Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2018 | Feb. 11, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Central Index Key | 1,173,204 | |
Entity Registrant Name | CINEDIGM CORP. | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2018 | |
Current Fiscal Year End Date | --03-31 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 35,678,248 | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Mar. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 17,141 | $ 17,952 |
Accounts receivable, net | 38,893 | 38,128 |
Inventory, net | 632 | 792 |
Unbilled revenue | 1,946 | 6,799 |
Prepaid and other current assets | 9,397 | 10,497 |
Total current assets | 68,009 | 74,168 |
Restricted cash | 1,000 | 1,000 |
Property and equipment, net | 16,312 | 21,483 |
Intangible assets, net | 10,685 | 14,653 |
Goodwill | 8,701 | 8,701 |
Other long-term assets | 1,107 | 1,177 |
Total assets | 105,814 | 121,182 |
Current liabilities | ||
Accounts payable and accrued expenses | 67,511 | 69,225 |
Current portion of notes payable, including unamortized debt discount of $1,217 and $225 respectively | 24,772 | 4,775 |
Current portion of notes payable, non-recourse | 279 | 512 |
Current portion of deferred revenue | 1,728 | 1,821 |
Total current liabilities | 94,290 | 76,333 |
Notes payable, non-recourse, net of current portion and unamortized debt issuance costs and debt discounts of $1,663 and $2,140 respectively | 24,742 | 37,570 |
Notes payable, net of current portion and unamortized debt issuance costs and debt discounts of $813 and $3,352 respectively | 14,989 | 25,435 |
Deferred revenue, net of current portion | 2,728 | 3,842 |
Other long-term liabilities | 229 | 306 |
Total liabilities | 136,978 | 143,486 |
Stockholders’ deficit | ||
Additional paid-in capital | 367,630 | 366,223 |
Treasury stock, at cost; 1,313,836 Class A common shares at December 31, 2018 and March 31, 2018 | 11,603 | 11,603 |
Accumulated deficit | (389,496) | (379,225) |
Accumulated other comprehensive loss | 3 | (38) |
Total stockholders’ deficit of Cinedigm Corp. | (29,871) | (21,049) |
Deficit attributable to noncontrolling interest | (1,293) | (1,255) |
Total deficit | (31,164) | (22,304) |
Total liabilities and deficit | 105,814 | 121,182 |
Series A preferred stock | ||
Stockholders’ deficit | ||
Preferred stock, 15,000,000 shares authorized; Series A 10% - $0.001 par value per share; 20 shares authorized; and 7 shares issued and outstanding at December 31, 2018 and March 31, 2018. Liquidation preference of $3,648 | 3,559 | 3,559 |
Class A common stock | ||
Stockholders’ deficit | ||
Common stock, $0.001 par value; Class A stock 60,000,000 shares authorized at December 31, 2018 and March 31, 2018; 36,830,922 and 36,261,975 shares issued and 35,517,086 and 34,948,139 shares outstanding at December 31, 2018 and March 31, 2018, respectively | $ 36 | $ 35 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Mar. 31, 2018 | |
Debt Instrument, Unamortized Discount, Current | $ 1,217,000 | $ 225,000 |
Unamortized debt issuance expense | $ 813,000 | $ 3,352,000 |
Preferred stock, shares authorized (shares) | 15,000,000 | 15,000,000 |
Treasury stock (in shares) | 1,313,836 | 1,313,836 |
Series A preferred stock | ||
Preferred stock, shares authorized (shares) | 20 | 20 |
Preferred stock, dividend rate (percentage) | 10.00% | 10.00% |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (shares) | 7 | 7 |
Preferred stock, shares outstanding (shares) | 7 | 7 |
Preferred stock, liquidation preference | $ 3,648 | $ 3,648 |
Class A common stock | ||
Common stock, shares authorized (shares) | 60,000,000 | 60,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued (shares) | 36,830,922 | 36,261,975 |
Common stock, shares outstanding (shares) | 35,517,086 | 34,948,139 |
Secured Debt | ||
Unamortized debt issuance expense | $ 1,663,000 | $ 2,140,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||||
Revenues | $ 14,643 | $ 18,492 | $ 41,465 | $ 50,010 |
Costs and expenses: | ||||
Direct operating (excludes depreciation and amortization shown below) | 5,246 | 6,363 | 12,287 | 14,470 |
Selling, general and administrative | 6,425 | 9,259 | 19,455 | 21,824 |
Provision for doubtful accounts | 113 | 631 | 1,245 | 1,580 |
Depreciation and amortization of property and equipment | 2,074 | 2,213 | 6,239 | 10,215 |
Amortization of intangible assets | 1,397 | 1,395 | 4,187 | 4,185 |
Total operating expenses | 15,255 | 19,861 | 43,413 | 52,274 |
Loss from operations | (612) | (1,369) | (1,948) | (2,264) |
Interest expense, net | (2,593) | (3,147) | (7,860) | (11,163) |
Debt conversion expense and loss on extinguishment of notes payable | 0 | (1,299) | 0 | (4,504) |
Other expense, net | (12) | (40) | (40) | (242) |
Change in fair value of interest rate derivatives | 0 | 44 | 0 | 127 |
Loss from operations before income taxes | (3,217) | (5,811) | (9,848) | (18,046) |
Income tax expense | (55) | (113) | (194) | (495) |
Net loss | (3,272) | (5,924) | (10,042) | (18,541) |
Net loss attributable to noncontrolling interest | 14 | 15 | 38 | 32 |
Net loss attributable to controlling interests | (3,258) | (5,909) | (10,004) | (18,509) |
Preferred stock dividends | (89) | (89) | (267) | (267) |
Net loss attributable to common stockholders | $ (3,347) | $ (5,998) | $ (10,271) | $ (18,776) |
Net loss per Class A and Class B common stock attributable to common stockholders - basic and diluted: | ||||
Net loss attributable to common stockholders (in dollars per share) | $ (0.09) | $ (0.20) | $ (0.27) | $ (1.02) |
Weighted average number of Class A and Class B common stock outstanding: basic and diluted (in shares) | 38,033,756 | 29,389,017 | 37,793,845 | 18,399,597 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (3,272) | $ (5,924) | $ (10,042) | $ (18,541) |
Other comprehensive income (loss): foreign exchange translation | 25 | 2 | 41 | (13) |
Comprehensive loss | (3,247) | (5,922) | (10,001) | (18,554) |
Less: comprehensive loss attributable to noncontrolling interest | (14) | (15) | (38) | (32) |
Comprehensive loss attributable to controlling interests | $ (3,233) | $ (5,907) | $ (9,963) | $ (18,522) |
Consolidated Statement of Defic
Consolidated Statement of Deficit Consolidated Statement of Deficit - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Treasury stock, beginning balance (in shares) | (1,313,836) | (1,313,836) | ||
Stockholders equity, beginning balance | $ (28,655) | $ (25,497) | $ (22,304) | $ (22,304) |
Issuance of shares for asset acquisition | 106 | |||
Foreign exchange translation | 25 | 12 | 4 | |
Issuance of common stock for third party professional services | 1 | |||
Fair value of conversion feature in connection with convertible note | 270 | |||
Stock-based compensation | 361 | 317 | 86 | |
Preferred stock dividends paid with common stock | 0 | 0 | 0 | |
Net loss | $ (3,272) | (3,487) | (3,283) | $ (10,042) |
Treasury stock, ending balance (in shares) | (1,313,836) | (1,313,836) | ||
Stockholders equity, ending balance | $ (31,164) | $ (28,655) | $ (25,497) | $ (31,164) |
Preferred Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Preferred stock, beginning balance (in shares) | 7 | 7 | 7 | 7 |
Stockholders equity, beginning balance | $ 3,559 | $ 3,559 | $ 3,559 | $ 3,559 |
Preferred stock, ending balance (in shares) | 7 | 7 | 7 | 7 |
Stockholders equity, ending balance | $ 3,559 | $ 3,559 | $ 3,559 | $ 3,559 |
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common stock, beginning balance (in shares) | 35,069,202 | 35,012,333 | 34,948,139 | 34,948,139 |
Stockholders equity, beginning balance | $ 35 | $ 35 | $ 35 | $ 35 |
Issuance of shares for asset acquisition (in shares) | 137,667 | |||
Issuance of common stock for third party professional services (in shares) | 225,862 | |||
Issuance of common stock for third party professional services | $ 1 | |||
Issuance of restricted stock to employees (in shares) | 10,000 | |||
Preferred stock dividends paid with common stock (in shares) | 74,355 | 56,869 | 64,194 | |
Common stock, ending balance (in shares) | 35,517,086 | 35,069,202 | 35,012,333 | 35,517,086 |
Stockholders equity, ending balance | $ 36 | $ 35 | $ 35 | $ 36 |
Additional Paid-In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stockholders equity, beginning balance | 366,804 | 366,398 | 366,223 | 366,223 |
Issuance of shares for asset acquisition | 106 | |||
Fair value of conversion feature in connection with convertible note | 270 | |||
Stock-based compensation | 361 | 317 | 86 | |
Preferred stock dividends paid with common stock | 89 | 89 | 89 | |
Stockholders equity, ending balance | $ 367,630 | $ 366,804 | $ 366,398 | $ 367,630 |
Treasury Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Treasury stock, beginning balance (in shares) | (1,313,836) | (1,313,836) | (1,313,836) | (1,313,836) |
Stockholders equity, beginning balance | $ (11,603) | $ (11,603) | $ (11,603) | $ (11,603) |
Treasury stock, ending balance (in shares) | (1,313,836) | (1,313,836) | (1,313,836) | (1,313,836) |
Stockholders equity, ending balance | $ (11,603) | $ (11,603) | $ (11,603) | $ (11,603) |
Accumulated Deficit | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stockholders equity, beginning balance | (386,149) | (382,581) | (379,225) | (379,225) |
Preferred stock dividends paid with common stock | (89) | (89) | (89) | |
Net loss | (3,258) | (3,479) | (3,267) | |
Stockholders equity, ending balance | (389,496) | (386,149) | (382,581) | (389,496) |
Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stockholders equity, beginning balance | (22) | (34) | (38) | (38) |
Foreign exchange translation | 25 | 12 | 4 | |
Stockholders equity, ending balance | 3 | (22) | (34) | 3 |
Total Stockholders’ Deficit | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stockholders equity, beginning balance | (27,376) | (24,226) | (21,049) | (21,049) |
Issuance of shares for asset acquisition | 106 | |||
Foreign exchange translation | 25 | 12 | 4 | |
Issuance of common stock for third party professional services | 1 | |||
Fair value of conversion feature in connection with convertible note | 270 | |||
Stock-based compensation | 361 | 317 | 86 | |
Net loss | (3,258) | (3,479) | (3,267) | |
Stockholders equity, ending balance | (29,871) | (27,376) | (24,226) | (29,871) |
Non-Controlling Interest | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stockholders equity, beginning balance | (1,279) | (1,271) | (1,255) | (1,255) |
Net loss | (14) | (8) | (16) | |
Stockholders equity, ending balance | $ (1,293) | $ (1,279) | $ (1,271) | $ (1,293) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (10,042) | $ (18,541) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment and amortization of intangible assets | 10,426 | 14,400 |
Loss on disposal of property and equipment | 0 | 64 |
Amortization of debt issuance costs included in interest expense | 1,377 | 1,573 |
Provision for doubtful accounts | 1,245 | 1,580 |
(Recovery) provision for inventory reserve | (49) | 327 |
Stock-based compensation and expenses | 763 | 2,214 |
Change in fair value of interest rate derivatives | 0 | 127 |
Accretion and PIK interest expense added to note payable | 1,316 | 862 |
Debt conversion expense and loss on extinguishment of notes payable | 0 | 4,504 |
Changes in operating assets and liabilities; | ||
Accounts receivable | (2,010) | 14,380 |
Inventory | 209 | (2) |
Unbilled revenue | 4,853 | 908 |
Prepaid expenses and other assets | 1,170 | 2,383 |
Accounts payable and accrued expenses | (1,718) | (8,966) |
Deferred revenue | (1,207) | (1,717) |
Net cash provided by operating activities | 6,333 | 14,096 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,068) | (531) |
Purchases of intangible assets | (111) | (3) |
Net cash used in investing activities | (1,179) | (534) |
Cash flows from financing activities: | ||
Payment of notes payable | (18,539) | (38,375) |
Proceeds (repayments) under revolving credit agreement, net | 7,574 | (7,790) |
Proceeds from issuance of convertible note and notes payable | 5,000 | 10,000 |
Repurchase of Class A common stock | 0 | (163) |
Net proceeds from issuance of common stock | 0 | 28,054 |
Principal payments on capital leases | 0 | (66) |
Payments of debt issuance costs | 0 | (570) |
Net cash used in financing activities | (5,965) | (8,910) |
Net change in cash and cash equivalents | (811) | 4,652 |
Cash, cash equivalents, and restricted cash at beginning of period | 18,952 | 13,566 |
Cash, cash equivalents, and restricted cash at end of period | $ 18,141 | $ 18,218 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | 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 leading 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 and (ii) a leading servicer of digital cinema assets for over 12,000 movie screens in both North America and several international countries. Change of Reportable Segments We previously had four reportable segments. As of April 1, 2018, information that our Chief Operating Decision Maker ("CODM") regularly reviews, for purposes of evaluating Company performance has been aggregated due to the winding down of Cinedigm Digital Funding I, LLC ("CDF I"). As a result, the Company reassessed and decided to revise its determination of the reportable segments. We now present our results of operations in two reportable segments as follows: (1) Cinema Equipment Business and (2) Content and Entertainment Business (“Content & Entertainment” or "CEG"). See Note 9 - Segment Information for detailed descriptions of our segments. We have retrospectively recast the results of operations for the reportable segments for all periods presented. Liquidity We have incurred net losses historically and have an accumulated deficit of $389.5 million and negative working capital of $26.3 million as of December 31, 2018 . We may continue to generate net losses for the foreseeable future. In addition, we have significant debt-related contractual obligations as of December 31, 2018 and beyond. The 2013 Notes (as defined in Note 5 - Notes Payable ) of $5.0 million were paid in full on October 18, 2018, prior to their maturity date of October 21, 2018. The Second Lien Loans (as defined in Note 5 - Notes Payable) mature on June 30, 2019. The Company's current plan is to obtain additional funding from or through Bison Capital Holding Limited or affiliates ("Bison") to pay the outstanding balances of the Second Lien Loans on the maturity date. See Note 5 - Notes Payable. The $10.0 million note payable with Bison Global Investment SPC due July 20, 2019 is guaranteed by Bison Entertainment and Media Group ("BEMG"). See Note 5 - Notes Payable . On October 9, 2018, the Company issued a subordinated convertible note (the “Convertible Note”) to MingTai Investment LP (the “Lender”) for $5.0 million . All proceeds from the Convertible Note were used to pay the $5.0 million 2013 Notes. See Note 5 - Notes Payable. The $5.0 million in aggregate principal bears interest at 8% maturing on October 9, 2019 with two one year extensions at the Company's option. See Note 5 - Notes Payable . Bison Note Payable In accordance with the Stock Purchase Agreement (as defined below in Note 5 - Notes Payable ), on December 29, 2017, the Company entered into a loan agreement with BEMG, an affiliate of Bison Capital Holding Limited ("Bison") , pursuant to which the Company borrowed $10.0 million (the “2017 Loan”). The maturity date was June 28, 2021 with interest at 5% per annum, payable quarterly in cash. The 2017 Loan is unsecured and may be prepaid without premium or penalty, and contains customary covenants, representations and warranties. The proceeds of the 2017 Loan were used for working capital and general corporate purposes. As part of the 2017 Loan, the Company also issued warrants to BEMG to purchase 1,400,000 shares of the Company’s Class A common stock (the “Warrants”). See Note 6 - Stockholders' Deficit for discussion of the Warrants. On July 20, 2018, the Company entered into a term loan agreement (the “Bison Loan Agreement”) with Bison Global Investment SPC for and on behalf of Global Investment SPC-Bison Global No. 1, another affiliate of Bison (“Bison Global”), pursuant to which the Company borrowed from Bison Global $10.0 million (the “2018 Loan”). The 2018 Loan has a one ( 1 ) year term (maturity date of July 20, 2019) that may be extended by mutual agreement of Bison Global and the Company and bears interest at 5% per annum, payable quarterly in cash. The principal is payable upon maturity. The 2018 Loan is unsecured and may be prepaid without premium or penalty at the election of the Company or upon demand of Bison Global, and contains customary covenants, representations and warranties. The proceeds of the 2018 Loan were used to prepay the 2017 Loan. Therefore, the 2017 Loan was classified as current as of June 30, 2018. The 2018 Loan is evidenced by a note dated as of July 20, 2018 (the “Note”). On July 20, 2018, the Company also entered into a side letter (the “Letter”) with BEMG, where BEMG agreed to guarantee the payment directly to Bison Global of any amount due if (i) the 2018 Loan matures prior to June 28, 2021 or (ii) Bison Global demands payment of the 2018 Loan, in whole or in part, prior to maturity. We believe the combination of: (i) our cash and cash equivalent balances at December 31, 2018, (ii) expected cash flows from operations, and (iii) the support or availability of funding from Bison and other parties will be sufficient to satisfy our liquidity and capital requirements for at least one year from December 31, 2018. 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 | 9 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION AND CONSOLIDATION The accompanying condensed consolidated financial statements are unaudited and include the accounts of the Company, its wholly owned and majority owned subsidiaries, and reflect all normal and recurring adjustments necessary for the fair presentation of its consolidated financial position, results of operations and cash flows. All material inter-company accounts and transactions 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 to the Condensed Consolidated Financial Statements for a discussion of our noncontrolling and majority interests. USE OF ESTIMATES The preparation of these condensed 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 amounts reported in these condensed consolidated financial statements and accompanying notes. As permitted under GAAP, interim accounting for certain expenses, such as the adequacy of accounts receivable reserves, return reserves, inventory reserves, recovery of advances, assessment of goodwill impairment, intangible asset impairment and estimated lives, and valuation reserve for income taxes, are based on full year assumptions when appropriate. Actual results could differ materially from those estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), although we believe that the disclosures are adequate to make the information presented not misleading. The results of operations for the respective interim periods are not necessarily indicative of the results expected for the full year. These Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with our annual consolidated financial statements and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 . CASH, CASH EQUIVALENTS, AND RESTRICTED CASH We consider all highly liquid investments with an original maturity of three months or less to be "cash equivalents." We maintain bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation’s insured limits. We periodically assess the financial condition of the institutions and believe that the risk of any loss is minimal. Our Prospect Loan (as defined below) requires that we maintain specified cash balances that are restricted to repayment of interest thereunder. See Note 5 - Notes Payable for information about our restricted cash balances. Cash, cash equivalents, and restricted cash consisted of the following: As of ( in thousands ) December 31, 2018 March 31, 2018 Cash and Cash Equivalents $ 17,141 $ 17,952 Restricted Cash 1,000 1,000 $ 18,141 $ 18,952 ADVANCES Advances, which are recorded within prepaid and other current assets on the condensed consolidated balance sheets, represent amounts prepaid to studios or content producers for which we provide content distribution services. We evaluate advances regularly for recoverability and record impairment charges for amounts that we expect may not be recoverable as of the consolidated balance sheet date. Impairments and accelerated amortization related to advances were $0.3 million and $1.1 million for the three months ended December 31, 2018 and 2017, respectively. Impairments and accelerated amortization related to advances were $0.9 million and $2.2 million respectively, for the nine months ended December 31, 2018 and 2017, respectively. INVENTORY, NET Inventory consists of finished goods inventory of Company-owned DVD and Blu-ray Disc titles and is stated at the lower of cost (determined based on weighted average cost) or market. We identify inventory items to be written down for obsolescence based on their sales status and condition. We write down discontinued or slow moving inventories based on an estimate of the markdown to retail price needed to sell through our current stock level of the inventories. 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, software and internal-use software 3 - 5 years Digital cinema projection systems 10 years Machinery and equipment 3 - 10 years Furniture and fixtures 3 - 6 years 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 condensed consolidated statements of operations. ACCOUNTING FOR DERIVATIVE ACTIVITIES Derivative financial instruments are recorded at fair value. Changes in the fair value of derivative financial instruments are either recognized in accumulated other comprehensive loss (a component of stockholders' deficit) or in the consolidated statements of operations depending on whether the derivative qualifies for hedge accounting. We entered into an interest rate cap transaction during the fiscal year ended March 31, 2013 to limit our exposure to interest rates on the Prospect Loan which cap matured on March 31, 2018. We have not sought hedge accounting treatment for the interest rate cap and therefore, changes in its value are recorded in the consolidated statements of operations. FAIR VALUE MEASUREMENTS The fair value measurement disclosures are grouped into three levels based on valuation factors: • Level 1 – quoted prices in active markets for identical investments • Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) • Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments) Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities. The following tables summarize the levels of fair value measurements of our financial assets and liabilities as of December 31, 2018 and March 31, 2018 : (in thousands) Level 1 Level 2 Level 3 Total Restricted cash $ 1,000 $ — $ — $ 1,000 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 condensed consolidated balance sheets. The estimated fair values of these financial instruments approximate their carrying amounts because of their short-term nature. At December 31, 2018 and March 31, 2018 , the estimated fair value of our fixed rate debt approximated its carrying amounts. We estimated the fair value of debt based upon current interest rates available to us at the respective balance sheet dates for arrangements with similar terms and conditions. Based on borrowing rates currently available to us for loans with similar terms, the carrying value of notes payable approximates fair value. 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 and nine months ended December 31, 2018 and 2017 , no impairment charge was recorded from operations for long-lived assets or finite-lived assets. GOODWILL Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. Goodwill is tested for impairment on an annual basis or more often if warranted by events or changes in circumstances indicating that the carrying value may exceed fair value, also known as impairment indicators. Inherent in the fair value determination for each reporting unit are certain judgments and estimates relating to future cash flows, including management’s interpretation of current economic indicators and market conditions, and assumptions about our strategic plans with regard to its operations. To the extent additional information arises, market conditions change, or our strategies change, it is possible that the conclusion regarding whether our remaining goodwill is impaired could change and result in future goodwill impairment charges that will have a material effect on our consolidated financial position or results of operations. No goodwill impairment charge was recorded in the three months or nine months ended December 31, 2018 and 2017 . 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. DEBT ISSUANCE COSTS We incur debt issuance costs in connection with long-term debt financings. Such costs are recorded as a direct deduction to notes payable and amortized over the terms of the respective debt obligations using the effective interest rate method. Debt issuance costs recorded in connection with revolving debt arrangements are presented as other assets on the Consolidated Balance Sheets and are amortized over the term of the revolving debt agreements using the effective interest rate method. REVENUE RECOGNITION Adoption of ASU Topic 606, "Revenue from Contracts with Customers" The Company adopted Accounting Standards Update ("ASU") Topic 606, Revenue from Contracts with Customers (“Topic 606”), as of April 1, 2018, using the modified retrospective method i.e. by recognizing the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of deficit at April 1, 2018. Therefore, the comparative information for the years ended prior to April 1, 2018 were not restated to comply with ASC 606. We applied the practical expedient and did not capitalize the incremental costs to obtain a contract if the amortization period for the asset is one year or less. The impact of adopting Topic 606 did not result in a change in accounting treatment for any of the Company’s revenue streams. Refer to Note 2 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 for our revenue recognition accounting policy as it relates to revenue transactions prior to April 1, 2018. The revenue recognition accounting policy described below relates to revenue transactions from April 1, 2018 and thereafter, which are accounted for in accordance with Topic 606. We determine revenue recognition by: • identifying the contract, or contracts, with the customer; • identifying the performance obligations in the contract; • determining the transaction price; • allocating the transaction price to performance obligations in the contract; and • recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services. We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the services provided, sales of physical products (DVD’s and Blu-ray) or when the content is available for subscription on the digital platform or available on the point-of-sale for transactional and VOD services which is when the control of the promised products and services is transferred to our customers and our performance obligations under the contract have been satisfied. Revenues that might be subject to various taxes is recorded net of transaction taxes assessed by governmental authorities such as sales value-added taxes and other similar taxes. Payment terms and conditions vary by customer and typically provide net 30 to 90 day terms. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less. We have in the past entered into arrangements in connection with activation fees due from our digital cinema equipment (the “Systems”) 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 Virtual print fees (“VPFs”) are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Cinedigm Digital Funding I, LLC. ("Phase 1 DC") and to Access Digital Cinema Phase 2 Corp. (“Phase 2 DC”) when movies distributed by the studio are displayed on screens utilizing our Systems installed in movie theatres. VPFs are earned and payable to Phase 1 DC 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 in which the digital title first plays on a System for general audience viewing in a digitally equipped movie theatre, as Phase 1 DC’s and Phase 2 DC’s performance obligations have been substantially met at that time. Phase 2 DC’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 2 DC 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 2 DC have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter. Further, if cost recoupment occurs before the end of the eighth contract year, the studios will pay us a one-time “cost recoupment bonus.” The Company evaluated the constraining estimates related to the variable consideration, i.e. the one-time bonus and determined that it is not probable to conclude at this point in time, that a significant reversal in the amount of cumulative revenue recognized will not 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 have begun, and expect to continue, to pursue the sale of the Systems to such exhibitors. Such sales were as originally contemplated as the conclusion of the digital cinema deployment plan. Revenues earned in connection with up front exhibitor contributions are deferred and recognized over the expected cost recoupment period. Exhibitors who purchased and own Systems using their own financing in the Cinema Equipment Business paid us an upfront activation fee of approximately $2.0 thousand per screen (the “Exhibitor-Buyer Structure”). Upfront activation fees were recognized in the period in which these Systems were delivered and ready for content, as we had no further obligations to the customer after that time and collection was reasonably assured. In addition, we recognize activation fee revenue of between $1.0 thousand and $2.0 thousand on Phase 2 DC Systems and for Systems installed by CDF2 Holdings, a related party, (See Note 3 - Other Interests) upon installation and such fees are generally collected upfront upon installation. Our services segment manages and collects VPFs on behalf of exhibitors, for which it earns an administrative fee equal to 10% of the VPFs collected. 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"), and physical goods (e.g. DVD and Blu-ray Discs). Fees earned are typically based on the gross amounts billed to our customers less the amounts owed to the media studios or content producers under distribution agreements, and gross media sales of owned or licensed content. 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 subscription on the digital platform, shipment of DVD and Blu-ray Discs, or make available at point-of-sale for transactional and VOD services. Revenue is recognized at the point in time when the performance obligation is satisfied which is when the content is available for subscription on the digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and VOD services as the control over the content or the physical title is transferred to the customer. The Company considers the delivery of content through various distribution channels to be a single performance obligation. Revenue is recognized after deducting the reserves for sales returns and other allowances, which are accounted for as variable consideration. Reserves for sales returns and other allowances are recorded based upon historical experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required. CEG also has contracts for the theatrical distribution of third party feature movies and alternative content. CEG’s distribution fee revenue and CEG's participation in box office receipts is recognized at the time a feature movie and alternative content are viewed. CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date. Principal Agent Considerations We determine whether revenue should be reported on a gross or net basis 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. Based on our evaluation of the above indicators, we concluded that there were no changes to our gross versus net reporting from legacy GAAP. Shipping and Handling Shipping and handling costs are incurred to move physical goods (e.g. DVD 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. 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. 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 are recorded based upon historical experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required. Sales returns and allowances are reported as a reduction of revenues. 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. The outstanding balances on these arrangements are insignificant and hence the impact of significant financing would be insignificant. Deferred revenue pertaining to our Content & Entertainment Business includes amounts related to the sale of DVD’s 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 opening balance and ending balance of deferred revenue, including current and non-current balances as of April 1, 2018 and December 31, 2018 were $5.7 million and $4.5 million , respectively. For the three and nine months ended December 31, 2018 , the additions to our deferred revenue balance were primarily due to cash payments are received or due in advance of satisfying performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business. During the three and nine months ended December 31, 2018 , $0.9 million and $2.9 million , respectively of revenue was recognized that was included in the deferred revenue balance at the beginning of the period. As of December 31, 2018 , the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $4.5 million . We expect to recognize approximately $1.7 million of this balance over the next 12 months, and the remainder thereafter. 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 and Services, 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 and nine months ended December 31, 2018 (in thousands): Three Months Ended December 31, 2018 Nine Months Ended December 31, 2018 Cinema Equipment Business: Phase I Deployment $ 2,156 $ 7,424 Phase II Deployment 1,754 8,191 Services 1,410 4,311 Total Cinema Equipment Business revenue $ 5,320 $ 19,926 Content & Entertainment Business: Base Distribution Business $ 6,565 $ 14,298 OTT Streaming and Digital 2,758 7,241 Total Content & Entertainment Business revenue $ 9,323 $ 21,539 DIRECT OPERATING COSTS Direct operating costs primarily consist of operating costs such as cost of goods sold, fulfillment expenses, property taxes and insurance on systems, shipping costs, royalty expenses, impairments of advances, participation expenses, marketing and direct personnel costs. STOCK-BASED COMPENSATION Employee and director stock-based compensation expense related to our stock-based awards was as follows: Three Months Ended December 31, Nine Months Ended December 31, (In thousands) 2018 2017 2018 2017 Direct operating $ — $ 47 $ — $ 60 Selling, general and administrative 361 1,520 763 2,154 $ 361 $ 1,567 $ 763 $ 2,214 During the three months ended December 31, 2018, the Company granted 1,222,830 of stock appreciation rights ("SARs") to three Company executives. There were 700,000 SARs granted to our Chief Executive Officer ("CEO") and 1,577,830 SARs granted to other executives during the nine months ended December 31, 2018. The SARs were granted under the Company's 2017 Equity Incentive Plan (the "2017 Plan"). There was $178 thousand and $282 thousand of stock-based compensation recorded in the three and nine months ended December 31, 2018, respectively. On July 26, 2018, the Company granted 1,941,400 units of performance stock units ("PSUs") to certain executives and employees under the 2017 Plan. The total units represent the maximum number of units eligible to vest at the end of the performance period. The awards vest in two tranches; one at each of March 31, 2019 and March 31, 2020, based on the Company achieving certain financial targets at each period. The Company engaged an outside consulting firm to provide valuation services relating to estimating the fair value of these PSUs each reporting period. Based on their analysis as of December 31, 2018, using the Monte Carlo simulation technique, the estimated per unit fair value of the PSU's, was $0.35 . There was $114 thousand and $282 thousand of stock-based compensation recorded in the three and nine months ended December 31, 2018, respectively, related to these PSUs. As of December 31, 2018, there were 1,904,177 PSUs outstanding as 37,223 PSUs were forfeited due to employee terminations. There were 225,862 and 111,724 shares of Class A common stock issued to the board of directors for the three and nine months ended December 31, 2018 and 2017, respectively, constituting payment of the stock portion of board service retainer fee. There was $66 thousand and $196 thousand of stock-based compensation recorded in the three and nine months ended December 31, 2018, respectively, related to the board of directors. There were 10,000 restricted shares awarded to an employee, during the nine months ended December 31, 2018, at a weighted average price of $1.52 , all of which were unvested and outstanding as of December 31, 2018. There was $3 thousand of stock-based compensation recorded in the three and nine months ended December 31, 2018, respectively, related to employees' restricted stock awards. 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 ), which clarified the accounting for uncertainty in tax positions. This amendment provides that the tax effects from an uncertain tax position can be recognized in the financial statements only if the position is "more-likely-than-not" to be sustained were it to be challenged by a taxing authority. The assessment of the tax position is based solely on the technical merits of the position, without regard to the likelihood that the tax position may be challenged. If an uncertain tax position meets the "more-likely-than-not" threshold, the largest amount of tax benefit that is more than 50% likely to be recognized upon ultimate settlement with the taxing authority is recorded. The Company has no uncertain tax positions. NET LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS Basic and diluted net loss per common share has been calculated as follows: Basic and diluted net loss per common share attributable to common stockholders = Net loss attributable to common stockholders Weighted average number of common stock outstanding during the period Stock issued and treasury stock repurchased during the period are weighted for the portion of the period that they are outstanding. The shares repurchased in connection with the forward stock purchase transaction discussed in Note 6 - Stockholders' Deficit were considered repurchased for the purposes of calculating net loss per share and therefore the calculation of weighted average shares outstanding as of June 30, 2017 excludes 1,179,138 shares. During the year ended March 31, 2018, the Company settled these shares and included them in the calculation of weighted average shares outstanding for the three and nine months ended December 31, 2018 . Shares issued and any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding. We incurred net losses for the three and nine months ended December 31, 2018 and 2017 , and therefore the impact of potentially dilutive common shares from outstanding stock options and warrants, totaling 5,043,341 shares and 2,893,574 shares as of December 31, 2018 and 2017 , respectively, and 3,333,333 shares from the convertible note issued October 9, 2018, were excluded from the computation of loss per share as their impact would have been anti-dilutive. COMPREHENSIVE LOSS As of three months and nine months ended December 31, 2018 and 2017, comprehensive loss consisted of net loss and foreign currency translation adjustments. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In February 2016, Financial Accounting Standards Board ("FASB") issued guidance amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The new guidance, issued as ASU 2016-02, Leases (Topic 842), will be effective for public entities for annual periods beginning after December 15, 2018 and interim periods therein. Early adoption is permitted. The new lease standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certa |
OTHER INTERESTS
OTHER INTERESTS | 9 Months Ended |
Dec. 31, 2018 | |
Noncontrolling Interest [Abstract] | |
Other Interests | 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 December 31, 2018 and March 31, 2018 , 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 were $0.4 million as of December 31, 2018 and March 31, 2018 , which are included in accounts receivable, net on the accompanying condensed consolidated balance sheets. The accompanying condensed consolidated statements of operations include $0.3 million and $0.9 million of digital cinema servicing revenue from CDF2 Holdings for the three months and nine months ended each of December 31, 2018 , respectively. For the three months and nine months ended December 31, 2017 , the accompanying Condensed Consolidated Statements of Operations includes $0.3 million of digital cinema servicing revenue from CDF2 Holdings. Total Stockholders' Deficit of CDF2 Holdings at December 31, 2018 and March 31, 2018 was $ 28.7 million and $ 26.3 million , respectively. We have no obligation to fund the operating loss or the stockholders' deficit beyond our initial investment of $2.0 million and, accordingly, our investment in CDF2 Holdings as of December 31, 2018 and March 31, 2018 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. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES We calculate income tax expense based upon an annual effective tax rate forecast, including estimates and assumptions. $0.1 million income tax expense was recorded for the three months ended December 31, 2018 and for the three months ended December 31, 2017 , respectively. For the nine months ended December 31, 2018 and 2017, we recorded income tax expense of $0.2 million and $0.5 million , 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 nine months ended December 31, 2018 and 2017 was negative 2.0% and negative 2.7% , respectively. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | ABLE Notes payable consisted of the following: December 31, 2018 March 31, 2018 (In thousands) Current Portion Long Term Portion Current Portion Long Term Portion Prospect Loan $ — $ 26,405 $ — $ 39,710 KBC Facilities — — 154 — P2 Vendor Note 279 — 336 — P2 Exhibitor Notes — — 22 — Total non-recourse notes payable 279 26,405 512 39,710 Less: Unamortized debt issuance costs and debt discounts — (1,663 ) — (2,140 ) Total non-recourse notes payable, net of unamortized debt issuance costs and debt discounts $ 279 $ 24,742 $ 512 $ 37,570 Bison Note Payable $ 10,000 $ — $ — $ 10,000 Second Lien Loans 10,989 — — 10,560 Credit Facility — 15,802 — 8,227 Convertible Note 5,000 — — — 2013 Notes — — 5,000 — Total recourse notes payable 25,989 15,802 5,000 28,787 Less: Unamortized debt issuance costs and debt discounts (1,217 ) (813 ) (225 ) (3,352 ) Total recourse notes payable, net of unamortized debt issuance costs and debt discounts $ 24,772 $ 14,989 $ 4,775 $ 25,435 Total notes payable, net of unamortized debt issuance costs $ 25,051 $ 39,731 $ 5,287 $ 63,005 Non-recourse debt is generally defined as debt whereby the lenders’ sole recourse with respect to defaults, is limited to the value of the asset, which is collateral for the debt. Certain of our subsidiaries are liable with respect to, and their assets serve as collateral for, certain indebtedness for which our assets and the assets of our other subsidiaries that are not parties to the transaction are generally not liable. We have referred to this indebtedness as "non-recourse debt" because the recourse of the lenders is limited to the assets of specific subsidiaries. Such indebtedness includes the Prospect Loan, the KBC Facilities, the P2 Vendor Note and the P2 Exhibitor Notes. Prospect Loan In February 2013, our DC Holdings, AccessDM and Phase 2 DC subsidiaries entered into a term loan agreement (the “Prospect Loan”) with Prospect Capital Corporation (“Prospect”), pursuant to which DC Holdings borrowed $70.0 million . The Prospect Loan bears interest at LIBOR plus 9.0% (with a 2.0% LIBOR floor), which is payable in cash, and at an additional 2.50% to be accrued as an increase to the aggregate principal amount of the Prospect Loan until the 2013 Credit Agreement is paid off, at which time all accrued interest will be payable in cash. Collections of DC Holdings accounts receivable are deposited into accounts designated to pay certain operating expenses, principal, interest, fees, costs and expenses relating to the Prospect Loan. On a quarterly basis, if there is excess cash flow, it is used for prepayment of the Prospect Loan. We also maintain a debt service fund under the Prospect Loan for future principal and interest payments. As of December 31, 2018 , and March 31, 2018 , the debt service fund had a balance of $1.0 million , which is classified as part of restricted cash on our Condensed Consolidated Balance Sheets. The Prospect Loan matures on March 31, 2021 and may be accelerated upon a change in control (as defined in the agreement) or other events of default as set forth therein and would be subject to mandatory acceleration upon insolvency of DC Holdings. We are permitted to pay the full outstanding balance of the Prospect Loan at any time after the second anniversary of the initial borrowing, subject to the following prepayment penalties: • 5.0% of the principal amount prepaid between the second and third anniversaries of issuance; • 4.0% of the principal amount prepaid between the third and fourth anniversaries of issuance; • 3.0% of the principal amount prepaid between the fourth and fifth anniversaries of issuance; • 2.0% of the principal amount prepaid between the fifth and sixth anniversary of issuance; • 1.0% of the principal amount prepaid between the sixth and seventh anniversaries of issuance; and • No penalty if the balance of the Prospect Loan, including accrued interest, is prepaid thereafter. The Prospect Loan is secured by, among other things, a first priority pledge of the stock of CDF2 Holdings, our wholly owned unconsolidated subsidiary, the stock of AccessDM, owned by DC Holdings, and the stock of our Phase 2 DC subsidiary, and is also guaranteed by AccessDM and Phase 2 DC. We provide limited financial support to the Prospect Loan not to exceed $1.5 million per year in the event financial performance does not meet certain defined benchmarks. The Prospect Loan contains customary representations, warranties, affirmative covenants, negative covenants and events of default. The following table summarizes the activity related to the Prospect Loan: As of (In thousands) December 31, 2018 March 31, 2018 Prospect Loan, at issuance $ 70,000 $ 70,000 PIK Interest 4,778 4,778 Payments to date (48,373 ) (35,068 ) Prospect Loan, net 26,405 39,710 Less current portion — — Total long term portion $ 26,405 $ 39,710 KBC Facilities In December 2008, we began entering into multiple credit facilities to fund the purchase of Systems to be installed in movie theatres as part of the deployment under our Cinema Equipment Business segment. There were no borrowings under the KBC Facilities during the nine months ended December 31, 2018 . The following table presents a summary of the KBC Facilities (dollar amounts in thousands): Outstanding Principal Balance Facility 1 Credit Facility Interest Rate 2 Maturity Date December 31, 2018 March 31, 2018 3 11,425 3.75 % March 2019 $ — $ 154 1. For this facility, principal is to be repaid in twenty-eight quarterly installments. 2. The facility bears interest at the three-month LIBOR rate, which was 2.797% at December 31, 2018 , plus the interest rate noted above. Bison Note Payable In December 2017, the Company entered into a loan with BEMG for $10.0 million (the "2017 Loan") and issued Warrants to purchase 1,400,000 shares of the Company's Class A common stock. See Note 6 - Stockholders' Deficit for further discussion of the warrants. The loan was made in accordance with the Stock Purchase Agreement between the Company and Bison Entertainment Investment Limited, another affiliate of Bison, entered into on June 29, 2017 (the "Stock Purchase Agreement"). On July 20, 2018, the Company entered into the Bison Loan Agreement with Bison Global, pursuant to which the Company borrowed from Bison Global $10.0 million (the “2018 Loan”). The 2018 Loan has a one ( 1 ) year term that may be extended by mutual agreement of Bison Global and the Company and bears interest at 5% per annum, payable quarterly in cash. The principal is payable upon maturity. The 2018 Loan is unsecured and may be prepaid without premium or penalty at the election of the Company or upon demand of Bison Global, and contains customary covenants, representations and warranties. The proceeds of the 2018 Loan were used to prepay the 2017 Loan. On July 20, 2018, the Company also entered into the Letter with BEMG, where BEMG agreed to guarantee the payment directly to Bison Global of any amount due if (i) the 2018 Loan matures prior to June 28, 2021 or (ii) Bison Global demands payment of the 2018 Loan, in whole or in part, prior to maturity. Second Lien Loans On July 14, 2016, we entered into a Second Lien Loan Agreement (the “Second Lien Loan Agreement”), under which we may borrow up to $15.0 million (the “Second Lien Loans”), subject to certain limitations imposed on us regarding the number of shares that we may issue in connection with the loans. During the year ended March 31, 2018, we borrowed an aggregate principal amount of $1.5 million under the Second Lien Loan Agreement and have an outstanding balance of $11.0 million as of December 31, 2018 which includes $4.0 million borrowed from Ronald L. Chez, at that time a member of the Board of Directors. Mr. Chez resigned from the Board of Directors in April 2017, and became a strategic advisor to the Company. The Second Lien Loans mature on June 30, 2019 and bear interest at 12.75% , payable 7.5% in cash and 5.25% in cash or in kind at our option. In addition, under the terms of the Second Lien Loan Agreement, we are required to issue 98,000 shares of our Class A common stock for every $1 million borrowed, subject to pro rata adjustments. As of December 31, 2018, we have issued 906,450 shares of Class A common stock cumulatively under the Second Lien Loan Agreement. There were no shares issued in the three or nine months ended December 31, 2018. The Second Lien Loans may be prepaid without premium or penalty and contain customary covenants, representations and warranties. The obligations under the Second Lien Loans are guaranteed by certain of our existing and future subsidiaries. We have pledged substantially all of our assets, except those assets related to our digital cinema deployment business, to secure payment on the Second Lien Loans. Credit Facility and Cinedigm Revolving Loans On March 30, 2018, the Company entered into a Credit Facility with a retail bank for a maximum of $19.0 million in revolving loans outstanding at any one time with a maturity date of March 31, 2020, which may be extended for two successive one-year periods at the sole discretion of the lender, subject to certain conditions. Interest under the Credit Facility is due monthly at a rate elected by the Company of either 0.5% plus Prime Rate or 3.25% above LIBOR Rate established by the lender. On March 30, 2018, the Company borrowed $8.2 million under the Credit Facility. The proceeds from the Credit Facility were used to pay the $7.8 million outstanding principal and accrued interest under the Prior Credit Agreement (as defined below). During the nine months ended December 31, 2018 , the Company borrowed $7.6 million . As of December 31, 2018, availability under the Credit Facility based on the Company's borrowing base was $3.2 million . On January 11, 2019, $3.0 million was borrowed from the Credit Facility resulting in a $0.2 million availability. Convertible Note On October 9, 2018, the Company issued a Convertible Note for $5.0 million . All proceeds from the Convertible Note were used to pay the $5.0 million 2013 Notes described below. The $5.0 million in aggregate principal bears interest at 8% maturing on October 9, 2019 with two one year extensions at the Company's option. The Convertible Note is convertible into 3,333,333 shares of the Company's Class A common stock, based on initial conversion price of $1.50 per share. The Convertible Note is convertible at the option of the Lender, or the Company, at any time prior to payment in full of the principal balance, and all accrued interest of this Convertible Note in whole, or in part, into fully paid and non-assessable shares of Company’s Class A common stock at the conversion rate of $1.50 . Upon conversion prior to maturity by the Lender, or the Company, we may elect to settle such conversion in shares of our Class A common stock, cash or a combination thereof. Upon the maturity date, the Company has the option to pay in Class A common shares convertible at the greater of the closing price of the Class A common stock or $1.10 . As a result of our cash conversion option, we separately accounted for the value of the embedded conversion option as a debt discount (with an offset to additional paid-in capital) of $270 thousand . The value of the embedded conversion option was determined based on the estimated fair value of the debt without the conversion feature, which was determined using market comparables to estimate the fair value similar non-convertible debt; the debt discount is being amortized to interest expense using the effective interest method over the one year term of the Convertible Note. 2013 Notes In October 2013, we entered into securities purchase agreements with certain investors, pursuant to which we sold notes in the aggregate principal amount of $5.0 million (the “2013 Notes”) and warrants to purchase an aggregate of 150,000 shares of Class A common stock (the “2013 Warrants”) to such investors. We allocated a fair value of $1.6 million to the 2013 Warrants, which was recorded as a discount to the 2013 Notes and is being amortized through the maturity of the 2013 Notes as interest expense. The principal amount outstanding under the 2013 Notes was due on October 21, 2018. The 2013 Notes bore interest at 9.0% per annum, payable in quarterly installments over the term of the 2013 Notes. The 2013 Notes of $5.0 million were paid in full by October 18, 2018 prior to their maturity date of October 21, 2018. Ronald L. Chez, a former director and a current strategic advisor to the Company, was a holder of $3.0 million of the 2013 Notes as of October 18, 2018 and March 31, 2018. Zvi Rhine, a member of our Board of Directors and a related party, was a holder of $0.5 million of the 2013 Notes as of October 18, 2018 and March 31, 2018. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ DEFICIT COMMON STOCK During the nine months ended December 31, 2018 , we issued 568,947 shares of Class A common stock in connection with the payment of preferred stock dividends, as compensation to the board of directors, for asset acquisition and awards to employees. See Note - 8 Supplemental Cash Flow Disclosure . PREFERRED STOCK Cumulative dividends in arrears on preferred stock were $0.1 million and $0.2 million as of December 31, 2018 and 2017, respectively. In January 2019, we paid the preferred stock dividends in arrears in the form of 161,511 shares of Class A common stock. TREASURY STOCK We have treasury stock, at a cost, consisting of 1,313,836 shares of Class A common stock at each of December 31, 2018 and March 31, 2018. 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 Class A 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 Class A 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 transactions pursuant to the Stock Purchase Agreement, 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 Class A Common Stock to employees, outside directors and consultants. As of December 31, 2018 there were 335,315 shares outstanding in the Plan with weighted average exercise price of $15.57 and a weighted average contract life of 4.38 years . As of March 31, 2018, there were 338,315 shares outstanding in the Plan with weighted average exercise price of $15.57 and a weighted average contract life of 4.63 years . In August 2017, the Company adopted 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 provides for the issuance of up to 2,098,270 shares of Class A common stock, in the form of various awards, including stock options, stock appreciation rights, stock, restricted stock, restricted stock units, performance awards and cash awards. The Compensation Committee of the Company’s Board of Directors (the “Board”) is authorized to administer the 2017 Plan and make grants thereunder. The approval of the 2017 Plan does not affect awards already granted under the 2000 Plan. Stock Appreciation Rights On June 7, 2018, 700,000 SARs were granted to the CEO of the Company under the 2017 Plan. Each SAR entitles the CEO to receive, upon exercise, an amount equal to the excess of the market price per share of the Class A common stock on the exercise date, over $1.47 , being not less than the market price per share of the Class A common stock on the grant date, cash, or combination of both cash and common stock, at the option of the Company. There was approximately $186 thousand of stock based compensation recorded for the nine months ended December 31, 2018 relating to these SARs. These SARs expire ten years from the grant date and vest 233,333 shares on each of March 31, 2019 and March 31, 2020, and 233,334 shares on March 31, 2021. On September 28, 2018, 355,000 SARs were granted to a Company executive under the 2017 Plan. Each SAR entitles the participant to receive, upon exercise, an amount equal to the excess of the market price per share of the Class A common stock on the exercise date, over $1.16 , being not less than the market price per share of the Class A common stock on the grant date, cash, or combination of both cash and common stock, at the option of the Company. Stock-based compensation was approximately $53 thousand for the nine months ended December 31, 2018 relating to these SARs. These SARs expire ten years from the grant date and vest 118,333 shares on each of March 31, 2019 and March 31, 2020, and 118,334 shares on March 31, 2021. On December 10, 2018, 1,222,830 SARs were granted to three executives under the 2017 Plan. Each SAR entitles the participant to receive, upon exercise, an amount equal to the excess of the market price per share of the Class A common stock on the exercise date, over $1.47 , being not less than the market price per share of the Class A common stock on the grant date, cash, or combination of both cash and common stock, at the option of the Company. Stock-based compensation was approximately $43 thousand for the nine months ended December 31, 2018 related to these SARs. These SARs expire ten years from the grant date and vest 407,610 shares on each March 31, 2019, March 31, 2020 and March 31, 2021. Performance Stock Units On July 26, 2018, the Company granted 1,941,400 PSUs to certain executives and employees under the 2017 Plan. The total units represent the maximum number of units eligible to vest at the end of the performance period. The awards vest in two tranches; one at each of March 31, 2019 and March 31, 2020, based on the Company achieving certain financial targets at each period. The Company engaged an outside consulting firm to provide valuation services relating to estimating the fair value of these PSUs. Based on their analysis, using the Monte Carlo simulation technique, the estimated per unit fair value of the PSU's as of the valuation date, was $0.35 . There was approximately $283 thousand of stock-based compensation recorded for the nine months ended December 31, 2018 related to these PSUs. As of December 31, 2018, there were 1,904,177 PSUs outstanding due to 37,223 PSUs forfeited as a result of employee terminations. Restricted Stock Awards During the nine months ended December 31, 2018, we granted 10,000 shares of restricted Class A common stock to an employee at a market price per share of $1.52 . The stock-based compensation for the nine months ended December 31, 2018 was immaterial. OPTIONS GRANTED OUTSIDE CINEDIGM’S EQUITY INCENTIVE PLAN In October 2013, we issued options outside of the Plan to 10 individuals who became employees as a result of a business combination. The employees received options to purchase an aggregate of 62,000 shares of our Class A Common Stock at an exercise price of $17.5 per share. The options are fully vested as of October 2017 and expire 10 years from the date of grant, if unexercised. In December 2010, we issued options to purchase 450,000 shares of Class A Common Stock outside of the Plan as part of our Chief Executive Officer's initial employment agreement with the Company. Such options have exercise prices per share between $15.00 and $50.00 , were vested as of December 2013 and will expire in December 2020. As of December 31, 2018 , all such options remained outstanding. WARRANTS The following table presents information about outstanding warrants to purchase shares of our Class A Common Stock as of December 31, 2018 . All of the outstanding warrants are fully vested and exercisable. Recipient Amount outstanding Expiration Exercise price per share Strategic management service provider 52,500 July 2021 $17.20 - $30.00 Warrants issued to Ronald L. Chez in connection with the Second Lien Loans 206,768 July 2023 $1.34 - $1.57 Warrants issued in connection with Convertible Notes exchange transaction 207,679 December 2021 $1.54 5-year Warrant issued to BEMG in connection with a term loan agreement 1,400,000 December 2022 $1.80 The warrants issued in connection with the Second Lien Loans (See Note 5 - Notes Payable ) to Ronald L. Chez, at the time a member of our Board of Directors, contain a cashless exercise provision and customary anti-dilution rights. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES LEASES We operate from leased properties under non-cancelable operating lease agreements, certain of which contain escalating lease clauses. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW DISCLOSURE | SUPPLEMENTAL CASH FLOW INFORMATION Nine Months Ended December 31, (in thousands) 2018 2017 Cash interest paid $ 6,627 $ 8,533 Accrued dividends on preferred stock 89 89 Issuance of Class A common stock for payment of preferred stock dividends 267 267 Issuance of Class A common stock for settlement of an obligation to a vendor — 867 Issuance of Second Lien Loans in connection with Convertible Notes exchange transaction — 1,462 Issuance of warrants in connection with debt instruments — 1,084 Issuance of Class A common stock in exchange for the CEO's Second Lien Loans — 500 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION As discussed in Note 1 - Nature of Operations and Liquidity, we have retrospectively recast the operating segments for the prior period. We operate in two reportable segments: Cinema Equipment Business and Content & Entertainment Business, or CEG. 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 3,480 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 6,426 Systems installed domestically and internationally in our second deployment phase (“Phase II Deployment”). Content & Entertainment Business Leading distributor of independent content, and collaborates with producers and other content owners to market, source, curate and distribute independent content to targeted and profitable 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 December 31, 2018 (In thousands) Intangible Assets, net Goodwill Total Assets Notes Payable, Non-Recourse Notes Payable Cinema Equipment Business $ 80 $ — $ 46,034 $ 25,021 $ — Content & Entertainment Business 10,593 8,701 56,170 — — Corporate 12 — 3,610 — 39,761 Total $ 10,685 $ 8,701 $ 105,814 $ 25,021 $ 39,761 As of March 31, 2018 (In thousands) Intangible Assets, net Goodwill Total Assets Notes Payable, Non-Recourse Notes Payable Cinema Equipment Business $ 115 $ — $ 53,427 $ 38,082 $ — Content & Entertainment Business 14,529 8,701 58,313 — — Corporate 9 — 9,442 — 30,210 Total $ 14,653 $ 8,701 $ 121,182 $ 38,082 $ 30,210 Statements of Operations Three Months Ended December 31, 2018 (Unaudited, in thousands) Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Revenues $ 5,320 $ 9,323 $ — $ 14,643 Direct operating (exclusive of depreciation and amortization shown below) 505 4,741 — 5,246 Selling, general and administrative 448 3,499 2,478 6,425 Allocation of corporate overhead 378 989 (1,367 ) — Provision for doubtful accounts 141 (28 ) — 113 Depreciation and amortization of property and equipment 1,942 87 45 2,074 Amortization of intangible assets 11 1,385 1 1,397 Total operating expenses 3,425 10,673 1,157 15,255 Income (loss) from operations $ 1,895 $ (1,350 ) $ (1,157 ) $ (612 ) Employee and director stock-based compensation expense related to the Company’s stock-based awards was $0.4 million for the three months ended December 31, 2018 . Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative 3 96 262 361 Total stock-based compensation $ 3 $ 96 $ 262 $ 361 Statements of Operations Three Months Ended December 31, 2017 (Unaudited, in thousands) Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Revenues $ 8,461 $ 10,031 $ — $ 18,492 Direct operating (exclusive of depreciation and amortization shown below) 459 5,904 — 6,363 Selling, general and administrative 683 4,634 3,942 9,259 Allocation of Corporate overhead 410 871 (1,281 ) — Provision for doubtful accounts 634 (3 ) — 631 Depreciation and amortization of property and equipment 2,066 91 56 2,213 Amortization of intangible assets 11 1,384 — 1,395 Total operating expenses 4,263 12,881 2,717 19,861 Income (loss) from operations $ 4,198 $ (2,850 ) $ (2,717 ) $ (1,369 ) Employee and director stock-based compensation expense related to the Company’s stock-based awards was $1.6 million for the three months ended December 31, 2017. Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ 28 $ 19 $ — $ 47 Selling, general and administrative 10 594 916 1,520 Total stock-based compensation $ 38 $ 613 $ 916 $ 1,567 Statements of Operations Nine Months Ended December 31, 2018 (Unaudited, in thousands) Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Revenues $ 19,926 $ 21,539 $ — $ 41,465 Direct operating (exclusive of depreciation and amortization shown below) 1,227 11,060 — 12,287 Selling, general and administrative 1,446 11,219 6,790 19,455 Allocation of corporate overhead 1,167 3,042 (4,209 ) — Provision (recovery) for doubtful accounts 1,384 (139 ) — 1,245 Depreciation and amortization of property and equipment 5,844 256 139 6,239 Amortization of intangible assets 34 4,149 4 4,187 Total operating expenses 11,102 29,587 2,724 43,413 Income (loss) from operations $ 8,824 $ (8,048 ) $ (2,724 ) $ (1,948 ) Employee and director stock-based compensation expense related to the Company’s stock-based awards was $0.8 million for the nine months ended December 31, 2018. Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Direct operating $ — — $ — $ — $ — Selling, general and administrative 8 161 594 763 Total stock-based compensation $ 8 $ 161 $ 594 $ 763 Statements of Operations Nine Months Ended December 31, 2017 (Unaudited, in thousands) Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Revenues $ 28,274 $ 21,736 $ — $ 50,010 Direct operating (exclusive of depreciation and amortization shown below) 1,210 13,260 — 14,470 Selling, general and administrative 1,553 12,518 7,753 21,824 Allocation of corporate overhead 1,210 2,572 (3,782 ) — Provision for doubtful accounts 1,583 (3 ) — 1,580 Depreciation and amortization of property and equipment 9,743 242 230 10,215 Amortization of intangible assets 34 4,147 4 4,185 Total operating expenses 15,333 32,736 4,205 52,274 Income (loss) from operations $ 12,941 $ (11,000 ) $ (4,205 ) $ (2,264 ) Employee and director stock-based compensation expense related to the Company’s stock-based awards was $2.2 million for the nine months ended December 31, 2017. Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Direct operating $ 36 $ 24 $ — $ 60 Selling, general and administrative 14 817 1,323 2,154 Total stock-based compensation $ 50 $ 841 $ 1,323 $ 2,214 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS During January and February 2019, Cinedigm completed the sale of 311 digital projection Systems, bringing the total number of Systems sold to 328 , for an aggregate sales price of approximately $3.8 million . On January 11, 2019, the Company borrowed $3.0 million under the Credit Facility, resulting in a $0.2 million availability, as of January 31, 2019. On December 12, 2018, we received a notice (the “Bid Price Notice”) from the Staff indicating that, based upon the closing bid price of the Company’s Class A common stock for the last 30 consecutive business days, the Company no longer met the requirement to maintain a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5450(a)(1). The Bid Price Notice did not result in the immediate delisting of the Common Stock from the Nasdaq Global Market. The deficiency was cured by the closing bid price being at least $1 per share for a minimum of ten consecutive business days ending on February 11, 2019, as confirmed by the Staff on February 12, 2019. Jeffrey Edell, Chief Financial Officer, notified the Company of his resignation to take effect February 28, 2019, to pursue other business interests. On February 14, 2019, the Company announced that Gary Loffredo, age 54, has been appointed as Chief Operating Officer of the Company, effective February 14, 2019. Mr. Loffredo will retain his roles as General Counsel and President of Digital Cinema, which he has held since 2000 and 2011, respectively. The Company’s finance team will now report directly to Mr. Loffredo. In connection with the new role, Mr. Loffredo will receive an annual base salary of $425,000 and his target bonus will be 60% of his base salary. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND CONSOLIDATION | BASIS OF PRESENTATION AND CONSOLIDATION The accompanying condensed consolidated financial statements are unaudited and include the accounts of the Company, its wholly owned and majority owned subsidiaries, and reflect all normal and recurring adjustments necessary for the fair presentation of its consolidated financial position, results of operations and cash flows. All material inter-company accounts and transactions 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 to the Condensed Consolidated Financial Statements for a discussion of our noncontrolling and majority interests. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of these condensed 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 amounts reported in these condensed consolidated financial statements and accompanying notes. As permitted under GAAP, interim accounting for certain expenses, such as the adequacy of accounts receivable reserves, return reserves, inventory reserves, recovery of advances, assessment of goodwill impairment, intangible asset impairment and estimated lives, and valuation reserve for income taxes, are based on full year assumptions when appropriate. Actual results could differ materially from those estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), although we believe that the disclosures are adequate to make the information presented not misleading. The results of operations for the respective interim periods are not necessarily indicative of the results expected for the full year. These Condensed Consolidated Financial Statements and accompanying notes should be read in conjunction with our annual consolidated financial statements and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 . |
CASH AND CASH EQUIVALENTS | CASH, CASH EQUIVALENTS, AND RESTRICTED CASH We consider all highly liquid investments with an original maturity of three months or less to be "cash equivalents." We maintain bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation’s insured limits. We periodically assess the financial condition of the institutions and believe that the risk of any loss is minimal. Our Prospect Loan (as defined below) requires that we maintain specified cash balances that are restricted to repayment of interest thereunder. See Note 5 - Notes Payable for information about our restricted cash balances. |
ADVANCES | ADVANCES Advances, which are recorded within prepaid and other current assets on the condensed 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. |
INVENTORY | INVENTORY, NET Inventory consists of finished goods inventory of Company-owned DVD and Blu-ray Disc titles and is stated at the lower of cost (determined based on weighted average cost) or market. We identify inventory items to be written down for obsolescence based on their sales status and condition. We write down discontinued or slow moving inventories based on an estimate of the markdown to retail price needed to sell through our current stock level of the inventories. |
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, software and internal-use software 3 - 5 years Digital cinema projection systems 10 years Machinery and equipment 3 - 10 years Furniture and fixtures 3 - 6 years 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 condensed consolidated statements of operations. |
ACCOUNTING FOR DERIVATIVE ACTIVITIES | ACCOUNTING FOR DERIVATIVE ACTIVITIES Derivative financial instruments are recorded at fair value. Changes in the fair value of derivative financial instruments are either recognized in accumulated other comprehensive loss (a component of stockholders' deficit) or in the consolidated statements of operations depending on whether the derivative qualifies for hedge accounting. We entered into an interest rate cap transaction during the fiscal year ended March 31, 2013 to limit our exposure to interest rates on the Prospect Loan which cap matured on March 31, 2018. We have not sought hedge accounting treatment for the interest rate cap and therefore, changes in its value are recorded in the consolidated statements of operations. |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The fair value measurement disclosures are grouped into three levels based on valuation factors: • Level 1 – quoted prices in active markets for identical investments • Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) • Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments) Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities. The following tables summarize the levels of fair value measurements of our financial assets and liabilities as of December 31, 2018 and March 31, 2018 : (in thousands) Level 1 Level 2 Level 3 Total Restricted cash $ 1,000 $ — $ — $ 1,000 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 condensed consolidated balance sheets. The estimated fair values of these financial instruments approximate their carrying amounts because of their short-term nature. At December 31, 2018 and March 31, 2018 , the estimated fair value of our fixed rate debt approximated its carrying amounts. We estimated the fair value of debt based upon current interest rates available to us at the respective balance sheet dates for arrangements with similar terms and conditions. Based on borrowing rates currently available to us for loans with similar terms, the carrying value of notes payable approximates fair value. |
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. |
GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS | GOODWILL Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. Goodwill is tested for impairment on an annual basis or more often if warranted by events or changes in circumstances indicating that the carrying value may exceed fair value, also known as impairment indicators. Inherent in the fair value determination for each reporting unit are certain judgments and estimates relating to future cash flows, including management’s interpretation of current economic indicators and market conditions, and assumptions about our strategic plans with regard to its operations. To the extent additional information arises, market conditions change, or our strategies change, it is possible that the conclusion regarding whether our remaining goodwill is impaired could change and result in future goodwill impairment charges that will have a material effect on our consolidated financial position or results of operations. |
PARTICIPATIONS AND ROYALTIES PAYABLE | 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. |
DEBT ISSUANCE COSTS | DEBT ISSUANCE COSTS We incur debt issuance costs in connection with long-term debt financings. Such costs are recorded as a direct deduction to notes payable and amortized over the terms of the respective debt obligations using the effective interest rate method. Debt issuance costs recorded in connection with revolving debt arrangements are presented as other assets on the Consolidated Balance Sheets and are amortized over the term of the revolving debt agreements using the effective interest rate method. |
Revenue From Contract With Customer | REVENUE RECOGNITION Adoption of ASU Topic 606, "Revenue from Contracts with Customers" The Company adopted Accounting Standards Update ("ASU") Topic 606, Revenue from Contracts with Customers (“Topic 606”), as of April 1, 2018, using the modified retrospective method i.e. by recognizing the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of deficit at April 1, 2018. Therefore, the comparative information for the years ended prior to April 1, 2018 were not restated to comply with ASC 606. We applied the practical expedient and did not capitalize the incremental costs to obtain a contract if the amortization period for the asset is one year or less. The impact of adopting Topic 606 did not result in a change in accounting treatment for any of the Company’s revenue streams. Refer to Note 2 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 for our revenue recognition accounting policy as it relates to revenue transactions prior to April 1, 2018. The revenue recognition accounting policy described below relates to revenue transactions from April 1, 2018 and thereafter, which are accounted for in accordance with Topic 606. We determine revenue recognition by: • identifying the contract, or contracts, with the customer; • identifying the performance obligations in the contract; • determining the transaction price; • allocating the transaction price to performance obligations in the contract; and • recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services. We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the services provided, sales of physical products (DVD’s and Blu-ray) or when the content is available for subscription on the digital platform or available on the point-of-sale for transactional and VOD services which is when the control of the promised products and services is transferred to our customers and our performance obligations under the contract have been satisfied. Revenues that might be subject to various taxes is recorded net of transaction taxes assessed by governmental authorities such as sales value-added taxes and other similar taxes. Payment terms and conditions vary by customer and typically provide net 30 to 90 day terms. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less. We have in the past entered into arrangements in connection with activation fees due from our digital cinema equipment (the “Systems”) 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 Virtual print fees (“VPFs”) are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Cinedigm Digital Funding I, LLC. ("Phase 1 DC") and to Access Digital Cinema Phase 2 Corp. (“Phase 2 DC”) when movies distributed by the studio are displayed on screens utilizing our Systems installed in movie theatres. VPFs are earned and payable to Phase 1 DC 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 in which the digital title first plays on a System for general audience viewing in a digitally equipped movie theatre, as Phase 1 DC’s and Phase 2 DC’s performance obligations have been substantially met at that time. Phase 2 DC’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 2 DC 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 2 DC have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter. Further, if cost recoupment occurs before the end of the eighth contract year, the studios will pay us a one-time “cost recoupment bonus.” The Company evaluated the constraining estimates related to the variable consideration, i.e. the one-time bonus and determined that it is not probable to conclude at this point in time, that a significant reversal in the amount of cumulative revenue recognized will not 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 have begun, and expect to continue, to pursue the sale of the Systems to such exhibitors. Such sales were as originally contemplated as the conclusion of the digital cinema deployment plan. Revenues earned in connection with up front exhibitor contributions are deferred and recognized over the expected cost recoupment period. Exhibitors who purchased and own Systems using their own financing in the Cinema Equipment Business paid us an upfront activation fee of approximately $2.0 thousand per screen (the “Exhibitor-Buyer Structure”). Upfront activation fees were recognized in the period in which these Systems were delivered and ready for content, as we had no further obligations to the customer after that time and collection was reasonably assured. In addition, we recognize activation fee revenue of between $1.0 thousand and $2.0 thousand on Phase 2 DC Systems and for Systems installed by CDF2 Holdings, a related party, (See Note 3 - Other Interests) upon installation and such fees are generally collected upfront upon installation. Our services segment manages and collects VPFs on behalf of exhibitors, for which it earns an administrative fee equal to 10% of the VPFs collected. 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"), and physical goods (e.g. DVD and Blu-ray Discs). Fees earned are typically based on the gross amounts billed to our customers less the amounts owed to the media studios or content producers under distribution agreements, and gross media sales of owned or licensed content. 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 subscription on the digital platform, shipment of DVD and Blu-ray Discs, or make available at point-of-sale for transactional and VOD services. Revenue is recognized at the point in time when the performance obligation is satisfied which is when the content is available for subscription on the digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and VOD services as the control over the content or the physical title is transferred to the customer. The Company considers the delivery of content through various distribution channels to be a single performance obligation. Revenue is recognized after deducting the reserves for sales returns and other allowances, which are accounted for as variable consideration. Reserves for sales returns and other allowances are recorded based upon historical experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required. CEG also has contracts for the theatrical distribution of third party feature movies and alternative content. CEG’s distribution fee revenue and CEG's participation in box office receipts is recognized at the time a feature movie and alternative content are viewed. CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date. Principal Agent Considerations We determine whether revenue should be reported on a gross or net basis 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. Based on our evaluation of the above indicators, we concluded that there were no changes to our gross versus net reporting from legacy GAAP. Shipping and Handling Shipping and handling costs are incurred to move physical goods (e.g. DVD 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. 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. 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 are recorded based upon historical experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required. Sales returns and allowances are reported as a reduction of revenues. 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. The outstanding balances on these arrangements are insignificant and hence the impact of significant financing would be insignificant. Deferred revenue pertaining to our Content & Entertainment Business includes amounts related to the sale of DVD’s 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 opening balance and ending balance of deferred revenue, including current and non-current balances as of April 1, 2018 and December 31, 2018 were $5.7 million and $4.5 million , respectively. For the three and nine months ended December 31, 2018 , the additions to our deferred revenue balance were primarily due to cash payments are received or due in advance of satisfying performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business. During the three and nine months ended December 31, 2018 , $0.9 million and $2.9 million , respectively of revenue was recognized that was included in the deferred revenue balance at the beginning of the period. As of December 31, 2018 , the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $4.5 million . We expect to recognize approximately $1.7 million of this balance over the next 12 months, and the remainder thereafter. 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 and Services, 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 and nine months ended December 31, 2018 (in thousands): Three Months Ended December 31, 2018 Nine Months Ended December 31, 2018 Cinema Equipment Business: Phase I Deployment $ 2,156 $ 7,424 Phase II Deployment 1,754 8,191 Services 1,410 4,311 Total Cinema Equipment Business revenue $ 5,320 $ 19,926 Content & Entertainment Business: Base Distribution Business $ 6,565 $ 14,298 OTT Streaming and Digital 2,758 7,241 Total Content & Entertainment Business revenue $ 9,323 $ 21,539 |
REVENUE RECOGNITION | EVENUE RECOGNITION Adoption of ASU Topic 606, "Revenue from Contracts with Customers" The Company adopted Accounting Standards Update ("ASU") Topic 606, Revenue from Contracts with Customers (“Topic 606”), as of April 1, 2018, using the modified retrospective method i.e. by recognizing the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of deficit at April 1, 2018. Therefore, the comparative information for the years ended prior to April 1, 2018 were not restated to comply with ASC 606. We applied the practical expedient and did not capitalize the incremental costs to obtain a contract if the amortization period for the asset is one year or less. The impact of adopting Topic 606 did not result in a change in accounting treatment for any of the Company’s revenue streams. Refer to Note 2 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 for our revenue recognition accounting policy as it relates to revenue transactions prior to April 1, 2018. The revenue recognition accounting policy described below relates to revenue transactions from April 1, 2018 and thereafter, which are accounted for in accordance with Topic 606. We determine revenue recognition by: • identifying the contract, or contracts, with the customer; • identifying the performance obligations in the contract; • determining the transaction price; • allocating the transaction price to performance obligations in the contract; and • recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services. We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the services provided, sales of physical products (DVD’s and Blu-ray) or when the content is available for subscription on the digital platform or available on the point-of-sale for transactional and VOD services which is when the control of the promised products and services is transferred to our customers and our performance obligations under the contract have been satisfied. Revenues that might be subject to various taxes is recorded net of transaction taxes assessed by governmental authorities such as sales value-added taxes and other similar taxes. Payment terms and conditions vary by customer and typically provide net 30 to 90 day terms. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less. We have in the past entered into arrangements in connection with activation fees due from our digital cinema equipment (the “Systems”) deployments that had extended payment terms. The outstanding balances on these arrangements are insignificant and hence the impact of significant financing would be insignificant. |
DIRECT OPERATING COSTS | DIRECT OPERATING COSTS Direct operating costs primarily consist of operating costs such as cost of goods sold, fulfillment expenses, property taxes and insurance on systems, shipping costs, royalty expenses, impairments of advances, participation expenses, marketing and direct personnel costs. |
INCOME TAXES | NCOME 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 ), which clarified the accounting for uncertainty in tax positions. This amendment provides that the tax effects from an uncertain tax position can be recognized in the financial statements only if the position is "more-likely-than-not" to be sustained were it to be challenged by a taxing authority. The assessment of the tax position is based solely on the technical merits of the position, without regard to the likelihood that the tax position may be challenged. If an uncertain tax position meets the "more-likely-than-not" threshold, the largest amount of tax benefit that is more than 50% likely to be recognized upon ultimate settlement with the taxing authority is recorded. The Company has no uncertain tax positions. N |
NET LOSS PER SHARE | NET LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS Basic and diluted net loss per common share has been calculated as follows: Basic and diluted net loss per common share attributable to common stockholders = Net loss attributable to common stockholders Weighted average number of common stock outstanding during the period |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In February 2016, Financial Accounting Standards Board ("FASB") issued guidance amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The new guidance, issued as ASU 2016-02, Leases (Topic 842), will be effective for public entities for annual periods beginning after December 15, 2018 and interim periods therein. Early adoption is permitted. The new lease standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We plan to adopt Topic 842 effective the start of our 2020 fiscal year, April 1, 2019, but the process of evaluating the impact, if any, on our consolidated financial statements remains ongoing. During the third quarter we established an implementation team that is currently analyzing our lease and service contracts. Our implementation efforts include reviewing existing leases and service contracts, which may include embedded leases. Based on preliminary results of the process, which has not been completed, nothing has come to our attention that would indicate that adoption of the new standard will have a material impact on our earnings or shareholders equity. We expect that the recording of right-of-use assets and associated lease liabilities will have an effect on our consolidated balance sheet; however, we are unable to determine an amount at this time. We are also in the process of evaluating changes to our business processes, systems and controls needed to support recognition and disclosure under the new standard. Further, we are continuing to assess any incremental disclosures that will be required in our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting to simplify the accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Under the new standard, most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. This standard is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements. On August 29, 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This new guidance, which was early adopted by the Company, requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Restrictions on Cash and Cash Equivalents | Cash, cash equivalents, and restricted cash consisted of the following: As of ( in thousands ) December 31, 2018 March 31, 2018 Cash and Cash Equivalents $ 17,141 $ 17,952 Restricted Cash 1,000 1,000 $ 18,141 $ 18,952 |
Estimated useful lives of Property and equipment | Depreciation expense is recorded using the straight-line method over the estimated useful lives of the respective assets as follows: Computer equipment, software and internal-use software 3 - 5 years Digital cinema projection systems 10 years Machinery and equipment 3 - 10 years Furniture and fixtures 3 - 6 years |
Fair Value Measurements of financial assets | The following tables summarize the levels of fair value measurements of our financial assets and liabilities as of December 31, 2018 and March 31, 2018 : (in thousands) Level 1 Level 2 Level 3 Total Restricted cash $ 1,000 $ — $ — $ 1,000 |
Disaggregation of Revenue | The following tables present the Company's revenue categories for the three months and nine months ended December 31, 2018 (in thousands): Three Months Ended December 31, 2018 Nine Months Ended December 31, 2018 Cinema Equipment Business: Phase I Deployment $ 2,156 $ 7,424 Phase II Deployment 1,754 8,191 Services 1,410 4,311 Total Cinema Equipment Business revenue $ 5,320 $ 19,926 Content & Entertainment Business: Base Distribution Business $ 6,565 $ 14,298 OTT Streaming and Digital 2,758 7,241 Total Content & Entertainment Business revenue $ 9,323 $ 21,539 |
Employee stock-based compensation expense related to stock-based awards | Employee and director stock-based compensation expense related to our stock-based awards was as follows: Three Months Ended December 31, Nine Months Ended December 31, (In thousands) 2018 2017 2018 2017 Direct operating $ — $ 47 $ — $ 60 Selling, general and administrative 361 1,520 763 2,154 $ 361 $ 1,567 $ 763 $ 2,214 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consisted of the following: December 31, 2018 March 31, 2018 (In thousands) Current Portion Long Term Portion Current Portion Long Term Portion Prospect Loan $ — $ 26,405 $ — $ 39,710 KBC Facilities — — 154 — P2 Vendor Note 279 — 336 — P2 Exhibitor Notes — — 22 — Total non-recourse notes payable 279 26,405 512 39,710 Less: Unamortized debt issuance costs and debt discounts — (1,663 ) — (2,140 ) Total non-recourse notes payable, net of unamortized debt issuance costs and debt discounts $ 279 $ 24,742 $ 512 $ 37,570 Bison Note Payable $ 10,000 $ — $ — $ 10,000 Second Lien Loans 10,989 — — 10,560 Credit Facility — 15,802 — 8,227 Convertible Note 5,000 — — — 2013 Notes — — 5,000 — Total recourse notes payable 25,989 15,802 5,000 28,787 Less: Unamortized debt issuance costs and debt discounts (1,217 ) (813 ) (225 ) (3,352 ) Total recourse notes payable, net of unamortized debt issuance costs and debt discounts $ 24,772 $ 14,989 $ 4,775 $ 25,435 Total notes payable, net of unamortized debt issuance costs $ 25,051 $ 39,731 $ 5,287 $ 63,005 |
Schedule of Debt Outstanding | The following table summarizes the activity related to the Prospect Loan: As of (In thousands) December 31, 2018 March 31, 2018 Prospect Loan, at issuance $ 70,000 $ 70,000 PIK Interest 4,778 4,778 Payments to date (48,373 ) (35,068 ) Prospect Loan, net 26,405 39,710 Less current portion — — Total long term portion $ 26,405 $ 39,710 |
Schedule of Credit Facilities | The following table presents a summary of the KBC Facilities (dollar amounts in thousands): Outstanding Principal Balance Facility 1 Credit Facility Interest Rate 2 Maturity Date December 31, 2018 March 31, 2018 3 11,425 3.75 % March 2019 $ — $ 154 1. For this facility, principal is to be repaid in twenty-eight quarterly installments. 2. The facility bears interest at the three-month LIBOR rate, which was 2.797% at December 31, 2018 , plus the interest rate noted above. |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Warrants | The following table presents information about outstanding warrants to purchase shares of our Class A Common Stock as of December 31, 2018 . All of the outstanding warrants are fully vested and exercisable. Recipient Amount outstanding Expiration Exercise price per share Strategic management service provider 52,500 July 2021 $17.20 - $30.00 Warrants issued to Ronald L. Chez in connection with the Second Lien Loans 206,768 July 2023 $1.34 - $1.57 Warrants issued in connection with Convertible Notes exchange transaction 207,679 December 2021 $1.54 5-year Warrant issued to BEMG in connection with a term loan agreement 1,400,000 December 2022 $1.80 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flows | Nine Months Ended December 31, (in thousands) 2018 2017 Cash interest paid $ 6,627 $ 8,533 Accrued dividends on preferred stock 89 89 Issuance of Class A common stock for payment of preferred stock dividends 267 267 Issuance of Class A common stock for settlement of an obligation to a vendor — 867 Issuance of Second Lien Loans in connection with Convertible Notes exchange transaction — 1,462 Issuance of warrants in connection with debt instruments — 1,084 Issuance of Class A common stock in exchange for the CEO's Second Lien Loans — 500 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting, Assets and Debt | The following tables present certain financial information related to our reportable segments and Corporate: As of December 31, 2018 (In thousands) Intangible Assets, net Goodwill Total Assets Notes Payable, Non-Recourse Notes Payable Cinema Equipment Business $ 80 $ — $ 46,034 $ 25,021 $ — Content & Entertainment Business 10,593 8,701 56,170 — — Corporate 12 — 3,610 — 39,761 Total $ 10,685 $ 8,701 $ 105,814 $ 25,021 $ 39,761 As of March 31, 2018 (In thousands) Intangible Assets, net Goodwill Total Assets Notes Payable, Non-Recourse Notes Payable Cinema Equipment Business $ 115 $ — $ 53,427 $ 38,082 $ — Content & Entertainment Business 14,529 8,701 58,313 — — Corporate 9 — 9,442 — 30,210 Total $ 14,653 $ 8,701 $ 121,182 $ 38,082 $ 30,210 |
Schedule of Segment Reporting, Statement of Operations | Statements of Operations Three Months Ended December 31, 2018 (Unaudited, in thousands) Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Revenues $ 5,320 $ 9,323 $ — $ 14,643 Direct operating (exclusive of depreciation and amortization shown below) 505 4,741 — 5,246 Selling, general and administrative 448 3,499 2,478 6,425 Allocation of corporate overhead 378 989 (1,367 ) — Provision for doubtful accounts 141 (28 ) — 113 Depreciation and amortization of property and equipment 1,942 87 45 2,074 Amortization of intangible assets 11 1,385 1 1,397 Total operating expenses 3,425 10,673 1,157 15,255 Income (loss) from operations $ 1,895 $ (1,350 ) $ (1,157 ) $ (612 ) Statements of Operations Nine Months Ended December 31, 2018 (Unaudited, in thousands) Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Revenues $ 19,926 $ 21,539 $ — $ 41,465 Direct operating (exclusive of depreciation and amortization shown below) 1,227 11,060 — 12,287 Selling, general and administrative 1,446 11,219 6,790 19,455 Allocation of corporate overhead 1,167 3,042 (4,209 ) — Provision (recovery) for doubtful accounts 1,384 (139 ) — 1,245 Depreciation and amortization of property and equipment 5,844 256 139 6,239 Amortization of intangible assets 34 4,149 4 4,187 Total operating expenses 11,102 29,587 2,724 43,413 Income (loss) from operations $ 8,824 $ (8,048 ) $ (2,724 ) $ (1,948 ) Statements of Operations Three Months Ended December 31, 2017 (Unaudited, in thousands) Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Revenues $ 8,461 $ 10,031 $ — $ 18,492 Direct operating (exclusive of depreciation and amortization shown below) 459 5,904 — 6,363 Selling, general and administrative 683 4,634 3,942 9,259 Allocation of Corporate overhead 410 871 (1,281 ) — Provision for doubtful accounts 634 (3 ) — 631 Depreciation and amortization of property and equipment 2,066 91 56 2,213 Amortization of intangible assets 11 1,384 — 1,395 Total operating expenses 4,263 12,881 2,717 19,861 Income (loss) from operations $ 4,198 $ (2,850 ) $ (2,717 ) $ (1,369 ) Statements of Operations Nine Months Ended December 31, 2017 (Unaudited, in thousands) Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Revenues $ 28,274 $ 21,736 $ — $ 50,010 Direct operating (exclusive of depreciation and amortization shown below) 1,210 13,260 — 14,470 Selling, general and administrative 1,553 12,518 7,753 21,824 Allocation of corporate overhead 1,210 2,572 (3,782 ) — Provision for doubtful accounts 1,583 (3 ) — 1,580 Depreciation and amortization of property and equipment 9,743 242 230 10,215 Amortization of intangible assets 34 4,147 4 4,185 Total operating expenses 15,333 32,736 4,205 52,274 Income (loss) from operations $ 12,941 $ (11,000 ) $ (4,205 ) $ (2,264 ) |
Schedule of Segement Reporting, Employee Stock-based Compensation Expense | Employee and director stock-based compensation expense related to the Company’s stock-based awards was $0.4 million for the three months ended December 31, 2018 . Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ — $ — $ — $ — Selling, general and administrative 3 96 262 361 Total stock-based compensation $ 3 $ 96 $ 262 $ 361 Employee and director stock-based compensation expense related to the Company’s stock-based awards was $0.8 million for the nine months ended December 31, 2018. Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Direct operating $ — — $ — $ — $ — Selling, general and administrative 8 161 594 763 Total stock-based compensation $ 8 $ 161 $ 594 $ 763 Employee and director stock-based compensation expense related to the Company’s stock-based awards was $2.2 million for the nine months ended December 31, 2017. Cinema Equipment Business Content & Entertainment Business Corporate Consolidated Direct operating $ 36 $ 24 $ — $ 60 Selling, general and administrative 14 817 1,323 2,154 Total stock-based compensation $ 50 $ 841 $ 1,323 $ 2,214 Employee and director stock-based compensation expense related to the Company’s stock-based awards was $1.6 million for the three months ended December 31, 2017. Cinema Equipment Business Content & Entertainment Corporate Consolidated Direct operating $ 28 $ 19 $ — $ 47 Selling, general and administrative 10 594 916 1,520 Total stock-based compensation $ 38 $ 613 $ 916 $ 1,567 |
NATURE OF OPERATIONS - NARRATIV
NATURE OF OPERATIONS - NARRATIVE (Details) | Oct. 18, 2018USD ($) | Jul. 20, 2018USD ($) | Mar. 31, 2018USD ($)segment | Dec. 31, 2018USD ($)segmenttheatre | Dec. 31, 2018USD ($)theatresegments | Oct. 09, 2018USD ($) | Dec. 31, 2017USD ($)shares | Dec. 29, 2017USD ($)shares | Jul. 14, 2016USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Number of movie theatres | theatre | 12,000 | 12,000 | |||||||
Number of reportable segments | 4 | 2 | 2 | ||||||
Accumulated deficit | $ (379,225,000) | $ (389,496,000) | $ (389,496,000) | ||||||
Working capital | $ (26,300,000) | $ (26,300,000) | |||||||
Second Lien Loans | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Debt interest rate, stated rate | 12.75% | ||||||||
Bison Note Payable | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Debt interest rate, stated rate | 5.00% | 5.00% | |||||||
Debt face amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||||||
Debt Instrument, Term | 1 year | ||||||||
Outstanding warrants (in shares) | shares | 1,400,000 | 1,400,000 | |||||||
Secured Debt | Second Lien Loans | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Repayments of debt | $ 5,000,000 | ||||||||
Debt interest rate, stated rate | 7.50% | ||||||||
Debt face amount | $ 15,000,000 | ||||||||
Convertible Debt | Convertible Notes [Member] | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Debt interest rate, stated rate | 8.00% | ||||||||
Debt face amount | $ 5,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NARRATIVE (Details) | Jul. 26, 2018shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Jun. 30, 2017shares | Dec. 31, 2018USD ($)tranche$ / sharesshares | Dec. 31, 2017USD ($)shares | Apr. 01, 2018USD ($) |
Deferred Revenue Arrangement [Line Items] | |||||||
Asset Impairment Charges | $ 0 | $ 0 | $ 0 | $ 0 | |||
Goodwill impairment | 0 | 0 | 0 | 0 | |||
Activation fee revenue, per screen | 2,000 | ||||||
Activation fee revenue range, minimum | 1,000 | 1,000 | |||||
Activation fee revenue range, maximum | 2,000 | 2,000 | |||||
Total stock-based compensation | 361,000 | 1,567,000 | 763,000 | $ 2,214,000 | |||
Contract with Customer, Liability | 4,500,000 | 4,500,000 | $ 5,700,000 | ||||
Contract with Customer, Liability, Revenue Recognized | 900,000 | $ 2,900,000 | |||||
Forward Contracts [Member] | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Antidilutive securities excluded from computation of earnings per share (shares) | shares | 1,179,138 | 1,179,138 | |||||
Stock Options and Warrants [Member] | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Antidilutive securities excluded from computation of earnings per share (shares) | shares | 5,043,341 | 2,893,574 | |||||
Convertible Debt Securities [Member] | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Antidilutive securities excluded from computation of earnings per share (shares) | shares | 3,333,333 | 3,333,333 | |||||
Performance Shares [Member] | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 1,941,400 | ||||||
Share-based Compensation Arrangement by Share-based Payment Awards, Number of Tranches | tranche | 2 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 0.35 | ||||||
Total stock-based compensation | $ 283,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares | 1,904,177 | 1,904,177 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | shares | 37,223 | ||||||
Performance Shares [Member] | Executive Officer [Member] | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Total stock-based compensation | $ 114,000 | 282,000 | $ 114,000 | $ 282,000 | |||
Stock Appreciation Rights (SARs) [Member] | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 1,222,830 | ||||||
Total stock-based compensation | $ 178,000 | $ 282,000 | |||||
Stock Appreciation Rights (SARs) [Member] | Chief Executive Officer | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 700,000 | ||||||
Stock Appreciation Rights (SARs) [Member] | Executive Officer [Member] | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 1,577,830 | ||||||
Restricted Stock [Member] | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | shares | 10,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 1.52 | ||||||
Total stock-based compensation | $ 3,000 | $ 3,000 | |||||
Minimum | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Revenue from Contract with Customer, Payment Term | 30 days | ||||||
Maximum | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Revenue from Contract with Customer, Payment Term | 90 days | ||||||
Services | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Administrative fee VPFs | 5.00% | 5.00% | |||||
Incentive fees, percentage of VPF Phase I | 2.50% | 2.50% | |||||
Up-front Payment Arrangement | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Administrative fee VPFs | 10.00% | 10.00% | |||||
Prepaid Expense and Other Assets, Current [Member] | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Asset Impairment Charges | $ 300,000 | $ 1,100,000 | $ 900,000 | $ 2,200,000 | |||
Class A common stock | |||||||
Deferred Revenue Arrangement [Line Items] | |||||||
Total stock-based compensation | $ 66,000 | $ 196,000 | |||||
Issuance of common stock for third party professional services (in shares) | shares | 225,862 | 111,724 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 17,141 | $ 17,952 | ||
Restricted Cash | 1,000 | 1,000 | ||
Total | $ 18,141 | $ 18,952 | $ 18,218 | $ 13,566 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY AND EQUIPMENT (Details) | 9 Months Ended |
Dec. 31, 2018 | |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Digital cinema projection systems | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 10 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 10 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 3 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 6 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - FAIR VALUE MEASUREMENTS (Details) - Recurring $ in Thousands | Dec. 31, 2018USD ($) |
Levels of fair value measurements of financial assets: | |
Restricted cash | $ 1,000 |
Fair Value, Inputs, Level 1 | |
Levels of fair value measurements of financial assets: | |
Restricted cash | 1,000 |
Fair Value, Inputs, Level 2 | |
Levels of fair value measurements of financial assets: | |
Restricted cash | 0 |
Fair Value, Inputs, Level 3 | |
Levels of fair value measurements of financial assets: | |
Restricted cash | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REMAINING PERFORMANCE OBLIGATION (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 $ in Millions | 9 Months Ended |
Dec. 31, 2018USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation | $ 1.7 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - DISAGGREGATION OF REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 14,643 | $ 18,492 | $ 41,465 | $ 50,010 |
Cinema Equipment Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5,320 | 8,461 | 19,926 | 28,274 |
Content & Entertainment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 9,323 | $ 10,031 | 21,539 | $ 21,736 |
Phase I Deployment | Cinema Equipment Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,156 | 7,424 | ||
Phase II Deployment | Cinema Equipment Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,754 | 8,191 | ||
Services | Cinema Equipment Business | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,410 | 4,311 | ||
Base Distribution Business | Content & Entertainment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6,565 | 14,298 | ||
OTT Streaming and Digital | Content & Entertainment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 2,758 | $ 7,241 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - EMPLOYEE STOCK-BASED COMPENSATION EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 361 | $ 1,567 | $ 763 | $ 2,214 |
Direct operating | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 0 | 47 | 0 | 60 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 361 | $ 1,520 | $ 763 | $ 2,154 |
Other Interests (Details)
Other Interests (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | |
Noncontrolling Interest [Line Items] | |||||
Accounts receivable service equity investment | $ 400,000 | $ 400,000 | $ 400,000 | ||
Management fees revenue | 300,000 | $ 300,000 | $ 900,000 | $ 300,000 | |
Holdings | |||||
Noncontrolling Interest [Line Items] | |||||
Ownership percentage | 100.00% | ||||
Equity method investment aggregate cost | 2,000,000 | $ 2,000,000 | |||
Holdings | Variable Interest Entity, Not Primary Beneficiary | |||||
Noncontrolling Interest [Line Items] | |||||
Equity method investment equity | (28,700,000) | (28,700,000) | (26,300,000) | ||
Equity method investment | $ 0 | $ 0 | $ 0 | ||
CONtv | |||||
Noncontrolling Interest [Line Items] | |||||
Ownership percentage | 85.00% | 85.00% |
INCOME TAXES Income Taxes (Deta
INCOME TAXES Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 55 | $ 113 | $ 194 | $ 495 |
Effective income tax rate | (2.00%) | (2.70%) |
NOTES PAYABLE - SCHEDULE OF NO
NOTES PAYABLE - SCHEDULE OF NOTES PAYABLE OUTSTANDING (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Mar. 31, 2017 |
Notes Payable: | ||
Current portion | $ 25,051 | $ 5,287 |
Long Term Portion | 39,731 | 63,005 |
Prospect Loan | ||
Notes Payable: | ||
Current portion | 0 | 0 |
Long Term Portion | 26,405 | 39,710 |
Bison Note Payable | ||
Notes Payable: | ||
Current portion gross | 10,000 | 0 |
Long term portion gross | 0 | 10,000 |
Non-recourse Notes Payable | ||
Notes Payable: | ||
Current portion gross | 279 | 512 |
Unamortized debt issuance cost, current | 0 | 0 |
Current portion | 279 | 512 |
Long term portion gross | 26,405 | 39,710 |
Unamortized debt issuance long term | (1,663) | (2,140) |
Long Term Portion | 24,742 | 37,570 |
Non-recourse Notes Payable | Prospect Loan | ||
Notes Payable: | ||
Current portion gross | 0 | 0 |
Long term portion gross | 26,405 | 39,710 |
Non-recourse Notes Payable | KBC Facilities | ||
Notes Payable: | ||
Current portion gross | 0 | 154 |
Long term portion gross | 0 | 0 |
Non-recourse Notes Payable | P2 Vendor Note | ||
Notes Payable: | ||
Current portion gross | 279 | 336 |
Long term portion gross | 0 | 0 |
Non-recourse Notes Payable | P2 Exhibitor Notes | ||
Notes Payable: | ||
Current portion gross | 0 | 22 |
Long term portion gross | 0 | 0 |
Recourse Notes Payable | ||
Notes Payable: | ||
Current portion gross | 25,989 | 5,000 |
Unamortized debt issuance cost, current | (1,217) | (225) |
Current portion | 24,772 | 4,775 |
Long term portion gross | 15,802 | 28,787 |
Unamortized debt issuance long term | (813) | (3,352) |
Long Term Portion | 14,989 | 25,435 |
Recourse Notes Payable | 2013 Notes | ||
Notes Payable: | ||
Current portion gross | 0 | 5,000 |
Long term portion gross | 0 | 0 |
Line of Credit [Member] | Credit Facility [Member] | ||
Notes Payable: | ||
Current portion gross | 0 | 0 |
Long term portion gross | 15,802 | 8,227 |
Convertible Debt | Convertible Notes [Member] | ||
Notes Payable: | ||
Current portion gross | 5,000 | 0 |
Long term portion gross | 0 | 0 |
Secured Debt | Second Lien Loans | ||
Notes Payable: | ||
Current portion gross | 10,989 | 0 |
Long term portion gross | $ 0 | $ 10,560 |
NOTES PAYABLE - NARRATIVE (Det
NOTES PAYABLE - NARRATIVE (Details) | Jan. 11, 2019USD ($) | Oct. 18, 2018USD ($) | Oct. 09, 2018USD ($)extension$ / sharesshares | Jul. 20, 2018USD ($) | Mar. 30, 2018USD ($)extension | Jul. 14, 2016USD ($)shares | Feb. 28, 2013USD ($) | Oct. 31, 2013USD ($)shares | Dec. 31, 2018USD ($)shares | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($)shares | Dec. 29, 2017USD ($)shares | Mar. 31, 2017USD ($) |
Second Lien Loans | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Outstanding warrants (in shares) | shares | 206,768 | ||||||||||||
Prospect Loan | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Restricted cash | $ 1,000,000 | $ 1,000,000 | |||||||||||
Recourse Notes Payable | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Current portion gross | $ 25,989,000 | $ 5,000,000 | |||||||||||
LIBOR | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Basis spread on variable rate | 2.797% | ||||||||||||
Bison Note Payable | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt face amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||||||||||
Debt Instrument, Term | 1 year | ||||||||||||
Current portion gross | $ 10,000,000 | 0 | |||||||||||
Outstanding warrants (in shares) | shares | 1,400,000 | 1,400,000 | |||||||||||
Debt interest rate, stated rate | 5.00% | 5.00% | |||||||||||
2013 Notes | Senior Notes | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt interest rate, stated rate | 9.00% | ||||||||||||
Debt conversion original debt amount | $ 5,000,000 | ||||||||||||
Number of securities called by warrants (in shares) | shares | 150,000 | ||||||||||||
Discount on debt instrument | $ 1,600,000 | ||||||||||||
2013 Notes | Recourse Notes Payable | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Current portion gross | 0 | 5,000,000 | |||||||||||
Second Lien Loans | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt interest rate, stated rate | 12.75% | ||||||||||||
Second Lien Loans | Secured Debt | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt face amount | $ 15,000,000 | ||||||||||||
Current portion gross | $ 10,989,000 | 0 | |||||||||||
Debt interest rate, stated rate | 7.50% | ||||||||||||
Repayments of debt | $ 5,000,000 | ||||||||||||
Proceeds from secured notes payable | 1,500,000 | ||||||||||||
Number of shares to be issued for every 1 Million borrowed (in shares) | shares | 98,000 | ||||||||||||
Issuance of common stock and warrants in connection with debt instruments (in shares) | shares | 906,450 | ||||||||||||
Second Lien Loans | Payment in Kind (PIK) Note | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt interest rate, stated rate | 5.25% | ||||||||||||
Cinedigm Revolving Loans | Revolving Credit Facility | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Repayments of long-term lines of credit | $ 7,800,000 | ||||||||||||
East West Loan Agreement [Member] | Revolving Credit Facility | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Proceeds from Lines of Credit | $ 8,200,000 | $ 7,600,000 | |||||||||||
Maximum borrowing capacity | 19,000,000 | ||||||||||||
Debt Instrument, Number of One-Year Extensions | extension | 2 | ||||||||||||
Remaining borrowing capacity | 3,200,000 | ||||||||||||
East West Loan Agreement [Member] | LIBOR | Revolving Credit Facility | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Basis spread on variable rate | 3.25% | ||||||||||||
East West Loan Agreement [Member] | Prime Rate [Member] | Revolving Credit Facility | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Basis spread on variable rate | 0.50% | ||||||||||||
Prospect Loan | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt face amount | $ 70,000,000 | 70,000,000 | 70,000,000 | ||||||||||
Basis spread on variable rate | 9.00% | ||||||||||||
Debt interest rate, stated rate | 2.50% | ||||||||||||
Debt Instrument, Maximum Amount of Support | 1,500,000 | ||||||||||||
Prospect Loan | Debt Instrument, Prepayment Period - Between Second And Third Anniversary | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Prepayment premium | 5.00% | ||||||||||||
Prospect Loan | Debt Instrument, Prepayment Period - Between Third and Fourth Anniversary | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Prepayment premium | 4.00% | ||||||||||||
Prospect Loan | Debt Instrument, Prepayment Period - Between Fourth and Fifth Anniversary | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Prepayment premium | 3.00% | ||||||||||||
Prospect Loan | Debt Instrument, Prepayment Period - Between Fifth and Sixth Anniversary | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Prepayment premium | 2.00% | ||||||||||||
Prospect Loan | Debt Instrument, Prepayment Period - Between Sixth and Seventh Anniversary | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Prepayment premium | 1.00% | ||||||||||||
Prospect Loan | LIBOR | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt variable rate basis floor | 2.00% | ||||||||||||
Convertible Notes [Member] | Convertible Debt | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt face amount | $ 5,000,000 | ||||||||||||
Current portion gross | 5,000,000 | $ 0 | |||||||||||
Debt interest rate, stated rate | 8.00% | ||||||||||||
Debt Instrument, Number of One-Year Extensions | extension | 2 | ||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 3,333,333 | ||||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 1.50 | ||||||||||||
Debt Instrument, Convertible, Conversion Price Before Maturity | $ / shares | $ 1.10 | ||||||||||||
Discount on debt instrument | $ 270,000 | ||||||||||||
Subsequent Event | East West Loan Agreement [Member] | Revolving Credit Facility | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Proceeds from Lines of Credit | $ 3,000,000 | ||||||||||||
Remaining borrowing capacity | $ 200,000 | ||||||||||||
Ronald L. Chez [Member] | 2013 Notes | Senior Notes | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt conversion original debt amount | 3,000,000 | 3,000,000 | |||||||||||
Ronald L. Chez [Member] | Second Lien Loans | Secured Debt | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Current portion gross | 4,000,000 | ||||||||||||
Zvi Rhine [Member] | 2013 Notes | Senior Notes | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Debt conversion original debt amount | $ 500,000 | $ 500,000 |
NOTES PAYABLE - NET OF ORIGINA
NOTES PAYABLE - NET OF ORIGINAL ISSUE DISCOUNT (Details) - USD ($) | Dec. 31, 2018 | Mar. 31, 2017 | Feb. 28, 2013 |
Debt Instrument [Line Items] | |||
Less current portion | $ (25,051,000) | $ (5,287,000) | |
Long Term Portion | 39,731,000 | 63,005,000 | |
Prospect Loan | |||
Debt Instrument [Line Items] | |||
Debt amount, at issuance | 70,000,000 | 70,000,000 | $ 70,000,000 |
PIK Interest | 4,778,000 | 4,778,000 | |
Payments to date | (48,373,000) | (35,068,000) | |
Notes payable, net | 26,405,000 | 39,710,000 | |
Less current portion | 0 | 0 | |
Long Term Portion | $ 26,405,000 | $ 39,710,000 |
NOTES PAYABLE - SUMMARY OF CRE
NOTES PAYABLE - SUMMARY OF CREDIT FACILITIES (Details) $ in Thousands | 9 Months Ended | |
Dec. 31, 2018USD ($)installments | Mar. 31, 2017USD ($) | |
LIBOR | ||
Line of Credit Facility [Line Items] | ||
Interest Rate | 2.797% | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Number of quarterly payments | installments | 28 | |
Credit Facility 5 | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Credit Facility | $ 11,425 | |
Interest Rate | 3.75% | |
Outstanding Principal Balance | $ 0 | $ 154 |
STOCKHOLDERS' DEFICIT - COMMON
STOCKHOLDERS' DEFICIT - COMMON STOCK (Details) | 9 Months Ended |
Dec. 31, 2018shares | |
Class A common stock | |
Class of Stock [Line Items] | |
Shares issued as payment for services rendered | 568,947 |
STOCKHOLDERS' DEFICIT - PREFER
STOCKHOLDERS' DEFICIT - PREFERRED STOCK (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | |
Jan. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock [Line Items] | |||
Dividends preferred stock | $ 0.1 | $ 0.2 | |
Subsequent Event | |||
Class of Stock [Line Items] | |||
Stock Dividends, Shares | 161,511 |
STOCKHOLDERS' DEFICIT - TREASUR
STOCKHOLDERS' DEFICIT - TREASURY STOCK (Details) - shares | Dec. 31, 2018 | Mar. 31, 2018 |
Equity [Abstract] | ||
Treasury stock (in shares) | 1,313,836 | 1,313,836 |
STOCKHOLDERS' DEFICIT - CINEDI
STOCKHOLDERS' DEFICIT - CINEDIGM'S EQUITY INCENTIVE PLAN (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 10, 2018 | Sep. 28, 2018 | Jul. 26, 2018 | Jun. 07, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | Aug. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Total stock-based compensation | $ 361 | $ 1,567 | $ 763 | $ 2,214 | ||||||
Stock Appreciation Rights (SARs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,222,830 | |||||||||
Total stock-based compensation | $ 178 | $ 282 | ||||||||
Performance Shares [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,941,400 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.35 | |||||||||
Total stock-based compensation | $ 283 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 1,904,177 | 1,904,177 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 37,223 | |||||||||
Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 10,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.52 | |||||||||
Total stock-based compensation | $ 3 | $ 3 | ||||||||
Class A common stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Total stock-based compensation | $ 66 | $ 196 | ||||||||
Cinedigm Equity Incentive Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Percent voting power threshold | 10.00% | |||||||||
Exercise price if voting threshold is met, percent | 110.00% | |||||||||
Cinedigm Equity Incentive Plan | Class A common stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (shares) | 2,380,000 | 2,380,000 | ||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options | 335,315 | 335,315 | 338,315 | |||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price | $ 15.57 | |||||||||
Options outstanding, weighted average remaining contractual term | 4 years 4 months 16 days | 4 years 7 months 18 days | ||||||||
2017 Plan | Class A common stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares authorized (shares) | 2,098,270 | |||||||||
2017 Plan, Tranche 1 | Stock Appreciation Rights (SARs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 700,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Exercise Price Threshold | $ 1.47 | |||||||||
Total stock-based compensation | $ 186 | |||||||||
Aware expiration period | 10 years | |||||||||
2017 Plan, Tranche 1 | Stock Appreciation Rights (SARs) [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 233,333 | |||||||||
2017 Plan, Tranche 1 | Stock Appreciation Rights (SARs) [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 233,333 | |||||||||
2017 Plan, Tranche 1 | Stock Appreciation Rights (SARs) [Member] | Share-based Compensation Award, Tranche Three [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 233,334 | |||||||||
2017 Plan, Tranche 2 | Stock Appreciation Rights (SARs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 355,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Exercise Price Threshold | $ 1.16 | |||||||||
Total stock-based compensation | 53 | |||||||||
Aware expiration period | 10 years | |||||||||
2017 Plan, Tranche 2 | Stock Appreciation Rights (SARs) [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 118,333 | |||||||||
2017 Plan, Tranche 2 | Stock Appreciation Rights (SARs) [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 118,333 | |||||||||
2017 Plan, Tranche 2 | Stock Appreciation Rights (SARs) [Member] | Share-based Compensation Award, Tranche Three [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 118,334 | |||||||||
2017 Plan, Tranche 3 | Stock Appreciation Rights (SARs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,222,830 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Exercise Price Threshold | $ 1.47 | |||||||||
Total stock-based compensation | $ 43 | |||||||||
Aware expiration period | 10 years | |||||||||
2017 Plan, Tranche 3 | Stock Appreciation Rights (SARs) [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 407,610 | |||||||||
2017 Plan, Tranche 3 | Stock Appreciation Rights (SARs) [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 407,610 | |||||||||
2017 Plan, Tranche 3 | Stock Appreciation Rights (SARs) [Member] | Share-based Compensation Award, Tranche Three [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 407,610 |
STOCKHOLDERS' DEFICIT - OPTION
STOCKHOLDERS' DEFICIT - OPTIONS GRANTED OUTSIDE CINEDIGM'S EQUITY INCENTIVE PLAN (Details) | 1 Months Ended | |
Oct. 31, 2013employee$ / sharesshares | Dec. 31, 2010$ / sharesshares | |
Class A common stock | Chief Executive Officer | ||
Class of Stock [Line Items] | ||
Options exercise price range, lower (in dollars per share) | $ 15 | |
Options exercise price range, upper (in dollars per share) | $ 50 | |
Class A common stock | Chief Executive Officer | Stock option | ||
Class of Stock [Line Items] | ||
Number of shares authorized (shares) | shares | 450,000 | |
Gaiam Americas, Inc. and Gaiam, Inc. (GVE) | ||
Class of Stock [Line Items] | ||
Number of employees joining company following acquisition | employee | 10 | |
Shares under option, granted (shares) | shares | 62,000 | |
Weighted average exercise price per share, granted (in dollars per share) | $ 17.5 | |
Gaiam Americas, Inc. and Gaiam, Inc. (GVE) | Stock option | ||
Class of Stock [Line Items] | ||
Aware expiration period | 10 years |
STOCKHOLDERS' DEFICIT - WARRAN
STOCKHOLDERS' DEFICIT - WARRANTS (Details) | Dec. 31, 2018$ / sharesshares |
Strategic Management Service Provider Warrants | |
Class of Warrant or Right [Line Items] | |
Outstanding warrants (in shares) | shares | 52,500 |
Second Lien Loans | |
Class of Warrant or Right [Line Items] | |
Outstanding warrants (in shares) | shares | 206,768 |
Warrants Issued in Connection with Convertible Notes | |
Class of Warrant or Right [Line Items] | |
Outstanding warrants (in shares) | shares | 207,679 |
Warrant exercise price (in dollars per share) | $ 1.54 |
Bison Note Payable | |
Class of Warrant or Right [Line Items] | |
Outstanding warrants (in shares) | shares | 1,400,000 |
Warrant exercise price (in dollars per share) | $ 1.80 |
Minimum | Strategic Management Service Provider Warrants | |
Class of Warrant or Right [Line Items] | |
Warrant exercise price (in dollars per share) | 17.20 |
Minimum | Second Lien Loans | |
Class of Warrant or Right [Line Items] | |
Warrant exercise price (in dollars per share) | 1.34 |
Maximum | Strategic Management Service Provider Warrants | |
Class of Warrant or Right [Line Items] | |
Warrant exercise price (in dollars per share) | 30 |
Maximum | Second Lien Loans | |
Class of Warrant or Right [Line Items] | |
Warrant exercise price (in dollars per share) | $ 1.57 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||
Cash interest paid | $ 6,627 | $ 8,533 |
Accrued dividends on preferred stock | 89 | 89 |
Issuance of Second Lien Loans in connection with Convertible Notes exchange transaction | 0 | 1,462 |
Issuance of warrants in connection with debt instruments | 0 | 1,084 |
Issuance of Class A common stock in exchange for the CEO's Second Lien Loans | 0 | 500 |
Class A common stock | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Issuance of Class A common stock for payment of preferred stock dividends | 267,000 | 267 |
Issuance of Class A common stock for settlement of an obligation to a vendor | $ 0 | $ 867 |
SEGMENT INFORMATION - ASSETS an
SEGMENT INFORMATION - ASSETS and DEBT (Details) | Mar. 31, 2018USD ($)segment | Dec. 31, 2018USD ($)segment | Dec. 31, 2018USD ($)segments | Dec. 31, 2018USD ($)systems | Mar. 31, 2017USD ($) |
Segment Reporting, Asset Reconciling Item [Line Items] | |||||
Number of reportable segments | 4 | 2 | 2 | ||
Total intangible assets, net | $ 14,653,000 | $ 10,685,000 | $ 10,685,000 | $ 10,685,000 | $ 14,653,000 |
Total goodwill | 8,701,000 | 8,701,000 | 8,701,000 | 8,701,000 | 8,701,000 |
Assets from continuing operations | $ 121,182,000 | 105,814,000 | 105,814,000 | 105,814,000 | 121,182,000 |
Notes payable, non-recourse | 25,021,000 | 25,021,000 | 25,021,000 | 38,082,000 | |
Current portion of notes payable | 39,761,000 | 39,761,000 | 39,761,000 | 30,210,000 | |
Cinema Equipment Business | Segment, Continuing Operations | |||||
Segment Reporting, Asset Reconciling Item [Line Items] | |||||
Total intangible assets, net | 80,000 | 80,000 | 80,000 | 115,000 | |
Total goodwill | 0 | 0 | 0 | 0 | |
Assets from continuing operations | 46,034,000 | 46,034,000 | 46,034,000 | 53,427,000 | |
Notes payable, non-recourse | 25,021,000 | 25,021,000 | 25,021,000 | 38,082,000 | |
Current portion of notes payable | 0 | 0 | 0 | 0 | |
Content & Entertainment | Segment, Continuing Operations | |||||
Segment Reporting, Asset Reconciling Item [Line Items] | |||||
Total intangible assets, net | 10,593,000 | 10,593,000 | 10,593,000 | 14,529,000 | |
Total goodwill | 8,701,000 | 8,701,000 | 8,701,000 | 8,701,000 | |
Assets from continuing operations | 56,170,000 | 56,170,000 | 56,170,000 | 58,313,000 | |
Notes payable, non-recourse | 0 | 0 | 0 | 0 | |
Current portion of notes payable | 0 | 0 | 0 | 0 | |
Corporate | Segment, Continuing Operations | |||||
Segment Reporting, Asset Reconciling Item [Line Items] | |||||
Total intangible assets, net | 12,000 | 12,000 | 12,000 | 9,000 | |
Total goodwill | 0 | 0 | 0 | 0 | |
Assets from continuing operations | 3,610,000 | 3,610,000 | 3,610,000 | 9,442,000 | |
Notes payable, non-recourse | 0 | 0 | 0 | 0 | |
Current portion of notes payable | $ 39,761,000 | $ 39,761,000 | $ 39,761,000 | $ 30,210,000 | |
Phase I Deployment | |||||
Segment Reporting, Asset Reconciling Item [Line Items] | |||||
Number of systems installed | systems | 3,480 | ||||
Phase II Deployment | |||||
Segment Reporting, Asset Reconciling Item [Line Items] | |||||
Number of systems installed | systems | 6,426 | ||||
Number of Systems Installed with No Residual Cash Flow Ownership | systems | 8,904 |
SEGMENT INFORMATION - RECONCILI
SEGMENT INFORMATION - RECONCILIATION OF OPERATING PROFIT (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | $ 14,643 | $ 18,492 | $ 41,465 | $ 50,010 |
Direct operating (excludes depreciation and amortization shown below) | 5,246 | 6,363 | 12,287 | 14,470 |
Selling, general and administrative | 6,425 | 9,259 | 19,455 | 21,824 |
Allocation of corporate overhead | 0 | 0 | 0 | 0 |
Provision for doubtful accounts | 113 | 631 | 1,245 | 1,580 |
Depreciation and amortization of property and equipment | 2,074 | 2,213 | 6,239 | 10,215 |
Amortization of intangible assets | 1,397 | 1,395 | 4,187 | 4,185 |
Total operating expenses | 15,255 | 19,861 | 43,413 | 52,274 |
Loss from operations | (612) | (1,369) | (1,948) | (2,264) |
Cinema Equipment Business | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | 5,320 | 8,461 | 19,926 | 28,274 |
Direct operating (excludes depreciation and amortization shown below) | 505 | 459 | 1,227 | 1,210 |
Selling, general and administrative | 448 | 683 | 1,446 | 1,553 |
Allocation of corporate overhead | 378 | 410 | 1,167 | 1,210 |
Provision for doubtful accounts | 141 | 634 | 1,384 | 1,583 |
Depreciation and amortization of property and equipment | 1,942 | 2,066 | 5,844 | 9,743 |
Amortization of intangible assets | 11 | 11 | 34 | 34 |
Total operating expenses | 3,425 | 4,263 | 11,102 | 15,333 |
Loss from operations | 1,895 | 4,198 | 8,824 | 12,941 |
Content & Entertainment | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | 9,323 | 10,031 | 21,539 | 21,736 |
Direct operating (excludes depreciation and amortization shown below) | 4,741 | 5,904 | 11,060 | 13,260 |
Selling, general and administrative | 3,499 | 4,634 | 11,219 | 12,518 |
Allocation of corporate overhead | 989 | 871 | 3,042 | 2,572 |
Provision for doubtful accounts | (28) | (3) | (139) | (3) |
Depreciation and amortization of property and equipment | 87 | 91 | 256 | 242 |
Amortization of intangible assets | 1,385 | 1,384 | 4,149 | 4,147 |
Total operating expenses | 10,673 | 12,881 | 29,587 | 32,736 |
Loss from operations | (1,350) | (2,850) | (8,048) | (11,000) |
Corporate | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Direct operating (excludes depreciation and amortization shown below) | 0 | 0 | 0 | 0 |
Selling, general and administrative | 2,478 | 3,942 | 6,790 | 7,753 |
Allocation of corporate overhead | (1,367) | (1,281) | (4,209) | (3,782) |
Provision for doubtful accounts | 0 | 0 | 0 | 0 |
Depreciation and amortization of property and equipment | 45 | 56 | 139 | 230 |
Amortization of intangible assets | 1 | 0 | 4 | 4 |
Total operating expenses | 1,157 | 2,717 | 2,724 | 4,205 |
Loss from operations | $ (1,157) | $ (2,717) | $ (2,724) | $ (4,205) |
SEGMENT INFORMATION - EMPLOYEE
SEGMENT INFORMATION - EMPLOYEE STOCK-BASED COMPENSATION EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | $ 361 | $ 1,567 | $ 763 | $ 2,214 | |
Direct operating | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 0 | 47 | 0 | 60 | |
Selling, general and administrative | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 361 | 1,520 | 763 | 2,154 | |
Cinema Equipment Business | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 3 | 38 | 8 | 50 | |
Cinema Equipment Business | Direct operating | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 0 | 28 | $ 36 | ||
Cinema Equipment Business | Selling, general and administrative | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 3 | 10 | 14 | 8 | |
Content & Entertainment | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 96 | 613 | 161 | 841 | |
Content & Entertainment | Direct operating | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 0 | 19 | 24 | 0 | |
Content & Entertainment | Selling, general and administrative | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 96 | 594 | 817 | 161 | |
Corporate | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 262 | 916 | 594 | $ 1,323 | |
Corporate | Direct operating | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | 0 | 0 | 0 | 0 | |
Corporate | Selling, general and administrative | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total stock-based compensation | $ 262 | $ 916 | $ 1,323 | $ 594 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Jan. 11, 2019USD ($) | Mar. 30, 2018USD ($) | Jan. 31, 2019USD ($)system | Dec. 31, 2018USD ($) | Feb. 14, 2019USD ($) |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Number of Projection Systems Sold | system | 311 | ||||
Aggregate Number of Projection Systems Sold | system | 328 | ||||
Proceeds from Sale of Projection Systems | $ 3,800,000 | ||||
Revolving Credit Facility | East West Loan Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Proceeds from Lines of Credit | $ 8,200,000 | $ 7,600,000 | |||
Remaining borrowing capacity | $ 3,200,000 | ||||
Revolving Credit Facility | Subsequent Event | East West Loan Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Proceeds from Lines of Credit | $ 3,000,000 | ||||
Remaining borrowing capacity | $ 200,000 | ||||
Chief Financial Officer [Member] | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Officers' Compensation, Salary of Chief Operating Officer | $ 425,000 | ||||
Officers' Compensation, Bonus Rate | 60.00% |