What changed in this filing

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Item 1A. Risk Factors

2021-07-30 compared with 2020-07-06 · 591 added, 337 removed, 20 unchanged (98% of the section changed)

Risks Related to our Business

We maintain a substantial amount of outstanding indebtedness, which could impair our ability to operate our business and react to changes in our business, remain in compliance with debt covenants and make payments on our debt.

Our level of indebtedness could have important consequences, including, without limitation:

requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;

limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;

limiting our ability to pursue our growth strategy or, including restricting us from making strategic acquisitions or causing us to make nonstrategic divestitures;

placing us at a disadvantage compared to our competitors who are less leveraged and may be better able to use their cash flow to fund competitive responses to changing industry, market or economic conditions;

making us more vulnerable in the event of a downturn in our business, our industry or the economy in general.

In addition, our current credit facilities contain, and any future credit facilities will likely contain, covenants and other provisions that restrict our operations.

These restrictive covenants and provisions could limit our ability to obtain future financing, make needed capital expenditures, withstand a future downturn in our business or the economy in general, or otherwise conduct necessary corporate activities, and may prevent us from taking advantage of business opportunities that arise in the future.

If we refinance our credit facilities, we cannot guarantee that any new credit facility will not contain similar covenants and restrictions.

We face the risks of doing business in new and rapidly evolving markets and may not be able successfully to address such risks and achieve acceptable levels of success or profits.

We have encountered and may continue to encounter the challenges, uncertainties and difficulties frequently experienced in new and rapidly evolving markets, including:

limited operating experience;

lack of sufficient customers or loss of significant customers;

a changing business focus;

the downward trend in sales of physical DVD and Blu-ray discs;

rapidly-changing technology for some of the products and services we offer;

difficulties in managing potentially rapid growth.

We expect competition to be intense.

If we are unable to compete successfully, our business and results of operations will be seriously harmed.

The markets for the digital cinema business and the content distribution business are competitive, evolving and subject to rapid technological and other changes.

Related to our Business

maintain an amount of outstanding indebtedness, which could impair our ability to operate our business and react to changes in our business,

remain in compliance with debt covenants and make payments on our debt.

maintain an amount of outstanding indebtedness, which could impair our ability to operate our business and react to changes in our business,

remain in compliance with debt covenants and make payments on our debt.

Our level of indebtedness could require a significant portion

of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our

ability to use our cash flow to fund our operations, capital expenditures and future business opportunities.

addition, our current credit facilities contain, and any future credit facilities will likely contain, covenants and other provisions

that restrict our operations.

These restrictive covenants and provisions could limit our ability to obtain future financing, make needed

capital expenditures, withstand a future downturn in our business or the economy in general, or otherwise conduct necessary corporate

activities, and may prevent us from taking advantage of business opportunities that arise in the future.

If we refinance our credit facilities,

we cannot guarantee that any new credit facility will not contain similar covenants and restrictions.

face the risks of doing business in new and rapidly evolving markets and may not be able successfully to address such risks and achieve

acceptable levels of success or profits.

have encountered and may continue to encounter the challenges, uncertainties and difficulties frequently experienced in new and rapidly

evolving markets, including:

operating experience;

sufficient customers or loss of significant customers;

business focus;

trend in sales of physical DVD and Blu-ray discs;

rapidly-changing

technology for some of the products and services we offer;

in managing potentially rapid growth.

expect competition to be intense.

If we are unable to compete successfully, our business and results of operations will be seriously

markets for the digital cinema business and the content distribution business are competitive, evolving and subject to rapid technological

and other changes.

We expect the intensity of competition in each of these areas to increase in the future.

Companies willing to expend the necessary capital to create facilities and/or capabilities similar to ours may compete with our business.

Increased competition may result in reduced revenues and/or margins and loss of market share, any of which could seriously harm our business.

In order to compete effectively in each of these fields, we must differentiate ourselves from competitors.

Many of our current and potential competitors have longer operating histories and greater financial, technical, marketing and other resources than we do, which may permit them to adopt aggressive pricing policies.

As a result, we may suffer from pricing pressures that could adversely affect our ability to generate revenues and our results of operations.

competitors also have significantly greater name and brand recognition and a larger customer base than us.

If we are unable to compete successfully, our business and results of operations will be seriously harmed.

Our plan to acquire additional businesses involves risks, including our inability to complete or integrate an acquisition successfully, our assumption of liabilities, dilution of your investment and significant costs.

Strategic and financially appropriate acquisitions are a key component of our growth strategy.

Although there are no acquisitions identified by us as probable at this time, we may make acquisitions of similar or complementary businesses or assets.

Even if we identify appropriate acquisition candidates, we may be unable to negotiate successfully the terms of the acquisitions, finance them, integrate the acquired business into our then existing business, obtain required regulatory approvals, and/or attract and retain customers.

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.

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.

If we were to proceed with one or more significant acquisitions in which the consideration included cash, we could be required to use a substantial portion of our available cash, or obtain additional financing to consummate them.

Our previous acquisitions involve risks, including our inability to integrate successfully the new businesses and our assumption of certain liabilities.

Our previous acquisitions of businesses and their respective assets also involved the risks that the businesses and assets acquired may prove to be less valuable than we expected and/or that we may assume unknown or unexpected liabilities, costs and problems.

In addition, we assumed certain liabilities in connection with these acquisitions and we cannot assure you that we will be able to satisfy adequately such assumed liabilities.

Other companies that offer similar products and services may be able to market and sell their products and services more cost-effectively than we can.

We have recorded goodwill impairment charges in the past and may be required to record additional charges to future earnings if our goodwill becomes further impaired or our intangible assets become impaired.

We are required under generally accepted accounting principles to review our goodwill and definite-lived intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

Goodwill must be tested for impairment at least annually.

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 a decline in stock price and market capitalization, 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.

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

If we do not m anage our growth, our business will be harmed.

We may not be successful in managing our growth.

Past growth has placed, and future growth will continue to place, significant challenges on our management and resources, related to the successful integration of the newly acquired businesses.

To manage the expected growth of our operations, we will need to improve our existing, and implement new, operational and financial systems, procedures and controls.

We may also need to expand our finance, administrative, client services and operations staffs and train and manage our growing employee base effectively.

Companies willing to expend

the necessary capital to create facilities and/or capabilities similar to ours may compete with our business.

Increased competition may

result in reduced revenues and/or margins and loss of market share, any of which could seriously harm our business.

In order to compete

effectively in each of these fields, we must differentiate ourselves from competitors.

of our current and potential competitors have longer operating histories and greater financial, technical, marketing and other resources

than we do, which may permit them to adopt aggressive pricing policies.

As a result, we may suffer from pricing pressures that could

adversely affect our ability to generate revenues and our results of operations.

Many of our competitors also have significantly greater

name and brand recognition and a larger customer base than us.

If we are unable to compete successfully, our business and results of

operations will be seriously harmed.

plan to acquire additional businesses involves risks, including our inability to complete or integrate an acquisition successfully, our

assumption of liabilities, dilution of your investment and significant costs.

and financially appropriate acquisitions are a key component of our growth strategy.

Although there are no acquisitions identified by

us as probable at this time, we may make acquisitions of similar or complementary businesses or assets.

Even if we identify appropriate

acquisition candidates, we may be unable to negotiate successfully the terms of the acquisitions, finance them, integrate the acquired

business into our then existing business, obtain required regulatory approvals, and/or attract and retain customers.

Completing an acquisition

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

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.

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.

If we were to proceed with

one or more significant acquisitions in which the consideration included cash, we could be required to use a substantial portion of our

available cash or obtain additional financing to consummate them.

previous acquisitions involve risks, including our inability to integrate successfully the new businesses and our assumption of certain

previous acquisitions of businesses and their respective assets also involved the risks that the businesses and assets acquired may prove

to be less valuable than we expected and/or that we may assume unknown or unexpected liabilities, costs and problems.

In addition, we

assumed certain liabilities in connection with these acquisitions and we cannot assure you that we will be able to satisfy adequately

such assumed liabilities.

Other companies that offer similar products and services may be able to market and sell their products and

services more cost-effectively than we can.

have recorded goodwill impairment charges in the past and may be required to record additional charges to future earnings if our goodwill

becomes further impaired or our intangible assets become impaired.

are required under generally accepted accounting principles to review our goodwill and definite-lived intangible assets for impairment

when events or changes in circumstances indicate the carrying value may not be recoverable.

Goodwill must be tested for impairment at

least annually.

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 a decline in stock price and market capitalization, 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.

required to record additional charges to earnings during any period in which a further impairment of our goodwill or other intangible

assets is determined which could adversely affect our results of operations.

we do not manage our growth, our business will be harmed.

may not be successful in managing our growth.

Past growth has placed, and future growth will continue to place, significant challenges

on our management and resources, related to the successful integration of the newly acquired businesses.

To manage the expected growth

of our operations, we will need to improve our existing, and implement new, operational and financial systems, procedures and controls.

We may also need to expand our finance, administrative, client services and operations staffs and train and manage our growing employee

base effectively.

Our current and planned personnel, systems, procedures and controls may not be adequate to support our future operations.

Our business, results of operations and financial position will suffer if we do not effectively manage our growth.

I f we are not successful in protecting our intellectual property, our business will suffer.

We depend heavily on technology and viewing content to operate our business.

Our success depends on protecting our intellectual property, which is one of our most important assets.

we are not successful in protecting our intellectual property, our business will suffer.

depend heavily on technology and viewing content to operate our business.

Our success depends on protecting our intellectual property,

which is one of our most important assets.

We have intellectual property consisting of:

rights to certain domain names;

registered service marks on certain names and phrases;

various unregistered trademarks and service marks;

film, television and other forms of viewing content;

rights to certain logos.

If we do not adequately protect our intellectual property, our business, financial position and results of operations would be harmed.

Our means of protecting our intellectual property may not be adequate.

Unauthorized parties may attempt to copy aspects of our intellectual property or to obtain and use information that we regard as proprietary.

In addition, competitors may be able to devise methods of competing with our business that are not covered by our intellectual property.

Our competitors may independently develop similar technology, duplicate our technology or design around any intellectual property that we may obtain.

Although we hold rights to various web domain names, regulatory bodies in the United States and abroad could establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names.

The relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear.

We may be unable to prevent third parties from acquiring domain names that are similar to or diminish the value of our proprietary rights.

Our substantial debt and lease obligations could impair our financial flexibility and restrict our business significantly.

We now have, and will continue to have, significant debt obligations.

We have a credit facility with East West Bank (the "Credit Facility"), of which the principal amount outstanding was $14.4 million as of March 31, 2020.

We have a second lien loan facility (the “Second Secured Lien Notes”), of which the principal amount outstanding was approximately $ $8.2 million principal amount of Second Secured Lien Notes was outstanding as of March 31, 2020.

We also have outstanding two convertible notes, one issued in July 2019 having a principal amount of $10.0 million (the “2019 Convertible Note”) and one issued in October 2018 having a principal amount of $5.0 million (the “2018 Convertible Note”).

We also received a Paycheck Protection Program loan in May 2020 having a principal amount of $2.1 million, which amount is intended to be eligible for forgiveness, subject to the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

As of March 31, 2020, total indebtedness of our consolidated subsidiaries (not including guarantees of our debt) was $ 37.7 million , which does not include the loan from Prospect Capital (the “Prospect Loan”).

In connection with the Prospect Loan, we provided a limited recourse guaranty pursuant to which Cinedigm guaranteed certain representations and warranties and perform ance obligations with respect to the Prospect Loan in favor of the collateral agent and the administrative agent for the Prospect Loan.

to certain domain names;

service marks on certain names and phrases;

unregistered trademarks and service marks;

television and other forms of viewing content;

to certain logos.

we do not adequately protect our intellectual property, our business, financial position and results of operations would be harmed.

means of protecting our intellectual property may not be adequate.

Unauthorized parties may attempt to copy aspects of our intellectual

property or to obtain and use information that we regard as proprietary.

In addition, competitors may be able to devise methods of competing

with our business that are not covered by our intellectual property.

Our competitors may independently develop similar technology, duplicate

our technology or design around any intellectual property that we may obtain.

we hold rights to various web domain names, regulatory bodies in the United States and abroad could establish additional top-level domains,

appoint additional domain name registrars or modify the requirements for holding domain names.

The relationship between regulations governing

domain names and laws protecting trademarks and similar proprietary rights is unclear.

We may be unable to prevent third parties from

acquiring domain names that are similar to or diminish the value of our proprietary rights.

debt obligations could impair our financial flexibility and restrict our business significantly.

We now have, and will continue to have, debt obligations.

We have a credit facility with East West Bank (the “Credit Facility”), of which the principal amount outstanding was $1.9

million as of March 31, 2021.

In February 2021, we fully paid off our previous second lien loan facility (the “Second Secured Lien

Notes”), of which the principal amount outstanding was approximately $8.2 million as of March 31, 2020.

Our two outstanding convertible

notes in the aggregate principal amount of $15 million were converted into equity in September 2020.

We also received a Paycheck Protection

Program loan in May 2020 having a principal amount of $2.1 million, which amount plus accrued interest were forgiven in full effective

June 30, 2021.

of March 31, 2021, total indebtedness of our consolidated subsidiaries (not including guarantees of our debt) was $2.0 million,

which does not include the loan from Prospect Capital (the “Prospect Loan”).

In connection with the Prospect Loan, we provided

a limited recourse guaranty pursuant to which Cinedigm guaranteed certain representations and warranties and performance obligations

with respect to the Prospect Loan in favor of the collateral agent and the administrative agent for the Prospect Loan.

Cinedigm Corp.

has provided a limited recourse guaranty in respect of a portion of this indebtedness $ 12.2 million as of March 31, 2020 pursuant to which it agreed to become a primary obligor of such indebtedness in certain specified circumstances, none of which have occurred as of the date hereof.

The obligations and restrictions under the Credit Facility, the Prospect Loan, and our other debt obligations could have important consequences for us, including:

limiting our ability to obtain necessary financing in the future;

requiring us to dedicate a substantial portion of our cash flow to payments on our debt obligations,

thereby reducing the availability of our cash flow to fund working capital, capital expenditures

and other corporate requirements or expansion of our business.

CDF2 and CDF2 Holdings are our indirect wholly owned, non-consolidated VIEs that are intended to be special purpose, bankruptcy remote entities.

CDF2 Holdings has entered into the CHG Lease pursuant to which CHG provided sale/leaseback financing for digital cinema projection systems that were partially financed as part of the Phase II deployment of our Digital Equipment segment.

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

Although the Phase II financing arrangements undertaken by CDF2 and CDF2 Holdings are important to us with respect to the success of our Phase II Deployment, 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 at March 31, 2020 was $31.8 million.

We have no obligation to fund the operating loss or the deficit beyond our initial investment, and accordingly, we carried our investment in CDF2 Holdings at $0 as of March 31, 2020 and 2019.

The obligations and restrictions under the CHG Lease could have important consequences for CDF2 and CDF2 Holdings, including:

Limiting our ability to obtain necessary financing in the future;

restricting us from incurring liens on the digital cinema projection systems financed and from

subleasing, assigning or modifying the digital cinema projection systems financed;

requiring them to dedicate a substantial portion of their cash flow to payments on their debt obligations, thereby reducing the availability of their cash flow for other uses.

If we are unable to meet our lease and debt obligations, we could be forced to restructure or refinance our obligations, to seek additional equity financing or to sell assets, which we may not be able to do on satisfactory terms or at all.

As a result, we could default on those obligations and in the event of such default, our lenders could accelerate our debt or take other actions that could restrict our operations.

The foregoing risks would be intensified to the extent we borrow additional money or incur additional debt.

The agree ments governing the financing of the Credit Facility and the Prospect Loan impose certain limitations on us.

T he Credit Facility restricts our ability and the ability of our subsidiaries that have guaranteed the obligations under the Credit Facility, subject to certain exceptions, to, among other things:

has provided a limited recourse guaranty in respect of a portion of this indebtedness $7.8 million as of March 31, 2021 pursuant

to which it agreed to become a primary obligor of such indebtedness in certain specified circumstances, none of which have occurred as

of the date hereof.

obligations and restrictions under the Credit Facility, the Prospect Loan, and our other debt obligations could have important consequences

for us, including:

our ability to obtain necessary financing in the future;

us to dedicate a substantial portion of our cash flow to payments on our debt obligations,

reducing the availability of our cash flow to fund working capital, capital expenditures

corporate requirements or expansion of our business.

and CDF2 Holdings are our indirect wholly owned, non-consolidated VIEs that are intended to be special purpose, bankruptcy remote entities.

CDF2 Holdings has entered into the CHG Lease pursuant to which CHG provided sale/leaseback financing for digital cinema projection systems

that were partially financed as part of the Phase II deployment of our Digital Equipment segment.

The CHG Lease is non-recourse to Cinedigm

and our subsidiaries, excluding our VIEs, CDF2 and CDF2 Holdings, as the case may be.

Although the Phase II financing arrangements undertaken

by CDF2 and CDF2 Holdings are important to us with respect to the success of our Phase II Deployment, 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 at March 31, 2021 was $46.3 million.

We have no obligation to fund the operating loss or the deficit

beyond our initial investment, and accordingly, we carried our investment in CDF2 Holdings at $0 as of March 31, 2021 and 2020.

obligations and restrictions under the CHG Lease could have important consequences for CDF2 and CDF2 Holdings, including:

our ability to obtain necessary financing in the future;

us from incurring liens on the digital cinema projection systems financed and from

assigning or modifying the digital cinema projection systems financed;

them to dedicate a substantial portion of their cash flow to payments on their debt obligations, thereby reducing the availability

of their cash flow for other uses.

we are unable to meet our debt obligations, we could be forced to restructure or refinance our obligations, to seek additional equity

financing or to sell assets, which we may not be able to do on satisfactory terms or at all.

As a result, we could default on those obligations

and in the event of such default, our lenders could accelerate our debt or take other actions that could restrict our operations.

foregoing risks would be intensified to the extent we borrow additional money or incur additional debt.

agreements governing the financing of the Credit Facility and the Prospect Loan impose certain limitations on us.

Credit Facility restricts our ability and the ability of our subsidiaries that have guaranteed the obligations under the Credit Facility,

subject to certain exceptions, to, among other things:

make investments;

incur other indebtedness or liens;

create or acquire subsidiaries;

engage in a new line of business;

other indebtedness or liens;

or acquire subsidiaries;

in a new line of business;

pay dividends;

acquire, consolidate with, or merge with or into other companies;

enter into transactions with affiliates.

The agreements governing the Prospect Loan restrict the ability of DC Holdings LLC and its subsidiaries, and ADCP2 and its subsidiaries, subject to certain exceptions, to, among other things:

make certain capital expenditures and investments;

incur other indebtedness or liens;

engage in a new line of business;

acquire, consolidate with, or merge with or into other companies;

enter into transactions with affiliates.

We may not be able to generate the amount of cash needed to fund our future operations.

Our ability either to make payments on or to refinance our indebtedness, or to fund planned capital expenditures and research and development efforts, will depend on our ability to generate cash in the future.

Our ability to generate cash is in part subject to general economic, financial, competitive, regulatory and other factors that are beyond our control.

Based on our current level of operations and in conjunction with the cost reduction measures that we have recently implemented and continue to implement, we believe our cash flow from operations, available borrowings and loan and credit agreement terms will be adequate to meet our future liquidity needs through at least the next twelve months.

Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity or capital requirements.

If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as:

reducing capital expenditures;

reducing our overhead costs and/or workforce;

reducing research and development efforts;

selling assets;

restructuring or refinancing our remaining indebtedness;

seeking additional funding.

We cannot assure you, however, that our business will generate sufficient cash flow from operations, or that we will be able to make future borrowings in amounts sufficient to enable us to pay the principal and interest on our current indebtedness or to fund our other liquidity needs.

consolidate with, or merge with or into other companies;

into transactions with affiliates.

agreements governing the Prospect Loan restrict the ability of DC Holdings LLC and its subsidiaries, and ADCP2 and its subsidiaries,

subject to certain exceptions, to, among other things:

capital expenditures and investments;

other indebtedness or liens;

in a new line of business;

consolidate with, or merge with or into other companies;

into transactions with affiliates.

may not be able to generate the amount of cash needed to fund our future operations.

ability either to make payments on or to refinance our indebtedness, or to fund planned capital expenditures and research and development

efforts, will depend on our ability to generate cash in the future.

Our ability to generate cash is in part subject to general economic,

financial, competitive, regulatory and other factors that are beyond our control.

on our current level of operations and in conjunction with the cost reduction measures that we have recently implemented and continue

to implement, we believe our cash flow from operations, available borrowings and loan and credit agreement terms will be adequate to

meet our future liquidity needs through at least the next twelve months.

Significant assumptions underlie this belief, including, among

other things, that there will be no material adverse developments in our business, liquidity or capital requirements.

If we are unable

to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as:

capital expenditures;

our overhead costs and/or workforce;

research and development efforts;

restructuring

or refinancing our remaining indebtedness;

additional funding.

cannot assure you, however, that our business will generate sufficient cash flow from operations, or that we will be able to make future

borrowings in amounts sufficient to enable us to pay the principal and interest on our current indebtedness or to fund our other liquidity

We may need to refinance all or a portion of our indebtedness on or before maturity.

We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all.

We have incurred losses since our inception.

W e have incurred losses since our inception in March 2000 and have financed our operations principally through equity investments and borrowings.

As of March 31, 2020, we had negative working capital, defined as current assets less current liabilities, of $(67.0) million , and cash, cash equivalents and restricted cash totaling $15.3 million ;

we have total deficit of $(19.3) million ;

however, during the fiscal year ended March 31, 2020 , we generated $7.8 million of net cash flows from operating activities.

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.

These efforts may prove to be more expensive than we currently anticipate which could further increase our losses.

We cannot assure you that we will be able

to refinance any of our indebtedness on commercially reasonable terms or at all.

have incurred losses since our inception.

We have incurred losses since our inception in

March 2000 and have financed our operations principally through equity raises and borrowings.

As of March 31, 2021, we had negative

working capital, defined as current assets less current liabilities, of $14.2 million, and cash, cash equivalents and restricted cash

totaling $17.8 million.

We have total equity of $15.8 million.

During the fiscal year ended March 31, 2021, we used $20.0 million

of net cash flows from operating activities.

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.

These efforts may prove to be more expensive than we currently anticipate which could further

increase our losses.

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 profitable.

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

If we cannot generate operating income or positive cash flows in the future, we will be unable to meet our working capital requirements.

Many of our corporate actions may be controlled by our officers, directors and principal stockholders;

these actions may benefit these principal stockholders more than our other stockholders.

As of June 29, 2020, our directors, executive officers and principal stockholders, those known by us to beneficially own

more than 5% of the outstanding shares of our Class A common stock, par value $0.001 per have (the “Common Stock” or

"Class A common stock"), beneficially own, directly or indirectly, in the aggregate, approximately 77.2% of our outstanding Class A common stock.

Certain of these stockholders are under the common control of one of our directors.

These stockholders, as a group, may have significant influence over our business affairs, with the ability to control matters requiring approval by our security holders, including elections of directors and approvals of mergers or other business combinations.

In addition, certain corporate actions directed by our officers may not necessarily inure to the proportional benefit of our other stockholders.

We face risks associated with expanding our business in China.

We expect to expand our business in China.

In November 2017, Bison, a Hong Kong-based entity that does business in mainland China as well as other locations, became our majority owner.

We anticipate that Bison's presence and relationships in China will provide us with assistance in expanding our business to China.

In January 2018, we announced a strategic alliance with Starrise Media Holdings Limited, a leading Chinese entertainment company whose ordinary shares are listed on the Hong Kong Stock Exchange (“Starrise”), to release films in China theatrically and to digital platforms, and to evaluate opportunities to jointly produce Chinese/American film co-productions, and in February and April 2020, we acquired approximately 26% of the outstanding ordinary shares of Starrise.

If we cannot generate operating income

or positive cash flows in the future, we will be unable to meet our working capital requirements.

face risks associated with our business in China.

In November 2017, Bison, a Hong Kong-based entity

that does business in mainland China as well as other locations, became our majority owner.

We anticipated that Bison’s presence

and relationships in China will provide us with assistance in expanding our business to China.

In January 2018, we announced a strategic

alliance with Starrise Media Holdings Limited, a leading Chinese entertainment company whose ordinary shares are listed on the Hong Kong

Stock Exchange (“Starrise”), to release films in China theatrically and to digital platforms, and to evaluate opportunities

to jointly produce Chinese/American film co-productions, and in February and April 2020, we acquired approximately 26% of the outstanding

ordinary shares of Starrise.

Accordingly, we are exposed to risks of doing business in China.

As a result, the economic, political, legal and social conditions in China could have a material adverse effect on our business.

In addition, the legal system in China has inherent uncertainties that may limit the legal protections available in the event of any claims or disputes that we may have with third parties, including our ability to protect the intellectual property we use in China.

As China’s legal system is still evolving, the interpretation of many laws, regulations and rules is not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit the remedies available in the event of any claims or disputes with third parties.

Some of the other risks related to doing business in China include:

the Chinese government exerts substantial influence over the manner in which we must conduct our business activities;

restrictions on currency exchange may limit our ability to receive and use our cash effectively;

the Chinese government may favor local businesses and make it more difficult for foreign businesses to operate in China on an equal footing, or generally;

there are increased uncertainties related to the enforcement of contracts with certain parties;

more restrictive rules on foreign investment could adversely affect our ability to expand our operations in China

As a result of our growing operations in China, these risks could have a material adverse effect on our business, results of operations and financial condition.

We are subject to risks from our equity investment in a foreign company.

We own approximately 26% of the outstanding ordinary shares of Starrise, a company that operates in China and whose ordinary shares trade on the Hong Kong Stock Exchange.

We have partnered with Starrise in the past, and continue to do so, with respect to the release of U.S.-sourced content in China and China-sourced content in the U.S.

We may experience consequences from economic and regulatory events and requirements outside of the United States that affect the value of these shares and their value to us, including changes in regulatory requirements that affect Starrise, fluctuations in international currency exchange rates, volatility in international political and economic environments, public disclosure requirements, and unforeseen developments and conditions, including terrorism, war, epidemics and international tensions and conflicts.

No assurance can be made that, if we were to sell these shares on the Hong Kong Stock Exchange in Hong Kong currency, we would receive the full value in U.S.

As a result, the economic, political, legal

and social conditions in China could have a material adverse effect on our business.

In addition, the legal system in China has inherent

uncertainties that may limit the legal protections available in the event of any claims or disputes that we may have with third parties,

including our ability to protect the intellectual property we use in China.

As China’s legal system is still evolving, the interpretation

of many laws, regulations and rules is not always uniform and enforcement of these laws, regulations and rules involve uncertainties,

which may limit the remedies available in the event of any claims or disputes with third parties.

Some of the other risks related to doing

business in China include:

government exerts substantial influence over the manner in which we must conduct our business activities;

on currency exchange may limit our ability to receive and use our cash effectively;

government may favor local businesses and make it more difficult for foreign businesses to operate in China on an equal footing,

or generally;

are increased uncertainties related to the enforcement of contracts with certain parties;

more restrictive

rules on foreign investment could adversely affect our ability to expand our operations in China

a result of our growing operations in China, these risks could have a material adverse effect on our business, results of operations

and financial condition.

are subject to risks from our equity investment in a foreign company.

own approximately 22% of the outstanding ordinary shares of Starrise, a company that operates in China and whose ordinary shares trade

on the Hong Kong Stock Exchange.

We have partnered with Starrise in the past, and continue to do so, with respect to the release of U.S.-sourced

content in China and China-sourced content in the U.S.

We may experience consequences from economic and regulatory events and requirements

outside of the United States that affect the value of these shares and their value to us, including changes in regulatory requirements

that affect Starrise, fluctuations in international currency exchange rates, volatility in international political and economic environments,

public disclosure requirements, and unforeseen developments and conditions, including terrorism, war, epidemics and international tensions

and conflicts.

No assurance can be made that, if we were to sell these shares on the Hong Kong Stock Exchange in Hong Kong currency,

we would receive the full value in U.S.

dollars upon repatriating the proceeds, based on fluctuating currency exchange rates.

While the impact of these factors is difficult to predict, any one or more of these factors could adversely affect the value of our investment in the Starrise shares.

CFIUS may modify, delay, or prevent our f uture acquisition activities or investments in Cinedigm.

Bison is the majority owner of our Class A common stock, and therefore Cinedigm is considered a "foreign person" under the regulations relating to the Committee on Foreign Investment in the United States (“CFIUS”).

Acquisitions or investments that Cinedigm may wish to pursue in the future may be subject to CFIUS review.

In such a case, Cinedigm and the other party may determine to submit to CFIUS review on a voluntary basis, or to proceed with the transaction and take a risk that CFIUS may retroactively require such a review.

CFIUS has the authority to review and potentially block certain acquisitions or investments by foreign persons, or impose conditions with respect to such transactions, which may limit our future endeavors or even prevent us from pursuing transactions that we believe would otherwise be beneficial to us and our stockholders.

Our success will significantly depend on our ability to hire and retain key personnel.

Our success will depend in significant part upon the continued performance of our senior management personnel and other key technical, sales and creative personnel.

the impact of these factors is difficult to predict, any one or more of these factors could adversely affect the value of our investment

in the Starrise shares.

success will significantly depend on our ability to hire and retain key personnel.

success will depend in significant part upon the continued performance of our senior management personnel and other key technical, sales

and creative personnel.

We do not currently have significant “key person” life insurance policies for any of our employees.

We currently have employment agreements with our chief executive officer.

If we lose one or more of our key employees, we may not be able to find a suitable replacement(s) and our business and results of operations could be adversely affected.

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.

If we do not respond to future changes in technology and customer demands, our financial position, prospects and results of operations may be adversely affected.

The demand for our Systems and other assets in connection with our digital cinema business (collectively, our “Digital Cinema Assets”) may be affected by future advances in technology and changes in customer demands.

We cannot assure you that there will be continued demand for our Digital Cinema Assets.

If we lose one or more of our key employees, we may not be

able to find a suitable replacement(s) and our business and results of operations could be adversely affected.

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.

we do not respond to future changes in technology and customer demands, our financial position, prospects and results of operations may

be adversely affected.

demand for our Systems and other assets in connection with our digital cinema business (collectively, our “Digital Cinema Assets”)

may be affected by future advances in technology and changes in customer demands.

We cannot assure you that there will be continued demand

for our Digital Cinema Assets.

Our profitability depends largely upon the continued use of digital presentations at theatres.

Although we have entered into long term agreements with major motion picture studios and independent studios (the “Studio Agreements”), there can be no assurance that these studios will continue to distribute digital content to movie theatres.

If the development of digital presentations and changes in the way digital files are delivered does not continue or technology is used that is not compatible with our Systems, there may be no viable market for our Systems and related products.

Any reduction in the use of our Systems and related products resulting from the development and deployment of new technology may negatively impact our revenues and the value of our Systems.

The demand for DVD products is declining, and we anticipate that this decline will continue.

We anticipate, however, that the distribution of DVD products will continue to generate positive cash flows for the Company for the foreseeable future.

Should a decline in consumer demand be greater than we anticipate, our business could be adversely affected.

We have concentration in our digital cinema business with respect to our major motion picture studio customers, and the loss of one or more of our largest studio customers could have a material adverse effect on us.

Our Studio Agreements account for a significant portion of our service revenue within Phase 2.

Our service fee revenue associated with these studios generated 8% of our consolidated revenues for the fiscal year ended March 31, 2020.

The Studio Agreements are critical to our business.

If some of the Studio Agreements were terminated prior to the end of their terms or found to be unenforceable, or if our Systems are not upgraded or enhanced as necessary, or if we had a material failure of our Systems, it may have a material adverse effect on our revenue, profitability, financial condition and cash flows.

The Studio Agreements also generally provide that the VPF rates and other material terms of the agreements may not be more favorable to one studio as compared to the others.

Termination of the MLAs and MLAAs could damage our revenue and profitability.

The master license agreements with each of our licensed exhibitors (the “MLAs”) are critical to our business as are master license administrative agreements (the “MLAAs”).

The MLAs have terms, which expire in 2020 through 2022 and provide the exhibitor with an option to purchase our Systems or to renew for successive one-year periods up to ten years thereafter.

The MLAs also require our suppliers to upgrade our Systems when technology necessary for compliance with DCI Specification becomes commercially available and we may determine to enhance the Systems, which may require additional capital expenditures.

If any one of the MLAs were terminated prior to the end of its term, not renewed at its expiration or found to be unenforceable, or if our Systems are not upgraded or enhanced as necessary, it would have a material adverse effect on our revenue, profitability, financial condition and cash flows.

Additionally, termination of MLAAs could adversely impact our servicing business.

An increase in the use of alternative movie distribution channels and other competing forms of entertainment could drive down movie theatre attendance, which, if causing significant theatre closures or a substantial decline in motion picture production, may lead to reductions in our revenues.

Various exhibitor chains, which are our distributors, face competition for patrons from a number of alternative motion picture distribution channels, such as DVD, network and syndicated television, VOD, pay-per-view television and downloading utilizing the Internet.

These exhibitor chains also compete with other forms of entertainment competing for patrons’ leisure time and disposable income such as concerts, amusement parks and sporting events.

An increase in popularity of these alternative movie distribution channels and competing forms of entertainment could drive down movie theatre attendance and potentially cause certain of our exhibitors to close their theatres for extended periods of time.

Significant theatre closures could in turn have a negative impact on the aggregate receipt of our VPF revenues, which in turn may have a material adverse effect on our business and ability to service our debt.

An increase in the use of alternative movie distribution channels could also cause the overall production of motion pictures to decline, which, if substantial, could have an adverse effect on the businesses of the major studios with which we have Studio Agreements.

A decline in the businesses of the major studios could in turn force the termination of certain Studio Agreements prior to the end of their terms.

The Studio Agreements with each of the major studios are critical to our business, and their early termination may have a material adverse effect on our revenue, profitability, financial condition and cash flows.

Our success depends on external factors in the motion picture and television industry.

Our success depends on the commercial success of movies and television programs, which is unpredictable.

Operating in the motion picture and television industry involves a substantial degree of risk.

Each movie and television program is an individual artistic work, and inherently unpredictable audience reactions primarily determine commercial success.

Generally, the popularity of movies and television programs depends on many factors, including the critical acclaim they receive, the format of their initial release, for example, theatrical or direct-to-video, the actors and other key talent, their genre and their 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.

We cannot predict the future effects of these factors with certainty, any of which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

In addition, because a movie’s or television program’s performance in ancillary markets, such as home video and pay and free television, is often directly related to its box office performance or television ratings, poor box office results or poor television ratings may negatively affect future revenue streams.

Our success will depend on the experience and judgment of our management to select and develop new content acquisition and investment opportunities.

We cannot make assurances that movies and television programs will obtain favorable reviews or ratings, will perform well at the box office or in ancillary markets or that broadcasters will license the rights to broadcast any of our television programs in development or renew licenses to broadcast programs in our library.

The failure to achieve any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

In addition, the motion picture industry has been significantly affected by the COVID-19 pandemic in light of mandatory theatre shutdown, changes to the planned production, distribution and release schedules.

The industry may continue to be negatively impacted by delays in the production and release schedules of new motion pictures and TV shows, which may negatively affect our business, financial condition, operating results, liquidity and prospects.

Our business involves risks of liability claims for media content, which could adversely affect our business, results of operations and financial condition.

As a distributor of media content, we may face potential liability for:

invasion of privacy;

other claims based on the nature and content of the materials distributed.

These types of claims have been brought, sometimes successfully, against producers and distributors of media content.

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 may fluctuate significantly in the future.

General economic or other conditions could cause lower than expected revenues and earnings within our digital cinema, technology or content and entertainment businesses.

The global economic turmoil of recent years has caused a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, an unprecedented level of intervention from the U.S.

federal government and other foreign governments, decreased consumer confidence, overall slower economic activity and extreme volatility in credit, equity and fixed income markets.

While the ultimate outcome of these events cannot be predicted, a decrease in economic activity in the U.S.

or in other regions of the world in which we do business could adversely affect demand for our movies, thus reducing our revenue and earnings.

While stabilization has continued, it remains a slow process and the global economy remains subject to volatility.

Moreover, financial institution failures may cause us to incur increased expenses or make it more difficult either to financing of any future acquisitions, or financing activities.

Any of these factors could have a material adverse effect on our business, results of operations and could result in significant additional dilution to shareholders.

Changes in economic conditions could have a material adverse effect on our business, financial position and results of operations.

Our operations and performance could be influenced by worldwide economic conditions.

Uncertainty about current global economic conditions poses a risk as consumers and businesses may postpone spending in response to tighter credit, negative financial news and/or declines in income or asset values, which could have a material negative effect on the demand for our products and services.

Other factors that could influence demand include continuing increases in fuel and other energy costs, conditions in the residential real estate and mortgage markets, labor and healthcare costs, access to credit, consumer confidence, and other macroeconomic factors affecting consumer-spending behavior.

These and other economic factors could have a material adverse effect on demand for our products and services and on our financial condition and operating results.

Uncertainty about current global economic conditions could also continue to increase the volatility of our stock price.

Changes to existing accounting pronouncements or taxation rules or practices may affect how we conduct our business and affect our reported results of operations.

New accounting pronouncements or tax rules and varying interpretations of accounting pronouncements or taxation practice have occurred and may occur in the future.

A change in accounting pronouncements or interpretations or taxation rules or practices can have a significant effect on our reported results and may even affect our reporting of transactions completed before the change is effective.

Changes to existing rules and pronouncements, future changes, if any, or the questioning of current practices or interpretations may adversely affect our reported financial results or the way we conduct our business.

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.

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.

we have entered into long term agreements with major motion picture studios and independent studios (the “Studio Agreements”),

there can be no assurance that these studios will continue to distribute digital content to movie theatres.

If the development of digital

presentations and changes in the way digital files are delivered does not continue or technology is used that is not compatible with

our Systems, there may be no viable market for our Systems and related products.

Any reduction in the use of our Systems and related

products resulting from the development and deployment of new technology may negatively impact our revenues and the value of our Systems.

demand for DVD products is declining, and we anticipate that this decline will continue.

We anticipate, however, that the distribution

of DVD products will continue to generate positive cash flows for the Company for the foreseeable future.

Should a decline in consumer

demand be greater than we anticipate, our business could be adversely affected.

have concentration in our digital cinema business with respect to our major motion picture studio customers, and the loss of one or more

of our largest studio customers could have a material adverse effect on us.

Studio Agreements account for a significant portion of our service revenue within Phase 2.

Our service fee revenue associated with these

studios generated 1.4% of our consolidated revenues for the fiscal year ended March 31, 2021.

Studio Agreements are critical to our business.

If some of the Studio Agreements were terminated prior to the end of their terms or found

to be unenforceable, or if our Systems are not upgraded or enhanced as necessary, or if we had a material failure of our Systems, it

may have a material adverse effect on our revenue, profitability, financial condition and cash flows.

The Studio Agreements also generally

provide that the VPF rates and other material terms of the agreements may not be more favorable to one studio as compared to the others.

of the MLAs and MLAAs could damage our revenue and profitability.

master license agreements with each of our licensed exhibitors (the “MLAs”) are critical to our business as are master license

administrative agreements (the “MLAAs”).

The MLAs have terms, which expire in 2020 through 2022 and provide the exhibitor

with an option to purchase our Systems or to renew for successive one-year periods up to ten years thereafter.

The MLAs also require

our suppliers to upgrade our Systems when technology necessary for compliance with DCI Specification becomes commercially available and

we may determine to enhance the Systems, which may require additional capital expenditures.

If any one of the MLAs were terminated prior

to the end of its term, not renewed at its expiration or found to be unenforceable, or if our Systems are not upgraded or enhanced as

necessary, it would have a material adverse effect on our revenue, profitability, financial condition and cash flows.

Additionally, termination

of MLAAs could adversely impact our servicing business.

increase in the use of alternative movie distribution channels and other competing forms of entertainment could drive down movie theatre

attendance, which, if causing significant theatre closures or a substantial decline in motion picture production, may lead to reductions

in our revenues.

exhibitor chains, which are our distributors, face competition for patrons from a number of alternative motion picture distribution channels,

such as DVD, network and syndicated television, VOD, pay-per-view television and downloading utilizing the Internet.

These exhibitor

chains also compete with other forms of entertainment competing for patrons’ leisure time and disposable income such as concerts,

amusement parks and sporting events.

An increase in popularity of these alternative movie distribution channels and competing forms of

entertainment could drive down movie theatre attendance and potentially cause certain of our exhibitors to close their theatres for extended

periods of time.

Significant theatre closures could in turn have a negative impact on the aggregate receipt of our VPF revenues, which

in turn may have a material adverse effect on our business and ability to service our debt.

increase in the use of alternative movie distribution channels could also cause the overall production of motion pictures to decline,

which, if substantial, could have an adverse effect on the businesses of the major studios with which we have Studio Agreements.

in the businesses of the major studios could in turn force the termination of certain Studio Agreements prior to the end of their terms.

The Studio Agreements with each of the major studios are critical to our business, and their early termination may have a material adverse

effect on our revenue, profitability, financial condition and cash flows.

success depends on external factors in the motion picture and television industry.

success depends on the commercial success of movies and television programs, which is unpredictable.

Operating in the motion picture

and television industry involves a substantial degree of risk.

Each movie and television program is an individual artistic work, and

inherently unpredictable audience reactions primarily determine commercial success.

Generally, the popularity of movies and television

programs depends on many factors, including the critical acclaim they receive, the format of their initial release, for example, theatrical

or direct-to-video, the actors and other key talent, their genre and their 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.

We cannot predict

the future effects of these factors with certainty, any of which could have a material adverse effect on our business, financial condition,

operating results, liquidity and prospects.

In addition, because a movie’s or television program’s performance in ancillary

markets, such as home video and pay and free television, is often directly related to its box office performance or television ratings,

poor box office results or poor television ratings may negatively affect future revenue streams.

Our success will depend on the experience

and judgment of our management to select and develop new content acquisition and investment opportunities.

We cannot make assurances

that movies and television programs will obtain favorable reviews or ratings, will perform well at the box office or in ancillary markets

or that broadcasters will license the rights to broadcast any of our television programs in development or renew licenses to broadcast

programs in our library.

The failure to achieve any of the foregoing could have a material adverse effect on our business, financial

condition, operating results, liquidity and prospects.

addition, the motion picture industry has been significantly affected by the COVID-19 pandemic in light of mandatory theatre shutdown,

changes to the planned production, distribution and release schedules.

The industry may continue to be negatively impacted by delays

in the production and release schedules of new motion pictures and TV shows, which may negatively affect our business, financial condition,

operating results, liquidity and prospects.

business involves risks of liability claims for media content, which could adversely affect our business, results of operations and financial

a distributor of media content, we may face potential liability for:

or trademark infringement (as discussed above);

claims based on the nature and content of the materials distributed.

types of claims have been brought, sometimes successfully, against producers and distributors of media content.

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.

revenues and earnings are subject to market downturns .

revenues and earnings may fluctuate significantly in the future.

General economic or other conditions could cause lower than expected

revenues and earnings within our digital cinema, technology or content and entertainment businesses.

The global economic turmoil of recent

years has caused a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy,

an unprecedented level of intervention from the U.S.

federal government and other foreign governments, decreased consumer confidence,

overall slower economic activity and extreme volatility in credit, equity and fixed income markets.

While the ultimate outcome of these

events cannot be predicted, a decrease in economic activity in the U.S.

or in other regions of the world in which we do business could

adversely affect demand for our movies, thus reducing our revenue and earnings.

While stabilization has continued, it remains a slow

process and the global economy remains subject to volatility.

Moreover, financial institution failures may cause us to incur increased

expenses or make it more difficult either to financing of any future acquisitions, or financing activities.

Any of these factors could

have a material adverse effect on our business, results of operations and could result in significant additional dilution to shareholders.

in economic conditions could have a material adverse effect on our business, financial position and results of operations.

operations and performance could be influenced by worldwide economic conditions.

Uncertainty about current global economic conditions

poses a risk as consumers and businesses may postpone spending in response to tighter credit, negative financial news and/or declines

in income or asset values, which could have a material negative effect on the demand for our products and services.

Other factors that

could influence demand include continuing increases in fuel and other energy costs, conditions in the residential real estate and mortgage

markets, labor and healthcare costs, access to credit, consumer confidence, and other macroeconomic factors affecting consumer-spending

These and other economic factors could have a material adverse effect on demand for our products and services and on our financial

condition and operating results.

Uncertainty about current global economic conditions could also continue to increase the volatility

of our stock price.

to existing accounting pronouncements or taxation rules or practices may affect how we conduct our business and affect our reported results

of operations.

accounting pronouncements or tax rules and varying interpretations of accounting pronouncements or taxation practice have occurred and

may occur in the future.

A change in accounting pronouncements or interpretations or taxation rules or practices can have a significant

effect on our reported results and may even affect our reporting of transactions completed before the change is effective.

existing rules and pronouncements, future changes, if any, or the questioning of current practices or interpretations may adversely affect

our reported financial results or the way we conduct our business.

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.

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, 2018, we experienced an ownership change with respect to the Bison acquisition.

Accordingly, our ability to utilize our NOL carryforwards attributable to periods prior to November 1, 2018 is subject to substantial limitations.

These limitations could result in increased future tax payments, which could be material.

We may experience unanticipated effects of the COVID-19 pandemic.

Our business could be adversely affected by the effects of a widespread outbreak of contagious disease, including the recent outbreak of COVID-19.

The impact that the recent COVID-19 pandemic will have on our business is uncertain.

Closures of certain entertainment facilities and retail locations have significantly impacted consumers’ behaviors as a result of the virus outbreak and corresponding preventative measures taken around the world to mitigate the spread of the virus.

As part of our Content & Entertainment business, we sell physical goods, including DVDs and Blu-ray discs, at brick-and-mortar stores.

Many of such stores in the United States closed during the spring of 2020 due to COVID-19 restrictions, and many of those have not yet re-opened, or have re-opened on a limited basis.

We expect that we will experience a loss of sales of such physical goods due to such closures, and we cannot predict the extent of such losses, or how long the closures or limited openings of the stores may last.

As a result of COVID-19, studios have temporarily halted distribution of new content to movie theatres due to mandatory theatre shutdown.

Because our digital cinema business earns a Virtual Print Fee when a movie is first played on a system, the temporary theatre closures resulting from the COVID-19 pandemic will result in reduced revenues that service the Prospect Loan.

We do not yet know the full impact of such reduced revenues or whether our ability to service the Prospect Loan will be materially affected.

We expect the studios to reschedule, once the theatres reopen, the release of those movies originally scheduled during the temporary movie theatre closure.

Management believes the cash flows from the Digital Cinema business, including the revenue from the sale of digital cinema projection systems, will be sufficient to pay the Prospect Loan.

The Borrower on the Prospect Loan is Cinedigm DC Holdings, LLC and the Prospect Loan is only guaranteed by the digital cinema subsidiaries.

Prospect has a security interest in certain digital cinema projection equipment and has no recourse to Cinedigm Corp., Cinedigm Entertainment Corp., Cinedigm Home Entertainment, LLC, OTT Holdings, LLC or any other non-digital cinema legal entity;

provided, however, Cinedigm Corp.

has provided a limited recourse guaranty pursuant to which it agreed to become a primary obligor of such indebtedness in certain specified circumstances, none of which have occurred as of the date hereof.

In addition, we are thinly-staffed and may be affected by illness or difficulty in performance due to geographic or other restrictions experienced by our management and personnel.

These events have negatively affected, and are expected to continue to negatively affect, our business and results of operations.

Given the dynamic nature of these events, we cannot reasonably estimate the period of time that the COVID-19 pandemic and related closures and market conditions will persist, or the extent of the impact they will have on our business or results of operations and financial condition.

R isks Relat ed to Class A Common Stock

The liquidity of the Class A common stock is uncertain;

the limited trading volume of the Class A common stock may depress the price of such stock or cause it to fluctuate significantly.

Although the Class A common stock is listed on Nasdaq, there has been a limited public market for the Class A common stock and there can be no assurance that a more active trading market for the Common Stock will develop.

As a result, you may not be able to sell your shares of Class A common stock in short time periods, or possibly at all.

The absence of an active trading market may cause the price per share of the Class A common stock to fluctuate significantly.

Substantial resales or future issuances of our Class A common stock could depress our stock price.

The market price for the Class A common stock could decline, perhaps significantly, as a result of resales or issuances of a large number of shares of the Class A 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 exercisable for shares of Class A common stock that may be exercised or converted in the future.

1, 2018, we experienced an ownership change with respect to the Bison acquisition.

Accordingly, our ability to utilize our NOL carryforwards

attributable to periods prior to November 1, 2018 is subject to substantial limitations.

These limitations could result in increased

future tax payments, which could be material.

may experience unanticipated effects of the COVID-19 pandemic.

business could be adversely affected by the effects of a widespread outbreak of contagious disease, including the recent outbreak of

The COVID-19 pandemic and related economic repercussions created significant volatility and uncertainty impacting the Company’s

results for the year.

As part of our Content & Entertainment business, the Company sells DVDs and Blu-ray discs at brick-and-mortar

With the closure of non-essential retail stores beginning in the spring of 2020, the sale of physical discs through our retail

partners declined although this was partially offset by digital purchases of physical product.

As part of our Cinema Equipment business,

the Company earns revenue when movies are exhibited in theaters.

Many movie theaters in the United States closed during the spring of

2020 and remained closed or re-opened on a limited basis through March 31, 2021.

The majority of major studios shifted films out of the

fiscal year to dates when more screens would be available, and consumers felt safe to return to theaters.

Films released during the year

had box office results below pre-Covid expectations due to theater closure, limited capacity and new commercial models that permitted

viewing day and date via premium video on demand (“PVOD”) and subscription video on demand (“SVOD”).

To the extent

films are not shown in theaters, we do not earn revenue.

term, there may be a shift in consumer preference towards digital consumption over physical or theatrical viewing.

Studios may reduce

their theatrical slates to tentpoles and certain genres releasing other content directly on their own streaming services.

This decision

could negatively impact the Company’s ability to license content for the sale of physical product, if those rights are withheld

to create exclusivity to the platform and reduce revenue opportunities for virtual print fees and sales of digital cinema equipment.

While the Company has been encouraged by the pace of mass vaccinations, spikes or the emergence of new variants could require future

These changes could negatively impact results of operations, financial conditional and cash flows.

We have identified two material weaknesses in our internal control

over financial reporting and, as such, a material misstatement of the annual or interim financial statement may not be prevented or detected

on a timely basis.

Effective internal controls are necessary for us to provide reliable

financial reports.

Nevertheless, all internal control systems, no matter how well designed, have inherent limitations.

We identified two

material weaknesses in our internal control over financial reporting during the 2021 fiscal year.

The material weaknesses relate to (i)

the fact that we have limited accounting personnel with sufficient expertise, accounting knowledge and training in United States generally

accepted accounting principles (“GAAP”) and financial reporting requirements and (ii) ineffective information and communication

See Item 9A, “Controls and Procedures,” for additional information.

If we fail to achieve and maintain effective

controls and procedures for financial reporting, we may be unable to provide timely and accurate financial information.

This may cause

investors to lose confidence in our reported financial information.

This may also have an adverse effect on the trading price of our Class

A common stock, give rise to an investigation by the SEC, and possible civil or criminal sanctions.

Additionally, ineffective internal

control over financial reporting could place us at increased risk of fraud or misuse of corporate assets.

Related to Class A Common Stock

liquidity of the Class A common stock is uncertain;

the limited trading volume of the Class A common stock may depress the price of such

stock or cause it to fluctuate significantly.

the Class A common stock is listed on Nasdaq, there has been a limited public market for the Class A common stock and there can be no

assurance that a more active trading market for the Common Stock will develop.

As a result, you may not be able to sell your shares of

Class A common stock in short time periods, or possibly at all.

The absence of an active trading market may cause the price per share

of the Class A common stock to fluctuate significantly.

resales or future issuances of our Class A common stock could depress our stock price.

market price for the Class A common stock could decline, perhaps significantly, as a result of resales or issuances of a large number

of shares of the Class A common stock in the public market or even the perception that such resales or issuances could occur.

we have outstanding a substantial number of options and warrants exercisable for shares of Class A common stock that may be exercised

in the future.

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 a substantial number of options and warrants currently outstanding which may be immediately exercised for shares of Class A common stock.

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

Our issuance of preferred stock could adversely affect holders of Class A common stock.

Our board of directors is authorized to issue series of preferred stock without any action on the part of our holders of Class A common stock.

Our board of directors also has the power, without stockholder approval, to set the terms of any such series of preferred stock that may be issued, including voting rights, dividend rights, preferences over our Class A common stock with respect to dividends or if we liquidate, dissolve or wind up our business and other terms.

If we issue preferred stock in the future that has preference over our Class A common stock with respect to the payment of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our Class A common stock, the rights of holders of our Class A common stock or the price of our Class A common stock could be adversely affected.

Our stock price has been volatile and may continue to be volatile in the future;

this volatility may affect the price at which you could sell our Class A common stock.

The trading price of the Class A common sto ck has been volatile and may continue to be volatile in response to various factors, some of which are beyond our control.

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

have a substantial number of options and warrants currently outstanding which may be immediately exercised for shares of Class A common

To the extent that these options or warrants are exercised, or to the extent we issue additional shares of Class A common stock

in the future, as the case may be, there will be further dilution to holders of shares of the Class A common stock.

issuance of preferred stock could adversely affect holders of Class A common stock.

board of directors is authorized to issue series of preferred stock without any action on the part of our holders of Class A common stock.

Our board of directors also has the power, without stockholder approval, to set the terms of any such series of preferred stock that

may be issued, including voting rights, dividend rights, preferences over our Class A common stock with respect to dividends or if we

liquidate, dissolve or wind up our business and other terms.

If we issue preferred stock in the future that has preference over our Class

A common stock with respect to the payment of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred

stock with voting rights that dilute the voting power of our Class A common stock, the rights of holders of our Class A common stock

or the price of our Class A common stock could be adversely affected.

stock price has been volatile and may continue to be volatile in the future;

this volatility may affect the price at which you could

sell our Class A common stock.

trading price of the Class A common stock has been volatile and may continue to be volatile in response to various factors, some of which

are beyond our control.

Any of the factors listed below could have a material adverse effect on an investment in our securities:

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

changes in the market’s expectations about our operating results;

success of competitors;

our operating results failing to meet the expectation of securities analysts or investors in a particular period;

changes in financial estimates and recommendations by securities analysts concerning us, the market for digital and physical content, content distribution and entertainment in general;

operating and stock price performance of other companies that investors deem comparable to us;

our ability to market new and enhanced products on a timely basis;

changes in laws and regulations affecting our business or our industry;

commencement of, or involvement in, litigation involving us;

changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

the volume of shares of the Class A common stock available for public sale;

any major change in our board of directors or management;

sales of substantial amounts of Class A common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur;

general economic and political conditions such as recessions, interest rates, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of the Class A common stock irrespective of our operating performance.

The stock market in general, and Nasdaq in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.

The trading prices and valuations of these stocks, and of the Class A common stock, may not be predictable.

A loss of investor confidence in the market for retail stocks or the stocks of other companies that investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations.

A decline in the market price of the Class A common stock also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

A nti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

Our fifth amended and restated certificate of incorporation and bylaws, as amended, contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of our board of directors.

These provisions include:

no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

the ability of our board of directors to determine to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

the requirement that an annual meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

limiting the liability of, and providing indemnification to, our directors and officers;

controlling the procedures for the conduct and scheduling of stockholder meetings;

providing that directors may be removed prior to the expiration of their terms by the Board of Directors only for cause.

In addition, our certificate of incorporation authorizes the issuance of 15,000,000 shares of preferred stock.

The terms of our preferred stock may be fixed by the company’s board of directors without further stockholder action.

The terms of any outstanding series or class of preferred stock may include priority claims to assets and dividends and special voting rights, which could adversely affect the rights of holders of Class A common stock.

Any future issuance(s) of preferred stock could make the takeover of the company more difficult, discourage unsolicited bids for control of the company in which our stockholders could receive premiums for their shares, dilute or subordinate the rights of holders of Class A common stock and adversely affect the trading price of the Class A common stock.

These provisions, alone or together, could delay hostile takeovers and changes in control of the Company or changes in our management.

As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents some stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all of our outstanding common stock.

Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our securities.

We may not be able to maintain the listing of our Common Stock on Nasdaq, which may adversely effect the flexibility of purchases of Common Stock in this offering to resell their securities in the secondary market.

The Common Stock is presently listed on Nasdaq.

If the Company is unable to meet the continued listing criteria of Nasdaq and the Common Stock became delisted, trading of the Common Stock could thereafter be conducted in the over-the-counter markets in the OTC Pink, also known as “pink sheets” or, if available, on another OTC trading platform.

We cannot assure you that we will meet the criteria for continued listing, in which case the Common Stock could become delisted.

Any such delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the loss of confidence in our financial stability by suppliers, customers and employees.

Investors would likely find it more difficult to dispose of, or to obtain accurate market quotations for, the Common Stock, as the liquidity that Nasdaq provides would no longer be available to investors.

In addition, the failure of our Common Stock to continue to be listed on the Nasdaq could adversely impact the market price for the Common Stock and our other securities, and we could face a lengthy process to re-list the Common Stock, if we are able to re-list the Common Stock.

We have no present intention of paying dividends on our Class A common stock.

We have never paid any cash dividends on our Class A common stock and have no present plans to do so.

In addition, certain of our credit facilities restrict our ability to pay dividends on the Class A common stock.

As a result, you may not receive any return on an investment in our Class A common stock unless you sell the shares for a price greater than that which you paid for them.

Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements.

Our business and operations may consume resources faster than we anticipate, or we may require additional funds to pursue acquisition or expansion opportunities.

In the future, we may need to raise additional funds through the issuance of new equity securities, debt or a combination of both.

or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar

in the market’s expectations about our operating results;

of competitors;

operating results failing to meet the expectation of securities analysts or investors in a particular period;

in financial estimates and recommendations by securities analysts concerning us, the market for digital and physical content, content

distribution and entertainment in general;

and stock price performance of other companies that investors deem comparable to us;

ability to market new and enhanced products on a timely basis;

in laws and regulations affecting our business or our industry;

● commencement

of, or involvement in, litigation involving us;

in our capital structure, such as future issuances of securities or the incurrence of additional debt;

volume of shares of the Class A common stock available for public sale;

major change in our board of directors or management;

of substantial amounts of Class A common stock by our directors, executive officers or significant stockholders or the perception that

such sales could occur;

economic and political conditions such as recessions, interest rates, international currency fluctuations and acts of war or terrorism.

market and industry factors may materially harm the market price of the Class A common stock irrespective of our operating performance.

The stock market in general, and Nasdaq in particular, have experienced price and volume fluctuations that have often been unrelated

or disproportionate to the operating performance of the particular companies affected.

The trading prices and valuations of these stocks,

and of the Class A common stock, may not be predictable.

A loss of investor confidence in the market for retail stocks or the stocks

of other companies that investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial

conditions or results of operations.

A decline in the market price of the Class A common stock also could adversely affect our ability

to issue additional securities and our ability to obtain additional financing in the future.

Anti-takeover

provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

fifth amended and restated certificate of incorporation and bylaws, as amended, contain provisions that could have the effect of delaying

or preventing changes in control or changes in our management without the consent of our board of directors.

provisions include:

cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or

the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

ability of our board of directors to determine to issue shares of preferred stock and to determine the price and other terms of those

shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership

of a hostile acquirer;

requirement that an annual meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders

to force consideration of a proposal or to take action, including the removal of directors;

the liability of, and providing indemnification to, our directors and officers;

● controlling

the procedures for the conduct and scheduling of stockholder meetings;

that directors may be removed prior to the expiration of their terms by the Board of Directors only for cause.

addition, our certificate of incorporation authorizes the issuance of 15,000,000 shares of preferred stock.

The terms of our preferred

stock may be fixed by the company’s board of directors without further stockholder action.

The terms of any outstanding series

or class of preferred stock may include priority claims to assets and dividends and special voting rights, which could adversely affect

the rights of holders of Class A common stock.

Any future issuance(s) of preferred stock could make the takeover of the company more

difficult, discourage unsolicited bids for control of the company in which our stockholders could receive premiums for their shares,

dilute or subordinate the rights of holders of Class A common stock and adversely affect the trading price of the Class A common stock.

provisions, alone or together, could delay hostile takeovers and changes in control of the Company or changes in our management.

a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents some stockholders

holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders

of substantially all of our outstanding common stock.

Any provision of our certificate of incorporation or bylaws or Delaware law that

has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for

their shares of our common stock, and could also affect the price that some investors are willing to pay for our securities.

may not be able to maintain the listing of our Common Stock on Nasdaq, which may adversely effect the flexibility of holders of Common

Stock to resell their securities in the secondary market.

Common Stock is presently listed on Nasdaq.

If the Company is unable to meet the continued listing criteria of Nasdaq and the Common

Stock became delisted, trading of the Common Stock could thereafter be conducted in the over-the-counter markets in the OTC Pink, also

known as “pink sheets” or, if available, on another OTC trading platform.

We cannot assure you that we will meet the criteria

for continued listing, in which case the Common Stock could become delisted.

Any such delisting could harm our ability to raise capital

through alternative financing sources on terms acceptable to us, or at all, and may result in the loss of confidence in our financial

stability by suppliers, customers and employees.

Investors would likely find it more difficult to dispose of, or to obtain accurate market

quotations for, the Common Stock, as the liquidity that Nasdaq provides would no longer be available to investors.

In addition, the failure

of our Common Stock to continue to be listed on the Nasdaq could adversely impact the market price for the Common Stock and our other

securities, and we could face a lengthy process to re-list the Common Stock, if we are able to re-list the Common Stock.

have no present intention of paying dividends on our Class A common stock.

have never paid any cash dividends on our Class A common stock and have no present plans to do so.

In addition, certain of our credit

facilities restrict our ability to pay dividends on the Class A common stock.

As a result, you may not receive any return on an investment

in our Class A common stock unless you sell any shares you hold for a price greater than that which you paid for them.

ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements.

business and operations may consume resources faster than we anticipate, or we may require additional funds to pursue acquisition or

expansion opportunities.

In the future, we may need to raise additional funds through the issuance of new equity securities, debt or

a combination of both.

Additional financing may not be available on favorable terms or at all.

funds are not available on acceptable terms, we may be unable to fund our capital requirements.

If we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our Class A common stock.

Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.

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

If adequate funds are not available

on acceptable terms, we may be unable to fund our capital requirements.

If we issue new debt securities, the debt holders would have

rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations,

including our ability to pay dividends on our Class A common stock.

Because our decision to issue securities in any future offering

will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of

our future offerings.

Thus, our stockholders bear the risk of our future securities offerings reducing the market price of our Class

A common stock, diluting their interest or being subject to rights and preferences senior to their own.

UNRESOLVED STAFF COMMENTS

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