Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Jun. 30, 2022 | Aug. 09, 2022 | |
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 | 177,250,068 | |
Amendment Flag | false | |
Entity Central Index Key | 0001173204 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
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 | 264 West 40th Street | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10018 | |
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 | Jun. 30, 2022 | Mar. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 11,519 | $ 13,062 |
Accounts receivable, net of allowance of $2,605 and $2,921, respectively | 25,215 | 30,843 |
Inventory | 129 | 116 |
Unbilled revenue | 2,597 | 2,349 |
Prepaid and other current assets | 4,621 | 5,793 |
Total current assets | 44,081 | 52,163 |
Equity investment in A Metaverse Company, a related party, at fair value | 5,772 | 7,028 |
Property and equipment, net | 1,865 | 1,980 |
Operating lease right-of use assets, net | 680 | 749 |
Intangible assets, net | 19,290 | 20,034 |
Goodwill | 21,084 | 21,084 |
Other long-term assets | 1,451 | 1,598 |
Total assets | 94,223 | 104,636 |
Current liabilities | ||
Accounts payable and accrued expenses | 46,450 | 52,025 |
Current portion of deferred consideration on purchase of business | 3,449 | 3,432 |
Current portion of earnout consideration on purchase of business | 1,188 | 1,081 |
Operating lease liabilities | 193 | 258 |
Current portion of deferred revenue | 371 | 196 |
Total current liabilities | 51,651 | 56,992 |
Deferred consideration on purchase – net of current portion | 5,379 | 5,600 |
Earnout consideration on purchase – net of current portion | 627 | 603 |
Operating lease liabilities, net of current portion | 489 | 491 |
Other long-term liabilities | 86 | |
Total liabilities | 58,232 | 63,686 |
Commitments and contingencies (see Note 6) | ||
Stockholders’ Equity | ||
Preferred stock, 15,000,000 shares authorized; Series A 10% - $0.001 par value per share; 20 shares authorized; 7 shares issued and outstanding at June 30, 2022 and March 31, 2022. Liquidation preference of $3,648 | 3,559 | 3,559 |
Common stock, $0.001 par value; Class A stock 275,000,000 and 275,000,000 shares authorized at June 30, 2022 and March 31, 2022, respectively, 176,737,459 and 176,629,435 shares issued and 175,421,608 and 175,313,584 shares outstanding at June 30, 2022 and March 31, 2022, respectively. | 174 | 174 |
Additional paid-in capital | 523,669 | 522,601 |
Treasury stock, at cost; 1,315,851 and 1,315,851 Class A common shares at June 30, 2022 and March 31, 2022, respectively. | (11,608) | (11,608) |
Accumulated deficit | (478,403) | (472,310) |
Accumulated other comprehensive loss | (115) | (163) |
Total stockholders’ equity of Cinedigm Corp. | 37,276 | 42,253 |
Deficit attributable to noncontrolling interest | (1,285) | (1,303) |
Total equity | 35,991 | 40,950 |
Total liabilities and equity | $ 94,223 | $ 104,636 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Accounts receivable, net of allowance (in Dollars) | $ 2,605 | $ 2,921 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Series A preferred stock | ||
Preferred stock, shares authorized | 20 | 20 |
Preferred stock, dividend rate | 10% | 10% |
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) | $ 3,648 | $ 3,648 |
Class A Common Stock | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 275,000,000 | 275,000,000 |
Common stock, shares issued | 176,737,459 | 176,629,435 |
Common stock, shares outstanding | 175,421,608 | 175,313,584 |
Treasury stock | 1,315,851 | 1,315,851 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 13,590 | $ 15,015 |
Costs and expenses: | ||
Direct operating (excludes depreciation and amortization shown below) | 7,356 | 4,631 |
Selling, general and administrative | 9,815 | 6,043 |
Bad debt expense | 3 | 71 |
Depreciation and amortization of property and equipment | 256 | 649 |
Amortization of intangible assets | 744 | 847 |
Total operating expenses | 18,174 | 12,241 |
Income (loss) from operations | (4,584) | 2,774 |
Interest expense, net | (133) | (144) |
Gain on forgiveness of PPP loan and extinguishment of note payable | 2,178 | |
Change in fair value of equity investment in A Metaverse Company, a related party | (1,256) | 334 |
Other expense, net | (14) | (11) |
Income (loss) before income taxes | (5,987) | 5,131 |
Income tax benefit | 63 | |
Net income (loss) | (5,987) | 5,194 |
Net loss attributable to noncontrolling interest | (18) | (7) |
Net income (loss) attributable to controlling interests | (6,005) | 5,187 |
Preferred stock dividends | (88) | (89) |
Net income (loss) attributable to common stockholders | $ (6,093) | $ 5,098 |
Net income (loss) per Class A common stock attributable to common stockholders - basic: (in Dollars per share) | $ (0.03) | $ 0.03 |
Weighted average number of Class A common stock outstanding: basic (in Shares) | 175,420,421 | 167,940,285 |
Net income (loss) per Class A common stock attributable to common stockholders - diluted: (in Dollars per share) | $ (0.03) | $ 0.03 |
Weighted average number of Class A common stock outstanding: diluted (in Shares) | 175,420,421 | 171,257,356 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ (5,987) | $ 5,194 |
Other comprehensive (loss) income: foreign exchange translation | 48 | (54) |
Comprehensive income (loss) | (5,939) | 5,140 |
Less: comprehensive income attributable to noncontrolling interest | (18) | (7) |
Comprehensive income (loss) attributable to controlling interests | $ (5,957) | $ 5,133 |
Consdensed Consolidated Stateme
Consdensed Consolidated Statements of (Deficit) Equity (Unaudited) - USD ($) $ in Thousands | Total | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity (Deficit) | Non-Controlling Interest | Series A Preferred Stock | Class A Common Stock |
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, 2022 | 40,950 | $ (11,608) | 522,601 | (472,310) | (163) | 42,253 | (1,303) | $ 3,559 | $ 174 |
Balance (in Shares) at Mar. 31, 2022 | 1,315,851 | 7 | 175,313,584 | ||||||
Foreign exchange translation | 48 | 48 | 48 | ||||||
Stock-based compensation | 980 | 980 | 980 | ||||||
Preferred stock dividends paid with common stock | 88 | 88 | 88 | ||||||
Preferred stock dividends paid with common stock (in Shares) | 108,024 | ||||||||
Preferred stock dividends accrued | (88) | (88) | (88) | ||||||
Net income (loss) | (5,987) | (6,005) | (6,005) | 18 | |||||
Balance at Jun. 30, 2022 | $ 35,991 | $ (11,608) | $ 523,669 | $ (478,403) | $ (115) | $ 37,276 | $ (1,285) | $ 3,559 | $ 174 |
Balance (in Shares) at Jun. 30, 2022 | 1,315,851 | 7 | 175,421,608 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (5,987) | $ 5,194 |
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 | 1,000 | 1,496 |
Impairment of prepaid advances | 32 | |
Changes in fair value of equity investment in A Metaverse Company | 1,256 | (334) |
Gain from forgiveness of PPP loan | (2,178) | |
Provision for doubtful accounts | 3 | 71 |
Stock-based compensation | 980 | 983 |
Interest expense for deferred consideration | 81 | |
Interest expense for earnout consideration | 52 | |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | 5,625 | (6,103) |
Inventory | (13) | 24 |
Unbilled revenue | (248) | (295) |
Prepaids and other current assets, and other long-term assets | 1,287 | 1,730 |
Accounts payable, accrued expenses, and other liabilities | (5,441) | 3,508 |
Deferred revenue | 175 | (475) |
Net cash (used in) provided by operating activities | (1,198) | 3,621 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (141) | (41) |
Purchase of a business | 80 | (750) |
Net cash used in investing activities | (61) | (791) |
Cash flows from financing activities: | ||
Payment of notes payable | (284) | (4,755) |
Payment under revolving credit agreement, net | (1,569) | |
Net cash used in by financing activities | (284) | (6,324) |
Net change in cash, cash equivalents, and restricted cash | (1,543) | (3,494) |
Cash, cash equivalents, and restricted cash at beginning of period | 13,062 | 17,849 |
Cash, cash equivalents, and restricted cash at end of period | $ 11,519 | $ 14,355 |
Nature of Operations and Liquid
Nature of Operations and Liquidity | 3 Months Ended |
Jun. 30, 2022 | |
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 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) 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 Australia. It also provides fee-based support to music and 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. Liquidity We have incurred net losses historically and have net of $ million for the three months ended June 30, 2022. We also have an accumulated deficit of $ million and negative working capital of $ million as of June 30, 2022. Net cash by operating activities for the three months ended June 30, 2022 was $ million. We may continue to generate net losses for the foreseeable future. Based on these conditions, the Company entered into the following transactions described below: We believe the combination of: (i) our cash and cash equivalent balances at June 30, 2022 and (ii) expected cash flow from operations, will be sufficient for our operations and capital needs, for at least 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 | 3 Months Ended |
Jun. 30, 2022 | |
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 accrual of digital revenue, accounts receivable reserves, return reserves, inventory reserves, recovery of advances, assessment of goodwill impairment, intangible asset 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 AND CASH EQUIVALENTS 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. Cash and cash equivalents consisted of the following: As of (in thousands) June 30, March 31, Cash and Cash Equivalents $ 11,519 $ 13,062 EQUITY INVESTMENT IN A METAVERSE COMPANY, A RELATED PARTY On February 14, 2020, the Company acquired an approximately 11.5% interest in A Metaverse Company (“Metaverse”), a leading publicly traded Chinese entertainment company, formerly Starrise Media Holdings Limited, 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 Metaverse that is related to our major shareholder. Our major shareholder also maintains a significant beneficial interest ownership in Metaverse. 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 Metaverse 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 of the Company. The difference in value of shares received in Metaverse and shares issued by the Company is deemed as contributed capital and recorded in additional paid-in capital. On April 10, 2020, the Company purchased an additional 15% interest in Metaverse in a private transaction from shareholders of Metaverse that are affiliated with the 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 Metaverse shares on the transaction date on the Stock Exchange of Hong Kong, in exchange for the Company’s common stock of $11.0 million, valued at the date of the issuance of the Common Stock of the Company. The difference in the value of shares received in Metaverse and shares issued by the Company is deemed as contributed capital and recorded in additional paid-in capital. This transaction was also recorded as an equity investment in Metaverse. The Company has accounted for these investments under the equity method of accounting as the Company can exert significant influence over Metaverse with its direct ownership and affiliation with the Company’s majority shareholders. The Company has made an irrevocable election to apply the fair value option under ASC 825-10, Financial Instruments On April 1, 2022, trading of Metaverse’s ordinary shares was halted on the Hong Kong Stock Exchange. This investment was previously a level 1 investment as the shares were being actively traded in a marketplace, but with the trading of the shares being halted, the Company needed to reassess the fair value level of the investment. Without an active market where the shares are being traded, the investment no longer qualifies as a level 1. As of June 30, 2022, Metaverse’s stock valuation is based on an evaluated offer received from an independent third party to purchase our shares and trending assessment of market pricing and is categorized as Level 3 based on unobservable inputs. 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 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 $32 thousand and $0.2 million, for the three months ended June 30, 2022 and 2021, respectively. 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. 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 months ended June 30, 2022 and 2021, no impairment charge was recorded from operations for long-lived assets or finite-lived assets. INTANGIBLE ASSETS Intangible assets are stated at cost less accumulated amortization. For intangible assets that have finite lives, the assets are amortized using the straight-line method over the estimated useful lives of the related assets. For intangible assets with indefinite lives, the assets are tested annually for impairment or sooner if a triggering event occurs. During the three months ended June 30, 2022 and 2021, no impairment charge was recorded from operations for intangible assets. Amortization expense is recorded using the straight-line method over the estimated useful lives of the respective assets as follows: Trademark 3 years Content Library 3 – 20 years Customer Relationships 5 – 13 years Tradename 2 – 15 years Supplier Agreements 2 years Advertiser relationships and Channel 3-13 years Software 10 years The Company’s intangible assets included the following on June 30, 2022: Cost Basis Accumulated Impairment Net Trademark $ 1,925 $ (925 ) $ - 1,000 Content Library 23,685 (20,803 ) - 2,882 Customer Relationships 10,658 (7,395 ) (1,968 ) 1,295 Tradename 2,101 (619 ) - 1,482 Theatre Relationship 550 (550 ) - - Patents 17 (17 ) - - Supplier Agreements 11,430 (11,399 ) - 31 Advertiser relationships and Channel 10,081 (361 ) - 9,720 Software 3,200 (320 ) - 2,880 Total Intangible Assets $ 63,647 $ (42,389 ) $ (1,968 ) 19,290 The Company’s intangible assets included the following on March 31, 2022: Cost Basis Accumulated Impairment Net Trademark $ 1,925 $ (776 ) $ - 1,149 Content Library 23,685 (20,665 ) - 3,020 Customer Relationships 10,658 (7,327 ) (1,968 ) 1,363 Tradename 2,101 (525 ) - 1,576 Theatre Relationship 550 (550 ) - - Patents 17 (17 ) - - Supplier Agreements 11,430 (11,384 ) - 46 Advertiser relationships and Channel 10,081 (161 ) - 9,920 Software 3,200 (240 ) - 2,960 Total Intangible Assets $ 63,647 $ (41,645 ) $ (1,968 ) 20,034 Below is the amortization expense per year for the intangible assets: Total 2023 $ 2,520 2024 3,048 2025 1,796 2026 1,489 2027 1,269 Thereafter 9,168 Total $ 19,290 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 fa The equity investment in Metaverse is in Hong Kong dollars and was translated into US dollars as of June 30, 2022 and 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 was measured by the quoted market price of Metaverse on the Stock Exchange of Hong Kong at June 30, 2021. On April 1, 2022, trading of Metaverse’s ordinary shares was halted on the Hong Kong Stock Exchange and as of June 30, 2022, Metaverse’s stock valuation is based on a preliminary evaluated offer received from an independent third party to purchase our shares and trending assessment of market pricing and is categorized as Level 3 based on unobservable inputs. The adjustment to fair value of this investment resulted in a loss of $1.3 million and gain of $0.3 million for the three months ended June 30, 2022 and 2021, respectively. As the value of the investment in Metaverse is being determined by an offer to purchase the shares from an independent third party, the value of the investment may need to be reduced or fully written off should the offer be rescinded. The following tables summarize the levels of fair value measurements of our financial assets and liabilities as of June 30, 2022 and March 31, 2022: As of June 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investment in Metaverse, at fair value $ - $ - $ 5,772 $ 5,772 $ - $ - $ 5,772 $ 5,772 Liabilities: Current portion of earnout consideration on purchase of a business $ — $ — $ 1,188 $ 1,188 Long term portion of earnout consideration on purchase of a business — — 627 627 $ — $ — $ 1,815 $ 1,815 As of March 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investment in Metaverse, at fair value $ 7,028 $ — $ — $ 7,028 $ 7,028 $ — $ — $ 7,028 Liabilities: Current portion of earnout consideration on purchase of a business $ — $ — $ 1,081 $ 1,081 Long term portion of earnout consideration on purchase of a business — — 603 603 $ — $ — $ 1,684 $ 1,684 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. ASSET ACQUISITIONS An asset acquisition is an acquisition of an asset, or a group of assets, that does not meet the definition of a business. Asset acquisitions are accounted for by using the cost accumulation model whereby the cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values. 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. The Company reassessed goodwill impairment on its annual measurement date of March 31, 2022 by performing a qualitative analysis and determined that it was not more likely than not that the fair value of its reporting unit is less than its carrying amount. No goodwill impairment charge was recorded in the three months ended June 30, 2022 and 2021. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: As of (In thousands) June 30, March 31, Accounts payable $ 29,325 $ 34,177 Amounts due to producers 9,254 10,430 Accrued compensation and benefits 4,401 3,507 Accrued taxes (refund) payable (67 ) (78 ) Accrued other expenses 3,537 3,989 Total accounts payable and accrued expenses $ 46,450 $ 52,025 PREPAID AND OTHER CURRENT ASSETS Prepaid and other current assets consisted of the following: As of (In thousands) June 30, March 31, Non-trade accounts receivable $ 688 $ 826 Advances 1,853 2,117 Due from producers 1,057 1,861 Prepaid insurance 212 169 Other prepaid expenses 811 820 Total prepaid and other current assets $ 4,621 $ 5,793 Impairments and accelerated amortization related to advances were $32 thousand and $0.2 million, for the three months ended June 30, 2022 and 2021, respectively. REVENUE RECOGNITION 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. We have in the past entered into arrangements in connection with activation fees due from our System deployments that had extended payment terms. The outstanding balances on these arrangements are insignificant and hence the impact of significant financing would be insignificant. Cinema Equipment Business We retain ownership of our 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 us with respect 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, 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 Cinedigm received the sale proceeds. Such sales were originally contemplated as the conclusion of the digital cinema deployment plan. Total system revenue was $1.2 million and $5.6 million, during the three months ended June 30, 2022 and 2021, 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 Phase II of 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 content is available for subscription on the digital platform (the company’s digital content is considered functional IP), 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 from the sale of physical goods is recognized after deducting the reserves for sales returns and other allowances, which are accounted for as variable consideration. Reserves for potential sales returns of physical goods 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 are 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. The Company follows the five-step model established by ASC 606 when preparing its assessment of revenue recognition Principal Agent Considerations Revenue earned by our CEG business from the delivery of digital content and physical goods may be recognized gross or net depending on the terms of the arrangement. We determine whether revenue should be reported on a gross or net basis based on each revenue stream. 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, including current and non-current balances, as of June 30, 2022 was $0.4 million. For the three months ended June 30, 2022, 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. For the three months ended June 30, 2022 and 2021, there was $12.0 million and $14.6 million , respectively, included in accounts payable that represents a refund liability, a portion or all of which may be recognized as revenue upon completion of audit periods. 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 months ended June 30, 2022 and 2021 (in thousands): Three Months Ended 2022 2021 Cinema Equipment Business: Phase I Deployment $ 113 $ 91 Phase II Deployment - 386 Services 120 179 Digital System Sales 1,194 5,575 Total Cinema Equipment Business revenue $ 1,427 $ 6,231 Content & Entertainment Business: Physical Revenue $ 2,205 $ 1,778 OTT Streaming and Digital 9,958 7,006 Total Content & Entertainment Business revenue $ 12,163 $ 8,784 Concentrations For the three months ended June 30, 2022, three customers, Distribution Solutions represented 2 % and 4% respectively of revenues and approximately %, and 13% , respectively, of our consolidated revenues. For the three months ended June 30, 2021, Distribution Solutions represented % and % respectively of revenues and approximately % and 6%, respectively, of our consolidated Revenues. DIRECT OPERATING COSTS Direct operating costs consist of operating costs such as cost of revenue, 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 (“ASC 718”). ASC 718 requires all stock-based payments, including grants of stock options and restricted stock units and modifications to existing stock options, to be recognized in the consolidated statements of operations and comprehensive loss based on their fair values. The Company measures the compensation expense of employee and nonemployee services received in exchange for an award of equity instruments based on the fair value of the award on the grant date. That cost is recognized on a straight-line basis over the period during which the employee and nonemployee is required to provide service in exchange for the award. The fair values of options and stock appreciation rights are calculated as of the date of grant using the Black-Scholes option pricing model based on key assumptions such as stock price, expected volatility and expected term. The Company’s estimates of these assumptions are primarily based on the trading price of the Company’s stock, historical data, peer company data and judgment regarding future trends and factors. 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 |
Other Interests
Other Interests | 3 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 and March 31, 2022, 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 $0.7 million and $0.8 million as of June 30, 2022 and March 31, 2022, respectively, which are included in accounts receivable, net on the accompanying consolidated balance sheets. The accompanying Consolidated Statements of Operations include $(104) thousand and $77 thousand of digital cinema servicing revenue from CDF2 Holdings for the three months ended June 30, 2022 and 2021, respectively. Total Stockholders’ Deficit of CDF2 Holdings at June 30, 2022 and March 31, 2022 was $57.3 million and $55.6 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 June 30, 2022 and March 31, 2022 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. Investment in Roundtable On March 15, 2022, the Company entered into a stock purchase agreement with Roundtable Entertainment Holdings, Inc. (“Roundtable”) pursuant to which the Company purchased 500 shares of Roundtable Series A Preferred Stock and warrants to purchase 100 shares of Roundtable Common Stock (together, the “Roundtable Securities”). The Company paid the purchase price for the Roundtable Securities by issuing to Roundtable 316,937 shares of Common Stock is based on the closing price of the company on the date of the purchase. The Company recorded $0.2 million for the purchase of the Roundtable Securities which is included in other long-term assets on the consolidated balance sheet. The investment in the Roundtable Securities was made in connection with a proposed collaboration with Roundtable regarding production and distribution of streaming content including the launch of high profile branded enthusiast streaming channels. The Roundtable investment was accounted for using the cost method. |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) | 3 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ EQUITY (DEFICIT) | 4. STOCKHOLDERS’ EQUITY (DEFICIT) COMMON STOCK Authorized Common Stock As of June 30, 2022 the number of shares of Common Stock authorized for issuance was 275,000,000 shares. During the three months ended June 30, 2022, the Company issued 108,024 shares of Common Stock which consist the issuance of Common Stock in payment of preferred stock dividends. PREFERRED STOCK Cumulative dividends in arrears on preferred stock were $0.1 million and $0.1 million as of June 30, 2022 and 2021, respectively. In May 2022 and 2021, we paid preferred stock dividends in arrears in the form of and 53,278 shares of Common Stock, respectively. TREASURY STOCK We have treasury stock, at cost, consisting of 1,315,851 and 1,315,851 shares of Common Stock at June 30, 2022 and March 31, 2022, 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 June 30, 2022, there were 212,037 stock options outstanding in the 2000 Plan with weighted average exercise price of $14.46 and a weighted average contract life of 1.32 years. As of March 31, 2022, there were 217,337 shares pursuant to stock options outstanding in the Plan with weighted average exercise price of $14.49 and a weighted average contract life of 1.54 years. A total of 5,300 options expired and zero options were forfeited during the three months ended June 30, 2022. Options outstanding under the 2000 Plan as of June 30, 2022 is as follows: As of June 30, 2022 Range of Prices Options Outstanding Weighted Average Remaining Life in Years Weighted Average Exercise Price Aggregate Intrinsic Value $1.16 - $7.40 5,000 3.01 $ 7.40 $ — $13.70 - $24.40 207,037 1.28 14.63 — 212,037 $ — An analysis of all options exercisable under the 2000 Plan as of June 30, 2022 is presented below: Options Exercisable Weighted Average Weighted Average Aggregate Intrinsic Value 212,037 1.32 $ 14.46 — 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 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 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. Stock appreciation rights outstanding under the 2017 Plan as of June 30, 2022 is as follows: As of June 30, 2022 Range of Prices SARs Outstanding Weighted Average Remaining Life in Years Weighted Average Exercise Price Aggregate Intrinsic Value $0.54 - $0.74 5,550,000 8.45 $ 0.60 $ — $1.16 - $1.47 2,283,610 6.29 1.25 — $1.71 - $2.10 2,455,738 6.53 1.49 — $2.23 - $2.56 604,250 9.31 2.29 — 10,893,598 $ — An analysis of all stock appreciation rights exercisable under the 2017 Plan as of June 30, 2022 is presented below: SAR Exercisable Weighted Average Weighted Average Aggregate Intrinsic Value 2,736,473 7.29 $ 1.21 - Total SARs outstanding are as follows: Year SARs Outstanding March 31, 2022 10,893,598 Issued - Forfeited - Total SARs Outstanding June 30, 2022 10,893,598 Following is the activity for performance stock unit awards: Shares Weighted Average Grant Date Fair Value Unvested balance at March 31, 2022 696,280 $ 1.25 Granted - - Vested - - Unvested balance at June 30, 2022 696,280 $ 1.25 During the three months ended June 30, 2022, zero shares were issued for vested awards and 255,219 shares are to be issued as of June 30, 2022. Employee and director stock-based compensation expense related to our stock-based awards was as follows: Three Months Ended (In thousands) 2022 2021 Selling, general and administrative $ 980 $ 983 $ 980 $ 983 There was $875 thousand and $1 thousand of stock-based compensation recorded for the three months ended June 30, 2022 and 2021, respectively, related to employees’ restricted stock awards. There was $105 thousand and $126 thousand of stock-based compensation for the three months ended June 30, 2022 and 2021, respectively, related to board of directors. During the three months ended June 30, 2022, the Company issued zero restricted shares to non-employee 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 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 June 30, 2022, 12,500 of such options remained outstanding. WARRANTS The following table presents information about outstanding warrants to purchase shares of our Common Stock as of June 30, 2022. All of the outstanding warrants are fully vested and exercisable. Recipient Amount Expiration Exercise price 5-year Warrant issued to Bison Entertainment and Media Group(” BEMG”) in connection with a term loan agreement 1,400,000 December 2022 $ 1.80 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 5. COMMITMENTS AND CONTINGENCIES We operate from leased properties under non-cancelable operating lease agreements, certain of which contain escalating lease clauses. The Company leases office space under an operating lease. 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 June 30, 2022 and March 31, 2022: (In thousands) Classification on the Balance Sheet June 30, 2022 March 31, Assets Noncurrent Operating lease right-of-use asset $ 680 $ 749 Liabilities Current Operating leases – current portion 193 258 Noncurrent Operating leases – long-term portion 489 491 Total operating lease liabilities $ 682 $ 749 Lease Costs The table below presents certain information related to lease costs for leases: Three Months Ended Three Months Ended (In thousands) June 30, June 30, Operating lease cost $ 84 $ 22 Total lease cost $ 84 $ 22 Other Information The table below presents supplemental cash flow information related to leases: Three Months Ended Three Months Ended (In thousands) June 30, June 30, Cash paid for amounts included in the measurement of lease liabilities - 22 Operating cash flows used for operating leases Hyde Park Agreement $ - $ 22 On January 5, 2022, the Company entered into a letter agreement with Hyde Park Entertainment, Inc. (“Hyde Park”), pursuant to which the Company and Hyde Park are collaborating on the development, production and/or distribution of a project based on the novel Audition |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information and Disclosure of Non-Cash Investmenting an Financing Activity | 3 Months Ended |
Jun. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION AND DISCLOSURE OF NON-CASH INVESTMENTING AN FINANCING ACTIVITY | 6. SUPPLEMENTAL CASH FLOW INFORMATION AND DISCLOSURE OF NON-CASH INVESTMENTING AN FINANCING ACTIVITY Three Months Ended (In thousands) 2022 2021 Cash interest paid $ - $ 663 Income taxes paid - - Accrued dividends on preferred stock 88 89 Issuance of Class A common stock for payment of preferred stock dividends 88 89 Issuance of Class A common stock for business combination - 2,506 Deferred consideration in purchase of a business - 1,980 Earnout consideration in purchase of a business 80 - |
Segment Information
Segment Information | 3 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 7. 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 434 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 648 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 June 30, 2022 (In thousands) Intangible Goodwill Total Notes Notes Operating Cinema Equipment Business $ — $ — $ 20,282 $ — $ — $ — Content & Entertainment Business 19,202 21,084 66,770 — — 675 Corporate 88 — 7,171 — — 7 Total $ 19,290 $ 21,084 $ 94,223 $ — $ — $ 682 As of March 31, 2022 (In thousands) Intangible Goodwill Total Notes Notes Operating Cinema Equipment Business $ — $ — $ 24,445 $ — $ — $ — Content & Entertainment Business 19,946 21,084 68,873 — — — Corporate 88 — 11,318 — — 749 Total $ 20,034 $ 21,084 $ 104,636 $ — $ — $ 749 Statements of Operations Three Months Ended June 30, 2022 (in thousands) Cinema Content & Entertainment Corporate Consolidated Revenues $ 1,427 $ 12,163 $ - $ 13,590 Direct operating (exclusive of depreciation and amortization shown below) 144 7,212 - 7,356 Selling, general and administrative 1,071 3,783 4,961 9,815 Allocation of corporate overhead 103 2,752 (2,855 ) 0 Provision for (recovery of) doubtful accounts 3 - - 3 Depreciation and amortization of property and equipment 117 138 1 256 Amortization of intangible assets - 637 107 744 Total operating expenses 1,438 14,522 2,214 18,174 Income (loss) from operations $ (11 ) $ (2,359 ) $ (2,214 ) $ (4,584 ) 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 - - 980 980 Total stock-based compensation $ - $ - $ 980 $ 980 Statements of Operations Three Months Ended June 30, 2021 (in thousands) Cinema Content & Entertainment Corporate Consolidated Revenues $ 6,231 $ 8,784 $ — $ 15,015 Direct operating (exclusive of depreciation and amortization shown below) 257 4,374 — 4,631 Selling, general and administrative 429 2,818 2,796 6,043 Allocation of corporate overhead 99 660 (759 ) — Provision for doubtful accounts 27 44 — 71 Depreciation and amortization of property and equipment 507 143 (1 ) 649 Amortization of intangible assets — 846 1 847 Total operating expenses 1,319 8,885 2,037 12,241 Income (loss) from operations $ 4,912 $ (101 ) $ (2,037 ) $ 2,774 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 — 166 817 983 Total stock-based compensation $ — $ 166 $ 817 $ 983 |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. 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 (expense) of approximately zero and $63 thousand for the three months ended June 30, 2022 and 2021, respectively. 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 three months ended June 30, 2022 and 2021 was zero and negative 1.2%, respectively. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Jun. 30, 2022 | |
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 accrual of digital revenue, accounts receivable reserves, return reserves, inventory reserves, recovery of advances, assessment of goodwill impairment, intangible asset 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 AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS 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. Cash and cash equivalents consisted of the following: As of (in thousands) June 30, March 31, Cash and Cash Equivalents $ 11,519 $ 13,062 |
EQUITY INVESTMENT IN A METAVERSE COMPANY, A RELATED PARTY | EQUITY INVESTMENT IN A METAVERSE COMPANY, A RELATED PARTY On February 14, 2020, the Company acquired an approximately 11.5% interest in A Metaverse Company (“Metaverse”), a leading publicly traded Chinese entertainment company, formerly Starrise Media Holdings Limited, 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 Metaverse that is related to our major shareholder. Our major shareholder also maintains a significant beneficial interest ownership in Metaverse. 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 Metaverse 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 of the Company. The difference in value of shares received in Metaverse and shares issued by the Company is deemed as contributed capital and recorded in additional paid-in capital. On April 10, 2020, the Company purchased an additional 15% interest in Metaverse in a private transaction from shareholders of Metaverse that are affiliated with the 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 Metaverse shares on the transaction date on the Stock Exchange of Hong Kong, in exchange for the Company’s common stock of $11.0 million, valued at the date of the issuance of the Common Stock of the Company. The difference in the value of shares received in Metaverse and shares issued by the Company is deemed as contributed capital and recorded in additional paid-in capital. This transaction was also recorded as an equity investment in Metaverse. The Company has accounted for these investments under the equity method of accounting as the Company can exert significant influence over Metaverse with its direct ownership and affiliation with the Company’s majority shareholders. The Company has made an irrevocable election to apply the fair value option under ASC 825-10, Financial Instruments On April 1, 2022, trading of Metaverse’s ordinary shares was halted on the Hong Kong Stock Exchange. This investment was previously a level 1 investment as the shares were being actively traded in a marketplace, but with the trading of the shares being halted, the Company needed to reassess the fair value level of the investment. Without an active market where the shares are being traded, the investment no longer qualifies as a level 1. As of June 30, 2022, Metaverse’s stock valuation is based on an evaluated offer received from an independent third party to purchase our shares and trending assessment of market pricing and is categorized as Level 3 based on unobservable inputs. |
ACCOUNTS RECEIVABLE | 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 Systems deployments that have extended payment terms. Such accounts receivable are discounted to their present value at prevailing market rate. |
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 $32 thousand and $0.2 million, for the three months ended June 30, 2022 and 2021, respectively. |
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. |
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 months ended June 30, 2022 and 2021, no impairment charge was recorded from operations for long-lived assets or finite-lived assets. |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets are stated at cost less accumulated amortization. For intangible assets that have finite lives, the assets are amortized using the straight-line method over the estimated useful lives of the related assets. For intangible assets with indefinite lives, the assets are tested annually for impairment or sooner if a triggering event occurs. During the three months ended June 30, 2022 and 2021, no impairment charge was recorded from operations for intangible assets. Amortization expense is recorded using the straight-line method over the estimated useful lives of the respective assets as follows: Trademark 3 years Content Library 3 – 20 years Customer Relationships 5 – 13 years Tradename 2 – 15 years Supplier Agreements 2 years Advertiser relationships and Channel 3-13 years Software 10 years The Company’s intangible assets included the following on June 30, 2022: Cost Basis Accumulated Impairment Net Trademark $ 1,925 $ (925 ) $ - 1,000 Content Library 23,685 (20,803 ) - 2,882 Customer Relationships 10,658 (7,395 ) (1,968 ) 1,295 Tradename 2,101 (619 ) - 1,482 Theatre Relationship 550 (550 ) - - Patents 17 (17 ) - - Supplier Agreements 11,430 (11,399 ) - 31 Advertiser relationships and Channel 10,081 (361 ) - 9,720 Software 3,200 (320 ) - 2,880 Total Intangible Assets $ 63,647 $ (42,389 ) $ (1,968 ) 19,290 The Company’s intangible assets included the following on March 31, 2022: Cost Basis Accumulated Impairment Net Trademark $ 1,925 $ (776 ) $ - 1,149 Content Library 23,685 (20,665 ) - 3,020 Customer Relationships 10,658 (7,327 ) (1,968 ) 1,363 Tradename 2,101 (525 ) - 1,576 Theatre Relationship 550 (550 ) - - Patents 17 (17 ) - - Supplier Agreements 11,430 (11,384 ) - 46 Advertiser relationships and Channel 10,081 (161 ) - 9,920 Software 3,200 (240 ) - 2,960 Total Intangible Assets $ 63,647 $ (41,645 ) $ (1,968 ) 20,034 Below is the amortization expense per year for the intangible assets: Total 2023 $ 2,520 2024 3,048 2025 1,796 2026 1,489 2027 1,269 Thereafter 9,168 Total $ 19,290 |
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 fa The equity investment in Metaverse is in Hong Kong dollars and was translated into US dollars as of June 30, 2022 and 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 was measured by the quoted market price of Metaverse on the Stock Exchange of Hong Kong at June 30, 2021. On April 1, 2022, trading of Metaverse’s ordinary shares was halted on the Hong Kong Stock Exchange and as of June 30, 2022, Metaverse’s stock valuation is based on a preliminary evaluated offer received from an independent third party to purchase our shares and trending assessment of market pricing and is categorized as Level 3 based on unobservable inputs. The adjustment to fair value of this investment resulted in a loss of $1.3 million and gain of $0.3 million for the three months ended June 30, 2022 and 2021, respectively. As the value of the investment in Metaverse is being determined by an offer to purchase the shares from an independent third party, the value of the investment may need to be reduced or fully written off should the offer be rescinded. The following tables summarize the levels of fair value measurements of our financial assets and liabilities as of June 30, 2022 and March 31, 2022: As of June 30, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investment in Metaverse, at fair value $ - $ - $ 5,772 $ 5,772 $ - $ - $ 5,772 $ 5,772 Liabilities: Current portion of earnout consideration on purchase of a business $ — $ — $ 1,188 $ 1,188 Long term portion of earnout consideration on purchase of a business — — 627 627 $ — $ — $ 1,815 $ 1,815 As of March 31, 2022 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investment in Metaverse, at fair value $ 7,028 $ — $ — $ 7,028 $ 7,028 $ — $ — $ 7,028 Liabilities: Current portion of earnout consideration on purchase of a business $ — $ — $ 1,081 $ 1,081 Long term portion of earnout consideration on purchase of a business — — 603 603 $ — $ — $ 1,684 $ 1,684 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. |
ASSET ACQUISITIONS | ASSET ACQUISITIONS An asset acquisition is an acquisition of an asset, or a group of assets, that does not meet the definition of a business. Asset acquisitions are accounted for by using the cost accumulation model whereby the cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values. |
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. The Company reassessed goodwill impairment on its annual measurement date of March 31, 2022 by performing a qualitative analysis and determined that it was not more likely than not that the fair value of its reporting unit is less than its carrying amount. No goodwill impairment charge was recorded in the three months ended June 30, 2022 and 2021. |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: As of (In thousands) June 30, March 31, Accounts payable $ 29,325 $ 34,177 Amounts due to producers 9,254 10,430 Accrued compensation and benefits 4,401 3,507 Accrued taxes (refund) payable (67 ) (78 ) Accrued other expenses 3,537 3,989 Total accounts payable and accrued expenses $ 46,450 $ 52,025 |
PREPAID AND OTHER CURRENT ASSETS | PREPAID AND OTHER CURRENT ASSETS Prepaid and other current assets consisted of the following: As of (In thousands) June 30, March 31, Non-trade accounts receivable $ 688 $ 826 Advances 1,853 2,117 Due from producers 1,057 1,861 Prepaid insurance 212 169 Other prepaid expenses 811 820 Total prepaid and other current assets $ 4,621 $ 5,793 Impairments and accelerated amortization related to advances were $32 thousand and $0.2 million, for the three months ended June 30, 2022 and 2021, respectively. |
REVENUE RECOGNITION | REVENUE RECOGNITION 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. We have in the past entered into arrangements in connection with activation fees due from our System deployments that had extended payment terms. The outstanding balances on these arrangements are insignificant and hence the impact of significant financing would be insignificant. Cinema Equipment Business We retain ownership of our 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 us with respect 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, 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 Cinedigm received the sale proceeds. Such sales were originally contemplated as the conclusion of the digital cinema deployment plan. Total system revenue was $1.2 million and $5.6 million, during the three months ended June 30, 2022 and 2021, 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 Phase II of 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 content is available for subscription on the digital platform (the company’s digital content is considered functional IP), 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 from the sale of physical goods is recognized after deducting the reserves for sales returns and other allowances, which are accounted for as variable consideration. Reserves for potential sales returns of physical goods 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 are 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. The Company follows the five-step model established by ASC 606 when preparing its assessment of revenue recognition Principal Agent Considerations Revenue earned by our CEG business from the delivery of digital content and physical goods may be recognized gross or net depending on the terms of the arrangement. We determine whether revenue should be reported on a gross or net basis based on each revenue stream. 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, including current and non-current balances, as of June 30, 2022 was $0.4 million. For the three months ended June 30, 2022, 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. For the three months ended June 30, 2022 and 2021, there was $12.0 million and $14.6 million , respectively, included in accounts payable that represents a refund liability, a portion or all of which may be recognized as revenue upon completion of audit periods. 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 months ended June 30, 2022 and 2021 (in thousands): Three Months Ended 2022 2021 Cinema Equipment Business: Phase I Deployment $ 113 $ 91 Phase II Deployment - 386 Services 120 179 Digital System Sales 1,194 5,575 Total Cinema Equipment Business revenue $ 1,427 $ 6,231 Content & Entertainment Business: Physical Revenue $ 2,205 $ 1,778 OTT Streaming and Digital 9,958 7,006 Total Content & Entertainment Business revenue $ 12,163 $ 8,784 Concentrations For the three months ended June 30, 2022, three customers, Distribution Solutions represented 2 % and 4% respectively of revenues and approximately %, and 13% , respectively, of our consolidated revenues. For the three months ended June 30, 2021, Distribution Solutions represented % and % respectively of revenues and approximately % and 6%, respectively, of our consolidated Revenues. |
DIRECT OPERATING COSTS | DIRECT OPERATING COSTS Direct operating costs consist of operating costs such as cost of revenue, 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 (“ASC 718”). ASC 718 requires all stock-based payments, including grants of stock options and restricted stock units and modifications to existing stock options, to be recognized in the consolidated statements of operations and comprehensive loss based on their fair values. The Company measures the compensation expense of employee and nonemployee services received in exchange for an award of equity instruments based on the fair value of the award on the grant date. That cost is recognized on a straight-line basis over the period during which the employee and nonemployee is required to provide service in exchange for the award. The fair values of options and stock appreciation rights are calculated as of the date of grant using the Black-Scholes option pricing model based on key assumptions such as stock price, expected volatility and expected term. The Company’s estimates of these assumptions are primarily based on the trading price of the Company’s stock, historical data, peer company data and judgment regarding future trends and factors. |
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 LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS | NET LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS Basic and diluted net loss per common share has been calculated as follows: Basic net income (loss) per common share attributable to common stockholders = Net loss attributable to common stockholders Weighted average number of common stock Diluted net income (loss) per common share attributable to common stockholders = Net loss attributable to common stockholders Weighted average number of common stock Stock issued and treasury stock repurchased or reacquired during the period are weighted for the portion of the period that they are outstanding. We incurred a net loss for the three months ended June 30, 2022, and therefore the impact of potentially dilutive common shares from outstanding stock options and warrants, totaling 8,506,098 shares as of June 30, 2022, were excluded from the computations of loss per share as their impact would have been anti-dilutive. We had a net income for the three months ended June 30, 2021, and therefore the impact of potentially dilutive common shares from outstanding stock options, stock appreciation rights, and warrants, totaling 2,003,235 shares for the three months ended June 30, 2021, respectively, were included in the computations of diluted earnings per share. The calculation of diluted net income per share for the three months ended June 30, 2021 does not include the impact of 9,616,429 potentially dilutive shares relating to stock options, stock appreciation rights, and warrants as their impact would have been anti-dilutive. |
COMPREHENSIVE LOSS | COMPREHENSIVE LOSS For the three months ended June 30, 2022 and 2021, comprehensive loss consisted of net loss and foreign currency translation adjustments. |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS 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) | 3 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of cash, cash equivalents and restricted cash | As of (in thousands) June 30, March 31, Cash and Cash Equivalents $ 11,519 $ 13,062 |
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 amortization expense | Trademark 3 years Content Library 3 – 20 years Customer Relationships 5 – 13 years Tradename 2 – 15 years Supplier Agreements 2 years Advertiser relationships and Channel 3-13 years Software 10 years |
Schedule of intangible assets | Cost Basis Accumulated Impairment Net Trademark $ 1,925 $ (925 ) $ - 1,000 Content Library 23,685 (20,803 ) - 2,882 Customer Relationships 10,658 (7,395 ) (1,968 ) 1,295 Tradename 2,101 (619 ) - 1,482 Theatre Relationship 550 (550 ) - - Patents 17 (17 ) - - Supplier Agreements 11,430 (11,399 ) - 31 Advertiser relationships and Channel 10,081 (361 ) - 9,720 Software 3,200 (320 ) - 2,880 Total Intangible Assets $ 63,647 $ (42,389 ) $ (1,968 ) 19,290 Cost Basis Accumulated Impairment Net Trademark $ 1,925 $ (776 ) $ - 1,149 Content Library 23,685 (20,665 ) - 3,020 Customer Relationships 10,658 (7,327 ) (1,968 ) 1,363 Tradename 2,101 (525 ) - 1,576 Theatre Relationship 550 (550 ) - - Patents 17 (17 ) - - Supplier Agreements 11,430 (11,384 ) - 46 Advertiser relationships and Channel 10,081 (161 ) - 9,920 Software 3,200 (240 ) - 2,960 Total Intangible Assets $ 63,647 $ (41,645 ) $ (1,968 ) 20,034 |
Schedule of amortization expense for intangible assets | Total 2023 $ 2,520 2024 3,048 2025 1,796 2026 1,489 2027 1,269 Thereafter 9,168 Total $ 19,290 |
Schedule of fair value measurements of our financial assets and liabilities | (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investment in Metaverse, at fair value $ - $ - $ 5,772 $ 5,772 $ - $ - $ 5,772 $ 5,772 Liabilities: Current portion of earnout consideration on purchase of a business $ — $ — $ 1,188 $ 1,188 Long term portion of earnout consideration on purchase of a business — — 627 627 $ — $ — $ 1,815 $ 1,815 (in thousands) Level 1 Level 2 Level 3 Total Assets: Equity investment in Metaverse, at fair value $ 7,028 $ — $ — $ 7,028 $ 7,028 $ — $ — $ 7,028 Liabilities: Current portion of earnout consideration on purchase of a business $ — $ — $ 1,081 $ 1,081 Long term portion of earnout consideration on purchase of a business — — 603 603 $ — $ — $ 1,684 $ 1,684 |
Schedule of accounts payable and accrued expenses | As of (In thousands) June 30, March 31, Accounts payable $ 29,325 $ 34,177 Amounts due to producers 9,254 10,430 Accrued compensation and benefits 4,401 3,507 Accrued taxes (refund) payable (67 ) (78 ) Accrued other expenses 3,537 3,989 Total accounts payable and accrued expenses $ 46,450 $ 52,025 |
Schedule of prepaid and other current assets | As of (In thousands) June 30, March 31, Non-trade accounts receivable $ 688 $ 826 Advances 1,853 2,117 Due from producers 1,057 1,861 Prepaid insurance 212 169 Other prepaid expenses 811 820 Total prepaid and other current assets $ 4,621 $ 5,793 |
Schedule of revenue categories | Three Months Ended 2022 2021 Cinema Equipment Business: Phase I Deployment $ 113 $ 91 Phase II Deployment - 386 Services 120 179 Digital System Sales 1,194 5,575 Total Cinema Equipment Business revenue $ 1,427 $ 6,231 Content & Entertainment Business: Physical Revenue $ 2,205 $ 1,778 OTT Streaming and Digital 9,958 7,006 Total Content & Entertainment Business revenue $ 12,163 $ 8,784 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of analysis of option activity | As of June 30, 2022 Range of Prices Options Outstanding Weighted Average Remaining Life in Years Weighted Average Exercise Price Aggregate Intrinsic Value $1.16 - $7.40 5,000 3.01 $ 7.40 $ — $13.70 - $24.40 207,037 1.28 14.63 — 212,037 $ — Options Exercisable Weighted Average Weighted Average Aggregate Intrinsic Value 212,037 1.32 $ 14.46 — |
Schedule of stock appreciation rights outstanding | As of June 30, 2022 Range of Prices SARs Outstanding Weighted Average Remaining Life in Years Weighted Average Exercise Price Aggregate Intrinsic Value $0.54 - $0.74 5,550,000 8.45 $ 0.60 $ — $1.16 - $1.47 2,283,610 6.29 1.25 — $1.71 - $2.10 2,455,738 6.53 1.49 — $2.23 - $2.56 604,250 9.31 2.29 — 10,893,598 $ — SAR Exercisable Weighted Average Weighted Average Aggregate Intrinsic Value 2,736,473 7.29 $ 1.21 - |
Schedule of SARs outstanding | Year SARs Outstanding March 31, 2022 10,893,598 Issued - Forfeited - Total SARs Outstanding June 30, 2022 10,893,598 |
Schedule of activity for performance stock unit awards | Shares Weighted Average Grant Date Fair Value Unvested balance at March 31, 2022 696,280 $ 1.25 Granted - - Vested - - Unvested balance at June 30, 2022 696,280 $ 1.25 |
Schedule of stock-based compensation expense | Three Months Ended (In thousands) 2022 2021 Selling, general and administrative $ 980 $ 983 $ 980 $ 983 |
Schedule of warrants | Recipient Amount Expiration Exercise price 5-year Warrant issued to Bison Entertainment and Media Group(” BEMG”) in connection with a term loan agreement 1,400,000 December 2022 $ 1.80 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease-related assets and liabilities | (In thousands) Classification on the Balance Sheet June 30, 2022 March 31, Assets Noncurrent Operating lease right-of-use asset $ 680 $ 749 Liabilities Current Operating leases – current portion 193 258 Noncurrent Operating leases – long-term portion 489 491 Total operating lease liabilities $ 682 $ 749 |
Schedule of lease costs | Three Months Ended Three Months Ended (In thousands) June 30, June 30, Operating lease cost $ 84 $ 22 Total lease cost $ 84 $ 22 Three Months Ended Three Months Ended (In thousands) June 30, June 30, Cash paid for amounts included in the measurement of lease liabilities - 22 Operating cash flows used for operating leases Hyde Park Agreement $ - $ 22 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information and Disclosure of Non-Cash Investmenting an Financing Activity (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flows | Three Months Ended (In thousands) 2022 2021 Cash interest paid $ - $ 663 Income taxes paid - - Accrued dividends on preferred stock 88 89 Issuance of Class A common stock for payment of preferred stock dividends 88 89 Issuance of Class A common stock for business combination - 2,506 Deferred consideration in purchase of a business - 1,980 Earnout consideration in purchase of a business 80 - |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of reportable segments and corporate | As of June 30, 2022 (In thousands) Intangible Goodwill Total Notes Notes Operating Cinema Equipment Business $ — $ — $ 20,282 $ — $ — $ — Content & Entertainment Business 19,202 21,084 66,770 — — 675 Corporate 88 — 7,171 — — 7 Total $ 19,290 $ 21,084 $ 94,223 $ — $ — $ 682 As of March 31, 2022 (In thousands) Intangible Goodwill Total Notes Notes Operating Cinema Equipment Business $ — $ — $ 24,445 $ — $ — $ — Content & Entertainment Business 19,946 21,084 68,873 — — — Corporate 88 — 11,318 — — 749 Total $ 20,034 $ 21,084 $ 104,636 $ — $ — $ 749 |
Schedule of statement of operations | Statements of Operations Three Months Ended June 30, 2022 (in thousands) Cinema Content & Entertainment Corporate Consolidated Revenues $ 1,427 $ 12,163 $ - $ 13,590 Direct operating (exclusive of depreciation and amortization shown below) 144 7,212 - 7,356 Selling, general and administrative 1,071 3,783 4,961 9,815 Allocation of corporate overhead 103 2,752 (2,855 ) 0 Provision for (recovery of) doubtful accounts 3 - - 3 Depreciation and amortization of property and equipment 117 138 1 256 Amortization of intangible assets - 637 107 744 Total operating expenses 1,438 14,522 2,214 18,174 Income (loss) from operations $ (11 ) $ (2,359 ) $ (2,214 ) $ (4,584 ) Statements of Operations Three Months Ended June 30, 2021 (in thousands) Cinema Content & Entertainment Corporate Consolidated Revenues $ 6,231 $ 8,784 $ — $ 15,015 Direct operating (exclusive of depreciation and amortization shown below) 257 4,374 — 4,631 Selling, general and administrative 429 2,818 2,796 6,043 Allocation of corporate overhead 99 660 (759 ) — Provision for doubtful accounts 27 44 — 71 Depreciation and amortization of property and equipment 507 143 (1 ) 649 Amortization of intangible assets — 846 1 847 Total operating expenses 1,319 8,885 2,037 12,241 Income (loss) from operations $ 4,912 $ (101 ) $ (2,037 ) $ 2,774 |
Schedule of employee and director stock-based compensation expense related to our stock-based awards | (In thousands) Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ - $ - $ - $ - Selling, general and administrative - - 980 980 Total stock-based compensation $ - $ - $ 980 $ 980 (In thousands) Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative — 166 817 983 Total stock-based compensation $ — $ 166 $ 817 $ 983 |
Nature of Operations and Liqu_2
Nature of Operations and Liquidity (Details) $ in Millions | 3 Months Ended |
Jun. 30, 2022 USD ($) | |
Nature of Operations and Liquidity [Abstract] | |
Nature of operations and liquidity, description | 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 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) 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 Australia. It also provides fee-based support to music and 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. |
Net loss | $ 6 |
Accumulated deficit | 478.4 |
Working capital | 7.6 |
Net cash used by operating activities | $ 1.2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 1 Months Ended | 3 Months Ended | ||
Apr. 10, 2020 USD ($) | Feb. 14, 2020 USD ($) | Jun. 30, 2022 USD ($) shares | Jun. 30, 2021 USD ($) shares | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Initial investment | $ 28,200,000 | $ 25,100,000 | ||
Issuance of common stock value | $ 11,000,000 | $ 11,200,000 | ||
Impairment accelerated amortization | $ 32,000 | $ 200 | ||
Foreign currency | 1 | |||
Adjustment to fair value of investment Loss | 1,300,000 | 300,000 | ||
Impairments and accelerated amortization advance | $ 32,000,000 | 200,000 | ||
Deployment payment period | 10 years | |||
Total system revenue | $ 1,200,000 | 5,600,000 | ||
Upfront activation fee | 2,000 | |||
Activation fee revenue range, minimum | 1,000 | |||
Activation fee revenue range, maximum | $ 2,000 | |||
Administrative fee percentage | 10% | |||
Incentive fees, percentage | 2.50% | |||
Deferred revenue current and non-current balances | $ 400,000 | |||
Refund liability | $ 12,000,000 | $ 14,600,000 | ||
Number of customers | 3 | |||
Tax benefit percentage | 50% | |||
Potentially dilutive common shares from outstanding stock options and warrants, totaling | shares | 8,506,098 | 9,616,429 | ||
Warrants of right shares | shares | 2,003,235 | |||
Starrise Media Holdings Limited [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Ownership percentage | 15% | 11.50% | ||
Alliance Entertainment and Roku, Inc., [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentrations received percentage | 10% | |||
Concentration risk percentage | 11% | |||
Amazon.com, Inc., [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration risk percentage | 23% | |||
Distribution Solutions [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration risk percentage | 11% | |||
Consolidated revenues [Member] | Alliance Entertainment and Roku, Inc., [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration risk percentage | 9% | 6% | ||
Consolidated revenues [Member] | Amazon.com, Inc., [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration risk percentage | 19% | 14% | ||
Consolidated revenues [Member] | Distribution Solutions [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Concentration risk percentage | 13% | 6% | ||
Cinema Equipment [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Administrative fee percentage | 5% | |||
Hong Kong [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Foreign currency exchange rate, translation | 7.8 | 7.8 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of cash, cash equivalents and restricted cash - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Schedule of cash, cash equivalents and restricted cash [Abstract] | ||
Cash and Cash Equivalents | $ 11,519 | $ 13,062 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives of property and equipment | 3 Months Ended |
Jun. 30, 2022 | |
Computer equipment and software [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Computer equipment and software [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
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 |
Machinery and equipment [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Machinery and equipment [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 10 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Furniture and fixtures [Member] | Maximum [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 amortization expense | 3 Months Ended |
Jun. 30, 2022 | |
Trademark [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 3 years |
Tradename [Member] | Minimum [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 2 years |
Tradename [Member] | Maximum [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 15 years |
Advertiser relationships and Channel [Member] | Minimum [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 3 years |
Advertiser relationships and Channel [Member] | Maximum [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 13 years |
Content Library [Member] | Minimum [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 3 years |
Content Library [Member] | Maximum [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 20 years |
Customer Relationships [Member] | Minimum [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 5 years |
Customer Relationships [Member] | Maximum [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 13 years |
Supplier Agreements [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 2 years |
Software [Member] | |
Amortization Expense Per Equivalent Unit of Production or Per Dollar of Gross Revenue [Line Items] | |
Estimated useful lives | 10 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Mar. 31, 2022 | |
Trademark [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | $ 1,925 | $ 1,925 |
Accumulated Amortization | (925) | (776) |
Impairment | ||
Net | 1,000 | 1,149 |
Content Library [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 23,685 | 23,685 |
Accumulated Amortization | (20,803) | (20,665) |
Impairment | ||
Net | 2,882 | 3,020 |
Customer Relationships [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 10,658 | 10,658 |
Accumulated Amortization | (7,395) | (7,327) |
Impairment | (1,968) | (1,968) |
Net | 1,295 | 1,363 |
Tradename [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 2,101 | 2,101 |
Accumulated Amortization | (619) | (525) |
Impairment | ||
Net | 1,482 | 1,576 |
Theatre Relationship [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 550 | 550 |
Accumulated Amortization | (550) | (550) |
Impairment | ||
Net | ||
Patents [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 17 | 17 |
Accumulated Amortization | (17) | (17) |
Impairment | ||
Net | ||
Supplier Agreements [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 11,430 | 11,430 |
Accumulated Amortization | (11,399) | (11,384) |
Impairment | ||
Net | 31 | 46 |
Advertiser relationships and Channel [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 10,081 | |
Accumulated Amortization | (361) | |
Impairment | ||
Net | 9,720 | |
Software [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 3,200 | 3,200 |
Accumulated Amortization | (320) | (240) |
Impairment | ||
Net | 2,880 | 2,960 |
Total Intangible Assets [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 63,647 | 63,647 |
Accumulated Amortization | (42,389) | (41,645) |
Impairment | (1,968) | (1,968) |
Net | $ 19,290 | 20,034 |
Indefinite-Lived Intangible Assets [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets [Line Items] | ||
Cost Basis | 10,081 | |
Accumulated Amortization | (161) | |
Impairment | ||
Net | $ 9,920 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of amortization expense for intangible assets - Intangible assets [Member] $ in Thousands | Jun. 30, 2022 USD ($) |
Summary of Significant Accounting Policies (Details) - Schedule of amortization expense for intangible assets [Line Items] | |
2023 | $ 2,520 |
2024 | 3,048 |
2025 | 1,796 |
2026 | 1,489 |
2027 | 1,269 |
Thereafter | 9,168 |
Total | $ 19,290 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details) - Schedule of fair value measurements of our financial assets and liabilities - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Assets: | ||
Equity investment in Metaverse, at fair value | $ 5,772 | $ 7,028 |
Total Assets | 5,772 | 7,028 |
Liabilities: | ||
Current portion of earnout consideration on purchase of a business | 1,188 | 1,081 |
Long term portion of earnout consideration on purchase of a business | 627 | 603 |
Total Liabilities | 1,815 | 1,684 |
Level 1 [Member] | ||
Assets: | ||
Equity investment in Metaverse, at fair value | 7,028 | |
Total Assets | 7,028 | |
Liabilities: | ||
Current portion of earnout consideration on purchase of a business | ||
Long term portion of earnout consideration on purchase of a business | ||
Total Liabilities | ||
Level 2 [Member] | ||
Assets: | ||
Equity investment in Metaverse, at fair value | ||
Total Assets | ||
Liabilities: | ||
Current portion of earnout consideration on purchase of a business | ||
Long term portion of earnout consideration on purchase of a business | ||
Total Liabilities | ||
Level 3 [Member] | ||
Assets: | ||
Equity investment in Metaverse, at fair value | 5,772 | |
Total Assets | 5,772 | |
Liabilities: | ||
Current portion of earnout consideration on purchase of a business | 1,188 | 1,081 |
Long term portion of earnout consideration on purchase of a business | 627 | 603 |
Total Liabilities | $ 1,815 | $ 1,684 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details) - Schedule of accounts payable and accrued expenses - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Schedule of accounts payable and accrued expenses [Abstract] | ||
Accounts payable | $ 29,325 | $ 34,177 |
Amounts due to producers | 9,254 | 10,430 |
Accrued compensation and benefits | 4,401 | 3,507 |
Accrued taxes (refund) payable | (67) | (78) |
Accrued other expenses | 3,537 | 3,989 |
Total accounts payable and accrued expenses | $ 46,450 | $ 52,025 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Details) - Schedule of prepaid and other current assets - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Schedule of prepaid and other current assets [Abstract] | ||
Non-trade accounts receivable | $ 688 | $ 826 |
Advances | 1,853 | 2,117 |
Due from producers | 1,057 | 1,861 |
Prepaid insurance | 212 | 169 |
Other prepaid expenses | 811 | 820 |
Total prepaid and other current assets | $ 4,621 | $ 5,793 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies (Details) - Schedule of revenue categories - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cinema Equipment Business [Member] | ||
Cinema Equipment Business: | ||
Total Cinema Equipment Business revenue | $ 1,427 | $ 6,231 |
Content & Entertainment Business [Member] | ||
Content & Entertainment Business: | ||
Total Content & Entertainment Business revenue | 12,163 | 8,784 |
Phase I Deployment [Member] | Cinema Equipment Business [Member] | ||
Cinema Equipment Business: | ||
Total Cinema Equipment Business revenue | 113 | 91 |
Phase II Deployment [Member] | Cinema Equipment Business [Member] | ||
Cinema Equipment Business: | ||
Total Cinema Equipment Business revenue | 386 | |
Services [Member] | Cinema Equipment Business [Member] | ||
Cinema Equipment Business: | ||
Total Cinema Equipment Business revenue | 120 | 179 |
Digital System Sales [Member] | Cinema Equipment Business [Member] | ||
Cinema Equipment Business: | ||
Total Cinema Equipment Business revenue | 1,194 | 5,575 |
Physical Revenue [Member] | Content & Entertainment Business [Member] | ||
Content & Entertainment Business: | ||
Total Content & Entertainment Business revenue | 2,205 | 1,778 |
OTT Streaming and Digital [Member] | Content & Entertainment Business [Member] | ||
Content & Entertainment Business: | ||
Total Content & Entertainment Business revenue | $ 9,958 | $ 7,006 |
Other Interests (Details)
Other Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 15, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Other Interests [Abstract] | |||
Purchase price shares (in Shares) | 316,937 | ||
Investments for purchase of roundtable securities | $ 200 | ||
CDF2 Holdings [Member] | |||
Other Interests [Abstract] | |||
Ownership percentage | 100% | ||
Accounts receivable | $ 700 | $ 800 | |
Digital cinema servicing revenue | (104) | 77 | |
Total stockholders’ deficit | 57,300 | 55,600 | |
Initial investment amount | $ 2,000 | $ 0 | |
CON TV, LLC [Member] | |||
Other Interests [Abstract] | |||
Majority interest, percentage | 85% | ||
Series A Preferred Stock [Member] | |||
Other Interests [Abstract] | |||
Preferred stock shares (in Shares) | 500 | ||
Warrant shares (in Shares) | 100 |
Stockholders_ Equity (Deficit_2
Stockholders’ Equity (Deficit) (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
May 31, 2022 shares | May 31, 2021 shares | Aug. 31, 2017 shares | Oct. 31, 2013 $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) | Mar. 31, 2022 $ / shares shares | Mar. 31, 2021 USD ($) | Oct. 11, 2021 shares | Oct. 23, 2020 shares | Dec. 04, 2019 shares | |
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Dividends preferred stock (in Dollars) | $ | $ 100 | $ 100 | |||||||||
Stock dividends | 108,024 | 53,278 | |||||||||
Treasury stock shares | 1,315,851 | 1,315,851 | |||||||||
Share-based payment arrangement, option, exercise price range, shares outstanding | 212,037 | ||||||||||
Options expired | 5,300 | ||||||||||
Options forfeited | 0 | ||||||||||
Issued for vested awards | 0 | ||||||||||
Shares issued | 255,219 | ||||||||||
Shares under option, granted | |||||||||||
Cinedigm Equity Incentive Plan [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Percent voting power threshold | 10% | ||||||||||
Exercise price if voting threshold is met, percent | 110% | ||||||||||
Common Stock [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Common stock, shares authorized | 275,000,000 | ||||||||||
Minimum [Member] | Two Thousand seventeen Plan [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Common stock, shares authorized | 14,098,270 | 4,098,270 | |||||||||
Maximum [Member] | Two Thousand seventeen Plan [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Common stock, shares authorized | 18,098,270 | 14,098,270 | |||||||||
Restricted Stock Awards [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Stock based compensation (in Dollars) | $ | $ 875 | $ 1 | |||||||||
Class A Common Stock [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Common stock, shares authorized | 275,000,000 | 275,000,000 | |||||||||
Common stock shares | 2,108,270 | ||||||||||
Class A Common Stock [Member] | Cinedigm Equity Incentive Plan [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Number of shares authorized | 2,380,000 | ||||||||||
Share-based payment arrangement, option, exercise price range, shares outstanding | 212,037 | 217,337 | |||||||||
Share-based payment arrangement, option, exercise price range, outstanding, weighted average exercise price (in Dollars per share) | $ / shares | $ 14.46 | $ 14.49 | |||||||||
Options outstanding, weighted average remaining contractual term | 1 year 3 months 25 days | 1 year 6 months 14 days | |||||||||
Class A Common Stock [Member] | Common Stock [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Shares of common stock | 108,024 | ||||||||||
Class A Common Stock [Member] | Minimum [Member] | Two Thousand seventeen Plan [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Number of shares authorized | 2,108,270 | ||||||||||
Class A Common Stock [Member] | Maximum [Member] | Two Thousand seventeen Plan [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Number of shares authorized | 4,098,270 | ||||||||||
Gaiam Americas, Inc. and Gaiam, Inc. GVE [Member] | |||||||||||
Stockholders’ Equity (Deficit) (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 | ||||||||||
Gaiam Americas, Inc. and Gaiam, Inc. GVE [Member] | Stock option [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Aware expiration period | 10 years | ||||||||||
Board of Directors [Member] | |||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||
Shares issued | 0 | ||||||||||
Stock based compensation (in Dollars) | $ | $ 105 | $ 126 |
Stockholders_ Equity (Deficit_3
Stockholders’ Equity (Deficit) (Details) - Schedule of analysis of option activity | 3 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding (in Shares) | shares | 212,037 |
Aggregate Intrinsic Value (in Dollars) | $ | |
$1.16 - $7.40 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding (in Shares) | shares | 5,000 |
Weighted Average Remaining Life in Years | 3 years 3 days |
Weighted Average Exercise Price | $ 7.4 |
Aggregate Intrinsic Value (in Dollars) | $ | |
$1.16 - $7.40 [Member] | Minimum [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Prices | $ 1.16 |
$1.16 - $7.40 [Member] | Maximum [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Prices | $ 7.4 |
$13.70 - $24.40 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding (in Shares) | shares | 207,037 |
Weighted Average Remaining Life in Years | 1 year 3 months 10 days |
Weighted Average Exercise Price | $ 14.63 |
Aggregate Intrinsic Value (in Dollars) | $ | |
$13.70 - $24.40 [Member] | Minimum [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Prices | $ 13.7 |
$13.70 - $24.40 [Member] | Maximum [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Prices | $ 24.4 |
Options Exercisable [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Weighted Average Remaining Life in Years | 1 year 3 months 25 days |
Weighted Average Exercise Price | $ 14.46 |
Aggregate Intrinsic Value (in Dollars) | $ | |
Options Exercisable (in Shares) | shares | 212,037 |
Stockholders_ Equity (Deficit_4
Stockholders’ Equity (Deficit) (Details) - Schedule of stock appreciation rights outstanding | 3 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Stockholders’ Equity (Deficit) (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Options Outstanding (in Shares) | shares | 10,893,598 |
Aggregate Intrinsic Value (in Dollars) | $ | |
$0.54 - $0.74 [Member] | |
Stockholders’ Equity (Deficit) (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Range of Prices, Minimum | $ 0.54 |
Range of Prices, Maximum | $ 0.74 |
Options Outstanding (in Shares) | shares | 5,550,000 |
Weighted Average Remaining Life in Years | 8 years 5 months 12 days |
Weighted Average Exercise Price | $ 0.6 |
Aggregate Intrinsic Value (in Dollars) | $ | |
$1.16 - $1.47 [Member] | |
Stockholders’ Equity (Deficit) (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Range of Prices, Minimum | $ 1.16 |
Range of Prices, Maximum | $ 1.47 |
Options Outstanding (in Shares) | shares | 2,283,610 |
Weighted Average Remaining Life in Years | 6 years 3 months 14 days |
Weighted Average Exercise Price | $ 1.25 |
Aggregate Intrinsic Value (in Dollars) | $ | |
$1.71 - $2.10 [Member] | |
Stockholders’ Equity (Deficit) (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Range of Prices, Minimum | $ 1.71 |
Range of Prices, Maximum | $ 2.1 |
Options Outstanding (in Shares) | shares | 2,455,738 |
Weighted Average Remaining Life in Years | 6 years 6 months 10 days |
Weighted Average Exercise Price | $ 1.49 |
Aggregate Intrinsic Value (in Dollars) | $ | |
$2.23 - $2.56 [Member] | |
Stockholders’ Equity (Deficit) (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Range of Prices, Minimum | $ 2.23 |
Range of Prices, Maximum | $ 2.56 |
Options Outstanding (in Shares) | shares | 604,250 |
Weighted Average Remaining Life in Years | 9 years 3 months 21 days |
Weighted Average Exercise Price | $ 2.29 |
Aggregate Intrinsic Value (in Dollars) | $ | |
Options Exercisable [Member] | |
Stockholders’ Equity (Deficit) (Details) - Schedule of stock appreciation rights outstanding [Line Items] | |
Weighted Average Remaining Life in Years | 7 years 3 months 14 days |
Weighted Average Exercise Price | $ 1.21 |
Options Exercisable (in Shares) | shares | 2,736,473 |
Stockholders_ Equity (Deficit_5
Stockholders’ Equity (Deficit) (Details) - Schedule of SARs outstanding | 3 Months Ended |
Jun. 30, 2022 shares | |
Schedule of SARs outstanding [Abstract] | |
SARs Outstanding March 31, 2022 | 10,893,598 |
Issued | |
Forfeited | |
Total SARs Outstanding June 30, 2022 | 10,893,598 |
Stockholders_ Equity (Deficit_6
Stockholders’ Equity (Deficit) (Details) - Schedule of activity for performance stock unit awards | 3 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Schedule of activity for performance stock unit awards [Abstract] | |
Unvested balance, Shares | shares | 696,280 |
Unvested balance, Weighted Average Grant Date Fair Value | $ / shares | $ 1.25 |
Granted, Shares | shares | |
Granted, Weighted Average Grant Date Fair Value | $ / shares | |
Vested, Shares | shares | |
Vested, Weighted Average Grant Date Fair Value | $ / shares | |
Unvested balance, shares | shares | 696,280 |
Unvested balance, Weighted Average Grant Date Fair Value | $ / shares | $ 1.25 |
Stockholders_ Equity (Deficit_7
Stockholders’ Equity (Deficit) (Details) - Schedule of stock-based compensation expense - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Stockholders’ Equity (Deficit) (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Selling, general and administrative | $ 980 | $ 983 |
Selling, general and administrative [Member] | ||
Stockholders’ Equity (Deficit) (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Selling, general and administrative | $ 980 | $ 983 |
Stockholders_ Equity (Deficit_8
Stockholders’ Equity (Deficit) (Details) - Schedule of warrants - BEMG in connection with a term loan agreement [Member] | 3 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Amount outstanding | shares | 1,400,000 |
Expiration | 2022-12 |
Exercise price per share | $ / shares | $ 1.8 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Jan. 05, 2022 USD ($) |
Commitments and Contingencies (Details) [Line Items] | |
Percentage of owns rights | 50% |
Legal fees | $ 26 |
Interest on revenue, percentage | 100% |
Hyde Park [Member] | |
Commitments and Contingencies (Details) [Line Items] | |
Legal fees | $ 100 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of lease-related assets and liabilities - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Liabilities | ||
Total operating lease liabilities | $ 682 | $ 749 |
Operating lease right-of-use asset [Member] | ||
Assets | ||
Noncurrent | 680 | 749 |
Operating leases – current portion [Member] | ||
Liabilities | ||
Current | 193 | 258 |
Operating leases – long-term portion [Member] | ||
Liabilities | ||
Noncurrent | $ 489 | $ 491 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of lease costs - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Schedule of lease costs [Abstract] | ||
Operating lease cost | $ 84 | $ 22 |
Total lease cost | 84 | 22 |
Cash paid for amounts included in the measurement of lease liabilities | 22 | |
Operating cash flows used for operating leases Hyde Park Agreement | $ 22 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information and Disclosure of Non-Cash Investmenting an Financing Activity (Details) - Schedule of supplemental cash flows - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Schedule of supplemental cash flows [Abstract] | ||
Cash interest paid | $ 663 | |
Income taxes paid | ||
Accrued dividends on preferred stock | 88 | 89 |
Issuance of Class A common stock for payment of preferred stock dividends | 88 | 89 |
Issuance of Class A common stock for business combination | 2,506 | |
Deferred consideration in purchase of a business | 1,980 | |
Earnout consideration in purchase of a business | $ 80 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended |
Jun. 30, 2022 | |
Segment Information (Details) [Line Items] | |
Number of reportable segments | 2 |
Phase I Deployment [Member] | |
Segment Information (Details) [Line Items] | |
Number of systems installed | 434 |
Phase II Deployment [Member] | |
Segment Information (Details) [Line Items] | |
Number of systems installed | 648 |
Segment Information (Details) -
Segment Information (Details) - Schedule of reportable segments and corporate - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 |
Segment Information (Details) - Schedule of reportable segments and corporate [Line Items] | ||
Intangible Assets, net | $ 19,290 | $ 20,034 |
Goodwill | 21,084 | 21,084 |
Total Assets | 94,223 | 104,636 |
Notes Payable, Non-Recourse | ||
Notes Payable | ||
Operating lease liabilities | 682 | 749 |
Cinema Equipment Business [Member] | ||
Segment Information (Details) - Schedule of reportable segments and corporate [Line Items] | ||
Intangible Assets, net | ||
Goodwill | ||
Total Assets | 20,282 | 24,445 |
Notes Payable, Non-Recourse | ||
Notes Payable | ||
Operating lease liabilities | ||
Content & Entertainment Business [Member] | ||
Segment Information (Details) - Schedule of reportable segments and corporate [Line Items] | ||
Intangible Assets, net | 19,202 | 19,946 |
Goodwill | 21,084 | 21,084 |
Total Assets | 66,770 | 68,873 |
Notes Payable, Non-Recourse | ||
Notes Payable | ||
Operating lease liabilities | 675 | |
Corporate [Member] | ||
Segment Information (Details) - Schedule of reportable segments and corporate [Line Items] | ||
Intangible Assets, net | 88 | 88 |
Goodwill | ||
Total Assets | 7,171 | 11,318 |
Notes Payable, Non-Recourse | ||
Notes Payable | ||
Operating lease liabilities | $ 7 | $ 749 |
Segment Information (Details)_2
Segment Information (Details) - Schedule of statement of operations - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cinema Equipment Business [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 1,427 | $ 6,231 |
Direct operating (exclusive of depreciation and amortization shown below) | 144 | 257 |
Selling, general and administrative | 1,071 | 429 |
Allocation of corporate overhead | 103 | 99 |
Provision for (recovery of) doubtful accounts | 3 | 27 |
Depreciation and amortization of property and equipment | 117 | 507 |
Amortization of intangible assets | ||
Total operating expenses | 1,438 | 1,319 |
Income (loss) from operations | (11) | 4,912 |
Content & Entertainment Business [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 12,163 | 8,784 |
Direct operating (exclusive of depreciation and amortization shown below) | 7,212 | 4,374 |
Selling, general and administrative | 3,783 | 2,818 |
Allocation of corporate overhead | 2,752 | 660 |
Provision for (recovery of) doubtful accounts | 44 | |
Depreciation and amortization of property and equipment | 138 | 143 |
Amortization of intangible assets | 637 | 846 |
Total operating expenses | 14,522 | 8,885 |
Income (loss) from operations | (2,359) | (101) |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | ||
Direct operating (exclusive of depreciation and amortization shown below) | ||
Selling, general and administrative | 4,961 | 2,796 |
Allocation of corporate overhead | (2,855) | (759) |
Provision for (recovery of) doubtful accounts | ||
Depreciation and amortization of property and equipment | 1 | (1) |
Amortization of intangible assets | 107 | 1 |
Total operating expenses | 2,214 | 2,037 |
Income (loss) from operations | (2,214) | (2,037) |
Consolidated [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 13,590 | 15,015 |
Direct operating (exclusive of depreciation and amortization shown below) | 7,356 | 4,631 |
Selling, general and administrative | 9,815 | 6,043 |
Allocation of corporate overhead | 0 | |
Provision for (recovery of) doubtful accounts | 3 | 71 |
Depreciation and amortization of property and equipment | 256 | 649 |
Amortization of intangible assets | 744 | 847 |
Total operating expenses | 18,174 | 12,241 |
Income (loss) from operations | $ (4,584) | $ 2,774 |
Segment Information (Details)_3
Segment Information (Details) - Schedule of employee and director stock-based compensation expense related to our stock-based awards - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total stock-based compensation | $ 980 | $ 983 |
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 | 166 | |
Corporate [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total stock-based compensation | 980 | 817 |
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 | 980 | 983 |
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 | 166 | |
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 | $ 980 | $ 817 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit from operations | $ 0 | $ 63 |
Tax rate | 0% | 1.20% |