What changed in this filing

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Item 1A. Risk Factors

2026-06-26 compared with 2025-06-30 · 63 added, 27 removed, 296 unchanged (23% of the section changed)

38 unchanged sentences

Completing an acquisition and integrating an acquired business may require a significant diversion of management time and resources and may involve assuming new liabilities.

Any acquisition also involves the risks that the assets acquired may prove less valuable than expected and/or that we may assume unknown or unexpected liabilities, costs and problems.

Any acquisition also involves the risks that the assets acquired may prove less valuable than expected, that we may assume unknown or unexpected liabilities, costs and problems, and/or that the anticipated benefits of the acquired business, when integrated, are not realized.

If we make one or more significant acquisitions in which any of the consideration consists of our capital stock, your equity interest in the Company could be diluted, perhaps significantly.

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Factors that may be considered a change in circumstances indicating that the carrying value of our reporting units and intangible assets may not be recoverable include, slower growth rates in our industry or our own operations, and/or other materially adverse events that have implications on the profitability of our business.

In the prior fiscal year, we recognized $14 million of impairment.

We may be required to record additional charges to earnings during any period in which further impairment of our goodwill or other intangible assets is determined that could adversely affect our results of operations.

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The CHG Lease is non-recourse to Cineverse and our subsidiaries, excluding our VIEs, CDF2 and CDF2 Holdings, as the case may be.

Our financial exposure related to the debt of CDF2 and CDF2 Holdings is limited to the $2.0 million initial investment we made into CDF2 and CDF2 Holdings.

Our financial

exposure related to the debt of CDF2 and CDF2 Holdings is limited to the $2.0 million initial investment we made into CDF2 and CDF2 Holdings.

CDF2 Holding’s total stockholder’s deficit as of March 31, 2026, was $59.2 million.

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We have incurred long-term losses and have financed our operations principally through equity investments and borrowings.

As of March 31, 2025, we had a positive working capital, defined as current assets less current liabilities, of $3.6 million, and cash and cash equivalents of $13.9 million, and total equity of $37.8 million.

The Company generated $17.4 million of net positive cash flows from operations for the year ended March 31, 2025.

As of March 31, 2026, we had a negative working capital, defined as current assets less current liabilities, of $(12.2) million, and cash and cash equivalents of $3.4 million, and total equity of $43.4 million.

The Company used $26.5 million of net cash flows for its operations for the year ended March 31, 2026.

Our net losses and cash outflows may increase as and to the extent that we increase the size of our business operations, increase our sales and marketing activities, increase our content distribution rights acquisition activities, enlarge our customer support and professional services and acquire additional businesses.

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We must continue to increase our revenues in order to become profitable.

We cannot reliably predict when, or if, we will become profitable.

We cannot reliably predict when, or if, we will become

Even if we achieve profitability, we may not be able to sustain it.

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In addition, competition for key employees necessary to create and distribute our entertainment content and software products is intense and may grow in the future.

Our future success will also depend upon our ability to hire, train, integrate and retain qualified new employees and our inability to do

so may have an adverse impact upon our business, financial condition, operating results, liquidity and prospects for growth.

Our future success will also depend upon our ability to hire, train, integrate and retain qualified new employees and our inability to do so may have an adverse impact upon our business, financial condition, operating results, liquidity and prospects for growth.

Our success depends on external factors in the media industry.

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Content is an individual artistic work, and inherently unpredictable audience reactions primarily determine commercial success.

Generally, the popularity of content depends on many factors, including the critical acclaim they receive, the format of their initial release, for example, theatrical or direct-to-streaming, the actors and other key talent, their genre and their specific subject matter.

Generally, the popularity of content depends on many factors, including the critical acclaim received, the format of the initial release, for example, theatrical or direct-to-streaming, the actors and other key talent, the genre and the specific subject matter.

The commercial success of movies and television programs also depends upon the quality and acceptance of movies or programs that our competitors release into the marketplace at or near the same time, critical reviews, the availability of alternative forms of entertainment and leisure activities, general economic conditions and other tangible and intangible factors, many of which we do not control and all of which may change.

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Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

O ur revenues and earnings are subject to market downturns .

Our revenues and earnings are subject to market downturns .

Our revenues and earnings may fluctuate significantly in the future.

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Our ability to utilize our net operating loss carryforwards in the future is subject to substantial limitations and we may not be able to use some identified net operating loss carryforwards, which could result in increased tax payments in future periods.

As of March 31, 2026 and 2025, the Company had $19.2 million and $16.2 million of net operating loss

carryforwards as a deferred tax asset.

Under Section 382 of the Internal Revenue Code, if a corporation undergoes an ownership change (generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period), the corporation’s ability to use its pre-change net operating loss (“NOL”) carryforwards to offset its post-change income may be limited.

Similar rules may apply under state tax laws.

On November 1, 2017, we experienced an ownership change with respect to the Bison acquisition.

On November 1, 2017, we experienced an ownership change with respect to the acquisition by Bison of our equity.

Accordingly, our ability to utilize our NOL carryforwards attributable to periods prior to November 1, 2017, is subject to substantial limitations.

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We experienced subsequent ownership changes under Section 382 on September 15, 2020 and November 1, 2022, which resulted in additional limitations in our ability to utilize our NOL carryforwards attributable to periods prior to September 15, 2020 and November 2022, respectively.

The limitations triggered by the September 15, 2020 and November 1, 2022 ownership changes were significantly less substantial than the limitation triggered by the November 1, 2017 ownership change, however.

The limitations triggered by the September 15, 2020 and November 1, 2022 ownership changes were significantly less substantial than the limitation triggered by the November 1, 2017 ownership change.

Our advertising technology growth is subject to the growth of connected television and the platforms to which we have access.

Our growth depends on the continued expansion of ad‑supported CTV and streaming and on our ability to access that demand and supply.

If CTV advertising spend grows more slowly than expected, shifts toward walled gardens or platforms we cannot access, or concentrates among a limited number of large platforms or sellers, our operating results and growth prospects could be harmed.

Because CTV inventory and demand are concentrated among a relatively small number of large publishers, platforms, and intermediaries, these participants may exert significant control over pricing, access, and transaction pathways, including favoring proprietary or exclusive solutions.

If we do not continue to acquire premium content, our advertising-related businesses will decline.

Our ability to attract advertising demand depends on maintaining and expanding access to high-quality CTV inventory across owned-and-operated properties and third-party partners.

Our success in this regard depends on continued content acquisition, programming, distribution, and partner relationships.

If we are unable to secure or retain premium inventory on favorable terms, or if partners shift inventory to competitors or proprietary channels, the volume, quality, and pricing power of inventory available through our platforms could decline.

Our profitability is impacted by sales channels and we are subject to pricing pressures at each stage in our advertising technology businesses' supply chain, which may negatively impact profitability.

We generate revenue primarily on a transactional basis, and our effective take rate varies by client, channel, and transaction type.

Our revenue and margins are sensitive to shifts in mix, including between direct-sold and programmatic demand, and between reserved/guaranteed and open auction transactions.

Buyers may demand pricing concessions, transparency, or rebates, while sellers may seek more favorable economics or guarantees.

Changes in transaction mix or increased pricing pressure could reduce our take rate and profitability, even if overall spend on our platform grows.

Our advertising technology business does not have contractual protections against sudden customer loss which may expose us to a material decline in revenue.

Our relationships with buyers and sellers are generally non‑exclusive, may be terminated on relatively short notice, and typically do not include minimum volume or long‑term commitments, which exposes us to the risk of rapid and significant reductions in revenue.

Buyers and sellers are generally free to do business with our competitors, purchase and sell advertising inventory directly with one another, or reduce or cease their use of our programmatic marketplace without penalty, which makes our business highly vulnerable to changes in the macro environment, price competition, and the availability of alternative solutions.

Because the market for digital and CTV advertising is concentrated among a finite number of large buyers and sellers, if one or more significant buyers or sellers materially reduces spend or inventory flowing through our programmatic marketplace, or terminates its relationship with us, we could experience an immediate and significant decline in our revenue and profitability and degradation in the attractiveness of our platform to other participants.

Our advertising technology performance, scalability and viability requires continuous successful investment in order to stay competitive.

Our advertising technology is a complex, real‑time technology platform that must continuously process large volumes of ad requests and deliver campaigns across multiple devices and formats, particularly high‑bandwidth CTV environments.

Any failure to maintain, scale, and enhance this platform could harm our business.

We must invest significant resources in developing and improving our platform to respond to rapid changes in advertising technology, including advancements in AI, evolving industry standards, and new ad formats and transaction types.

We may not successfully prioritize or execute these development efforts in a timely or cost‑effective manner.

If we are unable to scale the IndiCue platform to handle increased transaction volumes, manage infrastructure costs (including cloud and data center expenses), or maintain fast and reliable performance, we may experience service disruptions, degraded performance, loss of clients, margin compression, and increased financial strain.

Our business may be heavily influenced by artificial intelligence ("AI") and our ability to compete in an evolving regulatory landscape may expose us to cost and compliance risk.

Advancements in AI are changing the way content is distributed, bought, sold, and optimized.

Our ability to effectively compete with competitors may depend in part on how successfully we incorporate AI into our business.

Competitors, including larger platforms with greater resources, may integrate AI‑driven content preparation, distribution, bidding, optimization, forecasting, and measurement capabilities more quickly or effectively than we do.

This could make their solutions more attractive to buyers and sellers and reduce demand.

In addition, our use of AI may be subject to evolving legal and regulatory requirements and expectations, including with respect to data usage, transparency, bias, and accountability, and any failure to comply with such requirements or to manage related cybersecurity and intellectual property risks could result in increased compliance costs, regulatory scrutiny, litigation, or reputational harm.

An increase in privacy tools and laws may lead to a reduction in data available which may adversely impact our advertising technology business.

Our platform depends on the collection, processing, and use of data to help buyers and sellers target, measure and optimize advertising campaigns.

Evolving privacy laws, platform policies, and privacy tools may reduce the availability or utility of such data and increase our compliance costs.

Domestic and international data‑protection, privacy and digital‑advertising laws and regulations including, the GDPR, UK‑GDPR, CCPA, and similar state laws, as well as emerging rules targeting data brokers and digital advertising may restrict the types of data we, our partners, and clients can collect and use.

These laws may also impose additional notice, consent, and opt‑out requirements, or require changes to our data practices and technical infrastructure.

This could diminish the effectiveness and value of our platform and adversely affect our revenue.

Our place in our advertising technology supply chain exposes us to credit risk and material working capital commitments.

We may be required, or may elect, to pay sellers for impressions delivered prior to collecting, or even if we are unable to collect, corresponding amounts from buyers, including demand side platforms and other intermediaries that control large volumes of spend across multiple advertisers.

If buyers delay payment, experience financial difficulties, or fail to pay amounts owed to us, particularly where underlying advertisers default or dispute charges, we may incur bad debt expense, be forced to use more of our working capital to fund payments to sellers, and be required to divert cash from other strategic uses, any of which could adversely affect our liquidity and results of operations.

RISKS RELATED TO INFORMATION TECHNOLOGY

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Service interruptions, errors in our software or the unavailability of computer systems or data used in our operations, delivery or user interface could diminish the overall attractiveness of our user service to existing and potential users.

Our computer systems, mobile and other applications and systems of third-parties we use in our operations are vulnerable to constantly evolving cybersecurity risks, including cyber-attacks and loss of integrity or availability, both from state-sponsored and individual activity, such as hacks, unauthorized access, computer viruses, denial of service attacks, electronic break-ins, malware, ransomware, insider threats, and misconfigurations in information systems, networks, software or hardware, errors and similar disruptions and destruction.

systems, networks, software or hardware, errors and similar disruptions and destruction.

Such systems have previously and may continue to periodically experience directed attacks intended to lead to interruptions, disruptions and delays in our service and operations as well as loss, misuse or theft of data or intellectual property.

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Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.

R isks Related to Our Common Stock

Risks Related to Our Common Stock

The liquidity of our Common Stock is uncertain;

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Substantial resales or future issuances of our Common Stock could depress our stock price.

The aggregate authorized offering price under our ATM Sales Agreement is $30 million.

The market price for our Common Stock could decline, perhaps significantly, as a result of resales or issuances of a large number of shares of our Common Stock in the public market or even the perception that such resales or issuances could occur.

In addition, we have outstanding a substantial number of options and warrants that are exercisable for shares of our Common Stock that may be exercised in the future.

In addition, we have outstanding a substantial number of convertible securities and warrants that are convertible and exercisable, as applicable, for shares of our Common Stock.

These factors could also make it more difficult for us to raise funds through future offerings of our equity securities.

You will incur substantial dilution as a result of certain future equity issuances.

We have warrants currently outstanding which may be immediately exercised to purchase 2.7 million shares of Common Stock.

To the extent that these warrants are exercised, or to the extent we issue additional shares of Common Stock in the future, as the case may be, there will be further dilution to holders of shares of the Common Stock.

We have convertible notes and warrants currently outstanding which may be immediately converted or exercised to

acquire shares of Common Stock.

To the extent that these convertible notes or warrants are converted or exercised, as the case may be, or to the extent we issue additional shares of Common Stock in the future there will be further dilution to holders of shares of the Common Stock.

In 2023, when stockholders approved a 20-for-1 reverse split of the Common Stock, stockholders did not approve proportionately reducing the number of authorized shares of Common Stock.

Accordingly, we have 275,000,000 shares of Common Stock authorized for issuance and less than 10% of that number issued and outstanding, allowing for additional issuances that would result in significant dilution.

Our issuance of preferred stock could adversely affect holders of Common Stock.

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A sustained decrease in share price may indicate a risk the Company's goodwill may become impaired.

On March 31, 2023, the Company's share price was $8.40.

It had declined to a share price of $1.39 as of March 31, 2024, but partially recovered to a share price of $3.16 as of March 31, 2025.

Under ASC 350, Goodwill , a sustained

decline in share price represents a triggering event which would require the Company to test for impairment and there may be a risk that the Company incurs expenses related to goodwill impairment.

The Company incurred Goodwill impairment of $14.0 million during the year ended March 31, 2024.

No impairment was recognized during the current year ended March 31, 2025, due to stock price recovery.

Under ASC 350, Goodwill , a sustained decline in share price represents a triggering event which would require the Company to test for impairment and there may be a risk that the Company incurs expenses related to goodwill impairment.

No impairment was recognized during the year ended March 31, 2026.

However, additional impairment may be incurred if there are future declines in the Company's share price.

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Thus, our stockholders bear the risk of our future securities offerings reducing the market price of our Common Stock, diluting their interest or being subject to rights and preferences senior to their own.

The execution of our stock repurchase program may not provide the desired return on investment.

In March 2023, the Company approved a program to share repurchase program, which was renewed in February 2024 and subsequently, in February 2025.

The Company will execute on this program if and when our Board of Directors and management perceives the share price of the Company's common stock to be attractive and after taking into consideration market and business conditions, available cash and capital requirements.

Any share repurchase under this program will take the place of other use of Company funds and may not achieve the same level of return on investment.

General Risk Factors

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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-K

Item 1A. Risk Factors