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Item 7. Management’s Discussion and Analysis

2021-07-30 compared with 2020-07-06 · 702 added, 411 removed, 66 unchanged (94% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our historical consolidated financial statements and the related notes included elsewhere in this report.

This report contains forward-looking statements within the meaning of the federal securities laws.

These include statements about our expectations, beliefs, intentions or strategies for the future, which are indicated by words or phrases such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “will,” “estimates," and similar words.

Forward-looking statements represent, as of the date of this report, our judgment relating to, among other things, future results of operations, growth plans, sales, capital requirements and general industry and business conditions applicable to us.

These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

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

In addition to our pioneering role in transitioning approximately 12,000 movie screens from traditional analog film prints to digital distribution, we have become a leading distributor of independent content, both through organic growth and acquisitions.

We distribute products for major brands such as the NFL, Hallmark and Scholastic, as well as leading international and domestic content creators, movie producers, television producers and other short form digital content producers.

We collaborate with producers, major brands and other content owners to market, source, curate and distribute quality content to targeted audiences through (i) existing and emerging digital home entertainment platforms, including but not limited to, iTunes, Amazon Prime, Netflix, Hulu, Xbox, Sony PlayStation, Tubi and cable video-on-demand ("VOD"), and (ii) physical goods, including DVD and Blu-ray Discs.

We report our financial results in two primary segments as follows:

(1) cinema equipment business and (2) media content and entertainment business (“Content & Entertainment” or "CEG").

The cinema equipment business segment consists of the non-recourse, financing vehicles and administrators for our digital cinema equipment (the “Systems”) installed in movie theatres throughout the United States and Canada and in Australia and New Zealand.

It also provides fee-based support to over 12,000 movie screens as well as directly to exhibitors and other third party customers in the form of monitoring, billing, collection and verification services.

Our Content & Entertainment segment is a market leader in:

following discussion and analysis should be read in conjunction with our historical consolidated financial statements and the related

notes included elsewhere in this report.

report contains forward-looking statements within the meaning of the federal securities laws.

These include statements about our expectations,

beliefs, intentions or strategies for the future, which are indicated by words or phrases such as “believes,” “anticipates,”

“expects,” “intends,” “plans,” “will,” “estimates,” and similar words.

Forward-looking

statements represent, as of the date of this report, our judgment relating to, among other things, future results of operations, growth

plans, sales, capital requirements and general industry and business conditions applicable to us.

These forward-looking statements are

not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond

our control that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

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

In addition to our pioneering role in transitioning approximately 12,000 movie screens from traditional analog film prints to digital

distribution, we have become a leading distributor of independent content, both through organic growth and acquisitions.

We distribute

products for major brands such as the Hallmark, Televisa, ITV, Nelvana, ZDF, Konami, NFL, NHL and Scholastic, as well as leading international

and domestic content creators, movie producers, television producers and other short form digital content producers.

We collaborate with

producers, major brands and other content owners to market, source, curate and distribute quality content to targeted audiences through

(i) existing and emerging digital home entertainment platforms, including but not limited to, iTunes, Amazon Prime, Netflix, Hulu, Xbox,

Sony PlayStation, Tubi and cable video-on-demand (“VOD”), and (ii) physical goods, including DVD and Blu-ray Discs.

report our financial results in two primary segments as follows:

(1) cinema equipment business and (2) media content and entertainment

business (“Content & Entertainment” or “CEG”).

The cinema equipment business segment consists of the non-recourse,

financing vehicles and administrators for our digital cinema equipment (the “Systems”) installed in movie theatres throughout

North America and several international countries.

It also provides fee-based support to over 6,200 movie screens as well as directly

to exhibitors and other third-party customers in the form of monitoring, billing, collection and verification services.

& Entertainment segment is a market leader in:

(1) ancillary market aggregation and distribution of entertainment content and (2)

branded and curated over-the-top (“OTT”) digital network business providing entertainment channels and applications.

Beginning in December 2015, certain of our cinema equipment began to reach the conclusion of their 10-year deployment payment period with certain distributors and, therefore, Virtual Print Fees ("VPF") revenues ceased to be recognized on such Systems, related to such distributors.

Furthermore, because the Phase I Deployment installation period ended in November 2007, a majority of the VPF revenue associated with the Phase I Deployment Systems has ended.

As of March 31, 2020 , all of our 3,480 systems from the Phase I Deployment phase of our cinema equipment business segment had ceased to earn a significant portion of VPF revenue from certain major studios, although various other studios, consisting mostly of small

independent studios, will continue to pay VPFs through December 2020.

We expect to continue to earn such ancillary revenue from the cinema equipment segment through December of 2020;

however, such amounts are expected to be significantly less material to our consolidated financial statements.

The reduction in VPF revenue on cinema equipment business systems approximately coincided with the conclusion of certain of our non-recourse debt obligations and, therefore, the reduced cash outflows related to such non-recourse debt obligations partially offset the reduced VPF revenue since November 2017.

Under the terms of our standard cinema equipment licensing agreements, exhibitors will continue to have the right to use our Systems through the end of the term of the licensing agreement, after which time, they have the option to:

in December 2015, certain of our cinema equipment began to reach the conclusion of their 10-year deployment payment period with certain

distributors and, therefore, Virtual Print Fees (“VPF”) revenues ceased to be recognized on such Systems, related to such

distributors.

Furthermore, because the Phase I Deployment installation period ended in November 2007, a majority of the VPF revenue associated

with the Phase I Deployment Systems has ended.

The reduction in VPF revenue on cinema equipment business systems approximately coincided

with the conclusion of certain of our non-recourse debt obligations and, therefore, the reduced cash outflows related to such non-recourse

debt obligations partially offset the reduced VPF revenue since November 2017.

the terms of our standard cinema equipment licensing agreements, exhibitors will continue to have the right to use our Systems through

the end of the term of the licensing agreement, after which time, they have the option to:

(1) return the Systems to us;

(2) renew their license agreement for successive one-year terms;

(2) renew their

license agreement for successive one-year terms;

or (3) purchase the Systems from us at fair market value.

As permitted by these agreements, we have begun, and expect to continue, to pursue the sale of the Systems to such exhibitors.

Such sales were as originally contemplated as the conclusion of the digital cinema deployment plan.

We are structured so that our cinema equipment business segment operates independently from our content & entertainment business.

As of March 31, 2020 , we had approximately $12.2 million of non-recourse outstanding debt principal that relates to, and is serviced by, our cinema equipment business.

We also have approximately $37.7 million of outstanding debt principal, as of March 31, 2020 that is attributable to our Content & Entertainment and Corporate segments.

Risks and Uncertainties

The COVID-19 pandemic and related economic repercussions have created significant volatility, uncertainty, and turmoil in certain industries.

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 part of our Cinema Equipment business, we earn revenues that are generated when movies are exhibited by theatres.

Many movie theatres in the United States closed during the spring of 2020 due to COVID-19 restrictions and many of those have not yet re-opened.

To the extent movies are not shown in movie theatres due to the closures, we have not received, and will not receive, related revenue.

The studios that produce movies may elect to delay the release of movies until theatres re-open, or to bypass exhibiting movies in theatres at all and distribute the movies through other means, such as on streaming platforms, in which case we would not earn revenues at all from such movies.

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.

We have incurred net losses historically and have an accumulated deficit of $410.9 million and negative working capital of $67.0 million as of March 31, 2020 .

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

In addition, we have significant debt-related contractual obligations as of March 31, 2020 and beyond.

Based on these conditions, the Company entered into the following transactions:

Capital Raise

On May 20, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain investors (the “Investors”) for the purchase and sale of 10,666,666 shares (the “Shares”) of the Company’s Class A common stock, par value $0.001 per share, at a purchase price of $0.75 per share, in a registered direct offering, pursuant to an effective shelf registration statement on Form S-3 which was declared effective by the Securities and Exchange Commission on May 14, 2020 and an applicable prospectus supplement.

The aggregate gross proceeds for the sale of the Shares was $8.0 million .

The net proceeds to the Company from the sale of the Shares, after deducting the fees of the placement agents but before paying the Company’s estimated offering expenses, were approximately $7.4 million .

The Company intends to use the net proceeds from the transaction for working capital and for other general corporate purposes, which may include, among other things, product development, acquisitions, capital expenditures, and other business opportunities.

As of June 29, 2020, there is still approximately $2.0 million available under our shelf registration to raise additional capital.

On July 9, 2019, the Company entered into a common stock purchase agreement (the “July Stock Purchase Agreement”) with BEMG pursuant to which 2,000,000 shares of Common Stock (the “July SPA Shares”), for an aggregate purchase price in cash of $3.0 million priced at $1.50 per share were sold to BEMG.

The July SPA Shares are subject to certain transfer restrictions.

The proceeds of the sale of the July SPA Shares sold were used for working capital purposes and the repayment of Second Lien Loans.

In addition, the Company agreed to enter into a registration rights agreement for the resale of the July SPA Shares.

On August 2, 2019, the Company entered into another common stock purchase agreement (the "August Stock Purchase Agreement") with BEMG, where the Company sold to BEMG a total of 1,900,000 shares of Common Stock (the “August SPA Shares”), for an aggregate purchase price in cash of $2.9 million priced at $1.50 per share.

The August SPA Shares are subject to certain transfer restrictions.

The proceeds of the sale of the August SPA Shares sold were used for working capital purposes.

In addition, the Company agreed to enter into a registration rights agreement for the resale of the August SPA Shares.

Equity Investment in a Related Party

As previously announced, on December 27, 2019, the Company entered into, and on February 14, 2020 amended, (see Note 2 - Summary of Significant Accounting Policies ), a stock purchase agreement (as so amended, the “Stock Purchase Agreement”) with BeiTai Investment LP (“BeiTai”), a related party for accounting purposes of Cinedigm and Aim Right Ventures Limited (“Aim Right”), two shareholders of Starrise Media Holdings Limited, a leading Chinese entertainment company (“Starrise”), to buy from them an aggregate of 410,901,000 outstanding Starrise ordinary shares (the “Share Acquisition”).

On February 14, 2020, the Company purchased 162,162,162 of the Starrise ordinary shares from BeiTai and issued BeiTai 21,646,604 shares of its Class A common stock in consideration.

The Starrise shares received were valued at approximately $25 million and the Company issued shares that were valued at approximately $11.2 million.

On April 10, 2020, the Company, in accordance with the terms of the Stock Purchase Agreement, terminated its obligation to purchase Starrise ordinary shares from Aim Right under the December 27, 2019 stock purchase agreement.

On April 10, 2020, the Company entered into another stock purchase agreement (the “April Stock Purchase Agreement”) with five ( 5 ) shareholders of Starrise-Bison Global Investment SPC - Bison Global No.

1 SP, Huatai Investment LP, Antai Investment LP, Mingtai Investment LP and Shangtai Asset Management LP, all of which are related parties to the Company

to buy an aggregate of 223,380,000 outstanding Starrise ordinary shares from them and for the Company to issue to them an aggregate of 29,855,081 shares of its Class A common stock as consideration therefor (the “April Share Acquisition”).

On April 15, 2020, the April Share Acquisition was consummated and this transaction was also recorded as an equity investment in Starrise.

Starrise's ordinary shares (HK 1616) are listed on the main board of the Stock Exchange of Hong Kong Limited.

Based on the closing price of HKD 0.73 per share on June 26, 2020, calculated at an exchange rate of 7.8 Hong Kong Dollars to 1 US dollar, the market value of Cinedigm’s ownership in Starrise ordinary shares was approximately $35.1 million .

On April 15, 2020, the Company received $2.2 million from East West Bank, the Company’s existing lender, pursuant to the Paycheck Protection Program (the “PPP Loan”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The PPP Loan matures on April 10, 2022 (the “Maturity Date”), accrues interest at 1% per annum and may be prepaid in whole or in part without penalty.

As permitted by these agreements,

we typically pursue the sale of the Systems to such exhibitors.

Such sales were as originally contemplated as the conclusion of the digital

cinema deployment plan.

are structured so that our cinema equipment business segment operates independently from our Content & Entertainment business.

of March 31, 2021, we had approximately $7.8 million of non-recourse outstanding debt principal that relates to, and is serviced by,

our cinema equipment business.

We have approximately $4.1 million of outstanding debt principal, as of March 31, 2021 that is attributable

to our Content & Entertainment and Corporate segments.

and Uncertainties

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 stores.

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

We have incurred net losses historically and have

an accumulated deficit of $474.1 million and negative working capital of $14.2 million as of March 31, 2021.

We may continue to generate

net losses for the foreseeable future.

In addition, we have debt-related contractual obligations as of March 31, 2021 and beyond.

on these conditions, the Company entered into the following transactions:

February 2, 2021, the Company entered into a Securities Purchase Agreement with a single institutional investor for the purchase and

sale of 5,600,000 shares of Class A common stock at a purchase price of $1.25 per share, in a registered direct offering, pursuant to

an effective shelf registration statement on Form S-3 which was declared effective by the Securities and Exchange Commission on July

10, 2020 (File No.

333-239710) and an applicable prospectus supplement.

The closing of the sale occurred on February 5, 2021.

The aggregate

gross proceeds for the sale was approximately $7.0 million.

The net proceeds to the Company from the sale, after deducting the fees of

the placement agent but before paying the Company’s estimated offering expenses, was approximately $6.5 million.

July 2020, we entered into an At-the-Market sales agreement (the “ATM Sales Agreement”) with A.G.P./Alliance Global Partners

(“A.G.P.”) and B.

Riley FBR, Inc.

Riley” and, together with A.G.P., the “Sales Agents”), pursuant

to which the Company may offer and sell, from time to time, through the Sales Agents, shares of Common Stock at the market prices prevailing

on Nasdaq at the time of the sale of such shares.

The Company is not obligated to sell any shares under the ATM Sales Agreement.

sales of shares made under the ATM Sales Agreement will be made pursuant to an effective registration statement on Form S-3 which was

declared effective by the Securities and Exchange Commission on July 10, 2020 (File No.

333-239710), for an aggregate offering price

of up to $30 million.

During the year ended March 31, 2021, we sold 28,405,840 shares of Common Stock under the ATM Sales Agreement.

Net proceeds from such sales totaled $18.6 million.

July 16, 2020, the Company entered into a securities purchase agreement with certain investors for the purchase and sale of 7,213,334

shares of Class A common stock, par value $0.001 per share, at a purchase price of $1.50 per share, in a registered direct offering,

pursuant to an effective shelf registration statement on Form S-3 which was declared effective by the Securities and Exchange Commission

on July 10, 2020 (File No.

333-239710) and an applicable prospectus supplement.

The closing of the sale occurred on July 20, 2020.

aggregate gross proceeds for the sale was approximately $10.8 million.

The net proceeds to the Company from the sale, after deducting

the fees of the placement agents but before paying the Company’s estimated offering expenses, is approximately $10.1 million.

May 20, 2020, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain

investors (the “Investors”) for the purchase and sale of 10,666,666 shares of the Class A common stock, at a purchase price

of $0.75 per share, in a registered direct offering, pursuant to an effective shelf registration statement on Form S-3 which was declared

effective by the Securities and Exchange Commission on May 14, 2020 (File No.

333-238183) and an applicable prospectus supplement.

closing of the sale occurred on May 22, 2020.

The aggregate gross proceeds for the sale was $8.0 million.

The net proceeds to the Company

from the sale, after deducting the fees of the placement agents but before paying the Company’s estimated offering expenses, were

approximately $7.1 million.

of March 31, 2021, there is still approximately $38.0 million available under our shelf registration to raise additional capital.

of Cinematic Equipment

On March 17, 2021, the Company entered into two

separate agreements for the sale of cinematic equipment to American Multi-Cinema, Inc.

The agreement included the

sale in tranches of a total of 2,369 cinematic projectors starting in March 2021 throughout January 2023 for a total cash consideration

of $10.8 million.

As of March 31, 2021 the Company executed the sale of the first tranche and recognized revenue for $300 thousand.

portion of the total proceeds will be utilized to eliminate the remaining Prospect note payable.

Investment in a Related Party

previously announced, on December 27, 2019, the Company entered into, and on February 14, 2020 amended, (see Note 2 - Summary of Significant

Accounting Policies ), a stock purchase agreement (as so amended, the “Stock Purchase Agreement”) with BeiTai Investment

LP (“BeiTai”), a related party for accounting purposes of Cinedigm and Aim Right Ventures Limited (“Aim Right”),

two shareholders of Starrise Media Holdings Limited, a leading Chinese entertainment company (“Starrise”), to buy from them

an aggregate of 410,901,000 outstanding Starrise ordinary shares (the “Share Acquisition”).

On February 14, 2020, the Company

purchased 162,162,162 of the Starrise ordinary shares from BeiTai and issued BeiTai 21,646,604 shares of its Class A common stock in

consideration.

The Starrise shares received were valued at approximately $25 million and the Company issued shares that were valued at

approximately $11.2 million.

On April 10, 2020, the Company, in accordance with the terms of the Stock Purchase Agreement, terminated

its obligation to purchase Starrise ordinary shares from Aim Right under the December 27, 2019 stock purchase agreement.

April 10, 2020, the Company entered into another stock purchase agreement (the “April Stock Purchase Agreement”) with five

(5) shareholders of Starrise-Bison Global Investment SPC - Bison Global No.

1 SP, Huatai Investment LP, Antai Investment LP, Mingtai

Investment LP and Shangtai Asset Management LP, all of which are related parties to the Company to buy an aggregate of 223,380,000 outstanding

Starrise ordinary shares from them and for the Company to issue to them an aggregate of 29,855,081 shares of its Class A common stock

as consideration therefor (the “April Share Acquisition”).

On April 15, 2020, the April Share Acquisition was consummated

and this transaction was also recorded as an equity investment in Starrise.

Starrise’s ordinary shares (HK 1616) are

listed on the main board of the Stock Exchange of Hong Kong Limited.

Based on the closing price of HKD 0.15 per share on July 23, 2021,

calculated at an exchange rate of 7.7663 Hong Kong Dollars to 1 US dollar, the market value of Cinedigm’s ownership in Starrise

ordinary shares was approximately $7.0 million.

On June 22, 2021, the maturity

date of the East West Credit Facility (as defined in Note 6 - Notes Payable) with East West Bank was extended from June 30, 2021 to September

April 15, 2020, the Company received $2.2 million from East West Bank, the Company’s existing lender, pursuant to the Paycheck

Protection Program (the “PPP Loan”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The PPP Loan matures on April 10, 2022 (the “Maturity Date”), accrues interest at 1% per annum and may be prepaid in whole

or in part without penalty.

No interest payments are due within the initial six months of the PPP Loan.

The interest accrued during the initial six-month period is due and payable, together with the principal, on the Maturity Date.

The Company intends to use all proceeds from the PPP Loan to retain employees, maintain payroll and make lease and utility payments to support business continuity throughout the COVID-19 pandemic, which amounts are intended to be eligible for forgiveness, subject to the provisions of the CARES Act and could be subject to repayment.

The Second Lien Loans (as defined in Note 5 - Notes Payable) were to mature on June 30, 2019.

On June 28, 2019, the Company entered into a consent agreement with lenders of the Second Lien Loans to an extension of the Second Lien Loans pursuant to which (i) the Company paid down a portion of the outstanding principal amount plus accrued interest to date, and (ii) the maturity date of the remaining outstanding principal amount of the Second Lien Loans was extended to September 30, 2019.

On July 30, 2019, one of the lenders, signed a waiver to defer the receipt of the portion of the outstanding principal amount on the Second Lien Loans agreed to be paid no later than September 30, 2019.

The Company paid $3.4 million of the outstanding Second Lien Loans and expects to obtain additional capital from or through Bison Capital Holding Limited or an affiliate thereof ("Bison") for final payment of the remaining outstanding balances.

October 24, 2019, the Company entered into a consent agreement to extend the maturity date to November 30, 2019.

On January 8, 2020, the Company entered into another consent agreement to extend the maturity date to February 17, 2020.

There were no consent fees paid for these extensions.

On June 26, the Company entered into another consent agreement to extend the maturity date to September 30, 2020 and grant the Company options to extend further to March 31, 2021 and then to June 30, 2021.

The interest accrued during the

initial six-month period is due and payable, together with the principal, on the Maturity Date.

The Company used all proceeds from the

PPP Loan to retain employees, maintain payroll and make lease and utility payments to support business continuity throughout the COVID-19

pandemic, which amounts are intended to be eligible for forgiveness, subject to the provisions of the CARES Act and could be subject

to repayment.

On January 5, 2021, the Company submitted its application for forgiveness and, as of June 30, 2021, obtained forgiveness for the

full amount as discussed on Note 12 – Subsequent Events .

June 24, 2020, the Company entered into an exchange agreement (the “Exchange Agreement”) pursuant to which the Company issued

329,501 shares of its Class A common stock, in exchange for $842,000, the’ principal amount and accrued and unpaid interest of outstanding

Second Lien Loans (as defined in Note 6 - Notes Payable ).

The surrendered Second Lien Loans were immediately canceled.

was consummated on June 24, 2020.

June 26, 2020, the Company signed a consent agreement with the holders of the Second Lien loans to extend the maturity date to September

30, 2020 and grant the Company options to extend further to March 31, 2021 and then to June 30, 2021.

A consent fee of $100,000 was paid

in connection with this extension.

a separate exchange with another holder of Second Lien Notes, on November 19, 2020, the Company issued 452,499 shares of Common Stock

in exchange for $247,108 principal amount of Second Lien Notes.

The exchanged Second Lien Notes were immediately cancelled.

December 4, 2020, the Company entered into exchange agreements (the “December Exchange Agreements”) with certain holders

of notes under its Second Lien Loan Agreement dated as of July 14, 2016 among the Company, the lenders party thereto, and Cortland Capital

Market Services LLC, as Agent (“Second Lien Notes”).

Pursuant to the December Exchange Agreements, the Company issued an

aggregate of 2,776,284 shares of its Class A common stock, par value $0.001 per share Common Stock in exchange for an aggregate of $1,386,106

of principal amount of Second Lien Notes.

The exchanged Second Lien Notes were immediately cancelled.

On January 21, 2021, the Company entered into

an exchange agreement (the “Exchange Agreement”) with a holder of notes under its Second Lien Loan Agreement dated as of July

14, 2016 among the Company, the lenders party thereto, and Cortland Capital Market Services LLC, as Agent (“Second Lien Notes”).

Pursuant to the Exchange Agreement, the Company issued an aggregate of 1,247,626 shares of Class A common stock, in exchange for an aggregate

of $1,289,650 of principal amount of Second Lien Notes.

The exchanged Second Lien Notes were immediately cancelled.

In two separate exchanges with another holder

of Second Lien Notes, on January 14, 2021 and January 21, 2021, the Company issued 689,500 shares and 580,448 shares (an aggregate of

1,269,948 shares) of Class A common stock in exchange for $500,000 and $600,000 (an aggregate of $1,100,000) principal amount of Second

The exchanged Second Lien Notes were immediately cancelled.

February 2, 2021, the Company issued 425,290 shares of Class A common stock in exchange for $500,000 principal amount of Second Lien

The exchanged Second Lien Notes were immediately cancelled.

Second Lien Loans (as defined in Note 6 - Notes Payable) were to mature on June 16, 2020.

On June 26, 2020, the Company entered into

a consent agreement with the lenders of the Second Lien Loans to an extension of the Second Lien Loans pursuant to which (i) the Company

paid down a portion of the outstanding principal amount plus accrued interest to date, and 47 (ii) the maturity date of the remaining

outstanding principal amount of the Second Lien Loans was extended to September 30, 2019.

On July 30, 2019, one of the lenders, signed

a waiver to defer the receipt of the portion of the outstanding principal amount on the Second Lien Loans agreed to be paid no later

than September 30, 2019.The Company paid $3.4 million of the outstanding Second Lien Loans and expects to obtain additional capital from

or through Bison Capital Holding Limited or an affiliate thereof (“Bison”) for final payment of the remaining outstanding

The Second Lien Loans (as defined in Note 6 - Notes Payable) were to mature on June February 16, 2020.

On June 26, 2020, the

Company entered into a consent agreement with the lenders to extend the maturity date to September 30, 2020 and grant the Company options

to extend further to March 31, 2021 and then to June 30, 2021.

There was a consent fee of $100,000 for this extension.

See Note 5 - Notes Payable and Note 12 - Subsequent Events.

The $10.0 million note payable ("2018 Loan") to Bison Global Investment SPC for and on behalf of Global Investment SPC-Bison Global No.

1, another affiliate of Bison (“Bison Global”), due July 20, 2019 is guaranteed by Bison Entertainment and Media Group ("BEMG").

On July 20, 2018, the Company also entered into a side letter (the “Letter”) with BEMG, where BEMG agreed to guarantee the payment directly to Bison Global of any amount due if (i) the 2018 Loan matures prior to June 28, 2021 or (ii) Bison Global demands payment of the 2018 Loan, in whole or in part, prior to maturity.

On July 12, 2019, the Company and Bison Global entered into a termination agreement (the “Termination Agreement”) with respect to the $10.0 million 2018 Loan.

Contemporaneously with the Termination Agreement, the Company entered into a convertible promissory note (“Bison Convertible Note”) with Bison Global for $10.0 million.

The Bison Convertible Note has a term ending on March 4, 2020, and bears interest at 5% per annum.

The principal is payable upon maturity, in cash or in shares of our Class A common stock, par value $0.001 per share (the “Common Stock” or "Class A common stock"), or a combination of cash and Common Stock, at the Company’s option.

The Bison Convertible Note is unsecured and may be prepaid without premium or penalty, and contains customary covenants, representations and warranties.

February 9, 2021, the Company prepaid all of the outstanding obligations in respect of principal, interest, fees and expenses

under the Second Lien Loan Agreement, among the Company, certain lenders and Cortland Capital Market Services LLC.

The payoff amount

of approximately $3.18 million was comprised of (i) $3.1 million of principal, (2) accrued payment-in-kind interest of $.018 million,

(3) accrued current interest of $0.007 million, and (4) fees and expenses of $0.004 million.

Upon such prepayment, the Second Lien Loan

Agreement was terminated effective February 9, 2021.

$10.0 million note payable (“2018 Loan”) to Bison Global Investment SPC for and on behalf of Global Investment SPC-Bison

1, another affiliate of Bison (“Bison Global”), due July 20, 2019 is guaranteed by Bison Entertainment and Media

Group (“BEMG”).

On July 20, 2018, the Company also entered into a side letter (the “Letter”) with BEMG, where

BEMG agreed to guarantee the payment directly to Bison Global of any amount due if (i) the 2018 Loan matures prior to June 28, 2021 or

(ii) Bison Global demands payment of the 2018 Loan, in whole or in part, prior to maturity.

July 12, 2019, the Company and Bison Global entered into a termination agreement (the “Termination Agreement”) with respect

to the $10.0 million 2018 Loan.

Contemporaneously with the Termination Agreement, the Company entered into a convertible promissory note

(“Bison Convertible Note”) with Bison Global for $10.0 million.

The Bison Convertible Note had a term ending on

March 4, 2020, and bears interest at 5% per annum.

The principal is payable upon maturity, in cash or in shares of our Class A common

stock, par value $0.001 per share (the “Common Stock” or “Class A common stock”), or a combination of cash and

Common Stock, at the Company’s option.

The Bison Convertible Note is unsecured and may be prepaid without premium or penalty, and

contains customary covenants, representations and warranties.

The proceeds of the Bison Convertible Note were used to repay the 2018 Loan.

On April 15, 2020, the Company executed a letter amendment (the “Letter Amendment”) to the Bison Convertible Note.

Among other things, the Letter Amendment amended the Bison Convertible Note, effective as of March 4, 2020, to change the maturity date of the Bison Convertible Note to March 4, 2021.

The Bison Convertible Note due 2021 is also convertible into Common Stock at our election.

See Note 5 - Notes Payable and Note 12 - Subsequent Events.

On October 9, 2018, the Company issued a subordinated convertible note (the “Convertible Note”) to MingTai Investment LP (the “Lender”) for $5.0 million .

things, the Letter Amendment amended the Bison Convertible Note, effective as of March 4, 2020, to change the maturity date of the Bison

Convertible Note to March 4, 2021.

The Bison Convertible Note due 2021 was converted to Common Stock in March 2021.

See Note 6 - Notes

On April 15, 2020, the Company executed a letter

amendment (the “Letter Amendment”) to the Bison Convertible Note (as defined in Note 6 - Notes Payable ).

things, the Letter Amendment amended the Note, effective as of March 4, 2020, to extend the maturity date of the Bison Convertible note

to March 4, 2021.

October 9, 2018, the Company issued a subordinated convertible note (the “Convertible Note”) to MingTai Investment LP (the

“Lender”) for $5.0 million.

All proceeds from the Convertible Note were used to pay the $5.0 million 2013 Notes.

See Note 5 - Notes Payable .

6 - Notes Payable .

The Convertible Note bears interest at 8% and matured on October 9, 2019.

The principal is payable upon maturity, in cash or in shares of our Class A common stock, or a combination of cash and Common Stock, at the Company’s option.

On October 9, 2019, the Company signed an extension to the Ming Tai Note of $5.0 million for the first of two (2) permitted additional (1) year extensions at the Company’s option from the original maturity date to October 9, 2020.

The Convertible Note will continue in full force and effect in accordance with its terms, including the Company’s reservation of its right to further extend the maturity date of this note, if it so elects.

On July 3, 2019, the Company entered into an amendment (the “EWB Amendment”) to the Loan, Guaranty and Security Agreement, dated as of March 30, 2018, by and between the Company, East West Bank and the Guarantors named therein (the “EWB Credit Agreement”).

The EWB Amendment reduced the size of the facility to $18.0 million , required certain prepayments and daily cash sweeps from collections of receivables to be made, changed in certain respects how the borrowing base is calculated, and extended the maturity date to June 30, 2020.

In connection with the EWB Amendment, three of our subsidiaries became additional Guarantors under the EWB Credit Agreement.

On June 26, 2020, the Company signed another amendment and extended the maturity date to June 30, 2021.

See Note 5 - Notes Payable and Note 12 - Subsequent Events.

We believe the combination of:

(i) our cash and cash equivalent balances at March 31, 2020 , (ii) expected cash flows from operations, (iii) cost cutting measures including payroll expense reduction and real estate occupancy cost reduction, and (iv) the availability of funding from capital resources and financings will be sufficient to satisfy our contractual obligations, as well as liquidity for our operational and capital needs, for twelve months from the filing of this document.

Our capital requirements will depend on many factors, and we may need to use capital resources and obtain additional capital.

Failure to generate additional revenues, obtain additional capital or manage discretionary spending could have an adverse effect on our financial position, results of operations and liquidity.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures.

We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared.

On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP.

However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed in Note 2 - Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.

Management believes that the following accounting policies are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management's most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.

Management has reviewed these critical accounting estimates and related disclosures with the Audit Committee of our board of directors.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less accumulated depreciation and amortization.

Depreciation expense is recorded using the straight-line method over the estimated useful lives of the respective assets as follows:

The principal is payable upon maturity,

in cash or in shares of our Class A common stock, or a combination of cash and Common Stock, at the Company’s option.

9, 2019, the Company signed an extension to the Ming Tai Note of $5.0 million for the first of two (2) permitted additional (1) year

extensions at the Company’s option from the original maturity date to October 9, 2020.

October 9, 2019, the Company signed an extension to the Ming Tai Note of $5.0 million for the first of two (2) permitted additional

(1) year extensions at the Company’s option from the original maturity date to October 9, 2020.

This note will continue in full

force and effect in accordance with its terms, including the Company’s reservation of its right to further extend the maturity

date of this note, if it so elects.

September 11, 2020, the Bison and Mingtai Notes, having an aggregate of $15 million principal amount (the “Notes”) were

converted in full into an aggregate of 10,000,000 shares of Common Stock at a conversion price of $1.50 per share in accordance with

the terms of the Notes.

Accordingly, the Notes have been extinguished.

The Notes were held by Bison Global and, both of which are affiliates

of Peixin Xu, the Chairman of Bison Capital Holding Company Limited, which is indirectly Cinedigm’s largest stockholder.

On July 3, 2019, the Company entered into an amendment

(the “EWB Amendment”) to the Loan, Guaranty and Security Agreement, dated as of March 30, 2018, by and between the Company,

East West Bank and the Guarantors named therein (the “EWB Credit Agreement”).

The EWB Amendment reduced the size of the facility

to $18.0 million, required certain prepayments and daily cash sweeps from collections of receivables to be made, changed in certain respects

how the borrowing base is calculated, and extended the maturity date to June 30, 2020.

In connection with the EWB Amendment, three of

our subsidiaries became additional Guarantors under the EWB Credit Agreement.

On June 26, 2020, the Company signed another amendment and

extended the maturity date to June 30, 2021 and on June 22, 2021, the maturity date was extended to September 28, 2021.

See Note 6 - Notes

March 4, 2021, Cinedigm DC Holdings, LLC (“CDCH”), Access Digital Media, Inc., Access Digital Cinema Phase 2, Corp., Christie/AIX,

Inc., Cinedigm Digital Funding I, LLC, certain Lenders, and Prospect Capital Corporation, as administrative agent and collateral agent

(“Prospect”), entered into Amendment No.

3 (the “Amendment”) to the Term Loan Agreement dated February 28, 2013

(the “Term Loan Agreement”).

Under the Amendment, the maturity date of the loan under the Term Loan Agreement (the “Loan”)

was extended to March 31, 2022.

believe the combination of:

(i) our cash and cash equivalent balances at March 31, 2021, (ii) expected cash flows from operations,

(iii) expansion into Streaming, and (iv) the capacity under existing arrangements and access to new sources of capital will be sufficient

to satisfy our contractual obligations, as well as liquidity for our operational and capital needs, for twelve months from the filing

of this document.

Our capital requirements will depend on many factors, and we may need to use capital resources and obtain additional

Failure to generate additional revenues, obtain additional capital or manage discretionary spending could have an adverse effect

on our financial position, results of operations and liquidity.

Accounting Policies and Estimates

consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America

In connection with the preparation of our financial statements, we are required to make assumptions and estimates

about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures.

We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes

to be relevant at the time our consolidated financial statements are prepared.

On a regular basis, management reviews the accounting

policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP.

However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions

and estimates, and such differences could be material.

significant accounting policies are discussed in Note 2 - Summary of Significant Accounting Policies , of the Notes to Consolidated

Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K.

believes that the following accounting policies are the most critical to aid in fully understanding and evaluating our reported financial

results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates

about the effect of matters that are inherently uncertain.

Management has reviewed these critical accounting estimates and related disclosures

with the Audit Committee of our board of directors.

AND EQUIPMENT

and equipment are stated at cost, less accumulated depreciation and amortization.

Depreciation expense is recorded using the straight-line

method over the estimated useful lives of the respective assets as follows:

Computer equipment and software

3 unchanged sentences

Furniture and fixtures

Leasehold improvements are being amortized over the shorter of the lease term or the estimated useful life of the improvement.

Maintenance and repair costs are charged to expense as incurred.

improvements are being amortized over the shorter of the lease term or the estimated useful life of the improvement.

Maintenance and

repair costs are charged to expense as incurred.

Major renewals, improvements and additions are capitalized.

Useful lives are determined based on an estimate of either physical or economic obsolescence, or both.

During the fiscal years ended March 31, 2020 and 2019 , we have neither made any revisions to estimated useful lives, nor recorded any impairment charges on our property, equipment and internal use software.

FAIR VALUE ESTIMATES

Goodwill, Intangible and Long-Lived Assets

We evaluate our goodwill for impairment in the fourth quarter of each fiscal year (as of March 31), or whenever events or changes in circumstances indicate the fair value of a reporting unit is below its carrying amount.

The determination of whether or not goodwill has become impaired involves a significant level of judgment in the assumptions underlying the approach used to determine the value of our reporting units.

Inherent in the fair value determination for each reporting unit are certain judgments and estimates relating to future cash flows, including management's interpretation of current economic indicators and market conditions, and assumptions about our strategic plans with regard to our operations.

To the extent additional information arises, market conditions change or our strategies change, it is possible that the conclusion regarding whether goodwill is impaired could change and result in future goodwill impairment charges that could have a material adverse effect on our consolidated financial position or results of operations.

The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount or to perform the quantitative impairment test.

The quantitative test involves comparing the estimated fair value of a reporting unit with its respective book value, including goodwill.

lives are determined based on an estimate of either physical or economic obsolescence, or both.

During the fiscal years ended March 31,

2021 and 2020, we have neither made any revisions to estimated useful lives, nor recorded any impairment charges on our property, equipment

and internal use software.

VALUE ESTIMATES

Intangible and Long-Lived Assets

evaluate our goodwill for impairment in the fourth quarter of each fiscal year (as of March 31), or whenever events or changes in circumstances

indicate the fair value of a reporting unit is below its carrying amount.

The determination of whether or not goodwill has become impaired

involves a significant level of judgment in the assumptions underlying the approach used to determine the value of our reporting units.

Inherent in the fair value determination for each reporting unit are certain judgments and estimates relating to future cash flows, including

management’s interpretation of current economic indicators and market conditions, and assumptions about our strategic plans with

regard to our operations.

To the extent additional information arises, market conditions change or our strategies change, it is possible

that the conclusion regarding whether goodwill is impaired could change and result in future goodwill impairment charges that could have

a material adverse effect on our consolidated financial position or results of operations.

Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely

than not that the fair value of a reporting unit is less than its carrying amount or to perform the quantitative impairment test.

quantitative test involves comparing the estimated fair value of a reporting unit with its respective book value, including goodwill.

If the estimated fair value exceeds book value, goodwill is considered not to be impaired.

If, however, the fair value of the reporting unit is less than book value, an impairment loss is recognized in an amount equal to the excess.

The Company tests for good will impairment annually at March 31.

During the years ended March 31, 2020 and 2019, there were no impairment charges recorded on goodwill.

In 2020 and 2019, we elected to conduct a quantitative goodwill assessment at March 31, 2020 and 2019, respectively.

In determining fair value, we used various assumptions, including expectations of future cash flows based on projections or forecasts derived from analysis of business prospects, economic or market trends and any regulatory changes that may occur.

We estimated the fair value of the reporting unit using a net present value methodology, which is dependent on significant assumptions related to estimated future discounted cash flows, discount rates and tax rates.

Certain of the estimates and assumptions that we used in determining the value of our CEG reporting unit are discussed in Note 2 - Summary of Significant Accounting Policies of Item 8 - Financial Statements and Supplementary Data of this Report on Form 10-K.

We review the recoverability of our long-lived assets and finite-lived intangible assets, when events or conditions occur that indicate a possible impairment exists.

Determining whether impairment has occurred typically requires various estimates and assumptions, including determining which cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur, their amount and the asset's residual value, if any.

The assessment for recoverability is based primarily on our ability to recover the carrying value of its long-lived and finite-lived assets from expected future undiscounted net cash flows.

If the total of expected future undiscounted net cash flows is less than the total carrying value of the assets the asset is deemed not to be recoverable and possibly impaired.

If, however, the fair value of the reporting

unit is less than book value, an impairment loss is recognized in an amount equal to the excess.

Company tests for goodwill impairment annually at March 31.

During the years ended March 31, 2021 and 2020, there were no impairment

charges recorded on goodwill.

In 2021, we elected to conduct a qualitative goodwill assessment and in 2020 we conducted a quantitative

goodwill assessment.

In determining fair value, we used various assumptions, including expectations of future cash flows based on projections

or forecasts derived from analysis of business prospects, economic or market trends and any regulatory changes that may occur.

the fair value of the reporting unit using a net present value methodology, which is dependent on significant assumptions related to

estimated future discounted cash flows, discount rates and tax rates.

Certain of the estimates and assumptions that we used in determining

the value of our CEG reporting unit are discussed in Note 2 - Summary of Significant Accounting Policies of Item 8 - Financial

Statements and Supplementary Data of this Report on Form 10-K.

review the recoverability of our long-lived assets and finite-lived intangible assets, when events or conditions occur that indicate

a possible impairment exists.

Determining whether impairment has occurred typically requires various estimates and assumptions, including

determining which cash flows are directly related to the potentially impaired asset, the useful life over which cash flows will occur,

their amount and the asset’s residual value, if any.

The assessment for recoverability is based primarily on our ability to recover

the carrying value of its long-lived and finite-lived assets from expected future undiscounted net cash flows.

If the total of expected

future undiscounted net cash flows is less than the total carrying value of the assets the asset is deemed not to be recoverable and

possibly impaired.

We then estimate the fair value of the asset to determine whether an impairment loss should be recognized.

An impairment loss will be recognized if the asset's fair value is determined to be less than its carrying value.

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

REVENUE RECOGNITION

Adoption of ASU Topic 606, "Revenue from Contracts with Customers"

The Company adopted Accounting Standards Update ("ASU") Topic 606, Revenue from Contracts with Customers (“Topic 606”), as of April 1, 2018, using the modified retrospective method, i.e., by recognizing the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of deficit at April 1, 2018.

Therefore, the comparative information for the years ended prior to April 1, 2018 were not restated to comply with ASC 606.

We applied the practical expedient and did not capitalize the incremental costs to obtain a contract if the amortization period for the asset is one year or less.

The impact of adopting Topic 606 did not result in a change in accounting treatment for any of the Company’s revenue streams.

Refer to Note 2 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2018 for our revenue recognition accounting policy as it relates to revenue transactions prior to April 1, 2018.

The revenue recognition accounting policy described below relates to revenue transactions from April 1, 2018 and thereafter, which are accounted for in accordance with Topic 606.

We determine revenue recognition by:

identifying the contract, or contracts, with the customer;

identifying the performance obligations in the contract;

determining the transaction price;

allocating the transaction price to performance obligations in the contract;

recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the services provided, sales of physical products (DVD’s and Blu-ray) or when the content is available for subscription on the digital platform or available on the point-of-sale for transactional and VOD services which is when the control of the promised products and services is transferred to our customers and our performance obligations under the contract have been satisfied.

Revenues that might be subject to various taxes is recorded net of transaction taxes assessed by governmental authorities such as sales value-added taxes and other similar taxes.

Payment terms and conditions vary by customer and typically provide net 30 to 90 day terms.

We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less.

We have in the past entered into arrangements in connection with activation fees due from our digital cinema equipment (the “Systems”) deployments that had extended payment terms.

The outstanding balances on these arrangements are insignificant and hence the impact of significant financing would be insignificant.

Cinema Equipment Business

Virtual print fees (“VPFs”) are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Cinedigm Digital Funding I, LLC.

("Phase 1 DC") and to Access Digital Cinema Phase 2 Corp.

(“Phase 2 DC”) when movies distributed by the studio are displayed on screens utilizing our Systems installed in movie theatres.

VPFs are earned and payable to Phase 1 DC based on a defined fee schedule until the end of the VPF term.

One VPF is payable for every digital title initially displayed per System.

The amount of VPF revenue is dependent on the number of movie titles released and displayed using the Systems in any given accounting period.

VPF revenue is recognized in the period in which the digital title first plays on a System for general audience viewing in a digitally equipped movie theatre, as Phase 1 DC’s and Phase 2 DC’s performance obligations have been substantially met at that time.

Phase 2 DC’s agreements with distributors require the payment of VPFs, according to a defined fee schedule, for ten years from the date each system is installed;

however, Phase 2 DC may no longer collect VPFs once “cost recoupment,” as defined in the contracts with movie studios and distributors, is achieved.

Cost recoupment will occur once the cumulative VPFs and other cash receipts collected by Phase 2 DC have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter.

Further, if cost recoupment occurs before the end of the eighth contract year, the studios will pay us a one-time “cost recoupment bonus.” The Company evaluated the constraining estimates related to the variable consideration, i.e.

the one-time bonus and determined that it is not probable to conclude at this point in time, that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Under the terms of our standard Cinema Equipment licensing agreements, exhibitors will continue to have the right to use our Systems through the end of the term of the licensing agreement, after which time, they have the option to:

An impairment

loss will be recognized if the asset’s fair value is determined to be less than its carrying value.

Fair value is determined by

computing the expected future discounted cash flows.

determine revenue recognition by:

● identifying

the contract, or contracts, with the customer;

● identifying

the performance obligations in the contract;

● determining

the transaction price;

the transaction price to performance obligations in the contract;

● recognizing

revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the services provided, sales of

physical products (DVDs and Blu-ray) or when the content is available for subscription on the digital platform or available on

the point-of-sale for transactional and VOD services which is when the control of the promised products and services is transferred to

our customers and our performance obligations under the contract have been satisfied.

Revenues that might be subject to various taxes

is recorded net of transaction taxes assessed by governmental authorities such as sales value-added taxes and other similar taxes.

terms and conditions vary by customer and typically provide net 30 to 90 day terms.

We do not adjust the promised amount of

consideration for the effects of a significant financing component when we expect, at contract inception, that the period between

our transfer of a promised product or service to our customer and payment for that product or service will be one year or less.

have in the past entered into arrangements in connection with activation fees due from our digital cinema equipment (the

“Systems”) deployments that had extended payment terms.

The outstanding balances on these arrangements are insignificant

and hence the impact of significant financing would be insignificant.

Equipment Business

Financing vehicles and administrators for 3,122

Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 3,104 Systems

installed domestically and internationally in our second deployment phase (“Phase II Deployment”).

We retain ownership of our digital cinema equipment (the “Systems”) and the residual cash flows related to the Systems in

Phase I Deployment after the after the end of the 10-year deployment payment period.

For certain Phase II Deployment Systems, we do

not retain ownership of the residual cash flows and digital cinema equipment in Phase II Deployment after the completion of cost recoupment

and at the expiration of the exhibitor master license agreements.

The Cinema Equipment Business also provides monitoring, collection, verification and management services to this segment, as well as to

exhibitors who purchase their own equipment, and also collects and disburses Virtual print fees (“VPFs”) from motion picture

studios, and distributors and ACFs from alternative content providers, movie exhibitors and theatrical exhibitors (collectively, “Services”).

VPFs are earned, net of administrative fees,

pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Phase I Deployment and to Phase

II Deployment when movies distributed by the studio are displayed on screens utilizing our Systems installed in movie theatres.

are earned and payable to Phase I Deployment based on a defined fee schedule until the end of the VPF term.

One VPF is payable for every

digital title initially displayed per System.

The amount of VPF revenue is dependent on the number of movie titles released and displayed

using the Systems in any given accounting period.

VPF revenue is recognized in the period in which the digital title first plays on a

System for general audience viewing in a digitally equipped movie theatre, as Phase I Deployment’s and Phase II Deployment’s

performance obligations have been substantially met at that time.

Phase II Deployment’s agreements with distributors

require the payment of VPFs, according to a defined fee schedule, for ten years from the date each system is installed;

however, Phase

II Deployment may no longer collect VPFs once “cost recoupment,” as defined in the contracts with movie studios and distributors,

Cost recoupment will occur once the cumulative VPFs and other cash receipts collected by Phase II Deployment have equaled

the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”,

as defined, and including service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter.

if cost recoupment occurs before the end of the eighth contract year, the studios will pay us a one-time “cost recoupment bonus.”

The Company evaluated the constraining estimates related to the variable consideration, i.e., the one-time bonus and determined that

it is not probable to conclude at this point in time that a significant reversal in the amount of cumulative revenue recognized will

occur when the uncertainty associated with the variable consideration is subsequently resolved.

the terms of our standard Cinema Equipment licensing agreements, exhibitors will continue to have the right to use our Systems through

the end of the term of the licensing agreement, after which time, they have the option to:

(1) return the Systems to us;

(2) renew their license agreement for successive one-year terms;

(2) renew their

license agreement for successive one-year terms;

or (3) purchase the Systems from us at fair market value.

As permitted by these agreements, we have begun, and expect to continue, to pursue the sale of the Systems to such exhibitors.

Such sales were as originally contemplated as the conclusion of the digital cinema deployment plan.

Revenues earned in connection with up front exhibitor contributions are deferred and recognized over the expected cost recoupment period.

Exhibitors who purchased and own Systems using their own financing in the Cinema Equipment Business paid us an upfront activation fee of approximately $2.0 thousand per screen (the “Exhibitor-Buyer Structure”).

Upfront activation fees were recognized in the period in which these Systems were delivered and ready for content, as we had no further obligations to the customer after that time and collection was reasonably assured.

In addition, we recognize activation fee revenue of between $1.0 thousand and $2.0 thousand on Phase 2 DC Systems and for Systems installed by CDF2 Holdings, a related party, (See Note 3 - Other Interests ) upon installation and such fees are generally collected upfront upon installation.

Our services segment manages and collects VPFs on behalf of exhibitors, for which it earns an administrative fee equal to 10% of the VPFs collected.

The Cinema Equipment Business earns an administrative fee of approximately 5% of VPFs collected and, in addition, earns an incentive service fee equal to 2.5% of the VPFs earned by Phase 1 DC.

This administrative fee is related to the collection and remittance of the VPF’s and the performance obligation is satisfied at that time the related VPF fees are due which is at the time the movies are displayed on screens utilizing our Systems installed in movie theatres.

The service fees are recognized as a point in time revenue when the corresponding VPF fees are due from the movie studios and distributors.

Under the terms of the standard cinema equipment licensing agreements, exhibitors will continue to have the right to use the Systems through the end of the term of the licensing agreement, after which time, they have the option to:

As permitted by these agreements,

we have begun, and expect to continue, to pursue the sale of the Systems to such exhibitors.

Such sales were as originally contemplated

as the conclusion of the digital cinema deployment plan.

earned in connection with up front exhibitor contributions are deferred and recognized over the expected cost recoupment period.

who purchased and own Systems using their own financing in the Cinema Equipment Business paid us an upfront activation fee of approximately

$2.0 thousand per screen (the “Exhibitor-Buyer Structure”).

Upfront activation fees were recognized in the period in which

these Systems were delivered and ready for content, as we had no further obligations to the customer after that time and collection was

reasonably assured.

In addition, we recognize activation fee revenue of between $1.0 thousand and $2.0 thousand on Phase 2 DC Systems

and for Systems installed by CDF2 Holdings, a related party, (See Note 4 - Other Interests ) upon installation and such fees are

generally collected upfront upon installation.

Our services division manages and collects VPFs on behalf of exhibitors, for which it

earns an administrative fee equal to 10% of the VPFs collected.

Cinema Equipment Business earns an administrative fee of approximately 5% of VPFs collected and, in addition, earns an incentive service

fee equal to 2.5% of the VPFs earned by Phase 1 DC.

This administrative fee is related to the collection and remittance of the VPF’s

and the performance obligation is satisfied at that time the related VPF fees are due which is at the time the movies are displayed on

screens utilizing our Systems installed in movie theatres.

The service fees are recognized as a point in time revenue when the corresponding

VPF fees are due from the movie studios and distributors.

the terms of the standard cinema equipment licensing agreements, exhibitors will continue to have the right to use the Systems through

the end of the term of the licensing agreement, after which time, they have the option to:

(1) return the Systems to us;

(2) renew their license agreement for successive one-year terms;

(2) renew their

license agreement for successive one-year terms;

or (3) purchase the Systems from us at fair market value.

As permitted by these agreements, we have begun, and expect to continue, to pursue the sale of the Systems to such exhibitors.

Such sales were as originally contemplated as the conclusion of the digital cinema deployment plan.

Cinedigm completed the sale of approximately 152 and 321 digital projection Systems for an aggregate sales price of approximately $1.6 million and $3.7 million during the year ended March 31, 2020 and 2019, respectively.

Content & Entertainment Business

CEG earns fees for the distribution of content in the home entertainment markets via several distribution channels, including digital, video on demand ("VOD"), and physical goods (e.g.

DVD and Blu-ray Discs).

Fees earned are typically based on the gross amounts billed to our customers less the amounts owed to the media studios or content producers under distribution agreements, and gross media sales of owned or licensed content.

Depending upon the nature of the agreements with the platform and content providers, the fee rate that we earn varies.

The Company’s performance obligations include the delivery of content for subscription on the digital platform, shipment of DVD and Blu-ray Discs, or make available at point-of-sale for transactional and VOD services.

Revenue is recognized at the point in time when the performance obligation is satisfied which is when the content is available for subscription on the digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and VOD services as the control over the content or the physical title is transferred to the customer.

The Company considers the delivery of content through various distribution channels to be a single performance obligation.

Revenue is recognized after deducting the reserves for sales returns and other allowances, which are accounted for as variable consideration.

Reserves for sales returns and other allowances are recorded based upon historical experience.

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

CEG also has contracts for the theatrical distribution of third party feature movies and alternative content.

CEG’s distribution fee revenue and CEG's participation in box office receipts is recognized at the time a feature movie and alternative content are viewed.

CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date.

Principal Agent Considerations

We determine whether revenue should be reported on a gross or net basis based on each revenue stream.

Key indicators that we use in evaluating gross versus net treatment include, but are not limited to, the following:

which party is primarily responsible for fulfilling the promise to provide the specified good or service;

which party has discretion in establishing the price for the specified good or service.

Based on our evaluation of the above indicators, we concluded that there were no changes to our gross versus net reporting from legacy GAAP.

Shipping and Handling

Shipping and handling costs are incurred to move physical goods (e.g.

DVD and Blu-ray Discs) to customers.

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

Contract Liabilities

We generally record a receivable related to revenue when we have an unconditional right to invoice and receive payment, and we record deferred revenue (contract liability) when cash payments are received or due in advance of our performance, even if amounts are refundable.

We maintain reserves for potential credit losses on accounts receivable.

We review the composition of accounts receivable and analyze historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.

As permitted by these agreements,

we have begun, and expect to continue, to pursue the sale of the Systems to such exhibitors.

Such sales were as originally contemplated

as the conclusion of the digital cinema deployment plan.

Cinedigm completed the sale of approximately 2,177 and 152 digital projection

Systems for an aggregate sales price of approximately $6.7 million and $1.6 million during the year ended March 31, 2021 and 2020, respectively.

& Entertainment Business

CEG earns fees for the distribution of content

in the home entertainment markets via several distribution channels, including digital, video on demand (“VOD”), and physical

goods (e.g., DVD and Blu-ray Discs).

Fees earned are typically a percentage based on the net amounts received from our customers depending

upon the nature of the agreements with the platform and content providers, the fee rate that we earn varies.

The Company’s performance

obligations include the delivery of content for transactional, subscription and ad supported/FAST on the digital platforms, and shipment

of DVD and Blu-ray Discs.

Revenue is recognized at the point in time when the performance obligation is satisfied which is when the content

is available for subscription on the digital platform, at the time of shipment for physical goods, or point-of-sale for transactional

and VOD services as the control over the content or the physical title is transferred to the customer.

The Company considers the delivery

of content through various distribution channels to be a single performance obligation.

Physical Revenue is recognized after deducting

the reserves for sales returns and other allowances, which are accounted for as variable consideration.

goods Reserves for sales returns and other allowances are recorded based upon historical experience.

If actual future returns and allowances

differ from past experience, adjustments to our allowances may be required.

Agent Considerations

determine whether revenue should be reported on a gross or net basis based on each revenue stream.

Key indicators that we use in evaluating

gross versus net treatment include, but are not limited to, the following:

party is primarily responsible for fulfilling the promise to provide the specified good or service;

party has discretion in establishing the price for the specified good or service.

on our evaluation of the above indicators, we concluded that there were no changes to our gross versus net reporting from legacy GAAP.

and handling costs are incurred to move physical goods (e.g., DVD and Blu-ray Discs) to customers.

We recognize all shipping and handling

costs as an expense in cost of goods sold because we are responsible for delivery of the product to our customers prior to transfer of

control to the customer.

generally record a receivable related to revenue when we have an unconditional right to invoice and receive payment, and we record deferred

revenue (contract liability) when cash payments are received or due in advance of our performance, even if amounts are refundable.

maintain reserves for potential credit losses on accounts receivable.

We review the composition of accounts receivable and analyze historical

bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate

the adequacy of these reserves.

Reserves are recorded primarily on a specific identification basis.

Our CEG segment recognizes accounts receivable, net of an estimated allowance for product returns and customer chargebacks, at the time that it recognizes revenue from a sale.

CEG segment recognizes accounts receivable, net of an estimated allowance for product returns and customer chargebacks, at the time that

it recognizes revenue from a sale.

Reserves for product returns and other allowances are recorded based upon historical experience.

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

Sales returns and allowances are reported as a reduction of revenues.

We record accounts receivable, long-term in connection with activation fees that we earn from Systems deployments that have extended payment terms.

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

Sales returns and allowances

are reported as a reduction of revenues.

record accounts receivable, long-term in connection with activation fees that we earn from Systems deployments that have extended payment

Such accounts receivable are discounted to their present value at prevailing market rates.

The outstanding balances on these arrangements are insignificant and hence the impact of significant financing would be insignificant.

Deferred revenue pertaining to our Content & Entertainment Business includes amounts related to the sale of DVD’s with future release dates.

Deferred revenue relating to our Cinema Equipment Business pertains to revenues earned in connection with up front exhibitor contributions that are deferred and recognized over the expected cost recoupment period.

It also includes unamortized balances in connection with activation fees due from the Systems deployments that have extended payment terms.

The ending deferred revenue balance, including current and non-current balances, as of March 31, 2020 was $ 2.6 million .

For the year ended March 31, 2020, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance of satisfying performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.

During the year ended March 31, 2020, $4.2 million of revenue was recognized that was included in the deferred revenue balance at the beginning of the year.

As of March 31, 2020, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $2.6 million .

We expect to recognize approximately $1.6 million of this balance over the next 12 months, and the remainder thereafter.

In connection with revenue recognition for CEG, the following are also considered critical accounting policies:

Advances, which are recorded within prepaid and other current assets within the consolidated balance sheets, represent amounts prepaid to studios or content producers for which we provide content distribution services.

We evaluate advances regularly for recoverability and record impairment charges for amounts that we expect may not be recoverable as of the consolidated balance sheet date.

Participations and royalties payable

When we use third parties to distribute company owned content, we record participations payable, which represent amounts owed to the distributor under revenue-sharing arrangements.

When we provide content distribution services, we record accounts payable and accrued expenses to studios or content producers for royalties owed under licensing arrangements.

We identify and record as a reduction to the liability any expenses that are to be reimbursed to us by such studios or content producers.

Results of Operations for the Fiscal Years Ended March 31, 2020 and 2019

The outstanding balances on these arrangements

are insignificant and hence the impact of significant financing would be insignificant.

revenue pertaining to our Content & Entertainment Business includes amounts related to the sale of DVDs with future release dates.

revenue relating to our Cinema Equipment Business pertains to revenues earned in connection with up front exhibitor contributions that

are deferred and recognized over the expected cost recoupment period.

It also includes unamortized balances in connection with activation

fees due from the Systems deployments that have extended payment terms.

ending deferred revenue balance, including current and non-current balances, as of March 31, 2021 was $0.9 million.

For the year ended

March 31, 2021, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance of satisfying

performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment

of our performance obligations, both of which were in the ordinary course of business.

the year ended March 31, 2021, $1.6 million of revenue was recognized that was included in the deferred revenue balance at the beginning

As of March 31, 2021, the aggregate amount of contract revenue allocated to unsatisfied performance obligations is $0.9

We expect to recognize this balance over the next 12 months.

connection with revenue recognition for CEG, the following are also considered critical accounting policies:

which are recorded within prepaid and other current assets within the consolidated balance sheets, represent amounts prepaid to studios

or content producers for which we provide content distribution services.

We evaluate advances regularly for recoverability and record

impairment charges for amounts that we expect may not be recoverable as of the consolidated balance sheet date.

asset acquisition is an acquisition of an asset, or a group of assets, that does not meet the definition of a business as substantially

all of the fair value of the gross assets acquired are concentrated in a single or group of similar, identifiable assets.

Asset acquisitions

are accounted for by using the cost accumulation model whereby the cost of the acquisition, including certain transaction costs, is allocated

to the assets acquired on a relative fair value basis.

Determining and valuing intangible assets requires judgment.

of Operations for the Fiscal Years Ended March 31, 2021 and 2020

For the Fiscal Year Ended March 31,

2 unchanged sentences

Content & Entertainment

Revenues generated by our Cinema Equipment Business segment decreased primarily as a result of the reduced number of systems (7,105 actively earning revenue systems at March 31, 2020 versus 9,333 systems at March 31, 2019) earning VPF revenue and Service Fees.

The decrease in Revenues was offset by revenues generated from the sale of 152 digital projection systems for revenue of approximately $1.4 million.

Content & Entertainment revenue decreased by $0.8 million as a result of a decline in DVD business and licensing revenue offset by an increase in digital transactional revenues in our distributed business.

Direct Operating Expenses

generated by our Cinema Equipment Business segment decreased as a result of the reduced number of Systems earning VPF revenue and

administrative fees for Phase II Deployment Systems, as well as the COVID-19 pandemic.

During the year ended March 31, 2021, studios

temporarily halted distribution of new content to movie theatres due to mandatory theatre shutdowns.

Restrictions for theatre

re-openings and capacity limitations were at the sole discretion of local governments and varied state to state.

The majority of new

content released in theatres during the year ended March 31, 2021 was from small Independent distributors with limited releases.

There were two major studios that provided theatrical releases during the period though simultaneously releasing on streaming

platforms, while other studios chose to bypass the theatrical market entirely or postpone domestic releases.

In addition, as studios

began to release new content directly on streaming platforms and capacity restrictions persisted, discounted VPFs were necessary to

encourage bookings in the limited theatrical market.

Because our digital cinema business earns a VPF when a movie is first played on

a system, the temporary theatre closures, limited releases and discounted VPFs resulting from the COVID-19 pandemic significantly

affected the reduced revenues.

The revenues in the Content & Entertainment Business segment increased by 6.2% for the year ended

March 31, 2021 compared to the year ended March 31, 2020.

The increase is consistent with the addition of five new streaming

channels as well as an increase in the number of advertising partners and stay at home orders increased in home digital

Operating Expenses

For the Fiscal Year Ended March 31,

2 unchanged sentences

Content & Entertainment

Increase in direct operating expenses for the year ended March 31, 2020 compared to the prior year, was mainly due to increases in royalty expenses of approximately $1.8 million offset by a decrease of delivery expenses of approximately $0.8 million.

Royalty based deals performed better than the prior year which increased the royalty expenses.

Freight expense increased as we had an increase in liquidation sales compared to the prior year.

In addition, property taxes decreased in our Cinema Equipment Business due having lower depreciated assets.

Selling, General and Administrative Expenses

decrease in direct operating expenses in the year ended March 31, 2021 for the Cinema Equipment Business compared to the prior period

was primarily due to a reduction in head count and shifting of certain employees from full time to part time as a result of the negative

impact of the Covid 19 pandemic.

The decrease in direct operating expenses in the year ended March 31, 2021 for the Content & Entertainment

Business compared to the prior period was primarily due to reduced cost of sales from the change in revenue mix from physical sales to

digital distribution, also less spend on marketing and on theatrical releases due to COVID-19, partially offset by an increase in transition

expenses related to a new third party DVD distributor.

These costs were mainly fulfillment and freight expenses.

General and Administrative Expenses

For the Fiscal Year Ended March 31,

2 unchanged sentences

Content & Entertainment

Selling, general and administrative expenses for the year ended March 31, 2020 decreased primarily from a $3.7 million reduction in personnel related expenses, a $2.9 million reversal of bonus accrual, decreases of $1.7 million in legal and consulting services, a decrease of approximately $0.8 million in marketing spend in our OTT business, a decrease of $1.3 million in stock-based compensation, and a decrease of approximately $0.8 million in travel related expenses.

Selling, general and administrative expenses for

the year ended March 31, 2021 increased by $5.7 million primarily due to a $4.9 million increase in bonus incentive expense and stock-based

compensation to management and employees, $0.7 million for legal and accounting fees related to securities reporting and consulting and

$0.3 for remote-working equipment, partially offset by $0.2 million related to occupancy costs as a result of the company-wide program

to downsize office space and move to a more remote workforce, in the Content & Entertainment Business segment.

Provision for Doubtful Accounts

Provision for doubtful accounts was $0.8 million and $ 1.6 million for the fiscal years ended March 31, 2020 and 2019, respectively.

Depreciation and Amortization Expense on Property and Equipment

for doubtful accounts was $(0.1) million and $0.8 million for the fiscal years ended March 31, 2021 and 2020, respectively.

and Amortization Expense on Property and Equipment

For the Fiscal Year Ended March 31,

2 unchanged sentences

Content & Entertainment

Depreciation and amortization expense decreased in our Cinema Equipment Business Segment as the majority of our digital cinema projection systems reached the conclusion of their 10-year useful lives during fiscal years 2020 and 2019.

Interest expense, net

and amortization expense decreased in our Cinema Equipment Business Segment as the majority of our digital cinema projection systems

reached the conclusion of their ten-year useful lives during fiscal years 2021 and 2020.

Corporate and Content & Entertainment depreciation

and amortization expense is lower due to the write off of leasehold improvements with the closing of the Los Angeles office.

For the Fiscal Year Ended March 31,

1 unchanged sentence

Cinema Equipment Business

Interest expense in the Cinema Equipment Business segment decreased primarily as a result of reduced debt balances compared to the prior year, due to the payoff of our KBC facilities, P2 vendor notes, and the reduction of the Prospect Term Loan.

Interest expense in our Corporate segment decreased as a result of lower loan balances from our Credit Facility and Secured Lien Loans.

Income Tax Expense

We recorded income tax expense from operations of $0.3 million and $0.3 million for the years ended March 31, 2020 and 2019, respectively, primarily for state income taxes in our Cinema Equipment Business and Corporate segments.

Income tax expense was mainly related to taxable income at the state level and timing differences related to fixed asset depreciation.

Adjusted EBITDA

We define Adjusted EBITDA to be earnings before interest, taxes, depreciation and amortization, other income, net, stock-based compensation and other expenses, merger and acquisition costs, restructuring, transition and acquisitions expense, net, goodwill impairment and certain other items.

Adjusted EBITDA (including the results of Cinema Equipment Business segment) for the year ended March 31, 2020 decreased, by $ 5.7 million or 49% , compared to the year ended March 31, 2019.

Adjusted EBITDA loss from our non-cinema equipment business was negative $1.9 million for the year ended March 31, 2020 , compared to an Adjusted EBITDA of negative $7.9 million for the year ended March 31, 2019 .

The decrease in Adjusted EBITDA compared to the prior period primarily reflects lower revenue in all of our business segments.

Adjusted EBITDA is not a measurement of financial performance under GAAP and may not be comparable to other similarly titled measures of other companies.

We use Adjusted EBITDA as a financial metric to measure the financial performance of the business because management believes it provides additional information with respect to the performance of its fundamental business activities.

For this reason, we believe Adjusted EBITDA will also be useful to others, including its stockholders, as a valuable financial metric.

We present Adjusted EBITDA because we believe that Adjusted EBITDA is a useful supplement to net loss as an indicator of operating performance.

We also believe that Adjusted EBITDA is a financial measure that is useful both to management and investors when evaluating our performance and comparing our performance with that of our competitors.

We also use Adjusted EBITDA for planning purposes and to evaluate our financial performance because Adjusted EBITDA excludes certain incremental expenses or non-cash items, such as stock-based compensation charges, that we believe are not indicative of our ongoing operating performance.

We believe that Adjusted EBITDA is a performance measure and not a liquidity measure, and therefore a reconciliation between net loss and Adjusted EBITDA has been provided below.

Adjusted EBITDA should not be considered as an alternative to income from operations or net loss as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of cash flows, in each case as determined in accordance with GAAP, or as a measure of liquidity.

In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows.

We do not intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

These non-GAAP measures should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

Following is the reconciliation of our consolidated net loss to Adjusted EBITDA:

For the Fiscal Year Ended March 31,

Content & Entertainment

expense in the Cinema Equipment Business segment decreased primarily as a result of reduced debt balances compared to the prior period

on the Prospect Term Loan.

Interest expense in our Corporate segment decreased as a result of lower loan balances from our Credit Facility,

Second Lien Loans settled for Class A common stock and the conversion of the Bison Convertible Note and the Mingtai Convertible Note

into shares of Class A Common Stock.

recorded an income tax benefit of approximately $0.3 million for year ended March 31, 2021.

We recorded income tax expense of approximately

$0.3 million year ended March 31, 2020.

The benefit in income tax is mainly derived from minor changes in estimates between the

State tax income tax provision and its filling.

We define Adjusted EBITDA to be earnings before

interest, taxes, depreciation and amortization, other income, net, stock-based compensation and expenses, merger and acquisition costs,

restructuring, transition and acquisitions expense, net, goodwill impairment, change in fair value on equity investment in Starrise and

certain other items.

Adjusted EBITDA (including the results of Cinema Equipment Business segment) for the year ended March 31, 2021 decreased by $9.7 million

compared to the year ended March 31, 2020.

Adjusted EBITDA from our Cinema Equipment Business segment decreased primarily due to state

mandated theater closures due to COVID-19, the temporary halt of distribution of major studio releases and the expected decline of the

Cinema Equipment Business.

Negative Adjusted EBITDA from the Content & Entertainment business and Corporate segment decreased by

$1.0 million for the year ended March 31, 2021 compared to the year ended March 31, 2020, due increase on bonus incentive and stock-compensation

expenses, offset by the growth of Streaming & Digital revenues based on higher volume for streaming due to the pandemic and

adding additional channels and content compared to the prior period.

EBITDA is not a measurement of financial performance under GAAP and may not be comparable to other similarly titled measures of other

We use Adjusted EBITDA as a financial metric to measure the financial performance of the business because management believes

it provides additional information with respect to the performance of its fundamental business activities.

For this reason, we believe

Adjusted EBITDA will also be useful to others, including its stockholders, as a valuable financial metric.

present Adjusted EBITDA because we believe that Adjusted EBITDA is a useful supplement to net loss from continuing operations as an indicator

of operating performance.

We also believe that Adjusted EBITDA is a financial measure that is useful both to management and investors

when evaluating our performance and comparing our performance with that of our competitors.

We also use Adjusted EBITDA for planning

purposes and to evaluate our financial performance because Adjusted EBITDA excludes certain incremental expenses or non-cash items, such

as stock-based compensation charges, that we believe are not indicative of our ongoing operating performance.

believe that Adjusted EBITDA is a performance measure and not a liquidity measure, and therefore a reconciliation between net loss from

continuing operations and Adjusted EBITDA has been provided in the financial results.

Adjusted EBITDA should not be considered as an

alternative to income from operations or net loss from continuing operations as an indicator of performance or as an alternative to cash

flows from operating activities as an indicator of cash flows, in each case as determined in accordance with GAAP, or as a measure of

In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and

income taxes that can affect cash flows.

We do not intend the presentation of these non-GAAP measures to be considered in isolation or

as a substitute for results prepared in accordance with GAAP.

These non-GAAP measures should be read only in conjunction with our consolidated

financial statements prepared in accordance with GAAP.

is the reconciliation of our consolidated net loss to Adjusted EBITDA:

For the Fiscal Year

Ended March 31,

($ in thousands)

Income tax expense

Income tax (benefit)/expense

Depreciation and amortization of property and equipment

Amortization of intangible assets

Loss on extinguishment of note payable

Interest expense, net

1 unchanged sentence

Other expense, net

Stock-based compensation and expenses

Net (loss) income attributable to noncontrolling interest

(Recovery) Provision for doubtful accounts

Stock-based compensation

Net income (loss) attributable to noncontrolling interest

Adjusted EBITDA

5 unchanged sentences

Adjusted EBITDA from non-cinema equipment business

Recent Accounting Pronouncements

Recently adopted

In February, 2016, the Financial Accounting Standards Board ("FASB") issued guidance amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting.

On April 1, 2019, the Company adopted the new leasing standard using the prospective transaction method.

See Note 7- Commitments and Contingencies for further details.

In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting to simplify the accounting for nonemployee share-based payment transactions by expanding the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees.

Under the new standard, most of the guidance on stock compensation payments to nonemployees would be aligned with the requirements for share-based payments granted to employees.

This standard is effective for annual reporting periods beginning after December 15, 2018, including interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company adopted the guidance as of April 1, 2019 and it did not have a material impact on the Company’s consolidated financial statements.

Not yet adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which provides new guidance regarding the measurement and recognition of credit impairment for certain financial assets.

Such guidance will impact how the Company determines its allowance for estimated uncollectible receivables and evaluates its available-for-sale investments for impairment.

ASU 2016-13 is effective for the Company in the first quarter of 2023.

The Company is currently evaluating the effect that ASU 2016-13 will have on its consolidated financial statements and related disclosures.

Liquidity and Capital Resources

We have incurred net losses each year since we commenced our operations.

Since our inception, we have financed our operations substantially through the private placement of shares of our common and preferred stock, the issuance of promissory notes, our initial public offering and subsequent private and public offerings, notes payable and common stock used to fund various acquisitions.

We may continue to generate net losses in the future primarily due to depreciation and amortization, interest on notes payable, marketing and promotional activities and content acquisition and marketing costs.

Certain of these costs, including costs of content acquisition, marketing and promotional activities, could be reduced if necessary.

The restrictions imposed by our debt agreements may limit our ability to obtain financing, make it more difficult to satisfy our debt obligations or require us to

dedicate a substantial portion of our cash flow to payments on our existing debt obligations.

The Prospect Loan requires certain screen turn performance from certain of our Cinema Equipment Business subsidiaries.

While such restrictions may reduce the availability of our cash flow to fund working capital, capital expenditures and other corporate requirements, we do not have similar restrictions imposed upon our CEG business.

We may seek to raise additional capital as necessary.

Failure to generate additional revenues, raise additional capital or manage discretionary spending could have an adverse effect on our financial position, results of operations or liquidity.

Bison Note Payable

As discussed in Note 1 - Nature of Operations and Liquidity, the Company entered into a Loan with Bison for $10.0 million and issued Warrants to purchase 1,400,000 shares of the Company's Class A Common Stock.

See Note 6 - Stockholders' Deficit for further discussion of the warrants.

The loan was made in accordance with the Stock Purchase Agreement between the Company and Bison Entertainment Investment Limited, another affiliate of Bison, entered into on June 29, 2017 (the "Stock Purchase Agreement").

On July 20, 2018, the Company entered into a term loan agreement (the “2018 Loan Agreement”) with Bison Global, pursuant to which the Company borrowed from Bison Global $10.0 million (the “2018 Loan”).

The 2018 Loan has a one ( 1 ) year term that may be extended by mutual agreement of Bison Global and the Company and bears interest at 5% per annum, payable quarterly in cash.

On July 12, 2019, we entered into a Termination Agreement for the 2018 Loan and at the same time entered into a $10.0 million Bison Convertible Note with Bison Global.

$10.0 Million Loan converted into Bison Convertible Note

The Bison Convertible Note has a term ending on March 4, 2020, and bears interest at 5% per annum.

The principal is due on March 4, 2020, in cash or in shares of Common Stock, or a combination of cash and Common Stock, at the Company’s option.

The Bison Convertible Note is convertible at the Company's option, at any time prior to payment in full of the principal balance and all accrued interest of the note, to convert this note in whole or in part, into fully paid and nonassessable shares of the Company's Class A common stock.

The Bison Convertible Note is Convertible into 6,666,666 shares of Company's Class A common stock, based on initial conversion price of $1.50 per share.

On April 15, 2020, the Company signed an amendment to this note, effective as of March 4, 2020, to extend the maturity date of the note to March 4, 2021.

As a result of our cash conversion option, we separately accounted for the value of the embedded conversion option as a debt discount (with an offset to additional paid-in-capital) of $478 thousand .

The value of the embedded conversion option was determined based on the estimated fair value of the debt without the conversion feature, which was determined using market comparables to estimate the fair value of similar non-convertible debt;

the debt is being amortized to interest expense using the effective interest method over the term of the note.

The embedded conversion feature was fully amortized as of March 31, 2020.

The Bison Convertible Note is unsecured and may be prepaid without premium or penalty, and contains customary covenants, representations and warranties.

The proceeds of the Bison Convertible Note were used to repay the 2018 Loan.

The Bison Convertible Note, offset by the concurrent payoff and termination of the 2018 Loan, did not result in any increase to the Company’s outstanding debt balance.

Non-Recourse Indebtedness

Our Cinema Equipment Business has historically been financed through a series of non-recourse loans.

Certain of the subsidiaries that make up the Cinema Equipment Business have pledged their assets as collateral for, and are liable with respect to, certain indebtedness for which our other subsidiaries and their assets generally are not.

We have referred to this indebtedness as "non-recourse debt" because the recourse of the lenders is limited to the assets of specific subsidiaries.

Such indebtedness includes the Prospect Loan, the KBC Facilities, the 2013 Term Loans, the P2 Vendor Note and the P2 Exhibitor Notes.

The balance of our non-recourse debt, net of related debt issuance costs, as of March 31, 2020 was $12.2 million for our Cinema Equipment Business segment, which mature as presented in the Contractual Obligations table below.

We continue to expect cash flows from our Cinema Equipment Business operations will be sufficient to satisfy our liquidity and contractual requirements that are linked to these operations.

Revolving Credit Agreements

On March 30, 2018, the Company entered into a Credit Facility with a retail bank for a maximum of $19.0 million in revolving loans outstanding at any one time with a maturity date of March 31, 2020, which may be extended for two successive one-year periods at the sole discretion of the lender, subject to certain conditions.

Interest under the Credit Facility is due monthly at a rate elected by the Company of either 0.5% plus Prime Rate or 3.25% above LIBOR Rate established by the lender.

As of March 31, 2020 and 2019, respectively, there was $14.5 million and $18.6 million outstanding, respectively, and there was no additional availability, under the Credit Facility based on the Company's borrowing base as of March 31, 2020.

On July 3, 2019, the Company entered into the EWB Amendment to the Loan, Guaranty and Security Agreement, dated as of March 30, 2018, by and between the Company, East West Bank and the Guarantors named therein.

The EWB Amendment reduced the size of the facility to $18.0 million, required certain prepayments and daily cash sweeps from collections of receivables to be made, changed in certain respects how the borrowing base is calculated, and extended the maturity date to June 30, 2020.

In connection with the EWB Amendment, three of our subsidiaries became Guarantors under the EWB Credit Agreement.

On June 25, 2020, the Company signed another amendment, no.

4 to extend the maturity date to June 30, 2021 and to waive certain events of default provisions.

Other Indebtedness

On October 9, 2018, the Company issued a Convertible Note for $5.0 million .

All proceeds from the Convertible Note were used to pay the $5.0 million 2013 Notes described below.

The $5.0 million in aggregate principal bears interest at 8% maturing on October 9, 2019 with two one year extensions at the Company's option.

The Convertible Note is convertible into 3,333,333 shares of the Company's Class A common stock, based on initial conversion price of $1.50 per share.

On October 9, 2019, the Company signed an extension, for one additional year from the original maturity date to be due on October 9, 2020.

This note will continue in full force and effect in accordance with its terms, including Company’s reservation of its right to further extend the maturity date of this note, if it so elects.

The Convertible Note is convertible at the option of the Lender, or the Company, at any time prior to payment in full of the principal balance, and all accrued interest of this Convertible Note in whole, or in part, into fully paid and non-assessable shares of Company’s Class A common stock at the conversion rate of $1.50 .

Upon conversion prior to maturity by the Lender, or the Company, we may elect to settle such conversion in shares of our Class A common stock, cash or a combination thereof.

Upon the maturity date, the Company has the option to pay in Class A common shares convertible at the greater of the closing price of the Class A common stock or $1.10 .

As a result of our cash conversion option, we separately accounted for the value of the embedded conversion option as a debt discount (with an offset to additional paid-in capital) of $270 thousand .

the debt discount is being amortized to interest expense using the effective interest method over the one year term of the Convertible Note.

The PPP Loan matures on April 10, 2022 (the “Maturity Date”), accrues interest at 1% per annum and may be prepaid in whole or in part without penalty.

No interest payments are due within the initial six months of the PPP Loan.

The interest accrued during the initial six-month period is due and payable, together with the principal, on the Maturity Date.

intends to use all proceeds from the PPP Loan to retain employees, maintain payroll and make lease and utility payments to support business continuity throughout the COVID-19 pandemic, which amounts are intended to be eligible for forgiveness, subject to the provisions of the CARES Act and could be subject to repayment.

In addition, as discussed in more detail in Note 5 - Notes Payable , our debt obligations have instituted certain financial and liquidity covenants and capital requirements, and from time to time, we may need to use available capital resources and raise additional capital to satisfy these covenants and requirements.

Changes in our cash flows were as follows:

Accounting Pronouncements

Note 2 - Summary of Significant Accounting Policies to our consolidated financial statements included herein.

in our cash flows were as follows:

For the Fiscal Years Ended March 31,

($ in thousands)

Net cash provided by operating activities

Net cash (used in) provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

Net decrease increase in cash and cash equivalents

As of March 31, 2020 , we had cash, cash equivalents and restricted cash balances of $15.3 million .

Net cash provided by operating activities is primarily driven by loss from operations, excluding non-cash expenses such as

depreciation, amortization, provision for doubtful accounts and stock-based compensation, offset by changes in working capital.

Cash received from VPFs declined from the previous period as Phase I Deployment Systems in our Cinema Equipment

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

of March 31, 2021, we had cash and restricted cash balances of $17.8 million.

of March 31, 2020, we had cash and restricted cash balances of $15.3 million.

the year ended March 31, 2021, net cash used in operating activities is primarily driven by loss from operations, excluding non-cash

expenses such as depreciation, amortization, recovery for doubtful accounts and stock-based compensation, including other changes in

working capital.

Additionally, during the year ended March 31, 2021, the Company paid down $29.8 million to vendors at both CEG and Corporate.

Cash received from VPFs declined from the previous period as Phase I Deployment Systems in our Cinema Equipment Business reached the

conclusion of their deployment payment periods with certain major studios.

Changes in accounts receivable from our studio customers largely

impact cash flows from operating activities and vary based on the seasonality of movie release schedules by the major studios.

cash flows from CEG are typically higher during our fiscal third and fourth quarters, resulting from revenues earned during the holiday

season, and lower in the other two quarters as we pay royalties on such revenues.

In addition, we make advances on theatrical releases

and to certain home entertainment distribution clients for which initial expenditures are generally recovered within six to twelve months.

Cash flows were also impacted as a result of COVID-19, as during the year ended March 31, 2021, theatres in many major markets remained

closed throughout the fourth quarter causing the majority of major studios to move wide releases scheduled for the year ended March 31,

2021 to future dates.

Only two major studios had wide theatrical releases in the last part of the year, however, the theatrical

window before the streaming debut was shortened or eliminated to accommodate the lack of theatrical venues.

Because our digital cinema

business earns a VPF when a movie is first played on a system, the temporary theatre closures resulting from the COVID-19 pandemic resulted

in reduced revenues.

the year ended March 31, 2020, net cash provided by operating activities is primarily driven by loss from operations, excluding non-cash

expenses such as depreciation, amortization, provision for doubtful accounts and stock-based compensation, offset by changes in working

Cash received from VPFs declined from the previous period as Phase I and Phase II Deployment Systems in our Cinema Equipment

Business reached the conclusion of their deployment payment period with certain major studios.

Changes in accounts receivable from our studio customers largely impact cash flows from operating activities and vary based on the seasonality of

movie release schedules by the major studios.

Operating cash flows from CEG are typically higher during our fiscal third and

fourth quarters, resulting from revenues earned during the holiday season, and lower in the other two quarters as we pay royalties on such revenues.

In addition, we make advances on theatrical releases and to certain home entertainment distribution

clients for which initial expenditures are generally recovered within six to twelve months.

Cash flows used in investing activities consisted of purchases of property, equipment and internal use software.

For the year ended March 31, 2020, cash flows used in financing activities reflects payments of approximately $8.4 million for the 2013 Prospect Loan, net payments of approximately $4.1 million for the Credit Facility, and approximately $3.4 million for the Second Lien Loan offset by $5.8 million received in connection with the sale of 3,900,000 shares of Class A common stock.

We have contractual obligations that primarily consist of term notes payable, credit facilities, and non-cancelable operating leases related to office space.

The following table summarizes our significant contractual obligations as of March 31, 2020 :

Contractual Obligations (in thousands)

Short-term recourse debt

Short-term non-recourse debt (1)

Debt-related obligations, principal

Interest on recourse debt

Interest on non-recourse debt (1)

Total interest

Total debt-related obligations

Total non-recourse debt including interest

Operating lease obligations

Non-recourse debt is generally defined as debt whereby the lenders’ sole recourse, with respect to defaults, is limited to the value of the asset that is collateral for the debt.

The Prospect Loan is not guaranteed by us or our other subsidiaries, other than Phase 1 DC and DC Holdings and the KBC Facilities are not guaranteed by us or our other subsidiaries, other than Phase 2 DC.

We may continue to generate net losses for the foreseeable future primarily due to depreciation and amortization, interest on our debt obligations, marketing and promotional activities and content acquisition and marketing costs.

Certain of these costs, including costs of content acquisition, marketing and promotional activities, could be reduced if necessary.

The restrictions imposed by the terms of our debt obligations may limit our ability to obtain financing, make it more difficult to satisfy our debt obligations or require us to dedicate a substantial portion of our cash flow to payments on our existing debt obligations.

We feel we are adequately financed for at least the next twelve months;

Changes in accounts receivable from our

studio customers largely impact cash flows from operating activities and vary based on the seasonality of movie release schedules by

the major studios.

Operating cash flows from CEG are typically higher during our fiscal third and fourth quarters, resulting from revenues

earned during the holiday season, and lower in the other two quarters as we pay royalties on such revenues.

In addition, we make advances

on theatrical releases and to certain home entertainment distribution clients for which initial expenditures are generally recovered

within six to twelve months.

the year ended March 31, 2021, cash flows used in investing activities consisted of proceeds from the sale of Starrise shares of $0.8

million, purchases of property and equipment of $0.06 million, the sale of property and equipment of $0.08 million, and the purchase of

intangible assets of $2.5 million related to the asset acquisition.

the year ended March 31, 2020, cash flows used in investing activities mainly consisted of purchases of property and equipment of $1.2

For the year ended March 31, 2021, cash flows

provided by financing activities consisted of payments of approximately $7.7 million in notes payable, $12.8 million in Credit Facility

repayments, $42.7 million received in connection with the issuance Class A common stock and the exercise of warrants, and $2.2 million

received pursuant to the Payment Protection Program of the Coronavirus Aid, Relief and Economic Security Act.

the year ended March 31, 2020, cash flows used in financing activities reflects payments of $39.5 million on notes payable offset

by $23.6 million form proceeds under the revolving credit agreement and $5.8 million received in connection with the sale of 3,900,000

shares of our Common Stock.

may continue to generate net losses for the foreseeable future primarily due to depreciation and amortization, interest on our debt obligations,

marketing and promotional activities and content acquisition and marketing costs.

Certain of these costs, including costs of content

acquisition, marketing and promotional activities, could be reduced if necessary.

The restrictions imposed by the terms of our debt obligations

may limit our ability to obtain financing, make it more difficult to satisfy our debt obligations or require us to dedicate a substantial

portion of our cash flow to payments on our existing debt obligations.

We feel we are adequately financed for at least the next twelve

however, we may need to raise additional capital for working capital as deemed necessary.

Failure to generate additional revenues, raise additional capital or manage discretionary spending could have an adverse effect on our financial position, results of operations or liquidity.

Revenues from our Cinema Equipment segment derived from the collection of VPFs from motion picture studios are seasonal, coinciding with the timing of releases of movies by the motion picture studios.

Generally, motion picture studios release the most marketable movies during the summer and the winter holiday season.

Failure to generate additional revenues,

raise additional capital or manage discretionary spending could have an adverse effect on our financial position, results of operations

or liquidity.

from our Cinema Equipment segment derived from the collection of VPFs from motion picture studios are seasonal, coinciding with the timing

of releases of movies by the motion picture studios.

Generally, motion picture studios release the most marketable movies during the

summer and the winter holiday season.

The unexpected emergence of a hit movie during other periods can alter the traditional trend.

The timing of movie releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter or any other quarter.

While CEG benefits from the winter holiday season, we believe the seasonality of motion picture exhibition, is becoming less pronounced as the motion picture studios are releasing movies somewhat more evenly throughout the year.

Off-balance sheet arrangements

We are not a party to any off-balance sheet arrangements, other than operating leases in the ordinary course of business, which are disclosed above in the table of our significant contractual obligations, and CDF2 Holdings.

In addition, as discussed further in Note 2 - Basis of Presentation and Consolidation and Note 4 - Other Interests to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, we hold a 100% equity interest in CDF2 Holdings, which is an unconsolidated variable interest entity (“VIE”), which wholly owns Cinedigm Digital Funding 2, LLC;

timing of movie releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily

indicative of results for the next quarter or any other quarter.

While CEG benefits from the winter holiday season, we believe the seasonality

of motion picture exhibition, is becoming less pronounced as the motion picture studios are releasing movies somewhat more evenly throughout

sheet arrangements

are not a party to any off-balance sheet arrangements, other than operating leases in the ordinary course of business, which are disclosed

above in the table of our significant contractual obligations, and CDF2 Holdings.

In addition, as discussed further in Note 2 - Basis

of Presentation and Consolidation and Note - Other Interests to the Consolidated Financial Statements included in Item 8 of

this Annual Report on Form 10-K, we hold a 100% equity interest in CDF2 Holdings, which is an unconsolidated variable interest entity

(“VIE”), which wholly owns Cinedigm Digital Funding 2, LLC;

however, we are not the primary beneficiary of the VIE.

Impact of Inflation

The impact of inflation on our operations has not been significant to date.

However, there can be no assurance that a high rate of inflation in the future would not have an adverse impact on our operating results.

impact of inflation on our operations has not been significant to date.

However, there can be no assurance that a high rate of inflation

in the future would not have an adverse impact on our operating results.

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 7. Management’s Discussion and Analysis