What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-02-14 · 250 added, 303 removed, 338 unchanged (62% of the section changed)

6 unchanged sentences

Accounts receivable, net of allowance for credit losses of $ 406 and $ 307 , respectively

Employee retention tax credit

Content advances

Content advances, net of allowance $ 4,690 and $ 4,818 respectively

Other current assets

7 unchanged sentences

Accounts payable and accrued expenses

Line of credit, including unamortized debt issuance costs of $ 153 and $ 81 , respectively

Line of credit

Current portion of deferred consideration on purchase of business

Earnout consideration on purchase of business

Current portion of operating lease liabilities

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Total current liabilities

Deferred consideration on purchase of business, net of current portion

Operating lease liabilities, net of current portion

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20 shares authorized;

7 shares issued and 7 shares outstanding at December 31, 2024 and March 31, 2024

7 shares issued and outstanding as of June 30 and March 31, 2025

Common Stock, $ 0.001 par value;

Class A Stock:

275,000,000 shares authorized as of December 31, 2024 and March 31, 2024;

16,462,308 and 15,985,620 shares issued, with 15,958,489 and 15,699,135 shares outstanding as of December 31, 2024 and March 31, 2024, respectively

275,000,000 shares authorized as of June 30 and March 31, 2025;

17,940,445 and 16,487,947 shares issued, with 17,110,131 and 15,984,129 shares outstanding as of June 30 and March 31, 2025, respectively

Additional paid-in capital

Treasury stock, at cost;

503,819 and 288,554 shares as of December 31, 2024 and March 31, 2024, respectively

830,315 and 503,821 shares as of June 30 and March 31, 2025, respectively

Accumulated deficit

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Cineverse Corp.

CONDENSED CONSOLIDATED STA TEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three Months Ended December 31,

Nine Months Ended

Three Months Ended

Costs and expenses

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Total operating expenses

Operating income (loss)

Interest expense

Gain (loss) from equity investment in Metaverse, a related party

Operating loss

Interest income (expense)

Other (expense) income, net

Net income (loss) before income taxes

Income tax (expense) benefit

Net income (loss)

Net loss before income taxes

Income tax expense

Net income attributable to noncontrolling interest

Net income (loss) attributable to controlling interests

Net loss attributable to controlling interests

Preferred stock dividends

Net income (loss) attributable to common stockholders

Net income (loss) per share attributable to common stockholders:

Net loss attributable to common stock holders

Net loss per share attributable to common stock holders:

Weighted average shares of Common Stock outstanding:

Basic and diluted

See accompanying Notes to Condensed Consolidated Financial Statements

Cineverse Corp.

CONDENSED CONSOLIDATED STATE MENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

Three Months Ended December 31,

Nine Months Ended

Net income (loss)

Other comprehensive income (loss):

Three Months Ended

Other comprehensive loss:

Foreign exchange translation

Net income attributable to noncontrolling interest

Comprehensive income (loss)

Comprehensive loss

See accompanying Notes to Condensed Consolidated Financial Statements

Cineverse Corp.

CONDENSED CONSOLIDATED ST ATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Nine Months Ended

Three Months Ended June 30,

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Change in provision for credit losses

Amortization of debt issuance costs

Stock-based compensation

Non-cash interest expense

Changes in fair value of equity investment in Metaverse

Change in estimated earnout consideration

Barter-related non-cash expenses

Interest (discount) expense for term loan

Barter transactions

Capitalized content

Internally developed software capitalization

Interest expense for deferred consideration and earnouts

Changes in operating assets and liabilities:

Accounts receivable

Other current and long-term assets

Content advances

Other current and long-term assets

Employee retention tax credit

Accounts payable, accrued expenses, and other liabilities

Capitalized content

Deferred revenue

Net cash provided by (used in) operating activities

Net cash used in operating activities

Cash flows from investing activities:

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Payment of deferred consideration

Withholding taxes paid on restricted stock unit grants

At-the-market issuance fees

Proceeds from the issuance of a term loan, net of debt issuance costs

Repayment of term loan

Payment of earnout consideration

Cost to acquire treasury shares

Financing fees for line of credit

Proceeds from common stock warrant exercise

Issuance of Class A common stock, net of issuance costs

Net cash (used in) provided by financing activities

Proceeds from the issuance of a term loan

Net cash provided by financing activities

Net change in cash and cash equivalents

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at beginning of period

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(In thousands)

Nine Months Ended

Three Months Ended

Cash interest paid

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Noncash investing and financing activities:

Issuance of Class A common stock for payment of employee bonuses

Treasury shares acquired for withholding taxes

Earnout liability settled in stock

Issuance of Common Stock for settlement of deferred consideration

Bonus liability settled in stock

Accrued dividends on preferred stock

Issuance of Class A common stock for payment of accrued preferred stock dividends

Issuance of Common Stock for payment of accrued preferred stock dividends

See accompanying Notes to Condensed Consolidated Financial Statements

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Stockholders'

Balances as of March 31, 2024 (Audited)

Balances as of March 31, 2025

Foreign exchange translation

Stock-based compensation

Treasury stock acquired

Fees incurred in connection with ATM offering

Issuance of common stock for acquiree consideration

Preferred stock dividends paid in stock

Issuance of Common Stock for deferred consideration

Issuance of Common Stock in connection with employee equity awards

Treasury shares withheld for employee taxes

Preferred stock dividends paid in Common Stock

Preferred stock dividends accrued

Net loss (income)

Balances as of June 30, 2025

Foreign exchange translation

Stock-based compensation

Issuance of Class A common stock for earnout commitment

Treasury stock acquired

Preferred stock dividends paid in stock

Preferred stock dividends accrued

Net loss (income)

Balances as of September 30, 2024

Foreign exchange translation

Stock-based compensation

Issuance of common stock for Board of Director compensation

Preferred stock dividends paid in stock

Preferred stock dividends accrued

Exercise of common stock warrant

Balances as of December 31, 2024

See accompanying Notes to Condensed Consolidated Financial Statements

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Stockholders'

Balances as of March 31, 2023 (Audited)

Balances as of March 31, 2024

Foreign exchange translation

Stock-based compensation

Issuance of Class A common stock in connection with ATM raises, net

Issuance of Class A common stock in connection with direct equity offering

Preferred stock dividends paid in stock

Treasury stock acquired

Fees incurred in connection with ATM offering

Issuance of Common Stock for acquiree consideration

Preferred stock dividends paid in Common Stock

Preferred stock dividends accrued

Balances as of June 30, 2024

Foreign exchange translation

Stock-based compensation

Issuance of Class A common stock in connection employee bonuses

Estimated fee decrease associated with equity issuance

Issuance in connection with the exercise of warrants

Issuance of Class A common stock for earnout commitment

Treasury stock in connection with taxes withheld from employees

Preferred stock dividends paid in stock

Preferred stock dividends accrued

Balances as of September 30, 2023

Foreign exchange translation

Stock-based compensation

Issuance of common stock for Board of Director compensation

Preferred stock dividends paid in stock

Preferred stock dividends accrued

Balances as of December 31, 2023

See accompanying Notes to Condensed Consolidated Financial Statements.

CINEVERSE CORP.

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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and its subsidiaries unless the context otherwise requires) was incorporated in Delaware on March 31, 2000.

Since our inception, we have played a role in the digital distribution revolution that continues to transform the media and entertainment landscape.

Cineverse is a streaming technology and entertainment company with its core business operating as (i) a portfolio of owned and operated streaming channels with enthusiast fan bases;

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direct-to-consumer, through these major application platforms, and through third-party distributors of content on platforms.

The Company’s streaming technology platform, known as Matchpoint TM , is a software-based streaming operating platform which provides clients with AVOD, SVOD, transactional video on demand ("TVOD") and linear capabilities, automates the distribution of content, and features a robust data analytics platform.

The Company’s streaming technology platform, known as Matchpoint , is a software-based streaming operating platform which provides clients with AVOD, SVOD, transactional video on demand ("TVOD") and linear capabilities, automates the distribution of content, and features a robust data analytics platform.

We distribute products for major brands such as Hallmark, ITV, Nelvana, ZDF, Konami, NFL and Highlander, as well as international and domestic content creators, movie producers, television producers and other short-form digital content producers.

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Financial Condition and Liquidity

We have a history of net losses and we may continue to generate net losses for the foreseeable future.

As of December 31, 2024, the Company has an accumulated deficit of $ 501.7 million and working capital surplus of $ 6.8 million.

For the three and nine months ended December 31, 2024, the Company had a net income attributable to Common Stock holders of $ 7.0 million and $ 2.5 million , respectively.

Net cash provided by operating activities for the nine months ended December 31, 2024 was $ 5.0 million, which i s net of $ 4.8 million of i ncremental investment in our content portfolio via advances or minimum guarantee payouts.

The Company is party to a Loan, Guaranty, and Security Agreement, as amended, with East West Bank ("EWB") providing for a $ 7.5 million Line of Credit Facility, guaranteed by substantially all of our material subsidiaries and secured by substantially all of our and our subsidiaries’ assets.

The Line of Credit Facility bears interest at a rate equal to 1.5 % above the prime rate, equal to 9.0 % as of December 31, 2024.

The Line of Credit Facility matures on September 15, 2025 .

As of December 31, 2024, $ 3.8 million was outstanding on the Line of Credit Facility, net of unamortized issuance costs of $ 153 thousand .

Subsequent to the quarter ended December 31, 2024 , our Line of Credit balance was paid down to $ 0 .

On April 5, 2024, Cineverse Terrifier LLC (“T3 Borrower”), a wholly-owned subsidiary of the Company entered into a Loan and Security Agreement with BondIt LLC (“T3 Lender”) and the Company, as a guarantor (the “T3 Loan Agreement”).

The T3 Loan Agreement provides for a term loan with a principal amount not to exceed $ 3,666 thousand (the “T3 Loan”), and a maturity date of April 1, 2025 , unless extended for 120 days under certain conditions.

The T3 Loan bears no interest until the maturity date other than an interest advance equal to $ 576 thousand paid at the closing of the T3 Loan on April 5, 2024.

A fter the principal of the T3 Loan is paid in full, the T3 Lender will be entitled to receive 15 % of all royalties earned by the Company on the film titled Terrifier 3 (the "Film") under its distribution agreements until the T3 Lender has received 1.75 times of the full commitment amount of $ 3,666 thousand consisting of principal plus interest and fees advanced to the T3 Borrower, plus any extension interest.

The T3 Loan, including interest o f $ 576 thousand, was repaid during the quarter ended December 31, 2024.

See Note 6 - Debt , for further information.

On May 3, 2024, the Company entered into a sales agreement (the “2024 Sales Agreement”) with A.G.P./Alliance Global Partners and The Benchmark Company, LLC (collectively, the “Sales Agents”), pursuant to which the Company may offer and

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

sell, from time to time, through the Sales Agents, shares of Common Stock.

We have a history of net losses, and for the three months ended June 30, 2025, we had a net loss attributable to Common Stock holders in the amount of $ 3.6 million.

We may continue to generate net losses for the foreseeable future.

As of June 30, 2025, the Company has an accumulated deficit of $ 504.6 million and negative working capital of $( 0.3 ) million.

Net cash used in operating activities for the three months ended June 30, 2025 was $ 14.5 million which included $ 1.2 million of incremental investment in our content portfolio via advances or minimum guarantee payouts.

Subsequent to June 30, 2025, 1.9 million warrants were exercised for net proceeds of $ 5.8 million.

The Company is party to a Loan, Guaranty, and Security Agreement, as amended on April 8, 2025 , with East West Bank (the "Line of Credit Facility") providing for borrowings of up to $ 12.5 million and expandable to $ 15.0 million, guaranteed by substantially all of our material subsidiaries and secured by substantially all of our and our subsidiaries’ assets.

The Line of Credit Facility bears interest at a rate equal to 1.25 % above the prime rate , equal to 8.75 % as of June 30, 2025.

The Line of Credit Facility matures on April 8, 2028 .

As of June 30, 2025, $ 3.6 million was outstanding on the Line of Credit Facility.

Under the Line of Credit Facility, the Company is subject to certain financial and non-financial covenants including terms which require the Company to maintain certain metrics and ratios, to maintain certain minimum cash on hand, and to report financial information to our lender on a periodic basis.

Please see Note 7 - Debt, for further information regarding the Company's Line of Credit Facility.

Shares of Common Stock may be offered and sold for an aggregate offering price of up to $ 15 million.

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333-273098) (the “Registration Statement”) filed by the Company with the U.S.

Securities and Exchange Commission (the “SEC”) on June 30, 2023 and declared effective by the SEC on January 25, 2024, and other customary closing conditions.

Securities and Exchange Commission (the “SEC”) on

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023 and declared effective by the SEC on January 25, 2024, and other customary closing conditions.

The Company will pay the Sales Agents a commission of 3.0 % of the aggregate gross proceeds from each sale of shares and has agreed to provide the Sales Agents with customary indemnification and contribution rights.

The Company has also agreed to reimburse the Sales Agents for certain specified expenses.

The Company is not obligated to sell any shares under the 2024 Sales Agreement and has not sold any shares through the date of this report.

The Company will continue to invest in content development and acquisition, from which it believes it will obtain an appropriate return on its investment.

As of December 31, 2024 and March 31, 2024, short term content advances were $ 8.8 million and $ 9.3 million, respectively, and content advances, net of the current portion, were $ 1.4 million and $ 2.6 million, respectively.

The Company is not obligated to sell any shares under the 2024 Sales Agreement and did not sell any shares during the three months ended June 30, 2025.

The Company will continue to invest in content development and acquisitions, from which it believes it will obtain an appropriate return on its investment.

As of June 30 and March 31, 2025, short-term content advances were $ 5.2 million and $ 6.7 million, respectively, and content advances, net of current portion, were $ 5.9 million and $ 4.1 million, respectively.

Our capital requirements will depend on many factors, and we may need to use existing capital resources and/or undertake equity or debt offerings, if necessary and opportunistically available, for further capital needs.

We believe our cash and cash equivalents and availability under our Line of Credit Facility as of December 31, 2024 will be sufficient to support our operations for at least twelve months from the filing of this report.

We believe our cash and cash equivalents and availability under our Line of Credit Facility as of June 30, 2025 will be sufficient to support our operations for at least twelve months from the filing of this report.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The accompanying interim Condensed Consolidated Financial Statements of Cineverse Corp.

have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended March 31, 2024 filed with the SEC on July 1, 2024.

These Condensed Consolidated Financial Statements are unaudited and have been prepared by the Company following the rules and regulations of the SEC.

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We evaluated the investment under the voting interest entity model and determined that the entity should be consolidated as we have a controlling financial interest in the entity through our ownership of outstanding voting shares, and that other equity holders do not have substantive voting, participating or liquidation rights.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Use of Estimates

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The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances.

On a regular basis, the Company evaluates these assumptions, judgments and estimates.

On a regular basis, the Company evaluates these

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

judgments and estimates.

Actual results may differ from these estimates.

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Segment Reporting

The Company manages its operations and its business in one reporting segment.

The Company manages its op erations and its business in one reporting segment.

Reclassifications

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We amortize internal-use software over its estimated useful life on a straight-line basis.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets, Net

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For intangible assets with indefinite lives, the assets are tested annually for impairment or sooner if a triggering event occurs.

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Amortization lives of intangible assets are as follows:

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The Company’s intangible assets included the following (in thousands):

As of December 31, 2024

As of June 30, 2025

Content Library

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Total Intangible Assets

During the three months ended June 30, 2025 and 2024, the Company had amortization expen se of $ 1.0 million and $ 0.7 mi llion, respectively, related to intangible assets.

As of March 31, 2025

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Total Intangible Assets

During the three and nine months ended December 31, 2024, the Company had amortization expense of $ 0.8 million and $ 2.3 million , respectively.

During the three and nine months ended December 31, 2023 , the Company had amortization expense of $ 0.9 million and $ 2.4 million, respectively.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024, future amortization expense is expected to be as follows (in thousands) :

As of June 30, 2025, amortization expense is expected to be (in thousands):

In-process intangible assets

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Capitalized Content

The Company capitalizes direct costs incurred in the production of content from which it expects to generate a return over the anticipated useful life and the Company’s predominant monetization strategy informs the method of amortizing these deferred costs.

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

amortizing these deferred costs.

The determination of the predominant monetization strategy is made at commencement of the production or license period and the classification of the monetization strategy as individual or group only changes if there is a significant change to the title’s monetization strategy relative to its initial assessment.

The costs are capitalized as Capitalized Content costs within Intangible Assets and are amortized as a group within Depreciation and Amortization on our Condensed Consolidated Statements of Operations.

The costs are capitalized to the Capitalized Content costs within Intangible Assets and are amortized as a group within Depreciation and Amortization within the Condensed Consolidated Statements of Operations.

Impairment of Long-lived and Finite-lived Intangible Assets

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Fair value is determined by computing the expected future discounted cash flows.

There were no impairment charges recorded for long-lived and finite-lived intangible assets during the three and nine months ended December 31, 2024 and 2023 .

There were no impairment charges recorded for long-lived and finite-lived intangible assets during the three months ended June 30, 2025 and 2024 .

Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business.

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The Company annually assesses goodwill for potential impairment during its fourth fiscal quarter, or sooner if events occur or circumstances would indicate it would be more likely than not that fair value would be reduced below its carrying amount.

For the year ended March 31, 2024, the Company recognized a goodwill impairment cha rge of $ 14 million.

No goodwill impairment charge was recorded in the three and nine months ended December 31, 2024 and 2023 .

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

No goodwill impairment charge was recorded in the three months ended June 30, 2025 and 2024 .

Fair Value Measurements

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• Level 3 – significant unobservable inputs (including our own assumptions in determining the fair value of investments)

The following tables summarize the levels of fair value measurements of our financial assets and liabilities (in thousands) :

As of December 31, 2024

Equity investment in Metaverse, at fair value

As of March 31, 2024

Equity investment in Metaverse, at fair value

Current portion of earnout consideration on purchase of a business

Our cash and cash equivalents, accounts receivable and accounts payable and accrued expenses are financial instruments and are recorded at cost in the consolidated balance sheets.

The estimated fair values of these financial instruments approximate their carrying amounts because of their short-term nature.

Equity Investment in Metaverse

The Company has an equity investment in A Metaverse Company (“Metaverse”), a publicly traded Chinese entertainment company, formerly Starrise Media Holdings Limited, whose ordinary shares are listed on the Stock Exchange of Hong Kong.

After a period of time when trading in Metaverse's ordinary shares had been halted, the resumption of active trading status in November 2023 represented renewed availability of quoted, unadjusted prices in active markets for identical assets, upon which the Company can execute a sale and readily access pricing information at the measurement date.

Accordingly, the Company has presented the fair value of its Metaverse shares held within the Level 1 grouping.

The fair value of the shares held is presented within Other long-term assets and as of December 31, 2024 and March 31, 2024 was $ 0.1 million and $ 0.4 million, respectively.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Earnout Consideration on Purchase of Business

Prior to the completion of an earnout period at the end of fiscal year 2024, the Company estimated the fair value of its earnout liability using contractual inputs from the related business combination, which established specific fiscal year revenue growth, profitability and EBITDA targets.

During the quarter ended September 30, 2024, the Company made its final earnout payment reducing the earnout liability as of September 30, 2024 to $ 0 .

There were no assets and liabilities carried at fair value as of June 30, 2025.

Content Advances

Content advances represent amounts prepaid to studios or content producers for which we provide content distribution services.

We evaluate advances regularly for recoverability and record a provision for amounts that we expect may not be recoverable.

Amounts which are expected to be recovered in more than 12 months are classified as long term and presented within content advances, net of current portion, which were $ 1.4 million and $ 2.6 million as of December 31, 2024 and March 31, 2024, respectively.

For the three and nine months ended December 31, 2024 , the Company recognized a reduction in our reserve for the recovery of advances in the amount of $ 67 thousand and $ 37 thousand, respectively.

We evaluate advances regularly for recoverability and record a provision for amounts that we

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

expect may not be recoverable.

Amounts which are expected to be recovered in more than 12 months are classified as long term and presented within content advances, net of current portion, which were $ 5.9 million and $ 4.1 million as of June 30, 2025, and 2024 respectively.

For the three months ended June 30, 2025 and 2024, the Company recognized a reduction in our reserve for the recovery of advances in th e amount of $ 128 thousand and $ 57 thousand, respectively.

Accounts Payable and Accrued Expenses

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Deferred Consideration

The Company has recognized liabilities related to deferred consideration arrangements related to the acquisition of FoundationTV ("FTV") and Digital Media Rights ("DMR").

These payments are fixed in nature and are due to the sellers of the respective companies.

The Company initially recognized the liability at fair value at the time of acquisition and has since recognized interest expense related to accretion in advance of the ultimate settlement of these liabilities.

Amounts due within 12 months under the terms of the agreements are classified as current within the Condensed Consolidated Balance Sheets.

The deferred consideration related to the acquisition of DMR is payable in either shares of Common Stock or cash, at the Company's discretion, and subject to certain conditions.

A final payment of $ 2.4 million is due in March 2025.

The deferred consideration related to the acquisition of FTV is payable in cash and up to 25 % in shares of Common Stock, at the Company's discretion, and subject to certain conditions.

The final payment of $1.1 million is due in June 2025.

As of December 31, 2024 and March 31, 2024 , the Company has outstanding liabilities of $ 3.4 million and $ 3.1 million, respectively, relating to deferred consideration arrangements.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company has recognized a liability related to a deferred consideration arrangement related to the acquisitions of FoundationTV ("FTV") and Digital Media Rights ("DMR").

These payments are fixed in nature and are due to the seller of the respective company.

The Company initially recognized the liability at fair value at the time of acquisition and has since recognized interest expense related to accretion in advance of the ultimate settlement.

The deferred consideration related to the acquisition of DMR was payable in either shares of Common Stock or cash, at the Company's discretion and subject to certain conditions.

The final deferred consideration payment of $ 2.4 million was made on April 1, 2025 through the issuance of 677 thousand shares of Common Stock.

The deferred consideration related to the FTV acquisition was $ 464 thousand as of June 30, 2025 which was paid in cash in July 2025.

Revenue Recognition

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The following tables present the Company’s disaggregated revenue by source (in thousands):

Three Months Ended December 31,

Nine Months Ended

For the Three Months Ended

Streaming and digital

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Podcast and other revenue primarily relate to the Company's Bloody Disgusting Podcast Network.

As the Company satisfies its performance obligations from these revenue sources, whether relating to the delivery of digital content, physical goods, or licensing, revenue is generally measured at a point in time.

Other non-recurring revenue relates to the Company's legacy digital cinema operations, whose operations have run off, still may generate non-recurring revenue from the sale of cinema assets or the recognition of variable consideration as the associated uncertainty associated with the revenue is resolved.

As the Company satisfies

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

its performance obligations from these revenue sources, whether relating to the delivery of digital content, physical goods, or licensing, revenue is generally measured at a point in time.

The Company follows the five-step model established by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 606, Revenue from contracts with customers ("ASC 606") when preparing its assessment of revenue recognition.

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We recognize all shipping and handling costs as an expense in direct operating expenses because we are responsible for delivery of the product to our customers prior to transfer of control to the customer.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Credit Losses

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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.

We recognize accounts receivable, net of an estimated allowance for product returns and customer chargebacks, at the time that we recognize revenue from a sale.

W e recognize accounts receivable, net of an estimated allowance for product returns and customer chargebacks, at the time that we recognize revenue from a sale.

Reserves for product returns and other allowances are variable consideration as part of the transaction price.

If actual future returns and allowances differ from past experience, adjustments to our allowances may be required.

During the three and nine months ended December 31, 2024, the Company recognized an increase (reduction) in its provision for credit losses of $ 68 thousand and ($ 118 ) thousand , respectively.

During the three and nine months ended December 31, 2023 , we did no t recognize any credit losses as part of its ongoing operations or reversals of previously recorded provisions.

A summary of the movements of our allowances for credit losses follows (in thousands) :

Allowance for credit losses at the beginning of the year

Decrease in estimated provision

Allowance for credit losses as at December 31, 2024

A summary of the movements of our allowances for credit losses for the three months ended June 30, 2025 (in thousands):

Allowance for credit losses as of March 31, 2025

Increase in estimated provision

Allowance for credit losses as of June 30, 2025

Contract Liabilities

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Amounts recorded as contract liabilities are generally not long-term in nature.

The ending deferred revenue balance, including current and non-current balances as of December 31, 2024 and March 31, 2024, was $ 0.3 million and $ 0.4 million, respectively.

The ending deferred revenue balance, including current and non-current balances as of June 30 and March 31, 2025, was $ 0.1 million and $ 0.2 million, resp ectively.

In each period, the additions to our deferred revenue balance are due to cash payments received or due in advance of satisfying performance obligations, while the reductions are due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Participations and royalties payable

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Concentrations

For the three and nine months ended December 31, 2024, customers that individually account for greater than 10% collectively represented 71 % ( two customers) and 56 % ( two customers) of consolidated revenues.

For the three and nine months ended December 31, 2023 , one customer represented 26 % and 23 % of consolidated revenues, respectively.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended June 30, 2025 and 2024 , one customer represented 27 % and 39 % of consolidated revenue, respectively.

As of June 30, 2025, two customers represented 21 % and 12 % of consolidated accounts receivable, respectively.

Direct Operating Expenses

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Stock-based Compensation

The Company issues stock-based awards to employees and non-employees, generally in the form of restricted stock, restricted stock units, stock appreciation rights ("SARs") and performance stock units ("PSUs").

The Company issues stock-based awards to employees and non-employees, generally in the form of restricted stock, restricted stock units and awards, stock appreciation rights ("SARs") and performance stock units ("PSUs").

The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”).

ASC 718 requires all stock-based payments, including grants of stock options and restricted stock units and modifications to existing awards, to be recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss based on their fair values.

ASC 718 requires all stock-based payments, including grants of stock options and restricted stock units and modifications to existing stock options, to be recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss based on their fair values.

The Company measures the compensation expense of employee and non-employee services received in exchange for an award of equity instruments based on the fair value of the award on the grant date.

10 unchanged sentences

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 had no uncertain tax positions as of December 31, 2024 and March 31, 2024.

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

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

settlement with the taxing authority is recorded.

The Company had no uncertain tax positions as of June 30, 2025 and March 31, 2025.

Recently Issued Accounting Pronouncements

The Company evaluates all Accounting Standard Updates ("ASUs") issued but not yet effective by FASB for consideration of their applicability.

The Company evaluates all Accounting Standard Updates ("ASUs") issued but not yet effective by Financial Accounting Standards Board (“FASB”) for consideration of their applicability.

ASU's not included in the Company's disclosures were assessed and determined to be not applicable and material to the Company's consolidated financial statements or disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures .

The update requires disclosure of incremental segment information, including significant segment expenses, on an annual and interim basis, and would apply to single segment companies.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 with early adoption is permitted.

The Company is required to apply the updates retrospectively.

The Company is assessing the impact of ASU 2023-07 on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures .

On an annual basis, this update requires the disclosure of specific tax categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

The amendments are effective for annual periods

CINEVERSE CORP.

In December 2023, the FASB issued ASU 2023-09, " Income Taxes - Improvements to Income Tax Disclosures.

(Topic 740) " On an annual basis, this update requires the disclosure of specific tax categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold.

The Company is adopting this update for its December 31, 2025 year end disclosure.

In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income- Expense Disaggregation Disclosures (Topic 220)" , requiring all public business entities to provide additional disclosure of the nature of expenses include in the income statement.

This ASU is effective for fiscal years beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027, on a prospective basis, with early adoption permitted.

We are currently evaluating the impact on our financial statement disclosures.

SEGMENT INFORMATION

The Company operates as a single reportable segment.

The Company’s CODM, its Chief Executive Officer , reviews financial information on a consolidated basis to make operating decisions, assess financial performance, and allocate resources.

In evaluating performance, the CODM primarily assesses operating income (loss) and net income (loss), as reported within the Condensed Consolidated Statements of Operations and regularly reviews certain significant expense categories, including royalty expense;

license, participation and technology costs;

other direct operation costs;

payroll and related expenses;

professional services;

advertising and marketing;

amortization;

and other general and administrative.

These expense categories are considered key factors in managing the business and guiding resource allocation decisions.

This approach ensures that the Company’s financial reporting reflects the way management monitors expenses and overall financial performance.

The following table presents financial information with respect to the Company’s single operating segment:

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

beginning after December 15, 2024.

Prospective and retrospective adoption is permitted.

The Company is still evaluating its method of adoption and assessing the impact of ASU 2023-09 on the disclosures within its consolidated financial statements.

For Three Months Ended,

Royalty expense

License, participation and technology costs

Other direct operating costs

Compensation and related

Professional services

Advertising and marketing

Other general and administrative

Depreciation and amortization

Total operating expenses

Operating loss

Interest income (expense)

Other (expense) income, net

Net loss before income taxes

Income tax expense

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.

We indirectly o wn 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 ASC Topic 810 (“ASC 810”), Consolidation .

CDF2 Holdings is a Variable Interest Entity (“VIE”), as defined in FASB ASC Topic 810, Consolidation (“ASC 810”).

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.

As of December 31, 2024 and March 31, 2024 , our maximum exposure to loss, as it relates to the non-consolidated CDF2 Holdings entity, represents accounts receivable for service fees under a master service agreement with CDF2 Holdings.

Such accounts receivable was $ 0 as of both December 31, 2024 and March 31, 2024.

Total Stockholders’ Deficit of CDF2 Holdings at both December 31, 2024 and March 31, 2024 was $ 59.2 million .

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 both December 31, 2024 and March 31, 2024 is carried at $ 0 .

Investment in Roundtable

As of June 30 and March 31, 2025 , our maximum exposure to loss, as it relates to the non-consolidated CDF2 Holdings entity, represents accounts receivable for service fees under a master service agreement with CDF2 Holdings.

Such accounts receivable was $ 0 as of June 30 and March 31, 2025 included in accounts receivable, net on the accompanying Condensed Consolidated Balance Sheets.

The accompanying Condensed Consolidated Statements of Operations includes digital cinema servicing revenue from CDF2 Holdings in the amount of $ 0 for the three months ended June 30, 2025 and 2024.

Total Stockholders’ Deficit of CDF2 Holdings as of June 30 and March 31, 2025 was $ 59.2 million.

We own an 85 % interest in CON TV, LLC ("CONtv"), 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.

CONtv is consolidated in our consolidated financial statements with the 15 % minority interest presented as a non-controlling interest.

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On March 15, 2022, the Company entered into a stock purchase agreement with Roundtable Entertainment Holdings, Inc.

1 unchanged sentence

The Company paid the purchase price for the Roundtable Securities by issuing 16 thousand shares of Common Stock to Roundtable.

The Compan y recorded $ 0.2 mi llion for the purchase of the Roundtable Securities which is included in other long-term assets on the accompanying Consolidated Balance Sheets.

The Compan y recorded $ 206 thousand for the purchase of the Roundtable Securities which is included in other long-term assets on the accompanying Consolidated Balance Sheets.

The investment in the Roundtable Securities was made in connection with a proposed collaboration with Roundtable regarding production and distribution of streaming content including the launch of high profile branded enthusiast streaming channels.

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Our President and Chief Strategy Officer is on the Roundtable Board of Directors.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STOCKHOLDERS’ EQUITY

As of December 31, 2024 and 2023 , the number of shares of Common Stock authorized for issuance was 275,000,000 shares.

During the three months ended December 31, 2024, the Company issued 173 thousand shares of Common Stock.

This was comprised of 89 thousand shares for preferred stock dividends and 74 thousand shares for payment of compensation to the Company's Board of Directors.

In addition, the Company issued 10 thousand shares in relation to the exercise of common stock warrants.

During the nine months ended December 31, 2024 and in addition to the activities cited abov e, the Company also purchased 215 thousand shares as part of the share repurchase program, paid preferred stock dividends through the issuance of 164 thousand common shares, issued 108 thousand shares for payment of compensation to former owners of an acquired entity and issued 29 thousand shares for acquiree consideration.

During the three months ended December 31, 2023, the Company issued 474 thousand shares of Common Stock.

This was comprised of 74 thousand shares for preferred stock dividends, and 400 thousand shares for Board of Director compensation.

During the nine months ended December 31, 2023, the Company issued 3,917 thousand shares of Common Stock.

In addition to the activity cited for three months ended December 31, 2023, this was comprised of 517 thousand shares issued in conjunction with the exercise of pre-funded warrants issued, 502 shares issued in connection with employee bonuses, 56 thousand shares for preferred stock dividends, 41 thousand to satisfy earnout-related liabilities, 2,150 thousand shares were issued through a June 16, 2023 direct offering, and 177 thousand issued in connection with ATM sales during the first fiscal quarter.

In addition, the Company issued common warrants to purchase up to 2,667 thousand shares of Common Stock in conjunction with its direct offering on June 16, 2023.

All common warrants were issued as immediately exercisable and 2,657 thousand common warrants remain outstanding as of December 31, 2024.

These common warrants are considered participating securities for purposes of the earnings per share calculation.

Refer to Note 5, Earnings (Loss) Per Share.

As of June 30 and March 31, 2025 , the number of shares of Common Stock authorized for issuance was 275 million shares.

During the three months ended June 30, 2025, the Company issue d 1.1 million shares of Common Stock.

This was comprised of 27 thousand shares for preferred stock dividends, 677 thousand shares issued for acquisition deferred consideration and 422 thousand shares, net of treasury shares, issued in connection with the issuance of employee equity awards.

During the three months ended June 30, 2024, the Company issued 93 thousand shares of Common Stock.

comprised of 64 thousand shares for preferred stock dividends and 29 thousand shares for payment of compensation

to former owners of an acquired entity.

Common Stock Warrants

As of June 30 and March 31, 2025, the number of warrants exercisable for shares of Common Stock was 2.7 million.

Subsequent to June 30, 2025, 1.9 million warrants were exercised for net proceeds of $ 5.8 million.

Preferred Stock

Cumulative dividends in arrears on Series A Preferred Stock were $ 89 th ousand an d $ 87 th ousand as of December 31, 2024 and 2023, respectively.

During the three and nine months ended December 31, 2024 and 2023, the Company paid preferred stock dividends in arrears for the same amount in the form of shares of Common Stock.

Cumulative dividends in arrears on Series A Preferred Stock were $ 89 th ousand and $ 89 thousand as of June 30, 2025 and 2024, respectively.

During the three months ended June 30, 2025 and 2024 , the Company paid preferred stock dividends in arrears of $ 89 thousand and $ 89 thousand in the form of shares of Common Stock, respectively.

The Company has the right to pay preferred stock dividends in cash or stock, at the Company's discretion.

Treasury Stock

We have treasury stock , at cost, consisting of 504 thousand and 289 thousand shares of Common Stock as of December 31, 2024 and March 31, 2024, respectively.

During the nine months ended December 31, 2024 , the Company acquired 215 thousand shares of treasury stock, repurchased through a Rule 10b5-1 trading plan with B.

Riley Securities, Inc.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We have treasury stock of 830 thousand and 504 thousand shares of Common Stock as of June 30 and March 31, 2025, respectively.

During the three months ended June 30, 2025 , the Company retained 326 thousand shares of common stock as treasury stock related to the payment of employee taxes for restricted stock awards issued to employees.

Equity Incentive Plans

1 unchanged sentence

The Company has issued awards under two plans, the 2000 Equity Incentive Plan (the “2000 Plan”) and the 2017 Equity Incentive Plan (the “2017 Plan").

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Awards issued under our 2000 Plan were permitted to be issued to employees, outside directors or consultants in any of the following forms (or a combination thereof) (i) stock option awards;

5 unchanged sentences

The exercise prices and vesting periods (if any) for non-statutory options were set at the discretion of our compensation committee.

On November 1, 2017, upon the consummation of the initial equity investment in Cineverse by Bison Entertainment Investment Limited, 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 August 2017, the Company adopted the 2017 Equity Incentive Plan (the “2017 Plan).

The 2017 Plan replaced the 2000 Plan, and applies to employees and directors of, and consultants to, the Company.

The 2017 Plan provides for the issuance of up to 2,055 thousand shares of Common Stock, in the form of various awards, including stock options, stock appreciation rights, stock, restricted stock, restricted stock units, performance awards and cash awards.

In December 2024, an increase in the authorization under the 2017 Plan to 2,505 thousand shares was approved.

For the three and nine months ended December 31, 2024 , the Company incurred stock-based compensation expense of $ 0.5 million and $ 1.5 million, respectively.

For the three and nine months ended December 31, 2023 , the Company incurred stock-based compensation expense of $ 0.2 million and $ 1.1 million, respectively.

Included within this expense, our Board of Directors stock-based compensation was $ 83 thousand and $ 248 thousand for the three and nine months ended December 31, 2024 , respectively, and $ 85 thousand and $ 265 thousand for the three and nine months ended December 31, 2023, respectively.

Share-based compensation expense is reported within Selling, General and Administrative expenses in our Condensed Consolidated Statements of Operations.

For the three and nine months ended December 31, 2024, the Company's stock grants are primarily in the form of restricted stocks and restricted stock units.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

EARNINGS (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing the net income (loss) attributable to Common Stockholders, adjusted for by the deemed earnings attributable to participating common warrant holders, by the weighted average number of shares of Common Stock outstanding during the period.

Diluted net income (loss) per share is computed by dividing the net income (loss) available to Common Stockholders by the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period.

The 2017 Plan provides for the issuance of up to 2,055 thousand shares of Common Stock as of December 8, 2023, in the form of various awards, including stock options, SARs, stock, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), performance awards and cash awards.

During the three months ended June 30, 2025, 5,000 SARs were forfeited.

During the three months ended June 30, 2025, the Company issued 522 thousand RSUs to certain employees.

The issued RSUs vest over a 3 -year period and had a fair value of $ 1.5 million, or $ 2.87 per RSU.

During the three months ended June 30, 2025, 60 thousand RSAs and 60 thousand RSUs were forfeited, and 374 thousand RSAs and 374 thousand RSUs were vested and 748 thousand shares of Common Stock were issued.

To facilitate the payment of employee payroll taxes related to this vesting event, 326 thousand shares of Common Stock were deducted from the shares distributed to employees.

The 326 thousand shares of Common Stock were retained by the Company as Treasury stock and the employee payroll taxes were paid with cash on hand.

For both the three months ended June 30, 2025 and 2024, the Company incurred stock-based compensation expenses of $ 0.4 million, of which $ 0.1 million related to Board of Director compensation.

Share-based compensation expense is reported within Selling, General and Administrative expenses.

Earnings per Share

Basic net income (loss) per share is computed by dividing the net income (loss) attributable to Common Stock holders, adjusted for by the deemed earnings attributable to participating common warrant holders, by the weighted average number of shares of Common Stock outstanding during the period.

Diluted net income (loss) per share is computed by dividing the net income (loss) available to Common Stock holders by the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period.

Potentially dilutive common shares include restricted stock units, stock options and warrants outstanding during the period, and are calculated using the treasury stock method.

Potentially dilutive common shares are excluded from the computations of diluted income (loss) per share if their effect would be anti-dilutive.

A net loss available to Common Stockholders causes all potentially dilutive securities to be anti-dilutive and are not included.

The following table sets forth the computation of basic and diluted earnings per share and a reconciliation of the weighted average number of common and common equivalent shares outstanding for the three and nine months ended December 31, 2024:

Three Months Ended December 31,

Nine Months Ended

(in thousands, except share & per share data)

Net income (loss) attributable to common stock holders

earnings attributable to participating common warrant holders

Net income (loss) attributable to common stock holders - basic and diluted

A net loss available to Common Stock holders causes all potentially dilutive securities to be anti-dilutive and are not included.

The following table sets forth the computation of basic and diluted earnings per share and a reconciliation of the

weighted average number of common and common equivalent shares outstanding:

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three Months Ended

Numerator (in thousands) :

Net loss attributable to Common Stock holders

Weighted average shares of Common Stock - basic

Effect of dilutive common stock equivalents

Weighted average shares of common stock - diluted

Earnings per share:

Basic earnings (loss) per share

Effect of dilutive common stock equivalents

Diluted earnings (loss) per share

Basic and Diluted

The following common equivalent shares outstanding at period-end have been excluded from the computation of earnings per share, as their inclusion would have been anti-dilutive:

Three Months Ended December 31,

Nine Months Ended

For the Three Months Ended

Options to purchase common stock

1 unchanged sentence

Warrants to purchase common stock

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

LINE OF CREDIT FACILITY

The Line of Credit Facility bears interest at a rate equal to 1.5 % above the prime rate, equal to 9.0 % as of December 31, 2024.

The Line of Credit Facility matures on September 15, 2025 .

The Company intends to renew when the Line of Credit matures.

Restricted stock units and awards

L ine of Credit Facility

The Line of Credit Facility bears interest at a rate equal to 1.25 % above the prime rate , equal to 8.75 % as of June 30, 2025.

The Line of Credit Facility matures on April 8, 2028 .

Under the Line of Credit Facility, the Company is subject to certain financial and non-financial covenants which require the Company to maintain certain metrics and ratios, maintain certain minimum cash on hand and to report financial information to our lender on a periodic basis.

As of December 31, 2024, $ 3.8 million was outstanding on the Line of Credit Facility, net of unamortized issuance costs of $ 153 thousand .

Subsequent to December 31, 2024, our Line of Credit balance was paid down to $ 0 .

During the three and nine months ended December 31, 2024, the Company had interest expense, including cash interest and amortization, of $ 0.2 million and $ 0.5 million , related to its Line of Credit Facility, respectively.

During the three and nine months ended December 31, 2023 , the Company had interest expense, including cash interest and amortization, of $ 0.2 million and $ 0.4 million related to its Line of Credit Facility, respectively.

On April 5, 2024, T3 Borrower, a wholly-owned subsidiary of the Company, entered into the T3 Loan Agreement with the T3 Lender.

The T3 Loan Agreement provides for the T3 Loan with a principal amount not to exceed $ 3.7 million, and a maturity date of April 1, 2025 , with a permitted extension of the term for 120 days under certain conditions.

As of June 30, 2025, $ 3.6 million was outstanding on the Line of Credit Facility and there are unamortized issuance costs of $ 168 thousand included in other long-term assets on our Condensed Consolidated Balance Sheets.

During the three months ended June 30, 2025 and 2024, the Company had interest expense, including cash interest and amortization, of $ 0.1 million and $ 0.2 million related to its Line of C redit Facility, respectively.

On April 5, 2024, Cineverse Terrifier LLC ("T3 Borrower"), a wholly-owned subsidiary of the Company, entered into a Loan and Security Agreement with BondIt LLC ("T3 Lender") and the Company, as guarantor (the "T3 Loan Agreement").

The T3 Loan Agreement provides for a term loan with a principal amount not to exceed $ 3.666 million ( the "T3 Loan"), and a maturity date of April 1, 2025 , with a permitted extension of the term for 120 days under certain conditions.

The T3 Loan bears no interest until the maturity date other than an interest advance equal to $ 576 thousand at the closing of the T3 Loan on April 5, 2024.

The interest advance was recorded as a discount on the T3 Loan at inception and will be amortized to interest expense and increase the loan amount over its term.

I f the T3 Loan is extended as noted above, the T3 Loan will bear interest at a rate of 1.44 % per month.

If the T3 Loan is extended as noted above, the T3 Loan will bear interest at a rate of 1.44 % per month.

The T3 Borrower may prepay the obligations under the T3 Loan, in full or in part, without penalty or premium.

The proceeds under the T3 Loan Agreement are being used for the funding under the Company’s distribution arrangements for the film titled Terrifier 3 (the “Film”).

The proceeds under the T3

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Loan Agreement were used for the funding under the Company’s distribution arrangements for the film titled Terrifier 3 (the “Film”).

The T3 Loan Agreement contains customary covenants, representation and warranties and events of default.

After the principal of the T3 Loan is paid in full, the T3 Lender will be entitled to receive 15 % of all royalties earned by the Company on the Film under its distribution agreements for the Film until the T3 Lender has received in total 1.75 times the full commitment amount of $ 3.7 million.

The T3 Loan is secured by a first priority interest in all of T3 Borrower’s assets in connection with the Film, including T3 Borrower's rights, title and interest in the distribution agreements, including the proceeds to the T3 Borrower from the distribution of the Film.

As of December 31, 2024, we have recorded interest expense of $ 1.5 million to the T3 Lender representing its 15 % share of royalties earned under the T3 Loan Agreement.

The Company entered into a Guaranty Agreement (the "T3 Guaranty Agreement") on April 25, 2024, pursuant to which it guarantees T3 Borrower's obligations under the T3 Loan Agreement (the "Guarantee").

The Guarantee is capped at $ 1.5 million.

Under an Intercreditor Agreement, dated April 5, 2024, by and among EWB, T3 Lender, T3 Borrower and the Company, the Guarantee is subordinated in payment and performance to the Line of Credit Facility.

The T3 Loan, including interest of $ 576 thousand, was repaid during the quarter ended December 31, 2024 .

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The $ 3.666 million principal of the T3 Loan was paid during the three months ended December 31, 2024.

During the three months ended March 31, 2025, the Company paid the T3 Lender $ 1.431 million of Participation Interest.

Subsequent to June 30, 2025, the Company negotiated a reduction to the accrued Participation Interest of $ 375 thousand and made a final payment of $ 944 thousand to the T3 Lender.

The $ 375 thousand reduction to Participation Interest was recorded as a reduction to interest expense in our Condensed Consolidated Statement of Operations for the three months e nded June 30, 2025.

COMMITMENTS AND CONTINGENCIES

Cineverse is a virtual company with one domestic operating lease, acquired through the acquisition of DMR which property is subleased to a third party.

The Company has not been relieved of the original lease obligation and therefore recognizes both a lease liability and right-of-use asset as part of the arrangement.

The end of both the original lease and sublease term is January 2025 .

Cineverse is a virtual company that operates without domestic operating leases.

The Company previously maintained one domestic operating lease acquired through the acquisition of Digital Media Rights ("DMR"), which was subleased to a third-party.

The Company was not relieved of its original lease obligation and therefore recognized both a lease liability and right-of-use asset as part of the arrangement through the end of the lease term in January 2025 .

In addition, the Company has two operating leases related to its Cineverse India operations, with expiration dates in July 2027 .

Expenses related to these leases were $ 117 thousand and $ 351 thousand during the three and nine months ended December 31, 2024 , respectively, and $ 109 thousand and $ 337 thousand during the three and nine months ended December 31, 2023, respectively.

The Company recognized $ 46 thousand and $ 138 thousand of income related to its subleasing arrangement during the three and nine months ended December 31, 2024 , respectively, and $ 45 thousand and $ 135 thousand for the three and nine months ended December 31, 2023, respectively.

Expenses related to these leases were $ 49 thousand and $ 115 thousand during the three months ended June 30, 2025 and 2024, respectively.

The Company recognized $ 0 thousand and $ 45 thousand of income related to its subleasing arrangement for the three months ended June 30, 2025 and 2024, respectively.

The table below presents the lease-related assets and liabilities recorded on our Consolidated Balance Sheets (in thousands):

3 unchanged sentences

Operating leases liabilities, net of current

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The table below presents the annual gross undiscounted cash flows related to the Company's operating lease commitments (in thousands):

4 unchanged sentences

Less imputed interest

For leases which have a term of twelve months or less and do not contain an option to extend which the Company is reasonably certain to extend the term, the Company has elected to not apply the recognition provisions of ASC 842, Leases , and recognizes these expenses on a straight-line basis over the term of the agreement.

CINEVERSE CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The table below presents the annual gross undiscounted cash flows related to the Company's operating lease subleasing arrangements (in thousands) :

Fiscal year ending March 31,

Sublease Payments

For leases which have a term of twelve months or less and do not contain an option to extend which the Company is reasonably certain to extend the term, the Company has elected to not apply the recognition provisions of FASB ASC Topic 842, Leases ("ASC 842") and recognizes these expenses on a straight-line basis over the term of the agreement.

We calculate income tax expense based upon an annual effective tax rate forecast, which includes estimates and assumptions.

We recognized income tax expense of $ 6 thousand and $ 19 thousand for the three and nine months ended December 31, 2024 , respectively.

We recognized income tax (benefit) expense of $( 24 ) thousand and $ 12 thousand for the three and nine months ended December 31, 2023, respectively.

Our income tax expense is attributable to taxable income earned in India relating to transfer pricing.

We have not recorded tax expense in the U.S.

on our income because we anticipate utilizing net operating loss carry forwards.

We recognized income tax expense of $ 14 thousand and $ 7 thousand for the three months ended June 30, 2025 and 2024, respectively.

Our income tax expense is attributable to taxable income earned in India relating to transfer pricing as well as state income taxes in the U.S.

We have recorded income tax expense of $ 14 thousand related to U.S.

state and foreign income taxes.

We have not recorded tax benefits on our U.S.

deferred tax assets because we continue to provide a valuation allowance for all our U.S.

net deferred tax assets as of December 31, 2024, as it is more likely than not that the assets will not be recovered based on an insufficient history of earnings

Our effective tax rate was 0.1 % and 0.6 % for the three and nine months ended December 31, 2024, respectively, and 0.9 % and ( 0.2 )% for the three and nine months ended December 31, 2023 , respectively.

net deferred tax assets as of June 30, 2025 as it is more likely than not that the assets will not be recovered based on an insufficient history of earnings.

Our effective tax rate for the three months ended June 30, 2025 and 2024 was ( 0.4 )% and ( 0.3 )%, respectively.

On July 4, 2025, the President signed the One Big Beautiful Bill Act (“OBBBA”;

119-21 ) into law.

The Act introduces significant changes to the Internal Revenue Code, several of which are expected to affect the Company’s future effective tax rate.

OBBBA retains the 21 % federal corporate income tax rate, restores and makes permanent the 100 % bonus depreciation for “qualified property” acquired on or after January 20, 2025, and permits immediate expensing of domestic research and experimental costs.

Because enactment occurred after June 30, 2025, the provisions are treated as a non-recognized subsequent event under ASC 740-10-45-15.

No measurement adjustments have been recorded in our Condensed Consolidated Financial Statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements