net loss attributable to common stockholders Weighted average number of common stock outstanding during the period Stock issued and treasury stock repurchased during the period are weighted for the portion of the period that they are outstanding. Shares issued and any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding. We had a net income for the six months ended September 30, 2021, and therefore the impact of potentially dilutive common shares from outstanding stock options, stock appreciation rights, and warrants, totaling 3,219,141 shares for the six months ended September 30, 2021, respectively, were included in the computations of diluted earnings per share. For the three months ended September 30, 2021, 11,937,243 potentially dilutive shares have been excluded from the diluted loss per share as their impact would have been antidilutive. We had a net loss for the three months ended September 30, 2021 and therefore no dilution as basic and diluted loss per share are the same for the period. The calculation of diluted net income per share for the six months ended September 30, 2021 does not include the impact of 8,718,102 potentially dilutive shares relating to stock options, stock appreciation rights, and warrants as their impact would have been anti-dilutive as their exercise prices are above the Company’s average Common Stock price during the period. We incurred net losses for the three and six months ended September 30, 2020, and therefore the impact of potentially dilutive common shares from outstanding stock options and warrants, totaling 3,940,138 shares as of September 30, 2020, respectively, were excluded from the computations of loss per share as their impact would have been anti-dilutive. COMPREHENSIVE INCOME (LOSS) As of the three and six months ended September 30, 2021 and 2020, comprehensive income (loss) consisted of net loss and foreign currency translation adjustments. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Adopted On December 18, 2019, the FASB issued ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, Not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Other Interests
Other Interests | 6 Months Ended |
Sep. 30, 2021 | |
Disclosure of Other Interests [Abstract] | |
OTHER INTERESTS | 3. OTHER INTERESTS Investment in CDF2 Holdings We indirectly own 100% of the common equity of CDF2 Holdings, LLC (“CDF2 Holdings”), which was created for the purpose of capitalizing on the conversion of the exhibition industry from film to digital technology. CDF2 Holdings assists its customers in procuring the equipment necessary to convert their systems to digital technology by providing financing, equipment, installation and related ongoing services. CDF2 Holdings is a Variable Interest Entity (“VIE”), as defined in Accounting Standards Codification Topic 810 (“ASC 810”), “Consolidation.” ASC 810 requires the consolidation of VIEs by an entity that has a controlling financial interest in the VIE which entity is thereby defined as the primary beneficiary of the VIE. To be a primary beneficiary, an entity must have the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, among other factors. Although we indirectly, wholly own CDF2 Holdings, we, a third party that also has a variable interest in CDF2 Holdings, and an independent third party manager must mutually approve all business activities and transactions that significantly impact CDF2 Holdings’ economic performance. We have therefore assessed our variable interests in CDF2 Holdings and determined that we are not the primary beneficiary of CDF2 Holdings. As a result, CDF2 Holdings’ financial position and results of operations are not consolidated in our financial position and results of operations. In completing our assessment, we identified the activities that we consider most significant to the economic performance of CDF2 Holdings and determined that we do not have the power to direct those activities, and therefore we account for our investment in CDF2 Holdings under the equity method of accounting. As of September 30, 2021 and March 31, 2021, our maximum exposure to loss, as it relates to the non-consolidated CDF2 Holdings entity, represents accounts receivable for service fees under a master service agreement with CDF2 Holdings. Such accounts receivable was $0.5 million and $0.3 million as of September 30, 2021 and March 31, 2021, respectively, which are included in accounts receivable, net on the accompanying consolidated balance sheets. The accompanying Consolidated Statements of Operations include $0.3 million and $36 thousand of digital cinema servicing revenue from CDF2 Holdings for the six months ended September 30, 2021 and 2020, respectively. The accompanying Consolidated Statements of Operations include $0.2 million and $27 thousand of digital cinema servicing revenue from CDF2 Holdings for the three months ended September 30, 2021 and 2020, respectively. Total Stockholders’ Deficit of CDF2 Holdings at September 30, 2021 and March 31, 2021 was $51.5 million and $46.3 million, respectively. We have no obligation to fund the operating loss or the stockholders’ deficit beyond our initial investment of $2.0 million and, accordingly, our investment in CDF2 Holdings as of September 30, 2021 and March 31, 2021 is carried at $0. Majority Interest in CONtv We own an 85% interest in CON TV, LLC, a worldwide digital network that creates original content, and sells and distributes on-demand digital content on the Internet and other consumer digital distribution platforms, such as gaming consoles, set-top boxes, handsets, and tablets. |
Business Combination
Business Combination | 6 Months Ended |
Sep. 30, 2021 | |
Disclosure of Asset Acquistion [Abstract] | |
BUSINESS COMBINATION | 4. BUSINESS COMBINATION FoundationTV, Inc. On May 12, 2021, the Company entered into a stock purchase agreement (the “Foundation Stock Purchase Agreement”) with FoundationTV, Inc. (“FoundationTV”), to buy all of FoundationTV´s issued and outstanding stock in consideration of an aggregate of $5.2 million, of which $0.7 million was paid in cash and 1,483,129 shares of Common Stock, which were valued at $2.5 million, were issued at closing stock price of $1.69 on the closing date of June 9, 2021, and an additional $2.0 million will be paid in eight equal installments of one installment on each six month anniversary of closing over forty-eight months, and a final lump sum payment of $225 thousand on the four year anniversary of the closing; reduced by $0.2 million settlement of a prior relationship. The Foundation Stock Purchase Agreement contained certain conditions to closing, including that the Company obtain approval of its stockholders, applicable lenders, and regulatory authorities, as applicable, and representations and warranties and covenants as are customary for transactions of this type. On June 9, 2021, the FoundationTV acquisition was consummated. The Company incurred transaction cost $36 thousand during the six months ended September 30, 2021. As of September 30, 2021, the deferred consideration is presented according to the agreed-upon cash payments, including a $0.5 million short-term payable and a long-term payable for $1.5 million. Purchase Price Purchase Price $ 5,237 Total purchase price $ 5,237 Allocation of purchase price Developed technology 3,200 Goodwill 2,037 Total allocation of purchase price $ 5,237 The developed technology acquired in this transaction has a useful life of 10 years. During the three and six months ended September 30, 2021, the Company recorded $80 thousand in amortization expense related to the developed technology acquired in the acquisition. Below is the amortization expense per year for the developed technology acquired in the business combination: 2022 (remaining) $ 160 2023 320 2024 320 2025 320 2026 320 2027 320 2028 320 2029 320 2030 320 2031 320 2032 80 Total $ 3,120 Bloody Disgusting, LLC. On September 17, 2021, the Company entered into an asset purchase agreement (the “Bloody Disgusting Asset Purchase Agreement”) with Bloody Disgusting, LLC (“Bloody Disgusting”), to buy substantially all of the assets of Bloody Disgusting, in consideration of an aggregate of $7.8 million, of which $4.0 million was paid in cash and 1,039,501 shares of Common Stock, which were valued at $2.3 million, were issued at closing stock price of $2.23 on the closing date of September 17, 2021, and $1.5 million as of the fair value of the earnout liability, related to earnout targets, as defined, to be met as of March 2022, March 2023 and March 2024. The Bloody Disgusting Asset Purchase Agreement contained certain conditions to closing and representations and warranties and covenants as are customary for transactions of this type. On September 17, 2021, the Bloody Disgusting acquisition was consummated. The Company incurred transaction cost $40 thousand during the six months ended September 30, 2021. Purchase Price Purchase Price $ 7,780 Total purchase price $ 7,780 Provisional allocation of purchase price Current assets 141 Advertiser relationships 3,750 Trade name 1,100 Goodwill 2,789 Total allocation of purchase price $ 7,780 The advertiser relationships acquired in this transaction has a useful life of 12 years and the trade name acquired has a useful life of 10 years. During the three and six months ended September 30, 2021, the Company recorded $0 in amortization expense related to the intangible assets acquired. Due to proximately of the closing date to the end of the quarter, the Company did not record any amortization expense during the three months ended September 30, 2021 related to the advertiser relationships and trade name acquired in the business combination. Below is the amortization expense per year for the intangible assets acquired in the business combination: Advertiser relationships Trade name Total 2022 (remaining) $ 156 $ 55 $ 211 2023 313 110 423 2024 313 110 423 2025 313 110 423 2026 313 110 423 2027 313 110 423 2028 313 110 423 2029 313 110 423 2030 313 110 423 2031 313 110 423 2032 313 55 368 2033 313 - 313 2034 151 - 151 Total 3,750 1,100 $ 4,850 |
Notes Payable
Notes Payable | 6 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | 5. NOTES PAYABLE Notes payable consisted of the following: September 30, March 31, (In thousands) Current Long Term Current Long Term Prospect Loan $ — $ — $ 7,786 $ — Total non-recourse notes payable — — 7,786 — Total non-recourse notes payable, net of unamortized debt issuance costs and debt discounts $ — $ — $ 7,786 $ — Credit Facility $ — $ — $ 1,956 $ — PPP Loan — — — 2,152 Total recourse notes payable — — 1,956 2,152 Total recourse notes payable, net of unamortized debt issuance costs and debt discounts $ — $ — $ 1,956 $ 2,152 Total notes payable, net of unamortized debt issuance costs $ — $ — $ 9,742 $ 2,152 Non-recourse debt is generally defined as debt whereby the lenders’ sole recourse with respect to defaults, is limited to the value of the asset, which is collateral for the debt. Certain of our subsidiaries are liable with respect to, and their assets serve as collateral for, certain indebtedness for which our assets and the assets of our other subsidiaries that are not parties to the transaction are generally not liable. We have referred to this indebtedness as “non-recourse debt” because the recourse of the lenders is limited to the assets of specific subsidiaries. Such indebtedness includes the Prospect Loan. Prospect Loan In February 2013, our Cinedigm DC Holdings, LLC (“CDCH”), Access Digital Media, Inc (“AccessDM”) and Access Digital Cinema Phase 2, Corp. (“Phase 2 DC”) subsidiaries entered into a term loan agreement (the “Prospect Loan” or the “Term Loan Agreement”) with Prospect Capital Corporation (“Prospect”), pursuant to which CDCH borrowed $70.0 million. The Prospect Loan included interest at LIBOR plus 9.0% (with a 2.0% LIBOR floor), which was payable in cash, and at an additional 2.50% accrued as an increase to the aggregate principal amount of the Prospect Loan until the Prospect Loan was paid off, at which time all accrued interest became payable in cash. Collections of CDCH accounts receivable were deposited into accounts designated to pay certain operating expenses, principal, interest, fees, costs and expenses relating to the Prospect Loan. On a quarterly basis, if there was excess cash flow, it was used for prepayment of the Prospect Loan. We also maintained a debt service fund under the Prospect Loan for future principal and interest payments. As of September 30, 2021, and March 31, 2021, the debt service fund had a balance of $0 and $1.0 million, which was classified as part of restricted cash on our Consolidated Balance Sheets. On March 4, 2021, CDCH, AccessDM, Phase 2 DC, Christie/AIX, Inc., Cinedigm Digital Funding I, LLC, certain Lenders, and Prospect Capital Corporation, as administrative agent and collateral agent, entered into Amendment No. 3 (the “Amendment”) to the Term Loan Agreement dated February 28, 2013. Under the Amendment, the maturity date of the loan under the Term Loan Agreement was extended to March 31, 2022. As a condition to the effectiveness of the Amendment, CDCH paid $3,500,000 to Prospect to reduce the outstanding principal amount of the Loan. The Prospect Loan was secured by, among other things, a first priority pledge of the stock of CDF2 Holdings, our wholly-owned unconsolidated subsidiary, the stock of AccessDM, owned by DC Holdings, and the stock of our Phase 2 DC subsidiary, and was also guaranteed by AccessDM and Phase 2 DC. We provided limited financial support to the Prospect Loan not to exceed $1.5 million per year in the event financial performance did not meet certain defined benchmarks. The Prospect Loan contained customary representations, warranties, affirmative covenants, negative covenants and events of default. Upon a series of payments between April 30 and July 9, 2021 , the Company paid in full the Prospect Loan outstanding non-recourse debt amount by paying an aggregate principal amount of $7.8 million. Pre-payment of the Prospect Loan was permissible without penalty. The following table summarizes the activity related to the Prospect Loan: As of (In thousands) September 30, March 31, Prospect Loan, at issuance $ 70,000 $ 70,000 PIK Interest 8,016 6,397 Payments to date (78,016 ) (68,611 ) Prospect Loan, gross $ — $ 7,786 Less unamortized debt issuance costs and debt discounts — — Prospect Loan, net — 7,786 Less current portion — (7,786 ) Total long term portion $ — $ — Credit Facility and Cinedigm Revolving Loans On March 30, 2018, the Company entered into the Loan, Guaranty and Security Agreement, dated as of March 30, 2018, by and between the Company, East West Bank and the Guarantors named therein (the “Credit Facility”) for a maximum of $19.0 million in revolving loans outstanding at any one time with a maturity date of March 31, 2020, which may be extended for two successive one-year periods at the sole discretion of the lender, subject to certain conditions. Interest under the Credit Facility is due monthly at a rate elected by the Company of either 0.5% plus Prime Rate or 3.25% above LIBOR Rate established by the lender. On July 3, 2019, the Company entered into the EWB Amendment to the Credit Facility. The EWB Amendment reduced the size of the facility to $18.0 million, required certain prepayments and daily cash sweeps from collections of receivables to be made, changed in certain respects how the borrowing base is calculated, and extended the maturity date to June 30, 2020. In connection with the EWB Amendment, three of our subsidiaries became Guarantors under the Credit Facility. On June 25, 2020, the Company signed amendment No. 4 with East West Bank to extend the maturity of the Credit Facility to June 30, 2021 and waive events of default provisions. On June 22, 2021, the maturity date of the Credit Facility was extended to September 28, 2021. During this extension period, until an amendment is entered into, we are not able to access any additional borrowings under the Credit Facility. The September 28, 2021 expiration date has passed and no amendment has been entered into as of the date of filing of this Quarterly Report on Form 10-Q. As of September 30, 2021 and March 31, 2021, there was $0 and $2.0 million outstanding, respectively, and there was no availability under the Credit Facility based on the Company’s borrowing base as of September 30, 2021. PPP Loan On April 15, 2020, the Company received $2.2 million from East West Bank, the Company’s existing lender pursuant to the Paycheck Protection Program (the “PPP Loan”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan matures on April 10, 2022 (the “PPP Maturity Date”), accrues interest at 1% per annum and may be prepaid in whole or in part without penalty. No interest payments are due within the initial six months of the PPP Loan. The interest accrued during the initial six-month period is due and payable, together with the principal, on the PPP Maturity Date. The Company used all proceeds from the PPP Loan to retain employees, maintain payroll and make lease and utility payments to support business continuity throughout the COVID-19 pandemic, which amounts were intended to be eligible for forgiveness, subject to the provisions of the CARES Act and could be subject to repayment. On July 7, 2021, the Company received notification from the lender that the U.S. Small Business Administration had approved the Company’s PPP Loan forgiveness application for the entire PPP Loan amount and accrued interest effective June 30, 2021. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ EQUITY | 6. STOCKHOLDERS’ EQUITY COMMON STOCK During the six months ended September 30, 2021, we issued 2,883,907 shares of Common Stock which consists of the issuance of Common Stock for business combination, the issuances of Common Stock in payment of preferred stock dividends and in payment of board retainer fees. PREFERRED STOCK Cumulative dividends in arrears on preferred stock were $0.2 million and $0.1 million as of September 30, 2021 and March 31, 2021. In May 2021, we paid the preferred stock dividends in arrears in the form of 53,278 shares of Class A common stock. TREASURY STOCK We have treasury stock, at cost, consisting of 1,315,851 and 1,313,836 shares of Class A common stock at September 30, 2021 and March 31, 2021, respectively. CINEDIGM’S EQUITY INCENTIVE PLANS Stock Based Compensation Awards Awards issued under our 2000 Equity Incentive Plan (the “2000 Plan”) may be in any of the following forms (or a combination thereof) (i) stock option awards; (ii) stock appreciation rights; (iii) stock or restricted stock or restricted stock units; or (iv) performance awards. The 2000 Plan provides for the granting of incentive stock options (“ISOs”) with exercise prices not less than the fair market value of our Common Stock on the date of grant. ISOs granted to shareholders having more than 10% of the total combined voting power of the Company must have exercise prices of at least 110% of the fair market value of our Common Stock on the date of grant. ISOs and non-statutory stock options granted under the 2000 Plan are subject to vesting provisions, and exercise is subject to the continuous service of the participant. The exercise prices and vesting periods (if any) for non-statutory options are set at the discretion of our compensation committee. On November 1, 2017, upon the consummation of the initial equity investment in Cinedigm by Bison, as a result of which there was a change of control of the Company, all stock options (incentive and non-statutory) and shares of restricted stock were vested immediately and the options became fully exercisable. In connection with the grants of stock options and shares of restricted stock under the 2000 Plan, we and the participants have executed stock option agreements and notices of restricted stock awards setting forth the terms of the grants. The 2000 Plan provided for the issuance of up to 2,380,000 shares of Common Stock to employees, outside directors and consultants. As of September 30, 2021, there were 218,837 stock options outstanding in the 2000 Plan with weighted average exercise price of $14.48 and a weighted average contract life of 1.67 years. As of March 31, 2021, there were 261,587 shares pursuant to stock options outstanding in the Plan with weighted average exercise price of $14.99 and a weighted average contract life of 2.11 years. A total of 42,500 options expired and 250 options forfeited during the three and six months ended September 30, 2021. Options outstanding under the 2000 Plan as of September 30, 2021 is as follows: As of September 30, 2021 Range of Prices Options Outstanding Weighted Average Remaining Life in Years Weighted Average Exercise Price Aggregate Intrinsic Value $7.40 - $13.69 5,000 3.75 $ 7.40 $ — $13.70 - $24.40 213,837 1.62 14.65 — 218,837 $ — An analysis of all options exercisable under the 2000 Plan as of September 30, 2021 is presented below: Options Exercisable Weighted Average Weighted Average Aggregate Intrinsic Value 218,837 1.67 $ 14.48 — In August 2017, the Company adopted the 2017 Equity Incentive Plan (the “2017 Plan). The 2017 Plan replaced the 2000 Plan, and applies to employees and directors of, and consultants to, the Company. The 2017 Plan provided for the issuance of up to 2,108,270 shares of Class A common stock, in the form of various awards, including stock options, stock appreciation rights, stock, restricted stock, restricted stock units, performance awards and cash awards. The Compensation Committee of the Company’s Board of Directors (the “Board”) is authorized to administer the 2017 Plan and make grants thereunder. The approval of the 2017 Plan did not affect awards already granted under the 2000 Plan. On December 4, 2019, upon shareholder approval, the 2017 Plan was amended to increase the maximum number of shares of Class A common stock authorized for issuance thereunder from 2,108,270 shares to 4,098,270. On October 23, 2020, the Company amended its 2017 Plan to increase the number of shares authorized for issuance thereunder from 4,098,270 to 14,098,270. On October 11, 2021, the Company amended its 2017 Plan to increase the number of shares authorized for issuance thereunder from 14,098,270 to 18,098,270. During the six months ended September 30, 2021, the Company granted 1,409,000 stock appreciation rights (“SARs”). The SARs were granted under the Company’s 2017 Equity Incentive Plan (the “2017 Plan), except for 600,000 SARs granted an officer of the Company as an inducement grant. All SARs issued have an exercise price equal to the fair value of the Company’s Class A common stock on the date of grant and a maturity date of 10 years. The SARs were valued on the grant date utilizing an option pricing model, as follows: Grant Date: May 23, 2021 – September 13, 2021 Maturity Date: May 23, 2031 – March 31, 2034 Exercise price: $1.29 - $2.10 Volatility: 110.32% - 114.42% Discount rate: 0.96% - 1.08% Expected term: 6 – 6.5 years Stock appreciation rights outstanding under the 2017 Plan as of September 30, 2021 is as follows: As of September 30, 2021 Range of Prices SAR´s Outstanding Weighted Average Remaining Life in Years Weighted Average Exercise Price Aggregate Intrinsic Value $0.54 - $0.74 5,550,000 9.23 $ 0.66 $ 10,624 $1.16 - $1.47 2,046,610 8.05 1.35 2,304 $1.71 - $2.10 2,682,114 9.40 1.97 1,429 10,278,724 $ 14,357 An analysis of all stock appreciation rights exercisable under the 2017 Plan as of September 30, 2021 is presented below: Options Exercisable Weighted Average Weighted Average Aggregate Intrinsic Value 2,576,740 7.51 $ 1.16 3,952 Employee and director stock-based compensation expense related to our stock-based awards was as follows: Three Months Ended Six Months Ended (In thousands) 2021 2020 2021 2020 Selling, general and administrative $ 946 $ 1,035 $ 1,929 $ 1,212 $ 946 $ 1,035 $ 1,929 $ 1,212 Total SARs outstanding are as follows: Six Months SARs Outstanding March 31, 2021 9,154,933 Issued 1,409,000 Forfeited (285,209 ) Total SARs Outstanding September 30, 2021 10,278,724 There was $1 thousand and $1 thousand of stock-based compensation recorded for the six months ended September 30, 2021 and 2020, respectively, related to employees’ restricted stock awards. There was $0 thousand and $1 thousand of stock-based compensation recorded for the three months ended September 30, 2021 and 2020, respectively, related to employees’ restricted stock awards. There was $193 thousand and $131 thousand of stock-based compensation for the six months ended September 30, 2021 and 2020, respectively, related to board of directors. There was $71 thousand and $65 thousand of stock-based compensation for the three months ended September 30, 2021 and 2020, respectively, related to board of directors. During the six months ended September 30, 2021, the Company issued 35,714 shares to the board of directors. OPTIONS GRANTED OUTSIDE CINEDIGM’S EQUITY INCENTIVE PLAN In October 2013, we issued options outside of the 2000 Plan to 10 individuals who became employees as a result of a business combination. The employees received options to purchase an aggregate of 62,000 shares of our Class A Common Stock at an exercise price of $17.50 per share. The options were fully vested as of October 2017 and expire 10 years from the date of grant, if unexercised. As of September 30, 2021, 12,500 of such options remained outstanding. WARRANTS The following table presents information about outstanding warrants to purchase shares of our Class A common stock as of September 30, 2021. All of the outstanding warrants are fully vested and exercisable. Recipient Amount Expiration Exercise price Warrants issued in connection with Convertible Notes exchange transaction 246,019 December 2021 $ 1.30 5-year Warrant issued to BEMG in connection with a term loan agreement 1,400,000 December 2022 $ 1.80 Warrants for the purchase of 52,500 shares of Common Stock expired unexercised during the three months ended September 30, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 7. COMMITMENTS AND CONTINGENCIES From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. Although the results of litigation and claims cannot be predicted with certainty, the Company does not believe it is party to any other claim or litigation the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on its business. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. We operate from leased properties under non-cancelable operating lease agreements, certain of which contain escalating lease clauses. The Company leases office space under operating leases. The Company’s portfolio of leases is primarily related to real estate and since most of our leases do not provide a readily determinable implicit rate, the Company estimated its incremental borrowing rate to discount the lease payments based on information available at either the implementation date of Topic 842 or at lease commencement for leases entered into thereafter. The table below presents the lease-related assets and liabilities recorded on the balance sheet as of September 30, 2021: (In thousands) Classification on the Balance Sheet September 30, Assets Noncurrent Operating lease right-of-use asset $ 31 Liabilities Current Operating leases - current portion 28 Noncurrent Operating leases - long-term portion 3 Total operating lease liabilities $ 31 Lease Costs The table below presents certain information related to lease costs for leases: Six months Ended (In thousands) September 30, Operating lease cost $ 45 Total lease cost $ 45 Other Information The table below presents supplemental cash flow information related to leases: Six months Ended (In thousands) September 30, Cash paid for amounts included in the measurement of lease liabilities 10 Operating cash flows used for operating leases $ 10 Distribution arrangement minimum guaranty On September 1, 2021 the Company extended a video works distribution arrangement providing a non-refundable and fully-recoupable advance minimum participation guaranty for a total amount of $3.5 million, where $1.5 million is payable no later than November 1, 2021, $1.0 million at the first year anniversary of the arrangement and $0.9 million on the second-year anniversary of the arrangement. These payments are subject to the selection of video works released by the Company whose initial commercial date occurs during the arrangement year. The Company paid the first advance on October 22, 2021. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Sep. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | 8. SUPPLEMENTAL CASH FLOW INFORMATION Six Months Ended (In thousands) 2021 2020 Cash interest paid $ 612 $ 1,635 Income taxes paid 45 — noncash investing and financing activities: Accrued dividends on preferred stock 178 89 Issuance of Class A common stock for payment of accrued preferred stock dividends 89 178 Issuance of Class A common stock to Starrise, a related party — 11,046 Contributed capital under the Starrise transaction, a related party — 17,187 Settlement of second lien loan with Class A common stock — 818 Conversion of note payable — 15,000 Amounts accrued in connection with addition of property and equipment — 34 Issuance of Class A common stock for business combination 4,824 — Starrise shares used to pay down vendors — 744 Treasury shares acquired for withholding taxes 5 — Deferred consideration in purchase of a business 3,441 — |
Segment Information
Segment Information | 6 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 9. SEGMENT INFORMATION We operate in two reportable segments: Cinema Equipment Business and Content & Entertainment Business. Our segments were determined based on the economic characteristics of our products and services, our internal organizational structure, the manner in which our operations are managed and the criteria used by our CODM to evaluate performance, which is generally the segment’s operating income (loss) before depreciation and amortization. Operations of: Products and services provided: Cinema Equipment Business Financing vehicles and administrators for 1,813 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 3,009 Systems installed domestically and internationally in our second deployment phase (“Phase II Deployment”). We retain ownership of the Systems and the residual cash flows related to the Systems in Phase I Deployment after the repayment of all non-recourse debt at the expiration of exhibitor master license agreements. For certain Phase II Deployment Systems, we do not retain ownership of the residual cash flows and digital cinema equipment in Phase II Deployment after the completion of cost recoupment and at the expiration of the exhibitor master license agreements. The Cinema Equipment Business segment also provides monitoring, collection, verification and management services to this segment, as well as to exhibitors who purchase their own equipment, and also collects and disburses VPFs from motion picture studios, distributors and ACFs from alternative content providers, movie exhibitors and theatrical exhibitors (collectively, “Services”). Content & Entertainment Business Leading independent streaming company of content and channels. We collaborate with producers and other content owners to market, source, curate and distribute independent content to targeted and under-served audiences in theatres and homes, and via mobile and emerging platforms. The following tables present certain financial information related to our reportable segments and Corporate: As of September 30, (In thousands) Intangible Goodwill Total Notes Notes Operating Cinema Equipment Business $ — $ — $ 17,367 $ — $ — $ — Content & Entertainment Business 16,366 13,527 51,964 — — 10 Corporate 1 — 14,570 — — 21 Total $ 16,367 $ 13,527 $ 83,901 $ — $ — $ 31 As of March 31, 2021 (In thousands) Intangible Goodwill Total Notes Notes Operating Cinema Equipment Business $ — $ — $ 13,169 $ 7,786 $ — $ 1 Content & Entertainment Business 9,858 8,701 42,733 — — 69 Corporate 2 — 19,544 — 4,108 30 Total $ 9,860 $ 8,701 $ 75,446 $ 7,786 $ 4,108 $ 100 Statements of Operations Three Months Ended (in thousands) Cinema Content & Entertainment Corporate Consolidated Revenues $ 3,253 $ 6,850 $ — $ 10,103 Direct operating (exclusive of depreciation and amortization shown below) 164 3,169 — 3,333 Selling, general and administrative 431 3,480 3,248 7,159 Allocation of corporate overhead 170 1,139 (1,309 ) — Provision for (recovery of) doubtful accounts (130 ) 19 — (111 ) Depreciation and amortization of property and equipment 300 140 — 440 Amortization of intangible assets — 696 — 696 Total operating expenses 935 8,643 1,939 11,517 Income (loss) from operations $ 2,318 $ (1,793 ) $ (1,939 ) $ (1,414 ) The following employee and director stock-based compensation expense related to our stock-based awards is included in the above amounts as follows: (In thousands) Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative — 345 601 946 Total stock-based compensation $ — $ 345 $ 601 $ 946 Statements of Operations Three Months Ended September 30, Cinema Content & Entertainment Corporate Consolidated Revenues $ 643 $ 6,539 $ — $ 7,182 Direct operating (exclusive of depreciation and amortization shown below) 172 4,158 — 4,330 Selling, general and administrative 631 2,528 3,009 6,168 Allocation of corporate overhead 171 1,135 (1,306 ) — Recovery of doubtful accounts (193 ) — — (193 ) Depreciation and amortization of property and equipment 1,239 101 5 1,345 Amortization of intangible assets 7 582 2 591 Total operating expenses 2,027 8,504 1,710 12,241 Loss from operations $ (1,384 ) $ (1,965 ) $ (1,710 ) $ (5,059 ) The following employee and director stock-based compensation expense related to our stock-based awards is included in the above amounts as follows: Cinema Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative — 26 1,009 1,035 Total stock-based compensation $ — $ 26 $ 1,009 $ 1,035 Statements of Operations Six Months Ended September 30, (in thousands) Cinema Content & Entertainment Corporate Consolidated Revenues $ 9,484 $ 15,634 $ — $ 25,118 Direct operating (exclusive of depreciation and amortization shown below) 421 7,543 — 7,964 Selling, general and administrative 860 6,298 6,044 13,202 Allocation of corporate overhead 269 1,799 (2,068 ) — (Recovery of) provision for doubtful accounts (103 ) 63 — (40 ) Depreciation and amortization of property and equipment 805 284 — 1,089 Amortization of intangible assets — 1,543 — 1,543 Total operating expenses 2,252 17,530 3,976 23,758 Income (loss) from operations $ 7,232 $ (1,896 ) $ (3,976 ) $ 1,360 The following employee and director stock-based compensation expense related to our stock-based awards is included in the above amounts as follows: (In thousands) Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative — 511 1,418 1,929 Total stock-based compensation $ — $ 511 $ 1,418 $ 1,929 Statements of Operations Six Months Ended September 30, Cinema Content & Entertainment Corporate Consolidated Revenues $ 1,248 $ 11,952 $ — $ 13,200 Direct operating (exclusive of depreciation and amortization shown below) 354 6,655 — 7,009 Selling, general and administrative 1,180 4,423 4,405 10,008 Allocation of corporate overhead 295 1,919 (2,214 ) — Recovery for doubtful accounts (193 ) — — (193 ) Depreciation and amortization of property and equipment 2,642 204 23 2,869 Amortization of intangible assets 15 1,164 2 1,181 Total operating expenses 4,293 14,365 2,216 20,874 Income (loss) from operations $ (3,045 ) $ (2,413 ) $ (2,216 ) $ (7,674 ) The following employee and director stock-based compensation expense related to our stock-based awards is included in the above amounts as follows: Cinema Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative — 52 1,160 1,212 Total stock-based compensation $ — $ 52 $ 1,160 $ 1,212 |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES We calculate income tax expense based upon an annual effective tax rate forecast, including estimates and assumptions. We recorded an income tax benefit of approximately $487 thousand and $550 thousand for the three and six months ended September 30, 2021. We recorded an income tax benefit of approximately $181 thousand for the three and six months ended September 30, 2020. We have not recorded tax benefits on our loss before income taxes because we have provided for a full valuation allowance that offsets potential deferred tax assets resulting from net operating loss carry forwards, reflecting our inability to use such loss carry forwards. Our effective tax rate for the six months ended September 30, 2021 and 2020 was negative 12.4% and 0.4%, respectively. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The Act contains several new or changed income tax provisions, including but not limited to the following: increased limitation threshold for determining deductible interest expense; class life changes to qualified improvements (in general, from 39 years to 15 years); and the ability to carry back net operating losses incurred from tax years 2018 through 2020 up to the five preceding tax years. The Company has evaluated the new tax provisions of the CARES Act and determined the impact to be either immaterial or not applicable. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS Authorized Class A Common Stock On October 11, 2021, the Company filed a Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation, pursuant to which the number of shares of Class A common stock authorized for issuance was increased to 275,000,000 shares. Equity Incentive Plan On October 11, 2021, the Company amended its 2017 Equity Incentive plan to increase the number of shares authorized for issuance thereunder from 14,098,270 to 18,098,270. Common Stock Purchase Agreement In October 2021, we entered into a Common Stock Purchase Agreement (the “Equity Line Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with B. Riley Principal Capital, LLC (“B. Riley Principal Capital”). Pursuant to the Equity Line Purchase Agreement, the Company has the right to sell to B. Riley Principal Capital up to the lesser of (i) $50,000,000 of newly issued shares of Common Stock and (ii) the Exchange Cap (as defined below) (subject to certain conditions and limitations), from time to time during the 24-month period from and after the October 21, 2021. Sales of Common Stock pursuant to the Equity Line Purchase Agreement, and the timing of any sales, are solely at the option of the Company, and the Company is under no obligation to sell any securities to B. Riley Principal Capital under the Equity Line Purchase Agreement. As consideration for B. Riley Principal Capital’s commitment to purchase shares of Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the Equity Line Purchase Agreement, upon execution of the Equity Line Purchase Agreement, the Company issued 210,084 shares of Common Stock to B. Riley Principal Capital (the “Commitment Shares”). The purchase price of the shares of Common Stock that we elect to sell to B. Riley Principal Capital pursuant to the Equity Line Purchase Agreement will be determined by reference to the volume weighted average price of the Common Stock (“VWAP”) during the applicable purchase date, less a fixed 5% discount to such VWAP. Pursuant to the Registration Rights Agreement, the Company filed a Registration Statement on Form S-1 that was declared effective by the Securities and Exchange Commission on October 21, 2021 (File No. 333-260210) for the resale by B. Riley Principal Capital of up to 25,210,084 shares of Common Stock (including the Commitment Shares) acquired pursuant to the Equity Line Purchase Agreement. During October and November 2021 , we sold 5,300,000 shares of Common Stock under the Equity Line Purchase Agreement. Net proceeds from such sales totaled $12.4 million. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND CONSOLIDATION | BASIS OF PRESENTATION AND CONSOLIDATION Our consolidated financial statements include the accounts of Cinedigm and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Investments in which we do not have a controlling interest or are not the primary beneficiary, but have the ability to exert significant influence, are accounted for under the equity method of accounting. Noncontrolling interests for which we have been determined to be the primary beneficiary are consolidated and recorded as net loss attributable to noncontrolling interest. See Note 3 - Other Interests |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include the adequacy of accounts receivable reserves, return reserves, inventory reserves, recovery of advances, assessment of goodwill impairment, long-lived and finite-lived assets impairment and estimated amortization lives, fair value for asset acquisitions and business combinations, valuation allowances for income taxes and stock awards. Actual results could differ from these estimates. |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | CASH, CASH EQUIVALENTS, AND RESTRICTED CASH We consider all highly liquid investments with an original maturity of three months or less to be “cash equivalents.” We maintain bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation’s insured limits. We periodically assess the financial condition of the institutions and believe that the risk of any loss is minimal. Our Prospect Loan required that we maintain specified cash balances that are restricted to repayment of interest thereunder. See Note 5 - Notes Payable Cash, cash equivalents, and restricted cash consisted of the following: As of (in thousands) September 30, September 30, Cash and Cash Equivalents $ 12,645 $ 16,503 Restricted Cash - 1,000 $ 12,645 $ 17,503 |
EQUITY INVESTMENT IN STARRISE, A RELATED PARTY | EQUITY INVESTMENT IN STARRISE, A RELATED PARTY On February 14, 2020, the Company acquired an approximately 11.5% interest in Starrise, a leading publicly traded Chinese entertainment company whose ordinary shares are listed on the Stock Exchange of Hong Kong. The Company acquired such interest as a strategic investment and in a private transaction from a shareholder of Starrise that is related to our major shareholders. When we acquired the Starrise stock, our then-majority affiliated stockholders also maintained a significant beneficial interest in Starrise. Upon consummation of the transaction on February 14, 2020, the Company recorded an initial investment of approximately $25.1 million, which is the fair market value of the Starrise shares on the transaction date on the Stock Exchange of Hong Kong, in exchange for the Company’s common stock of $11.2 million, valued as of the date of the issuance of the Common Stock. The difference in value of shares received in Starrise and shares issued by the Company was deemed as contributed capital and recorded in additional paid-in capital. On April 10, 2020, the Company purchased an additional 15% interest in Starrise in a private transaction from shareholders of Starrise that are affiliated with the then-major shareholder of the Company. The Company recorded an additional equity investment of approximately $28.2 million, which is the fair market value of the Starrise shares on the transaction date on the Stock Exchange of Hong Kong, in exchange for the Common Stock of $11.0 million, valued at the date of the issuance of the Common Stock. The difference in the value of shares received in Starrise and shares issued by the Company was deemed as contributed capital and recorded in additional paid-in capital. This transaction was also recorded as an equity investment in Starrise. The Company has made an irrevocable election to apply the fair value accounting option under ASC 825-10, Financial Instruments As of September 30, 2021 and March 31, 2021, the value of our equity investment in Starrise, using the readily determinable fair value inputs from the market pricing of the Stock Exchange of Hong Kong, was approximately $7.4 million and $6.4 million, respectively, resulting in a change in fair value of approximately $1.0 million and ($35.6) million for the six months ended September 30, 2021 and 2020 respectively, on our consolidated statement of operations. On April 1 and May 5, 2021, the Company sold 80,000 and 600,000 Starrise’s ordinary shares, respectively for a total amount of $11 thousand. At September 30, 2021 and March 31, 2021, the Company owned 362,307,397 and 362,987,397 ordinary shares or 18% and 26% of Starrise, respectively. |
NON-MONETARY TRANSACTIONS | NON-MONETARY TRANSACTIONS During the three and six months ended September 30, 2020, the Company entered into agreements with certain vendors to transfer 7,116,100 and 16,122,315 Starrise shares to satisfy outstanding liabilities with these vendors. Upon the sale of the Starrise shares by the vendors, with certain restrictions on sales unless the Company gives consent to sell, if the proceeds do not satisfy the amount due to the vendor, the Company is liable for the balance owed. There were no such transactions during the six months ended September 30, 2021. There was no gain or loss resulting from these transactions for the three and six months ended September 30, 2021 and 2020. |
ACCOUNTS RECEIVABLE | accounts receivable are discounted to their present value at prevailing market rate. ADVANCES Advances, which are recorded within prepaid and other current assets on the consolidated balance sheets, represent amounts prepaid to studios or content producers for which we provide content distribution services. We evaluate advances regularly for recoverability and record impairment charges for amounts that we expect may not be recoverable as of the consolidated balance sheet date. Impairments and accelerated amortization related to advances were $0.2 million and $0 million, respectively, for the three months ended September 30, 2021 and 2020. Impairments and accelerated amortization related to advances were $0.4 million and $0.04 million, respectively, for the six months ended September 30, 2021 and 2020. PROPERTY AND EQUIPMENT Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation expense is recorded using the straight-line method over the estimated useful lives of the respective assets as follows: Computer equipment and software 3 - 5 years Internal use software 5 years Digital cinema projection systems 10 years Machinery and equipment 3 - 10 years Furniture and fixtures 3 - 6 years We capitalize costs associated with software developed or obtained for internal use when the preliminary project stage is completed, and it is determined that the software will provide significantly enhanced capabilities and modifications. These capitalized costs are included in property and equipment and include external direct cost of services procured in developing or obtaining internal-use software and personnel and related expenses for employees who are directly associated with, and who devote time to internal-use software projects. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended use. Once the software is ready for its intended use, the costs are amortized over the useful life of the software. Post-configuration training and maintenance costs are expensed as incurred. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the leasehold improvements. Repair and maintenance costs are charged to expense as incurred. Major renewals, improvements and additions are capitalized. Upon the sale or other disposition of any property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and the gain or loss on disposal is included in the consolidated statements of operations. FAIR VALUE MEASUREMENTS The fair value measurement disclosures are grouped into three levels based on valuation factors: ● Level 1 – quoted prices in active markets for identical investments ● Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) ● Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments) Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities. The equity investment in Starrise is in Hong Kong dollars and was translated into US dollars as of September 30, 2021 and March 31, 2021 at an exchange rate of 7.8 and 7.8 Hong Kong Dollars to 1 US Dollar, respectively. The fair value of this equity investment is measured by the unadjusted market pricing of Starrise on the Stock Exchange of Hong Kong. The following tables summarize the levels of fair value measurements of our financial assets and liabilities as of September 30, 2021 and March 31, 2021: As of September 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Equity investment in Starrise, at fair value $ 7,443 $ — $ — $ 7,443 $ 7,443 $ — — $ 7,443 As of March 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Restricted cash $ 1,000 $ — $ — $ 1,000 Equity investment in Starrise, at fair value 6,443 — — 6,443 $ 7,443 $ — $ — $ 7,443 Our cash and cash equivalents, accounts receivable, unbilled revenue and accounts payable and accrued expenses are financial instruments and are recorded at cost in the consolidated balance sheets. The estimated fair values of these financial instruments approximate their carrying amounts because of their short-term nature. IMPAIRMENT OF LONG-LIVED AND FINITE-LIVED ASSETS We review the recoverability of our long-lived assets and finite-lived intangible assets, when events or conditions occur that indicate a possible impairment exists. The assessment for recoverability is based primarily on our ability to recover the carrying value of our long-lived and finite-lived assets from expected future undiscounted net cash flows. If the total of expected future undiscounted net cash flows is less than the total carrying value of the asset, the asset is deemed not to be recoverable and possibly impaired. We then estimate the fair value of the asset to determine whether an impairment loss should be recognized. An impairment loss will be recognized if the asset’s fair value is determined to be less than its carrying value. Fair value is determined by computing the expected future discounted cash flows. During the three and six months ended September 30, 2021 and 2020, no impairment charge was recorded from operations for long-lived assets or finite-lived assets. GOODWILL Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. Goodwill is tested for impairment on an annual basis or more often if warranted by events or changes in circumstances indicating that the carrying value may exceed fair value, also known as impairment indicators. Inherent in the fair value determination for each reporting unit are certain judgments and estimates relating to future cash flows, including management’s interpretation of current economic indicators and market conditions, and assumptions about our strategic plans with regard to its operations. To the extent additional information arises, market conditions change, or our strategies change, it is possible that the conclusion regarding whether our remaining goodwill is impaired could change and result in future goodwill impairment charges that will have a material effect on our consolidated financial position or results of operations. The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount or to perform the quantitative impairment test. No goodwill impairment charge was recorded in the six months ended September 30, 2021 and 2020. Gross amounts of goodwill and accumulated impairment charges that we have recorded are as follows: (In thousands) Goodwill at March 31, 2021 $ 8,701 Goodwill from business combinations – see Note 4 4,826 Goodwill at September 30, 2021 $ 13,527 REVENUE RECOGNITION We determine revenue recognition by: ● identifying the contract, or contracts, with the customer; ● identifying the performance obligations in the contract; ● determining the transaction price; ● allocating the transaction price to performance obligations in the contract; and ● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services. We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the services provided, sales of physical products (e.g., DVDs and Blu-ray Discs) or when the content is available for subscription on the digital platform or available on the point-of-sale for transactional and video on demand services which is when the control of the promised products and services is transferred to our customers and our performance obligations under the contract have been satisfied. Revenues that might be subject to various taxes are recorded net of transaction taxes assessed by governmental authorities such as sales value-added taxes and other similar taxes. Payment terms and conditions vary by customer and typically provide net 30 to 90 day terms. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less. Cinema Equipment Business Our Cinema Equipment Business consists of financing vehicles and administrators for 1,813 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 3,009 Systems installed domestically and internationally in our second deployment phase (“Phase II Deployment”). We retain ownership of our digital cinema equipment (the “Systems”) and the residual cash flows related to the Systems in Phase I Deployment after the end of the 10-year deployment payment period. For certain Phase II Deployment Systems, we do not retain ownership of the residual cash flows and digital cinema equipment in Phase II Deployment after the completion of cost recoupment and at the expiration of the exhibitor master license agreements. The Cinema Equipment Business also provides monitoring, data collection, serial data verification and management services to this segment, as well as to exhibitors who purchase their own equipment, in order to collect virtual print fees (“VPFs”) from motion picture studios and distributors and Alternative Content Fees (“ACFs”) from alternative content providers, and to distribute those fees to theatrical exhibitors (collectively, “Services”). VPFs are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Phase I Deployment and to Phase II Deployment when movies distributed by the studio are displayed on screens utilizing our Systems installed in movie theatres. VPFs are earned and payable to Phase I Deployment based on a defined fee schedule until the end of the VPF term. One VPF is payable for every digital title initially displayed per System. The amount of VPF revenue is dependent on the number of movie titles released and displayed using the Systems in any given accounting period. VPF revenue is recognized in the period the title first plays for general audience viewing in a digital projector equipped movie theatre. The Phase 1 Deployment’s and Phase 2 Deployments performance obligations for revenue recognition are met at this time. Phase II Deployment’s agreements with distributors require the payment of VPFs, according to a defined fee schedule, for ten years from the date each system is installed; however, Phase II Deployment may no longer collect VPFs once “cost recoupment,” as defined in the contracts with movie studios and distributors, is achieved. Cost recoupment will occur once the cumulative VPFs and other cash receipts collected by Phase II Deployment have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter. Further, if cost recoupment occurs before the end of the eighth contract year, the studios will pay us a one-time “cost recoupment bonus.” The Company evaluated the constraining estimates related to the variable consideration, i.e., the one-time bonus and determined that it is not probable to conclude at this point in time that a significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is subsequently resolved. Under the terms of our standard cinema equipment licensing agreements, exhibitors will continue to have the right to use our Systems through the end of the term of the licensing agreement, after which time, they have the option to: (1) return the Systems to us; (2) renew their license agreement for successive one-year terms; or (3) purchase the Systems from us at fair market value. As permitted by these agreements, we typically pursue the sale of the Systems to such exhibitors. Cinedigm recognizes revenue once the customer takes possession of the systems and is predicated on Cinedigm’s receipt of sale proceeds. Such sales were as originally contemplated as the conclusion of the digital cinema deployment plan. Total system sales revenue recognized were $2.2 million and $15 thousand, during the three months ended September 30, 2021 and 2020, respectively. Total system sales revenue recognized were $7.8 million and $91 thousand, during the six months ended September 30, 2021 and 2020, respectively. Revenues earned in connection with up front exhibitor contributions are deferred and recognized over the expected cost recoupment period. Exhibitors who purchased and own Systems using their own financing in the Cinema Equipment Business paid us an upfront activation fee of approximately $2.0 thousand per screen (the “Exhibitor-Buyer Structure”). Upfront activation fees were recognized in the period in which these Systems were delivered and ready for content, as we had no further obligations to the customer after that time and collection was reasonably assured. In addition, we recognize activation fee revenue of between $1.0 thousand and $2.0 thousand on Phase II Deployment Systems and for Systems installed by CDF2 Holdings, a related party, (See Note 3 - Other Interests The Cinema Equipment Business earns an administrative fee of approximately 5% of VPFs collected and, in addition, earns an incentive service fee equal to 2.5% of the VPFs earned by Phase 1 DC. This administrative fee is related to the collection and remittance of the VPF’s and the performance obligation is satisfied at that time the related VPF fees are due which is at the time the movies are displayed on screens utilizing our Systems installed in movie theatres. The service fees are recognized as a point in time revenue when the corresponding VPF fees are due from the movie studios and distributors. Content& Entertainment Business CEG earns fees for the distribution of content in the home entertainment markets via several distribution channels, including digital, video on demand (“VOD” or “OTT Streaming and Digital”), and physical goods (e.g., DVDs and Blu-ray Discs) (“Physical Revenue” or “Base Distribution Business”). Fees earned are typically a percentage based on the net amounts received from our customers. Depending upon the nature of the agreements with the platform and content providers, the fee rate that we earn varies. The Company’s performance obligations include the delivery of content for transactional, subscription and ad supported/free ad-supported streaming TV (“FAST”) on the digital platforms, and shipment of DVDs and Blu-ray Discs. Revenue is recognized at the point in time when the performance obligation is satisfied which is when the content is available for subscription on the digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and VOD services as the control over the content or the physical title is transferred to the customer. The Company considers the delivery of content through various distribution channels to be a single performance obligation. Physical revenue is recognized after deducting the reserves for sales returns and other allowances, which are accounted for as variable consideration. Physical goods reserved for sales returns and other allowances are recorded based upon historical experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required. CEG also has contracts for the theatrical distribution of third party feature movies and alternative content. CEG’s distribution fee revenue and CEG’s participation in box office receipts is recognized at the time a feature movie and alternative content are viewed. CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date. Principal Agent Considerations We determine whether revenue should be reported on a gross or net basis for each revenue stream based on the transfer of control of goods and services. Key indicators that we use in evaluating gross versus net treatment include, but are not limited to, the following: ● which party is primarily responsible for fulfilling the promise to provide the specified good or service; and ● which party has discretion in establishing the price for the specified good or service. Shipping and Handling Shipping and handling costs are incurred to move physical goods (e.g., DVDs and Blu-ray Discs) to customers. We recognize all shipping and handling costs as an expense in cost of goods sold because we are responsible for delivery of the product to our customers prior to transfer of control to the customer. Credit Losses We maintain reserves for potential credit losses on accounts receivable. We review the composition of accounts receivable and analyze historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. |
ADVANCES | ADVANCES Advances, which are recorded within prepaid and other current assets on the consolidated balance sheets, represent amounts prepaid to studios or content producers for which we provide content distribution services. We evaluate advances regularly for recoverability and record impairment charges for amounts that we expect may not be recoverable as of the consolidated balance sheet date. Impairments and accelerated amortization related to advances were $0.2 million and $0 million, respectively, for the three months ended September 30, 2021 and 2020. Impairments and accelerated amortization related to advances were $0.4 million and $0.04 million, respectively, for the six months ended September 30, 2021 and 2020. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation expense is recorded using the straight-line method over the estimated useful lives of the respective assets as follows: Computer equipment and software 3 - 5 years Internal use software 5 years Digital cinema projection systems 10 years Machinery and equipment 3 - 10 years Furniture and fixtures 3 - 6 years We capitalize costs associated with software developed or obtained for internal use when the preliminary project stage is completed, and it is determined that the software will provide significantly enhanced capabilities and modifications. These capitalized costs are included in property and equipment and include external direct cost of services procured in developing or obtaining internal-use software and personnel and related expenses for employees who are directly associated with, and who devote time to internal-use software projects. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended use. Once the software is ready for its intended use, the costs are amortized over the useful life of the software. Post-configuration training and maintenance costs are expensed as incurred. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the leasehold improvements. Repair and maintenance costs are charged to expense as incurred. Major renewals, improvements and additions are capitalized. Upon the sale or other disposition of any property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and the gain or loss on disposal is included in the consolidated statements of operations. |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The fair value measurement disclosures are grouped into three levels based on valuation factors: ● Level 1 – quoted prices in active markets for identical investments ● Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) ● Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments) Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities. The equity investment in Starrise is in Hong Kong dollars and was translated into US dollars as of September 30, 2021 and March 31, 2021 at an exchange rate of 7.8 and 7.8 Hong Kong Dollars to 1 US Dollar, respectively. The fair value of this equity investment is measured by the unadjusted market pricing of Starrise on the Stock Exchange of Hong Kong. The following tables summarize the levels of fair value measurements of our financial assets and liabilities as of September 30, 2021 and March 31, 2021: As of September 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Equity investment in Starrise, at fair value $ 7,443 $ — $ — $ 7,443 $ 7,443 $ — — $ 7,443 As of March 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Restricted cash $ 1,000 $ — $ — $ 1,000 Equity investment in Starrise, at fair value 6,443 — — 6,443 $ 7,443 $ — $ — $ 7,443 Our cash and cash equivalents, accounts receivable, unbilled revenue and accounts payable and accrued expenses are financial instruments and are recorded at cost in the consolidated balance sheets. The estimated fair values of these financial instruments approximate their carrying amounts because of their short-term nature. |
IMPAIRMENT OF LONG-LIVED AND FINITE-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED AND FINITE-LIVED ASSETS We review the recoverability of our long-lived assets and finite-lived intangible assets, when events or conditions occur that indicate a possible impairment exists. The assessment for recoverability is based primarily on our ability to recover the carrying value of our long-lived and finite-lived assets from expected future undiscounted net cash flows. If the total of expected future undiscounted net cash flows is less than the total carrying value of the asset, the asset is deemed not to be recoverable and possibly impaired. We then estimate the fair value of the asset to determine whether an impairment loss should be recognized. An impairment loss will be recognized if the asset’s fair value is determined to be less than its carrying value. Fair value is determined by computing the expected future discounted cash flows. During the three and six months ended September 30, 2021 and 2020, no impairment charge was recorded from operations for long-lived assets or finite-lived assets. |
GOODWILL | GOODWILL Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. Goodwill is tested for impairment on an annual basis or more often if warranted by events or changes in circumstances indicating that the carrying value may exceed fair value, also known as impairment indicators. Inherent in the fair value determination for each reporting unit are certain judgments and estimates relating to future cash flows, including management’s interpretation of current economic indicators and market conditions, and assumptions about our strategic plans with regard to its operations. To the extent additional information arises, market conditions change, or our strategies change, it is possible that the conclusion regarding whether our remaining goodwill is impaired could change and result in future goodwill impairment charges that will have a material effect on our consolidated financial position or results of operations. The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount or to perform the quantitative impairment test. No goodwill impairment charge was recorded in the six months ended September 30, 2021 and 2020. Gross amounts of goodwill and accumulated impairment charges that we have recorded are as follows: (In thousands) Goodwill at March 31, 2021 $ 8,701 Goodwill from business combinations – see Note 4 4,826 Goodwill at September 30, 2021 $ 13,527 |
REVENUE RECOGNITION | REVENUE RECOGNITION We determine revenue recognition by: ● identifying the contract, or contracts, with the customer; ● identifying the performance obligations in the contract; ● determining the transaction price; ● allocating the transaction price to performance obligations in the contract; and ● recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services. We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the services provided, sales of physical products (e.g., DVDs and Blu-ray Discs) or when the content is available for subscription on the digital platform or available on the point-of-sale for transactional and video on demand services which is when the control of the promised products and services is transferred to our customers and our performance obligations under the contract have been satisfied. Revenues that might be subject to various taxes are recorded net of transaction taxes assessed by governmental authorities such as sales value-added taxes and other similar taxes. Payment terms and conditions vary by customer and typically provide net 30 to 90 day terms. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less. Cinema Equipment Business Our Cinema Equipment Business consists of financing vehicles and administrators for 1,813 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 3,009 Systems installed domestically and internationally in our second deployment phase (“Phase II Deployment”). We retain ownership of our digital cinema equipment (the “Systems”) and the residual cash flows related to the Systems in Phase I Deployment after the end of the 10-year deployment payment period. For certain Phase II Deployment Systems, we do not retain ownership of the residual cash flows and digital cinema equipment in Phase II Deployment after the completion of cost recoupment and at the expiration of the exhibitor master license agreements. The Cinema Equipment Business also provides monitoring, data collection, serial data verification and management services to this segment, as well as to exhibitors who purchase their own equipment, in order to collect virtual print fees (“VPFs”) from motion picture studios and distributors and Alternative Content Fees (“ACFs”) from alternative content providers, and to distribute those fees to theatrical exhibitors (collectively, “Services”). VPFs are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Phase I Deployment and to Phase II Deployment when movies distributed by the studio are displayed on screens utilizing our Systems installed in movie theatres. VPFs are earned and payable to Phase I Deployment based on a defined fee schedule until the end of the VPF term. One VPF is payable for every digital title initially displayed per System. The amount of VPF revenue is dependent on the number of movie titles released and displayed using the Systems in any given accounting period. VPF revenue is recognized in the period the title first plays for general audience viewing in a digital projector equipped movie theatre. The Phase 1 Deployment’s and Phase 2 Deployments performance obligations for revenue recognition are met at this time. Phase II Deployment’s agreements with distributors require the payment of VPFs, according to a defined fee schedule, for ten years from the date each system is installed; however, Phase II Deployment may no longer collect VPFs once “cost recoupment,” as defined in the contracts with movie studios and distributors, is achieved. Cost recoupment will occur once the cumulative VPFs and other cash receipts collected by Phase II Deployment have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter. Further, if cost recoupment occurs before the end of the eighth contract year, the studios will pay us a one-time “cost recoupment bonus.” The Company evaluated the constraining estimates related to the variable consideration, i.e., the one-time bonus and determined that it is not probable to conclude at this point in time that a significant reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is subsequently resolved. Under the terms of our standard cinema equipment licensing agreements, exhibitors will continue to have the right to use our Systems through the end of the term of the licensing agreement, after which time, they have the option to: (1) return the Systems to us; (2) renew their license agreement for successive one-year terms; or (3) purchase the Systems from us at fair market value. As permitted by these agreements, we typically pursue the sale of the Systems to such exhibitors. Cinedigm recognizes revenue once the customer takes possession of the systems and is predicated on Cinedigm’s receipt of sale proceeds. Such sales were as originally contemplated as the conclusion of the digital cinema deployment plan. Total system sales revenue recognized were $2.2 million and $15 thousand, during the three months ended September 30, 2021 and 2020, respectively. Total system sales revenue recognized were $7.8 million and $91 thousand, during the six months ended September 30, 2021 and 2020, respectively. Revenues earned in connection with up front exhibitor contributions are deferred and recognized over the expected cost recoupment period. Exhibitors who purchased and own Systems using their own financing in the Cinema Equipment Business paid us an upfront activation fee of approximately $2.0 thousand per screen (the “Exhibitor-Buyer Structure”). Upfront activation fees were recognized in the period in which these Systems were delivered and ready for content, as we had no further obligations to the customer after that time and collection was reasonably assured. In addition, we recognize activation fee revenue of between $1.0 thousand and $2.0 thousand on Phase II Deployment Systems and for Systems installed by CDF2 Holdings, a related party, (See Note 3 - Other Interests The Cinema Equipment Business earns an administrative fee of approximately 5% of VPFs collected and, in addition, earns an incentive service fee equal to 2.5% of the VPFs earned by Phase 1 DC. This administrative fee is related to the collection and remittance of the VPF’s and the performance obligation is satisfied at that time the related VPF fees are due which is at the time the movies are displayed on screens utilizing our Systems installed in movie theatres. The service fees are recognized as a point in time revenue when the corresponding VPF fees are due from the movie studios and distributors. Content& Entertainment Business CEG earns fees for the distribution of content in the home entertainment markets via several distribution channels, including digital, video on demand (“VOD” or “OTT Streaming and Digital”), and physical goods (e.g., DVDs and Blu-ray Discs) (“Physical Revenue” or “Base Distribution Business”). Fees earned are typically a percentage based on the net amounts received from our customers. Depending upon the nature of the agreements with the platform and content providers, the fee rate that we earn varies. The Company’s performance obligations include the delivery of content for transactional, subscription and ad supported/free ad-supported streaming TV (“FAST”) on the digital platforms, and shipment of DVDs and Blu-ray Discs. Revenue is recognized at the point in time when the performance obligation is satisfied which is when the content is available for subscription on the digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and VOD services as the control over the content or the physical title is transferred to the customer. The Company considers the delivery of content through various distribution channels to be a single performance obligation. Physical revenue is recognized after deducting the reserves for sales returns and other allowances, which are accounted for as variable consideration. Physical goods reserved for sales returns and other allowances are recorded based upon historical experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required. CEG also has contracts for the theatrical distribution of third party feature movies and alternative content. CEG’s distribution fee revenue and CEG’s participation in box office receipts is recognized at the time a feature movie and alternative content are viewed. CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date. Principal Agent Considerations We determine whether revenue should be reported on a gross or net basis for each revenue stream based on the transfer of control of goods and services. Key indicators that we use in evaluating gross versus net treatment include, but are not limited to, the following: ● which party is primarily responsible for fulfilling the promise to provide the specified good or service; and ● which party has discretion in establishing the price for the specified good or service. Shipping and Handling Shipping and handling costs are incurred to move physical goods (e.g., DVDs and Blu-ray Discs) to customers. We recognize all shipping and handling costs as an expense in cost of goods sold because we are responsible for delivery of the product to our customers prior to transfer of control to the customer. Credit Losses We maintain reserves for potential credit losses on accounts receivable. We review the composition of accounts receivable and analyze historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. Our CEG segment recognizes accounts receivable, net of an estimated allowance for product returns and customer chargebacks, at the time that it recognizes revenue from a sale. Reserves for product returns and other allowances is variable consideration as part of the transaction price. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required. We record accounts receivable, long-term in connection with activation fees that we earn from Systems deployments that have extended payment terms. Such accounts receivable are discounted to their present value at prevailing market rates. Contract Liabilities We generally record a receivable related to revenue when we have an unconditional right to invoice and receive payment, and we record deferred revenue (contract liability) when cash payments are received or due in advance of our performance, even if amounts are refundable. Deferred revenue pertaining to our Content & Entertainment Business includes amounts related to the sale of DVDs with future release dates. Deferred revenue relating to our Cinema Equipment Business pertains to revenues earned in connection with up front exhibitor contributions that are deferred and recognized over the expected cost recoupment period. It also includes unamortized balances in connection with activation fees due from the Systems deployments that have extended payment terms. The ending deferred revenue balance as of September 30, 2021 was $0.2 million. For the three and six months ended September 30, 2021 and 2020, respectively, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance of satisfying performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business. During the three months ended September 30, 2021 and 2020, $0.3 million and $0.7 million, respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the period. During the six months ended September 30, 2021 and 2020, $0.8 million and $1.3 million, respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the period. As of September 30, 2021, the aggregate amount of contract revenue allocated to unsatisfied performance obligations was $0.2 million. We recognized this balance in full by October 31, 2021. Participations and royalties payable When we use third parties to distribute company owned content, we record participations payable, which represent amounts owed to the distributor under revenue-sharing arrangements. When we provide content distribution services, we record accounts payable and accrued expenses to studios or content producers for royalties owed under licensing arrangements. We identify and record as a reduction to the liability any expenses that are to be reimbursed to us by such studios or content producers. Disaggregation of Revenue The Company disaggregates revenue into different revenue categories for the Cinema Equipment and CEG Businesses. The Cinema Equipment Business revenue categories are: Phase I Deployment revenue, Phase II Deployment revenue, Services, and Digital System Sales, and the Content & Entertainment Business revenue categories are: Base Distribution Business and OTT Streaming and Digital. The following tables present the Company’s revenue categories for the three and six months ended September 30, 2021 and 2020 (in thousands): Three Months Ended Six Months Ended 2021 2020 2021 2020 Cinema Equipment Business: Phase I Deployment $ 148 $ 112 $ 239 $ 143 Phase II Deployment 375 351 761 749 Services 486 165 665 265 Digital System Sales 2,244 15 7,819 91 Total Cinema Equipment Business revenue $ 3,253 $ 643 $ 9,484 $ 1,248 Content & Entertainment Business: Base Distribution Business $ 922 $ 2,931 $ 2,700 $ 5,088 OTT Streaming and Digital 5,928 3,608 12,934 6,864 Total Content & Entertainment Business revenue $ 6,850 $ 6,536 $ 15,634 $ 11,952 |
DIRECT OPERATING COSTS | DIRECT OPERATING COSTS Direct operating costs consist of operating costs such as cost of goods sold, fulfillment expenses, shipping costs, property taxes and insurance on Systems, royalty expenses, impairments of advances, and marketing and direct personnel costs. |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company issues stock-based awards to employees and non-employees, generally in the form of restricted stock, restricted stock units, stock appreciation rights and performance stock units. The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation |
INCOME TAXES | INCOME TAXES The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to operating loss and tax credit carryforwards and for differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Valuation allowances are established when management is unable to conclude that it is more likely than not that some portion, or all, of the deferred tax asset will ultimately be realized. The Company is primarily subject to income taxes in the United States. The Company accounts for uncertain tax positions in accordance with an amendment to ASC Topic 740-10, Income Taxes (Accounting for Uncertainty in Income Taxes) |
NET INCOME/LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS | NET INCOME/LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS Basic and diluted net loss per common share has been calculated as follows: Basic and diluted net loss per common share attributable to common stockholders = Net loss attributable to common stockholders Weighted average number of common stock outstanding during the period Stock issued and treasury stock repurchased during the period are weighted for the portion of the period that they are outstanding. Shares issued and any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding. We had a net income for the six months ended September 30, 2021, and therefore the impact of potentially dilutive common shares from outstanding stock options, stock appreciation rights, and warrants, totaling 3,219,141 shares for the six months ended September 30, 2021, respectively, were included in the computations of diluted earnings per share. For the three months ended September 30, 2021, 11,937,243 potentially dilutive shares have been excluded from the diluted loss per share as their impact would have been antidilutive. We had a net loss for the three months ended September 30, 2021 and therefore no dilution as basic and diluted loss per share are the same for the period. The calculation of diluted net income per share for the six months ended September 30, 2021 does not include the impact of 8,718,102 potentially dilutive shares relating to stock options, stock appreciation rights, and warrants as their impact would have been anti-dilutive as their exercise prices are above the Company’s average Common Stock price during the period. We incurred net losses for the three and six months ended September 30, 2020, and therefore the impact of potentially dilutive common shares from outstanding stock options and warrants, totaling 3,940,138 shares as of September 30, 2020, respectively, were excluded from the computations of loss per share as their impact would have been anti-dilutive. |
COMPREHENSIVE INCOME (LOSS) | COMPREHENSIVE INCOME (LOSS) As of the three and six months ended September 30, 2021 and 2020, comprehensive income (loss) consisted of net loss and foreign currency translation adjustments. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Adopted On December 18, 2019, the FASB issued ASU 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, Not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of cash, cash equivalents and restricted cash | As of (in thousands) September 30, September 30, Cash and Cash Equivalents $ 12,645 $ 16,503 Restricted Cash - 1,000 $ 12,645 $ 17,503 |
Schedule of estimated useful lives of property and equipment | Computer equipment and software 3 - 5 years Internal use software 5 years Digital cinema projection systems 10 years Machinery and equipment 3 - 10 years Furniture and fixtures 3 - 6 years |
Schedule of fair value measurements of financial assets | As of September 30, 2021 (in thousands) Level 1 Level 2 Level 3 Total Equity investment in Starrise, at fair value $ 7,443 $ — $ — $ 7,443 $ 7,443 $ — — $ 7,443 As of March 31, 2021 (in thousands) Level 1 Level 2 Level 3 Total Restricted cash $ 1,000 $ — $ — $ 1,000 Equity investment in Starrise, at fair value 6,443 — — 6,443 $ 7,443 $ — $ — $ 7,443 |
Schedule of goodwill | (In thousands) Goodwill at March 31, 2021 $ 8,701 Goodwill from business combinations – see Note 4 4,826 Goodwill at September 30, 2021 $ 13,527 |
Schedule of revenue categories | Three Months Ended Six Months Ended 2021 2020 2021 2020 Cinema Equipment Business: Phase I Deployment $ 148 $ 112 $ 239 $ 143 Phase II Deployment 375 351 761 749 Services 486 165 665 265 Digital System Sales 2,244 15 7,819 91 Total Cinema Equipment Business revenue $ 3,253 $ 643 $ 9,484 $ 1,248 Content & Entertainment Business: Base Distribution Business $ 922 $ 2,931 $ 2,700 $ 5,088 OTT Streaming and Digital 5,928 3,608 12,934 6,864 Total Content & Entertainment Business revenue $ 6,850 $ 6,536 $ 15,634 $ 11,952 |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of acquired intangible assets | Purchase Price Purchase Price $ 5,237 Total purchase price $ 5,237 Allocation of purchase price Developed technology 3,200 Goodwill 2,037 Total allocation of purchase price $ 5,237 Purchase Price Purchase Price $ 7,780 Total purchase price $ 7,780 Provisional allocation of purchase price Current assets 141 Advertiser relationships 3,750 Trade name 1,100 Goodwill 2,789 Total allocation of purchase price $ 7,780 |
Schedule of amortization expense per year for the intangible assets acquired in the business combination | 2022 (remaining) $ 160 2023 320 2024 320 2025 320 2026 320 2027 320 2028 320 2029 320 2030 320 2031 320 2032 80 Total $ 3,120 |
Schedule of amortization expense per year for the intangible assets acquired in the business combination | Advertiser relationships Trade name Total 2022 (remaining) $ 156 $ 55 $ 211 2023 313 110 423 2024 313 110 423 2025 313 110 423 2026 313 110 423 2027 313 110 423 2028 313 110 423 2029 313 110 423 2030 313 110 423 2031 313 110 423 2032 313 55 368 2033 313 - 313 2034 151 - 151 Total 3,750 1,100 $ 4,850 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | September 30, March 31, (In thousands) Current Long Term Current Long Term Prospect Loan $ — $ — $ 7,786 $ — Total non-recourse notes payable — — 7,786 — Total non-recourse notes payable, net of unamortized debt issuance costs and debt discounts $ — $ — $ 7,786 $ — Credit Facility $ — $ — $ 1,956 $ — PPP Loan — — — 2,152 Total recourse notes payable — — 1,956 2,152 Total recourse notes payable, net of unamortized debt issuance costs and debt discounts $ — $ — $ 1,956 $ 2,152 Total notes payable, net of unamortized debt issuance costs $ — $ — $ 9,742 $ 2,152 |
Schedule of debt outstanding | As of (In thousands) September 30, March 31, Prospect Loan, at issuance $ 70,000 $ 70,000 PIK Interest 8,016 6,397 Payments to date (78,016 ) (68,611 ) Prospect Loan, gross $ — $ 7,786 Less unamortized debt issuance costs and debt discounts — — Prospect Loan, net — 7,786 Less current portion — (7,786 ) Total long term portion $ — $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of analysis of option activity | As of September 30, 2021 Range of Prices Options Outstanding Weighted Average Remaining Life in Years Weighted Average Exercise Price Aggregate Intrinsic Value $7.40 - $13.69 5,000 3.75 $ 7.40 $ — $13.70 - $24.40 213,837 1.62 14.65 — 218,837 $ — Options Exercisable Weighted Average Weighted Average Aggregate Intrinsic Value 218,837 1.67 $ 14.48 — |
Schedule of stock appreciation rights outstanding | As of September 30, 2021 Range of Prices SAR´s Outstanding Weighted Average Remaining Life in Years Weighted Average Exercise Price Aggregate Intrinsic Value $0.54 - $0.74 5,550,000 9.23 $ 0.66 $ 10,624 $1.16 - $1.47 2,046,610 8.05 1.35 2,304 $1.71 - $2.10 2,682,114 9.40 1.97 1,429 10,278,724 $ 14,357 Options Exercisable Weighted Average Weighted Average Aggregate Intrinsic Value 2,576,740 7.51 $ 1.16 3,952 |
Schedule of stock-based compensation expense | Three Months Ended Six Months Ended (In thousands) 2021 2020 2021 2020 Selling, general and administrative $ 946 $ 1,035 $ 1,929 $ 1,212 $ 946 $ 1,035 $ 1,929 $ 1,212 |
Schedule of SARs outstanding | Six Months SARs Outstanding March 31, 2021 9,154,933 Issued 1,409,000 Forfeited (285,209 ) Total SARs Outstanding September 30, 2021 10,278,724 |
Schedule of warrants | Recipient Amount Expiration Exercise price Warrants issued in connection with Convertible Notes exchange transaction 246,019 December 2021 $ 1.30 5-year Warrant issued to BEMG in connection with a term loan agreement 1,400,000 December 2022 $ 1.80 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease-related assets and liabilities | (In thousands) Classification on the Balance Sheet September 30, Assets Noncurrent Operating lease right-of-use asset $ 31 Liabilities Current Operating leases - current portion 28 Noncurrent Operating leases - long-term portion 3 Total operating lease liabilities $ 31 |
Schedule of lease costs | Six months Ended (In thousands) September 30, Operating lease cost $ 45 Total lease cost $ 45 Six months Ended (In thousands) September 30, Cash paid for amounts included in the measurement of lease liabilities 10 Operating cash flows used for operating leases $ 10 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flows | Six Months Ended (In thousands) 2021 2020 Cash interest paid $ 612 $ 1,635 Income taxes paid 45 — noncash investing and financing activities: Accrued dividends on preferred stock 178 89 Issuance of Class A common stock for payment of accrued preferred stock dividends 89 178 Issuance of Class A common stock to Starrise, a related party — 11,046 Contributed capital under the Starrise transaction, a related party — 17,187 Settlement of second lien loan with Class A common stock — 818 Conversion of note payable — 15,000 Amounts accrued in connection with addition of property and equipment — 34 Issuance of Class A common stock for business combination 4,824 — Starrise shares used to pay down vendors — 744 Treasury shares acquired for withholding taxes 5 — Deferred consideration in purchase of a business 3,441 — |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting, assets and debt | As of September 30, (In thousands) Intangible Goodwill Total Notes Notes Operating Cinema Equipment Business $ — $ — $ 17,367 $ — $ — $ — Content & Entertainment Business 16,366 13,527 51,964 — — 10 Corporate 1 — 14,570 — — 21 Total $ 16,367 $ 13,527 $ 83,901 $ — $ — $ 31 As of March 31, 2021 (In thousands) Intangible Goodwill Total Notes Notes Operating Cinema Equipment Business $ — $ — $ 13,169 $ 7,786 $ — $ 1 Content & Entertainment Business 9,858 8,701 42,733 — — 69 Corporate 2 — 19,544 — 4,108 30 Total $ 9,860 $ 8,701 $ 75,446 $ 7,786 $ 4,108 $ 100 |
Schedule of segment reporting, statement of operations | Statements of Operations Three Months Ended (in thousands) Cinema Content & Entertainment Corporate Consolidated Revenues $ 3,253 $ 6,850 $ — $ 10,103 Direct operating (exclusive of depreciation and amortization shown below) 164 3,169 — 3,333 Selling, general and administrative 431 3,480 3,248 7,159 Allocation of corporate overhead 170 1,139 (1,309 ) — Provision for (recovery of) doubtful accounts (130 ) 19 — (111 ) Depreciation and amortization of property and equipment 300 140 — 440 Amortization of intangible assets — 696 — 696 Total operating expenses 935 8,643 1,939 11,517 Income (loss) from operations $ 2,318 $ (1,793 ) $ (1,939 ) $ (1,414 ) Statements of Operations Three Months Ended September 30, Cinema Content & Entertainment Corporate Consolidated Revenues $ 643 $ 6,539 $ — $ 7,182 Direct operating (exclusive of depreciation and amortization shown below) 172 4,158 — 4,330 Selling, general and administrative 631 2,528 3,009 6,168 Allocation of corporate overhead 171 1,135 (1,306 ) — Recovery of doubtful accounts (193 ) — — (193 ) Depreciation and amortization of property and equipment 1,239 101 5 1,345 Amortization of intangible assets 7 582 2 591 Total operating expenses 2,027 8,504 1,710 12,241 Loss from operations $ (1,384 ) $ (1,965 ) $ (1,710 ) $ (5,059 ) Statements of Operations Six Months Ended September 30, (in thousands) Cinema Content & Entertainment Corporate Consolidated Revenues $ 9,484 $ 15,634 $ — $ 25,118 Direct operating (exclusive of depreciation and amortization shown below) 421 7,543 — 7,964 Selling, general and administrative 860 6,298 6,044 13,202 Allocation of corporate overhead 269 1,799 (2,068 ) — (Recovery of) provision for doubtful accounts (103 ) 63 — (40 ) Depreciation and amortization of property and equipment 805 284 — 1,089 Amortization of intangible assets — 1,543 — 1,543 Total operating expenses 2,252 17,530 3,976 23,758 Income (loss) from operations $ 7,232 $ (1,896 ) $ (3,976 ) $ 1,360 Statements of Operations Six Months Ended September 30, Cinema Content & Entertainment Corporate Consolidated Revenues $ 1,248 $ 11,952 $ — $ 13,200 Direct operating (exclusive of depreciation and amortization shown below) 354 6,655 — 7,009 Selling, general and administrative 1,180 4,423 4,405 10,008 Allocation of corporate overhead 295 1,919 (2,214 ) — Recovery for doubtful accounts (193 ) — — (193 ) Depreciation and amortization of property and equipment 2,642 204 23 2,869 Amortization of intangible assets 15 1,164 2 1,181 Total operating expenses 4,293 14,365 2,216 20,874 Income (loss) from operations $ (3,045 ) $ (2,413 ) $ (2,216 ) $ (7,674 ) |
Schedule of segment reporting, employee stock-based compensation expense | (In thousands) Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative — 345 601 946 Total stock-based compensation $ — $ 345 $ 601 $ 946 Cinema Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative — 26 1,009 1,035 Total stock-based compensation $ — $ 26 $ 1,009 $ 1,035 (In thousands) Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative — 511 1,418 1,929 Total stock-based compensation $ — $ 511 $ 1,418 $ 1,929 Cinema Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative — 52 1,160 1,212 Total stock-based compensation $ — $ 52 $ 1,160 $ 1,212 |
Nature of Operations and Liqu_2
Nature of Operations and Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 10, 2020 | Mar. 17, 2021 | Feb. 14, 2020 | Dec. 27, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Jul. 09, 2021 | Jun. 30, 2021 | Apr. 15, 2020 |
Nature of Operations and Liquidity [Abstract] | |||||||||
Accumulated deficit | $ (469,300) | ||||||||
Working capital | 11,100 | ||||||||
Aggregate principal amount | $ 7,800 | ||||||||
Outstanding amount | 0 | ||||||||
Net cash provided by operating activities | 9,358 | $ (12,773) | |||||||
Agreements included the sale in tranches (in Shares) | 2,369 | ||||||||
Cash consideration | $ 10,800 | ||||||||
Recognized revenue | 7,800 | ||||||||
Maturity description | On December 27, 2019, the Company entered into, and on February 14, 2020 amended, (see Note 2 - Summary of Significant Accounting Policies), a stock purchase agreement (as so amended, the “Starrise Stock Purchase Agreement”) with BeiTai Investment LP (“BeiTai”), a related party for accounting purposes of Cinedigm and Aim Right Ventures Limited (“Aim Right”), two shareholders of Starrise Media Holdings Limited, a leading Chinese entertainment company (“Starrise”), to buy from them an aggregate of 410,901,000 outstanding Starrise ordinary shares (the “Starrise Share Acquisition”). | ||||||||
Number of shares acquired (in Shares) | 162,162,162 | ||||||||
Comon per share (in Dollars per share) | $ 1 | ||||||||
Starrise shares issued amount | $ 11,200 | ||||||||
Converted aggregate description | On April 10, 2020, the Company entered into another stock purchase agreement (the “April Starrise Stock Purchase Agreement”) with five (5) shareholders of Starrise - Bison Global Investment SPC - Bison Global No. 1 SP, Huatai Investment LP, Antai Investment LP, Mingtai Investment LP and Shangtai Asset Management LP, all of which are related parties to the Company to buy an aggregate of 223,380,000 outstanding Starrise ordinary shares from them and for the Company to issue to them an aggregate of 29,855,081 shares of its Common Stock as consideration therefor (the “April Starrise Share Acquisition”). | ||||||||
Stock purchase agreement, description | Starrise’s ordinary shares (HK 1616) are listed on the main board of the Stock Exchange of Hong Kong Limited. Based on the closing price of HKD 0.159 per share on November 11, 2021, calculated at an exchange rate of 7.8 Hong Kong Dollars to 1 US dollar, the market value of Cinedigm’s ownership in Starrise ordinary shares was approximately $7.4 million. | ||||||||
Received amount from east west bank | $ 2,200 | ||||||||
Interest rate | 1.00% | ||||||||
PPP Loan recognized gain | $ 2,200 | ||||||||
Borrowings [Member] | |||||||||
Nature of Operations and Liquidity [Abstract] | |||||||||
Aggregate principal amount | $ 7,800 | ||||||||
BeiTai [Member] | |||||||||
Nature of Operations and Liquidity [Abstract] | |||||||||
Number of shares issued for acquisition (in Shares) | 21,646,604 | ||||||||
Starrise shares issued amount | $ 25,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Apr. 01, 2021shares | May 05, 2020USD ($)shares | Apr. 10, 2020USD ($) | Feb. 14, 2020USD ($) | Sep. 30, 2021USD ($)shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2021USD ($)shares | Sep. 30, 2020USD ($)shares | Mar. 31, 2021shares | Mar. 31, 2020USD ($) | Oct. 11, 2021shares |
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Initial investment | $ 28,200,000 | $ 25,100,000 | |||||||||
Sale of starrise's ordinary shares (in Shares) | shares | 80,000 | 600,000 | |||||||||
Sale of starrises ordinary value | $ 11,000 | ||||||||||
Shares owned (in Shares) | shares | 210,084 | ||||||||||
Transfer of Starrise shares (in Shares) | shares | 7,116,100 | 16,122,315 | |||||||||
Impairment accelerated amortization | $ 200,000 | $ 0 | |||||||||
Impairments and accelerated amortization advances | $ 400,000 | $ 40,000 | |||||||||
Foreign currency exchange rate, translation | 7.8 | 7.8 | 7.8 | ||||||||
Sales revenue | $ 2,200,000 | 15,000 | |||||||||
Recognized revenue | $ 7,800,000 | 91,000 | |||||||||
Activation fee revenue, per screen | 2,000 | ||||||||||
Activation fee revenue range, minimum | 1,000 | 1,000 | |||||||||
Activation fee revenue range, maximum | 2,000 | 2,000 | |||||||||
Deferred revenue balance | 200,000 | 200,000 | |||||||||
Deferred revenue | 300,000 | $ 700,000 | 300,000 | 700,000 | |||||||
Revenue recognized | 800,000 | 1,300,000 | |||||||||
Unsatisfied performance obligations | $ 200,000 | $ 200,000 | |||||||||
Tax benefit percentage | 50.00% | ||||||||||
Warrants of right shares (in Shares) | shares | 3,219,141 | 3,219,141 | |||||||||
Potentially dilutive shares (in Shares) | shares | 11,937,243 | 3,940,138 | 8,718,102 | ||||||||
Starisse [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Ownership percentage | 15.00% | 11.50% | 18.00% | 18.00% | |||||||
Shares owned (in Shares) | shares | 362,307,397 | 362,307,397 | 362,987,397 | ||||||||
Shares percentage | 26.00% | ||||||||||
Services [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Administrative fee VPFs | 5.00% | 5.00% | |||||||||
Incentive fees, percentage of VPF Phase I | 2.50% | 2.50% | |||||||||
Stock Exchange of Hong Kong Limited [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Change in fair value | $ 1,000,000 | $ (35,600,000) | |||||||||
Stock Exchange of Hong Kong Limited [Member] | Starisse [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Change in fair value | $ 7,400,000 | $ 6,400,000 | |||||||||
Up-front Payment Arrangement [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Administrative fee VPFs | 10.00% | 10.00% | |||||||||
Common Class A [Member] | |||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||||||||
Issuance of shares for asset acquisition | $ 11,000,000 | $ 11,200,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of cash, cash equivalents and restricted cash - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 |
Schedule of cash, cash equivalents and restricted cash [Abstract] | |||
Cash and Cash Equivalents | $ 12,645 | $ 16,849 | $ 16,503 |
Restricted Cash | 1,000 | ||
Total | $ 12,645 | $ 17,503 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment | 6 Months Ended |
Sep. 30, 2021 | |
Internal use software [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Digital cinema projection systems [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 10 years |
Minimum [Member] | Computer equipment and software [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Minimum [Member] | Machinery and equipment [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Minimum [Member] | Furniture and fixtures [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Maximum [Member] | Computer equipment and software [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Maximum [Member] | Machinery and equipment [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 10 years |
Maximum [Member] | Furniture and fixtures [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 6 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of fair value measurements of financial assets - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Summary of Significant Accounting Policies (Details) - Schedule of fair value measurements of financial assets [Line Items] | ||
Equity investment in Starrise, at fair value | $ 7,443 | $ 6,443 |
Total fair value | 7,443 | 7,443 |
Restricted cash | 1,000 | |
Level 1 [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of fair value measurements of financial assets [Line Items] | ||
Equity investment in Starrise, at fair value | 7,443 | 6,443 |
Total fair value | 7,443 | 7,443 |
Restricted cash | 1,000 | |
Level 2 [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of fair value measurements of financial assets [Line Items] | ||
Equity investment in Starrise, at fair value | ||
Total fair value | ||
Restricted cash | ||
Level 3 [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of fair value measurements of financial assets [Line Items] | ||
Equity investment in Starrise, at fair value | ||
Total fair value | ||
Restricted cash |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of goodwill - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Mar. 31, 2021 | |
Schedule of goodwill [Abstract] | ||
Goodwill gross ending balance | $ 13,527 | $ 8,701 |
Goodwill from business combinations – see Note 4 | $ 4,826 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of revenue categories - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Cinema Equipment Business [Member] | ||||
Cinema Equipment Business: | ||||
Total Cinema Equipment Business revenue | $ 3,253 | $ 643 | $ 9,484 | $ 1,248 |
Content & Entertainment Business [Member] | ||||
Content & Entertainment Business: | ||||
Total Content & Entertainment Business revenue | 6,850 | 6,536 | 15,634 | 11,952 |
Phase I Deployment [Member] | Cinema Equipment Business [Member] | ||||
Cinema Equipment Business: | ||||
Total Cinema Equipment Business revenue | 148 | 112 | 239 | 143 |
Phase II Deployment [Member] | Cinema Equipment Business [Member] | ||||
Cinema Equipment Business: | ||||
Total Cinema Equipment Business revenue | 375 | 351 | 761 | 749 |
Services [Member] | Cinema Equipment Business [Member] | ||||
Cinema Equipment Business: | ||||
Total Cinema Equipment Business revenue | 486 | 165 | 665 | 265 |
Digital System Sales [Member] | Cinema Equipment Business [Member] | ||||
Cinema Equipment Business: | ||||
Total Cinema Equipment Business revenue | 2,244 | 15 | 7,819 | 91 |
Base Distribution Business [Member] | Content & Entertainment Business [Member] | ||||
Content & Entertainment Business: | ||||
Total Content & Entertainment Business revenue | 922 | 2,931 | 2,700 | 5,088 |
OTT Streaming and Digital [Member] | Content & Entertainment Business [Member] | ||||
Content & Entertainment Business: | ||||
Total Content & Entertainment Business revenue | $ 5,928 | $ 3,608 | $ 12,934 | $ 6,864 |
Other Interests (Details)
Other Interests (Details) - USD ($) | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
Other Interests [Abstract] | |||
Servicing revenue | $ 300,000 | $ 36,000 | |
CDF2 Holdings [Member] | |||
Other Interests [Abstract] | |||
Digital cinema servicing revenue | $ 200 | $ 27,000 | |
CDF2 Holdings [Member] | |||
Other Interests [Abstract] | |||
Ownership percentage | 100.00% | ||
Accounts receivable | $ 500,000 | $ 300,000 | |
Total Stockholders’ Deficit | 51,500,000 | 46,300,000 | |
Initial investment amount | $ 2,000,000 | $ 0 | |
CON TV, LLC [Member] | |||
Other Interests [Abstract] | |||
Majority interest, percentage | 85.00% |
Business Combination (Details)
Business Combination (Details) - USD ($) | May 12, 2021 | Sep. 17, 2021 | Sep. 30, 2021 | Sep. 30, 2021 |
Business Combination (Details) [Line Items] | ||||
Description of stock purchase agreement | On May 12, 2021, the Company entered into a stock purchase agreement (the “Foundation Stock Purchase Agreement”) with FoundationTV, Inc. (“FoundationTV”), to buy all of FoundationTV´s issued and outstanding stock in consideration of an aggregate of $5.2 million, of which $0.7 million was paid in cash and 1,483,129 shares of Common Stock, which were valued at $2.5 million, were issued at closing stock price of $1.69 on the closing date of June 9, 2021, and an additional $2.0 million will be paid in eight equal installments of one installment on each six month anniversary of closing over forty-eight months, and a final lump sum payment of $225 thousand on the four year anniversary of the closing; reduced by $0.2 million settlement of a prior relationship. | |||
Incurred transaction cost | $ 36,000 | |||
Short-term payable | $ 500 | 500 | ||
Long-term payable | 1,500 | 1,500 | ||
Amortization expense | 80,000 | $ 80,000 | ||
Description of business combination | the Company entered into an asset purchase agreement (the “Bloody Disgusting Asset Purchase Agreement”) with Bloody Disgusting, LLC (“Bloody Disgusting”), to buy substantially all of the assets of Bloody Disgusting, in consideration of an aggregate of $7.8 million, of which $4.0 million was paid in cash and 1,039,501 shares of Common Stock, which were valued at $2.3 million, were issued at closing stock price of $2.23 on the closing date of September 17, 2021, and $1.5 million as of the fair value of the earnout liability, related to earnout targets, as defined, to be met as of March 2022, March 2023 and March 2024. The Bloody Disgusting Asset Purchase Agreement contained certain conditions to closing and representations and warranties and covenants as are customary for transactions of this type. On September 17, 2021, the Bloody Disgusting acquisition was consummated. The Company incurred transaction cost $40 thousand during the six months ended September 30, 2021. | |||
Transaction useful life | 12 years | |||
Trade name acquired usefull life | 10 years | |||
Amortization intangible assets | $ 0 | $ 0 | ||
Developed Technology Rights [Member] | ||||
Business Combination (Details) [Line Items] | ||||
Useful life | 10 years |
Business Combination (Details)
Business Combination (Details) - Schedule of acquired intangible assets $ in Thousands | Sep. 30, 2021USD ($) |
FoundationTV, Inc. [Member] | |
Purchase Price | |
Purchase Price | $ 5,237 |
Total purchase price | 5,237 |
Allocation of purchase price | |
Developed technology | 3,200 |
Goodwill | 2,037 |
Total allocation of purchase price | 5,237 |
Bloody Disgusting, LLC. [Member] | |
Purchase Price | |
Purchase Price | 7,780 |
Total purchase price | 7,780 |
Allocation of purchase price | |
Current assets | 141 |
Advertiser relationships | 3,750 |
Trade name | 1,100 |
Goodwill | 2,789 |
Total allocation of purchase price | $ 7,780 |
Business Combination (Details_2
Business Combination (Details) - Schedule of amortization expense per year for the developed technology acquired in the business combination $ in Thousands | Sep. 30, 2021USD ($) |
Schedule of amortization expense per year for the developed technology acquired in the business combination [Abstract] | |
2022 (remaining) | $ 160 |
2023 | 320 |
2024 | 320 |
2025 | 320 |
2026 | 320 |
2027 | 320 |
2028 | 320 |
2029 | 320 |
2030 | 320 |
2031 | 320 |
2032 | 80 |
Total | $ 3,120 |
Business Combination (Details_3
Business Combination (Details) - Schedule of amortization expense per year for the intangible assets acquired in the business combination $ in Thousands | Sep. 30, 2021USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2022 (remaining) | $ 211 |
2023 | 423 |
2024 | 423 |
2025 | 423 |
2026 | 423 |
2027 | 423 |
2028 | 423 |
2029 | 423 |
2030 | 423 |
2031 | 423 |
2032 | 368 |
2033 | 313 |
2034 | 151 |
Total | 4,850 |
Advertiser relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2022 (remaining) | 156 |
2023 | 313 |
2024 | 313 |
2025 | 313 |
2026 | 313 |
2027 | 313 |
2028 | 313 |
2029 | 313 |
2030 | 313 |
2031 | 313 |
2032 | 313 |
2033 | 313 |
2034 | 151 |
Total | 3,750 |
Trade Names [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2022 (remaining) | 55 |
2023 | 110 |
2024 | 110 |
2025 | 110 |
2026 | 110 |
2027 | 110 |
2028 | 110 |
2029 | 110 |
2030 | 110 |
2031 | 110 |
2032 | 55 |
2033 | |
2034 | |
Total | $ 1,100 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2021 | Apr. 15, 2020 | Feb. 28, 2013 | Sep. 30, 2021 | Jul. 09, 2021 | Mar. 31, 2020 | Jul. 03, 2019 | Mar. 30, 2018 | |
Notes Payable (Details) [Line Items] | ||||||||
Debt face amount | $ 70,000,000 | $ 70,000,000 | ||||||
Restricted cash | 1,000,000 | |||||||
Principal amount loan | $ 7,800,000 | |||||||
Credit facility outstanding | $ 2,000,000 | 0 | ||||||
PPP Loan [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Amount received | $2.2 | |||||||
CDCH [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Principal amount loan | 3,500,000,000 | |||||||
Prospect Loan [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Restricted cash | 0 | $ 1,000,000 | ||||||
Line of Credit [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Maximum borrowing capacity | $ 18,000,000 | |||||||
Prospect Loan [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Debt face amount | $ 70,000,000 | |||||||
Basis spread on variable rate | 9.00% | |||||||
Debt interest rate | 2.50% | |||||||
Debt instrument maximum amount of support | $ 1,500,000 | |||||||
Prospect Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Debt variable rate basis floor | 2.00% | |||||||
Revolving Credit Facility [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Maximum borrowing capacity | $ 19,000,000 | |||||||
Convertible Notes Payable [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Debt interest rate | 1.00% | |||||||
Prime Rate [Member] | Cinedigm Credit Facility [Member] | Revolving Credit Facility [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | |||||||
London Interbank Offered Rate (LIBOR) [Member] | Cinedigm Credit Facility [Member] | Revolving Credit Facility [Member] | ||||||||
Notes Payable (Details) [Line Items] | ||||||||
Basis spread on variable rate | 3.25% |
Notes Payable (Details) - Sched
Notes Payable (Details) - Schedule of notes payable - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Debt Instrument [Line Items] | ||
Current portion, gross | $ 9,742 | |
Long term portion, gross | 2,152 | |
PPP Loan [Member] | ||
Debt Instrument [Line Items] | ||
Current portion, gross | ||
Long term portion, gross | 2,152 | |
Recourse Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Current portion, gross | 1,956 | |
Long term portion, gross | 2,152 | |
Current portion | 1,956 | |
Long term portion | 2,152 | |
Prospect Loan [Member] | ||
Debt Instrument [Line Items] | ||
Current portion, gross | 7,786 | |
Long term portion, gross | ||
Current portion | 7,786 | |
Long term portion | ||
Prospect Loan [Member] | Non-recourse Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Current portion, gross | 7,786 | |
Long term portion, gross | ||
Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Current portion, gross | 1,956 | |
Long term portion, gross |
Notes Payable (Details) - Sch_2
Notes Payable (Details) - Schedule of debt outstanding - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Schedule of debt outstanding [Abstract] | ||
Prospect Loan, at issuance | $ 70,000 | $ 70,000 |
PIK Interest | 8,016 | 6,397 |
Payments to date | (78,016) | (68,611) |
Prospect Loan, gross | 7,786 | |
Less unamortized debt issuance costs and debt discounts | ||
Prospect Loan, net | 7,786 | |
Less current portion | (7,786) | |
Total long term portion |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
May 31, 2021shares | Oct. 31, 2013$ / sharesshares | Sep. 30, 2021$ / sharesshares | Jun. 30, 2021USD ($)shares | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Mar. 31, 2021USD ($)$ / sharesshares | Oct. 11, 2021shares | Oct. 23, 2020shares | Dec. 04, 2019shares | Aug. 31, 2017shares | |
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Dividends preferred stock (in Dollars) | $ | $ 200 | $ 100 | ||||||||||
Stock Dividends | 53,278 | |||||||||||
Treasury stock | 1,315,851 | 1,315,851 | 1,313,836 | |||||||||
Share-based Payment arrangement, option, exercise price range, shares outstanding | 218,837,000 | 218,837,000 | ||||||||||
Options expired | 42,500 | |||||||||||
Options forfeited | 250 | |||||||||||
Granted shares | 1,409,000 | |||||||||||
Maturity date | 10 years | |||||||||||
Stock-based compensation (in Dollars) | $ | $ 193 | $ 131 | ||||||||||
Shares issued | 210,084 | |||||||||||
Common stock expired unexercised | 52,500 | |||||||||||
Gaiam Americas, Inc. and Gaiam, Inc. GVE [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Number of employees joining company following acquisition | 10 | |||||||||||
Shares under option, granted | 62,000 | |||||||||||
Weighted average exercise price per share, granted (in Dollars per share) | $ / shares | $ 17.5 | |||||||||||
Options, outstanding shares | 12,500 | 12,500 | ||||||||||
Board of Directors [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Shares issued | 35,714 | |||||||||||
SARs [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Stock based compensation (in Dollars) | $ | $ 1 | $ 1 | ||||||||||
Board of Directors [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Stock based compensation (in Dollars) | $ | 65 | $ 71 | ||||||||||
Restricted Stock Awards [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Stock based compensation (in Dollars) | $ | $ 1 | $ 0 | ||||||||||
Class A Common Stock [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Shares of common stock | 2,883,907 | |||||||||||
Treasury stock | 1,315,851 | 1,315,851 | 1,313,836 | |||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||||||||
Minimum [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Fair value common stock per share (in Dollars per share) | $ / shares | $ 1.29 | |||||||||||
Volatility percentage | 110.32% | |||||||||||
Discount rate percentage | 0.96% | |||||||||||
Expected term | 6 | |||||||||||
Maximum [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Fair value common stock per share (in Dollars per share) | $ / shares | $ 2.1 | |||||||||||
Volatility percentage | 114.42% | |||||||||||
Discount rate percentage | 1.08% | |||||||||||
Expected term | 6.5 years | |||||||||||
Cinedigm Equity Incentive Plan [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Percent voting power threshold | 10.00% | |||||||||||
Exercise price if voting threshold is met, percent | 110.00% | |||||||||||
Cinedigm Equity Incentive Plan [Member] | Class A Common Stock [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Number of shares authorized | 2,380,000 | 2,380,000 | ||||||||||
Share-based Payment arrangement, option, exercise price range, shares outstanding | 218,837 | 218,837 | 261,587 | |||||||||
Share-based payment arrangement, option, exercise price range, outstanding, weighted average exercise price (in Dollars per share) | $ / shares | $ 14.48 | $ 14.48 | $ 14.99 | |||||||||
Options outstanding, weighted average remaining contractual term | 1 year 8 months 1 day | 2 years 1 month 9 days | ||||||||||
Two Thousand seventeen Plan [Member] | Class A Common Stock [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Number of shares authorized | 4,098,270 | 2,108,270 | ||||||||||
Two Thousand seventeen Plan [Member] | Minimum [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Common stock, shares authorized | 14,098,270 | 4,098,270 | ||||||||||
Two Thousand seventeen Plan [Member] | Maximum [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Common stock, shares authorized | 18,098,270 | 14,098,270 | ||||||||||
Stock option [Member] | Gaiam Americas, Inc. and Gaiam, Inc. GVE [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Aware expiration period | 10 years |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of analysis of option activity | 6 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding (in Shares) | shares | 218,837,000 |
Aggregate Intrinsic Value (in Dollars) | $ | |
$7.40 - $13.69 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Prices, Minimum | $ 7.4 |
Range of Prices, Maximum | $ 13.69 |
Options Outstanding (in Shares) | shares | 5,000,000 |
Weighted Average Remaining Life in Years | 3 years 9 months |
Weighted Average Exercise Price | $ 7.4 |
Aggregate Intrinsic Value (in Dollars) | $ | |
$13.70 - $24.40 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Prices, Minimum | $ 13.7 |
Range of Prices, Maximum | $ 24.4 |
Options Outstanding (in Shares) | shares | 213,837,000 |
Weighted Average Remaining Life in Years | 1 year 7 months 13 days |
Weighted Average Exercise Price | $ 14.65 |
Aggregate Intrinsic Value (in Dollars) | $ | |
Options Exercisable [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Weighted Average Remaining Life in Years | 1 year 8 months 1 day |
Weighted Average Exercise Price | $ 14.48 |
Aggregate Intrinsic Value (in Dollars) | $ | |
Options Exercisable (in Shares) | shares | 218,837,000 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of stock appreciation rights outstanding $ / shares in Units, $ in Thousands | 6 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Stockholders' Equity (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Range of Prices, Minimum | $ 10,278,724 |
Weighted Average Exercise Price | 14,357 |
0.54 - $0.74 [Member] | |
Stockholders' Equity (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Range of Prices, Minimum | $ 5,550,000 |
Options Outstanding (in Shares) | shares | 9,230 |
Weighted Average Remaining Life in Years | 7 months 28 days |
Weighted Average Exercise Price | $ 10,624 |
$1.16 - $1.47 [Member] | |
Stockholders' Equity (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Range of Prices, Minimum | $ 2,046,610 |
Options Outstanding (in Shares) | shares | 8,050 |
Weighted Average Remaining Life in Years | 1 year 4 months 6 days |
Weighted Average Exercise Price | $ 2,304 |
$1.71 - $2.10 [Member] | |
Stockholders' Equity (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Range of Prices, Minimum | $ 2,682,114 |
Options Outstanding (in Shares) | shares | 9,400 |
Weighted Average Remaining Life in Years | 1 year 11 months 19 days |
Weighted Average Exercise Price | $ 1,429 |
Options Exercisable [Member] | |
Stockholders' Equity (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Weighted Average Remaining Life in Years | 1 year 1 month 28 days |
Weighted Average Exercise Price | $ 3,952 |
Aggregate Intrinsic Value (in Dollars) | $ | $ 2,576,740 |
Options Exercisable (in Shares) | shares | 7,510 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of stock-based compensation expense - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stockholders' Equity (Details) - Schedule of stock-based compensation expense [Line Items] | ||||
Selling, general and administrative | $ 946 | $ 1,035 | $ 1,929 | $ 1,212 |
Selling, general and administrative [Member] | ||||
Stockholders' Equity (Details) - Schedule of stock-based compensation expense [Line Items] | ||||
Selling, general and administrative | $ 946 | $ 1,035 | $ 1,929 | $ 1,212 |
Stockholders' Equity (Details_4
Stockholders' Equity (Details) - Schedule of SARs outstanding | 6 Months Ended |
Sep. 30, 2021shares | |
Schedule of SARs outstanding [Abstract] | |
SARs Outstanding March 31, 2021 | 9,154,933 |
Issued | 1,409,000 |
Forfeited | (285,209) |
Total SARs Outstanding June 30, 2021 | 10,278,724 |
Stockholders' Equity (Details_5
Stockholders' Equity (Details) - Schedule of warrants | 6 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Warrants issued in connection with Convertible Notes exchange transaction [Member] | |
Class of Warrant or Right [Line Items] | |
Amount outstanding | shares | 246,019 |
Expiration | 2021-12 |
Warrants issued in connection with Convertible Notes exchange transaction [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price per share | $ / shares | $ 1.3 |
BEMG in connection with a term loan agreement [Member] | |
Class of Warrant or Right [Line Items] | |
Amount outstanding | shares | 1,400,000 |
Expiration | 2022-12 |
BEMG in connection with a term loan agreement [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price per share | $ / shares | $ 1.8 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Millions | Sep. 01, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum participation guaranty | $ 3.5 |
Arrangement payable | 1.5 |
First year anniversary arrangement | 1 |
Second year anniversary arrangement | $ 0.9 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of lease-related assets and liabilities | Sep. 30, 2021USD ($) |
Assets | |
Noncurrent | $ 31 |
Liabilities | |
Current | 28 |
Noncurrent | 3 |
Total operating lease liabilities | $ 31 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of lease costs | 6 Months Ended |
Sep. 30, 2021USD ($) | |
Schedule of lease costs [Abstract] | |
Operating lease cost | $ 45 |
Total lease cost | 45 |
Cash paid for amounts included in the measurement of lease liabilities | 10 |
Operating cash flows used for operating leases | $ 10 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - Schedule of supplemental cash flows - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of supplemental cash flows [Abstract] | ||
Cash interest paid | $ 612 | $ 1,635 |
Income taxes paid | 45 | |
noncash investing and financing activities: | ||
Accrued dividends on preferred stock | 178 | 89 |
Issuance of Class A common stock for payment of accrued preferred stock dividends | 89 | 178 |
Issuance of Class A common stock to Starrise, a related party | 11,046 | |
Contributed capital under the Starrise transaction, a related party | 17,187 | |
Settlement of second lien loan with Class A common stock | 818 | |
Conversion of note payable | 15,000 | |
Amounts accrued in connection with addition of property and equipment | 34 | |
Issuance of Class A common stock for business combination | 4,824 | |
Starrise shares used to pay down vendors | 744 | |
Treasury shares acquired for withholding taxes | 5 | |
Deferred consideration in purchase of a business | $ 3,441 |
Segment Information (Details)
Segment Information (Details) | 6 Months Ended |
Sep. 30, 2021 | |
Segment Information (Details) [Line Items] | |
Number of reportable segments | 2 |
Phase I Deployment [Member] | |
Segment Information (Details) [Line Items] | |
Number of systems installed | 1,813 |
Phase II Deployment [Member] | |
Segment Information (Details) [Line Items] | |
Number of systems installed | 3,009 |
Segment Information (Details) -
Segment Information (Details) - Schedule of segment reporting, assets and debt - USD ($) $ in Thousands | Sep. 30, 2021 | Mar. 31, 2021 |
Segment Information (Details) - Schedule of segment reporting, assets and debt [Line Items] | ||
Intangible Assets, net | $ 16,367 | $ 9,860 |
Goodwill | 13,527 | 8,701 |
Total Assets | 83,901 | 75,446 |
Notes Payable, Non-Recourse | 7,786 | |
Notes Payable | 4,108 | |
Operating lease liabilities | 31 | 100 |
Cinema Equipment Business [Member] | ||
Segment Information (Details) - Schedule of segment reporting, assets and debt [Line Items] | ||
Intangible Assets, net | ||
Goodwill | ||
Total Assets | 17,367 | 13,169 |
Notes Payable, Non-Recourse | 7,786 | |
Notes Payable | ||
Operating lease liabilities | 1 | |
Content & Entertainment Business [Member] | ||
Segment Information (Details) - Schedule of segment reporting, assets and debt [Line Items] | ||
Intangible Assets, net | 16,366 | 9,858 |
Goodwill | 13,527 | 8,701 |
Total Assets | 51,964 | 42,733 |
Notes Payable, Non-Recourse | ||
Notes Payable | ||
Operating lease liabilities | 10 | 69 |
Corporate [Member] | ||
Segment Information (Details) - Schedule of segment reporting, assets and debt [Line Items] | ||
Intangible Assets, net | 1 | 2 |
Goodwill | ||
Total Assets | 14,570 | 19,544 |
Notes Payable, Non-Recourse | ||
Notes Payable | 4,108 | |
Operating lease liabilities | $ 21 | $ 30 |
Segment Information (Details)_2
Segment Information (Details) - Schedule of segment reporting, statement of operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 10,103 | $ 7,182 | $ 25,118 | $ 13,200 |
Direct operating (exclusive of depreciation and amortization shown below) | 3,333 | 4,330 | 7,964 | 7,009 |
Selling, general and administrative | 7,159 | 6,168 | 13,202 | 10,008 |
Allocation of corporate overhead | ||||
Provision for (recovery of) doubtful accounts | (111) | (193) | (40) | (193) |
Depreciation and amortization of property and equipment | 440 | 1,345 | 1,089 | 2,869 |
Amortization of intangible assets | 696 | 591 | 1,543 | 1,181 |
Total operating expenses | 11,517 | 12,241 | 23,758 | 20,874 |
Income (loss) from operations | (1,414) | (5,059) | 1,360 | (7,674) |
Cinema Equipment Business [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,253 | 643 | 9,484 | 1,248 |
Direct operating (exclusive of depreciation and amortization shown below) | 164 | 172 | 421 | 354 |
Selling, general and administrative | 431 | 631 | 860 | 1,180 |
Allocation of corporate overhead | 170 | 171 | 269 | 295 |
Provision for (recovery of) doubtful accounts | (130) | (193) | (103) | (193) |
Depreciation and amortization of property and equipment | 300 | 1,239 | 805 | 2,642 |
Amortization of intangible assets | 7 | 15 | ||
Total operating expenses | 935 | 2,027 | 2,252 | 4,293 |
Income (loss) from operations | 2,318 | (1,384) | 7,232 | (3,045) |
Content & Entertainment Business [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 6,850 | 6,539 | 15,634 | 11,952 |
Direct operating (exclusive of depreciation and amortization shown below) | 3,169 | 4,158 | 7,543 | 6,655 |
Selling, general and administrative | 3,480 | 2,528 | 6,298 | 4,423 |
Allocation of corporate overhead | 1,139 | 1,135 | 1,799 | 1,919 |
Provision for (recovery of) doubtful accounts | 19 | 63 | ||
Depreciation and amortization of property and equipment | 140 | 101 | 284 | 204 |
Amortization of intangible assets | 696 | 582 | 1,543 | 1,164 |
Total operating expenses | 8,643 | 8,504 | 17,530 | 14,365 |
Income (loss) from operations | (1,793) | (1,965) | (1,896) | (2,413) |
Corporate [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | ||||
Direct operating (exclusive of depreciation and amortization shown below) | ||||
Selling, general and administrative | 3,248 | 3,009 | 6,044 | 4,405 |
Allocation of corporate overhead | (1,309) | (1,306) | (2,068) | (2,214) |
Provision for (recovery of) doubtful accounts | ||||
Depreciation and amortization of property and equipment | 5 | 23 | ||
Amortization of intangible assets | 2 | 2 | ||
Total operating expenses | 1,939 | 1,710 | 3,976 | 2,216 |
Income (loss) from operations | $ (1,939) | $ (1,710) | $ (3,976) | $ (2,216) |
Segment Information (Details)_3
Segment Information (Details) - Schedule of segment reporting, employee stock-based compensation expense - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | $ 946 | $ 1,035 | $ 1,929 | $ 1,212 |
Cinema Equipment Business [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | ||||
Content & Entertainment Business [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | 345 | 26 | 511 | 52 |
Corporate [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | 601 | 1,009 | 1,418 | 1,160 |
Direct operating [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | ||||
Direct operating [Member] | Cinema Equipment Business [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | ||||
Direct operating [Member] | Content & Entertainment Business [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | ||||
Direct operating [Member] | Corporate [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | ||||
Selling, general and administrative [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | 946 | 1,035 | 1,929 | 1,212 |
Selling, general and administrative [Member] | Cinema Equipment Business [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | ||||
Selling, general and administrative [Member] | Content & Entertainment Business [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | 345 | 26 | 511 | 52 |
Selling, general and administrative [Member] | Corporate [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Total stock-based compensation | $ 601 | $ 1,009 | $ 1,418 | $ 1,160 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Mar. 27, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense benefit | $ 487 | $ 181 | $ 550 | ||
Effective tax rate percentage | 12.40% | 0.40% | |||
Income tax description | Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The Act contains several new or changed income tax provisions, including but not limited to the following: increased limitation threshold for determining deductible interest expense; class life changes to qualified improvements (in general, from 39 years to 15 years); and the ability to carry back net operating losses incurred from tax years 2018 through 2020 up to the five preceding tax years. The Company has evaluated the new tax provisions of the CARES Act and determined the impact to be either immaterial or not applicable. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Oct. 31, 2021 | Nov. 30, 2021 | Oct. 11, 2021 |
Subsequent Events (Details) [Line Items] | |||
Paying principal amount (in Dollars) | $ 50,000,000 | ||
Common stock shares | 210,084 | ||
Subsequent Event [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Net proceeds from sales (in Dollars) | $ 12,400,000 | ||
Purchase agreements [Member] | Subsequent Event [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Common stock, shares | 5,300,000 | ||
Minimum [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Common stock authorized for issuance | 14,098,270,000,000 | ||
Maximum [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Common stock authorized for issuance | 18,098,270 | ||
Class A Common Stock [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Common stock authorized for issuance | 275,000,000 |