What changed in this filing

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Item 1. Financial Statements

2022-02-14 compared with 2021-11-15 · 1181 added, 990 removed, 236 unchanged (90% of the section changed)

2 unchanged sentences

thousands, except for share and per share data)

September 30,

Current assets

30 unchanged sentences

20 shares authorized;

and 7 shares issued and outstanding at September 30, 2021 and March 31, 2021.

and 7 shares issued and outstanding at December 31, 2021 and March 31, 2021.

Liquidation preference of $ 3,648

Common stock, $ 0.001 par value;

Class A stock 200,000,000 and 200,000,000 shares authorized at September 30, 2021 and March 31, 2021, respectively;

170,426,311 and 167,542,404 shares issued and 169,110,460 and 166,228,568 shares outstanding at September 30, 2021 and March 31, 2021, respectively

Class A stock 275,000,000 and 200,000,000 shares authorized at December 31, 2021 and March 31, 2021, respectively;

176,187,067 and 167,542,404 shares issued and 174,871,216 and 166,228,568 shares outstanding at December 31, 2021 and March 31, 2021, respectively

Additional paid-in capital

Treasury stock, at cost;

1,315,851 and 1,313,836 Class A common shares at September 30, 2021 and March 31, 2021, respectively

1,315,851 and 1,313,836 Class A common shares at December 31, 2021 and March 31, 2021, respectively

Accumulated deficit

7 unchanged sentences

Three Months Ended

September 30,

Six Months Ended

September 30,

Nine Months Ended

Costs and expenses:

1 unchanged sentence

Selling, general and administrative

Recovery for doubtful accounts

Bad debt (recovery)

Depreciation and amortization of property and equipment

20 unchanged sentences

Three Months Ended

September 30,

Six Months Ended

September 30,

Nine Months Ended

Net income (loss)

8 unchanged sentences

Preferred Stock

Other Comprehensive

Stockholders’

Accumulated Other

Comprehensive

Total Stockholders’

Non-Controlling

as of March 31, 2020

Balances as of March 31, 2020

$ ( 410,904 )

exchange translation

issued in connection with the SPA with certain investors, net

of Class A common stock in connection with the Starrise transaction, a related party

capital under the Starrise transaction, a related party

of stock in connection with settlement of second lien loan

of warrants for Class A common stock

stock dividends paid with common stock

as of June 30, 2020

exchange translation

2020 issuance of Class A common stock, net of $695 in issuance costs

stock issued in connection with conversion of Convertible Notes

of common stock for third party professional service

of Class A common stock to management and employees

of common stock in connection with performance stock units

stock issued to settle second lien loan

stock dividends paid with common stock

as of September 30, 2020

Foreign exchange translation

Stock issued in connection with the

SPA with certain investors, net

Issuance of Class A common stock

in connection with the Starrise transaction, a related party

Contributed capital under the Starrise

transaction, a related party

Issuance of stock in connection with

settlement of second lien loan

Exercise of warrants for Class A

Stock-based compensation

Preferred stock dividends paid with

Balances as of June 30, 2020

Foreign exchange translation

July 2020 issuance of Class A common stock, net of $ 695 in issuance costs

Common stock issued in connection

with conversion of Convertible Notes

Issuance of common stock for third

party professional service

Issuance of Class A common stock

to management and employees

Issuance of common stock in connection

with performance stock units

Common stock issued to settle second

Stock-based compensation

Preferred stock dividends paid with

Balances as of September 30, 2020

$ ( 457,481 )

Foreign exchange translation

Common stock issued to settle second

Preferred stock dividends paid with

Stock compensation and expenses

Issuance of Class A common stock

to management

Issuance of common stock in connection

with performance stock units

Issuance of common stock in connection

with ATM raises, net

Class A common stock to be issued

in connection with asset acquisition

Balance as of December 31, 2020

$ ( 467,214 )

accompanying & Notes to Condensed Consolidated Financial Statements

4 unchanged sentences

Non-Controlling

as of March 31, 2021

Balances as of March 31, 2021

$ ( 474,080 )

exchange translation

of common stock in connection with a business combination

stock dividends paid with common stock

as of June 30, 2021

exchange translation

of common stock in connection with business combinations

stock in connection with taxes withheld from employees

stock dividends

as of September 30, 2021

Foreign exchange translation

Stock-based compensation

Issuance of common stock in connection

with a business combination

Preferred stock dividends paid with

Balances as of June 30, 2021

Foreign exchange translation

Stock-based compensation

Issuance of common stock in connection

with business combinations

Treasury stock in connection with

taxes withheld from employees

Preferred stock dividends

Balances as of September 30, 2021

Foreign exchange translation

Stock-based compensation

Issuance of common stock in connection

with equity line purchase commitment

Preferred stock dividends

Issuance of common stock in connection

with performance stock units

Issuance of common stock in connection

with ATM raises, net

Preferred stock dividends accrued

Balances as of December 31, 2021

accompanying Notes to Condensed Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

September 30,

Nine Months Ended

Cash flows from operating activities:

8 unchanged sentences

Provision for doubtful accounts

Recovery for inventory reserve

Stock-based compensation

Accretion and PIK interest expense added to note payable

Interest expense for deferred consideration

Interest expense for earnout consideration

Changes in operating assets and liabilities, net of acquisitions:

10 unchanged sentences

Sale of equity investment in Starrise

Net cash (used in) provided by investing activities

Purchases of intangible assets

Net cash used in investing activities

Cash flows from financing activities:

3 unchanged sentences

Proceeds from issuance of Class A common stock, net

Net cash (used in) provided by financing activities

Net cash provided by financing activities

Net change in cash, cash equivalents, and restricted cash

2 unchanged sentences

accompanying Notes to Condensed Consolidated Financial Statements

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

thousands, except share information)

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share information)

NATURE OF OPERATIONS AND LIQUIDITY

(“Cinedigm,” the “Company,” “we,” “us,” or similar pronouns) was incorporated in

Delaware on March 31, 2000.

We are (i) a distributor and aggregator of independent movie, television and other short form content managing

a library of distribution rights to thousands of titles and episodes released across digital, physical, theatrical, home and mobile entertainment

platforms (“Streaming”) and (ii) a servicer of digital cinema assets (“Systems”) for over 4,822 movie screens

in both North America and several international countries.

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

4,822 movie screens as well as directly to exhibitors and other third-party customers in the form of monitoring, billing, collection

and verification services.

Cinedigm Corp.

(“Cinedigm,” the “Company,”

“we,” “us,” or similar pronouns) was incorporated in Delaware on March 31, 2000.

We are (i) a distributor and

aggregator of independent movie, television and other short form content managing a library of distribution rights to thousands of titles

and episodes released across digital, physical, theatrical, home and mobile entertainment platforms (“Streaming”) and (ii)

a servicer of digital cinema assets (“Systems”) for over 4,609 movie screens in both North America and several international

We report our financial results in two primary

segments as follows:

(1) cinema equipment business and (2) content and entertainment business (“Content & Entertainment”

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 Australia.

It also provides

fee-based support to over 4,609 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 operates 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.

and Uncertainties

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

for the period.

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

Due to the lingering effects of the COVID-19 pandemic in the six-month period ended September 30, 2021, the sale of physical discs through

our retail partners declined although this was partially offset by digital purchases of physical product and increases in streaming views.

As part of our Cinema Equipment business, the Company earns revenue when movies are exhibited in theatres.

As vaccines became readily

available and COVID-19 cases decreased, major studios began to test consumer confidence by releasing blockbusters in the theatrical venues

during the six months ended September 30, 2021.

The test period during the prior quarters encouraged theatre re-openings and proved commercial

viability for theatrical distribution of tentpole films.

Films released during the summer period saw an uptick in box office revenue

compared to the previous 12 months;

however, box office results remained below pre-COVID expectations due to limited seating capacities

and shortened windows for release on streaming platforms such as premium video on demand (“PVOD”) and subscription video

on demand (“SVOD”).

To the extent films are not shown in theatres, we do not earn revenue.

have incurred net losses historically and have an accumulated deficit of $ 469.3 million and negative working capital of $ 11.1 million

as of September 30, 2021.

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

In addition, we had debt-related contractual

obligations and upon a series of payments between April 30 and July 9, 2021, the Company paid in full the Prospect Loan (as defined below)

non-recourse debt amount by paying an aggregate principal amount of $ 7.8 million.

As of September 30, 2021 there was $ 0 million

outstanding and there was no availability under the Credit Facility which expired on September 28, 2021.

Net cash provided by operating

activities for the six months ended September 30, 2021 was $ 9.4 million.

Based on these conditions, the Company entered into the following

transactions described below:

of Cinematic Equipment

March 17, 2021, the Company entered into two separate agreements for the sale of cinematic equipment to American Multi-Cinema, Inc.

The agreements included the sale in tranches of a total of 2,369 cinematic projectors starting in March 2021 and continuing through January

2023 for total cash consideration of $ 10.8 million.

Through September 30, 2021, the Company executed the sale of the first two tranches

and recognized aggregate revenue for $ 7.8 million.

A portion of the total proceeds were used to paydown the remaining outstanding balance

of the Prospect Loan notes payable.

Investment in a Related Party

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 “Starrise 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 “Starrise 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, par value $.

001 per share

(the “Common Stock”) in consideration therefor.

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 Starrise Stock

Purchase Agreement.

April 10, 2020, the Company entered into another stock purchase agreement (the “April Starrise 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 Common Stock

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

On April 15, 2020, the April Starrise 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 0.159 per share on November 11,

2021, 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 $7.4 million.

June 22, 2021, the maturity date of the East West Credit Facility (as defined in Note 5 - Notes Payable) with East West Bank was

extended from June 30, 2021 to September 28, 2021.

The September 28, 2021 expiration date has passed and no amendment has been entered

into as of the date of filing of this Quarterly Report on Form 10-Q.

April 15, 2020, the Company received $ 2.2 million from East West Bank, 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 “PPP 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 PPP 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 were intended to be eligible for forgiveness, subject to the provisions of the CARES Act and could be subject to repayment.

July 7, 2021, the Company received notification from the lender that the U.S.

Small Business Administration had approved the Company’s

PPP Loan forgiveness application for the entire PPP Loan amount and accrued interest effective as of June 30, 2021.

The forgiveness of

the PPP Loan was recognized as a gain of $ 2.2 million during the Company’s fiscal quarter ending June 30, 2021.

a series of payments between April 30 and July 9, 2021, the Company paid in full the Prospect loan non-recourse outstanding debt amount

by paying an aggregate principal amount of $ 7.8 million.

(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.

Risks and Uncertainties

The COVID-19 pandemic and related economic repercussions created significant

volatility and uncertainty impacting the Company’s results for the period.

As part of our Content & Entertainment business,

the Company sells DVDs and Blu-ray discs at brick-and-mortar stores.

Due to the lingering effects of the COVID-19 pandemic in the nine-month

period ended December 31, 2021, the sale of physical discs through our retail partners declined although this was partially offset by

digital purchases of physical product and increases in streaming views.

As part of our Cinema Equipment business, the Company earns revenue

when movies are exhibited in theatres.

Major studios continued to release tentpole films in the theatrical markets as box office results

steadily showed improvement in the three months ended December 31, 2021.

However, the number of wide releases remained below pre-pandemic

levels during that quarter as studios continue to shuffle release dates and test theatrical windows.

The Canadian government tightened

Movie Theatre restrictions amid a Covid surge due to the Omicron variant as well as shuttering all Quebec theatres during that quarter.

Movie theatres in the U.S.

remained open and continued to follow NATO CinemaSafe protocols in an effort to help reinforce consumer

confidence in the safety of the theatrical moviegoing experience.

We have incurred net losses historically and have

an accumulated deficit of $ 469.7 million and our working capital is $ 2.9 million as of December 31, 2021.

We may continue to generate

net losses for the foreseeable future.

In addition, we have had debt-related contractual obligations.

Upon a series of payments between

April 30 and July 9, 2021, the Company paid in full the Prospect Loan (as defined below) non-recourse debt amount by paying an aggregate

principal amount of $ 7.8 million.

As of December 31, 2021 there was $ 0 million principal outstanding and there was no availability

under the Credit Facility which expired on September 28, 2021.

Net cash provided by operating activities for the nine months ended December

31, 2021 was $ 4.7 million.

Based on these conditions and the Company´s financing strategies, the Company entered into the transactions

described below:

Sale 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 agreements included the sale in tranches of

a total of 2,369 cinematic projectors starting in March 2021 and continuing through January 2023 for total cash consideration of $ 10.8

Through December 31, 2021, the Company recognized aggregate revenue for $ 9.1 million.

A portion of the total proceeds were used

to paydown the remaining outstanding balance of the Prospect Loan notes payable.

Equity Investment in a Related Party

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 “Starrise 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 “Starrise 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, par value $.

001 per share (the “Common Stock”)

in consideration therefor.

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 Starrise Stock Purchase Agreement.

On April 10, 2020, the Company entered into another

stock purchase agreement (the “April Starrise 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 Common Stock as consideration therefor (the “April

Starrise Share Acquisition”).

On April 15, 2020, the April Starrise 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 0.159 per share on February 11, 2022, 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

$7.4 million.

On June 22, 2021, the maturity date of the East West Credit Facility

(as defined in Note 5 - Notes Payable) with East West Bank was extended from June 30, 2021 to September 28, 2021 and was not extended.

On April 15, 2020, the Company received $ 2.2 million from East

West Bank, 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 “PPP 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

The interest accrued during the initial six-month period is due and payable, together with the principal, on the PPP 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 were intended to be eligible for forgiveness, subject to the provisions of

the CARES Act, and could be subject to repayment.

On July 7, 2021, the Company received notification from the lender that the U.S.

Business Administration had approved the Company’s PPP Loan forgiveness application for the entire PPP Loan amount and accrued interest

effective as of June 30, 2021.

The forgiveness of the PPP Loan was recognized as a gain of $ 2.2 million during the Company’s fiscal

quarter ended June 30, 2021.

Upon a series of payments between April 30 and

July 9, 2021, the Company paid in full the Prospect loan non-recourse outstanding debt amount by paying an aggregate principal amount

of $ 7.8 million.

Pre-payment of the Prospect Loan was permissible without penalty.

believe the combination of:

(i) our cash and cash equivalent balances at September 30, 2021, and (ii) expected cash flows from operations

as well as liquidity for our operational and capital needs, for twelve months from the filing of this report.

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.

Common Stock Purchase Agreement

In October 2021, we entered into a Common Stock

Purchase Agreement (the “Equity Line Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights

Agreement”) with B.

Riley Principal Capital, LLC (“B.

Riley Principal Capital”).

Pursuant to the Equity Line Purchase

Agreement, the Company has the right to sell to B.

Riley Principal Capital up to the lesser of (i) $50,000,000 of newly issued shares

of Common Stock and (ii) the Exchange Cap (as defined below) (subject to certain conditions and limitations), from time to time during

the 24-month period from and after the October 21, 2021.

Sales of Common Stock pursuant to the Equity Line Purchase Agreement, and the

timing of any sales, are solely at the option of the Company, and the Company is under no obligation to sell any securities to B.

Principal Capital under the Equity Line Purchase Agreement.

As consideration for B.

Riley Principal Capital’s commitment to purchase

shares of Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the Equity Line Purchase

Agreement, upon execution of the Equity Line Purchase Agreement, the Company issued 210,084 shares of Common Stock to B.

Riley Principal

Capital (the “Commitment Shares”).

The purchase price of the shares of Common Stock that we elect to sell to B.

Riley Principal

Capital pursuant to the Equity Line Purchase Agreement will be determined by reference to the volume weighted average price of the Common

Stock (“VWAP”) during the applicable purchase date, less a fixed 5% discount to such VWAP.

Pursuant to the Registration Rights

Agreement, the Company filed a Registration Statement on Form S-1 that was declared effective by the Securities and Exchange Commission

on October 21, 2021 (File No.

333-260210) for the resale by B.

Riley Principal Capital of up to 25,210,084 shares of Common Stock (including

the Commitment Shares) acquired pursuant to the Equity Line Purchase Agreement.

During October and November 2021 ,

we sold 5,300,000 shares of Common Stock under the Equity Line Purchase Agreement.

Net proceeds from such sales totaled $12.4 million.

We believe the combination of:

(i) our cash and cash equivalent balances

at December 31, 2021 and (ii) expected cash flows from operations, as well as liquidity for our operational and capital needs, for twelve

months from the filing of this report 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 report.

Our capital requirements will depend on many factors, and we may

need to use capital resources and obtain additional capital.

Failure to generate additional revenues, obtain additional capital or manage

discretionary spending could have an adverse effect on our financial position, results of operations and liquidity.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

OF PRESENTATION AND CONSOLIDATION

consolidated financial statements include the accounts of Cinedigm and its wholly-owned and majority-owned subsidiaries.

All intercompany

transactions and balances have been eliminated in consolidation.

in which we do not have a controlling interest or are not the primary beneficiary, but have the ability to exert significant influence,

are accounted for under the equity method of accounting.

Noncontrolling interests for which we have been determined to be the primary

beneficiary are consolidated and recorded as net loss attributable to noncontrolling interest.

See Note 3 - Other Interests to

the Consolidated Financial Statements for a discussion of our noncontrolling interests.

preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of

America (“GAAP”) requires us to make estimates and assumptions that affect the assets and liabilities, disclosures of contingent

assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the

reporting period.

Such estimates include the adequacy of accounts receivable reserves, return reserves, inventory reserves, recovery

of advances, assessment of goodwill impairment, long-lived and finite-lived assets impairment and estimated amortization lives, fair

value for asset acquisitions and business combinations, valuation allowances for income taxes and stock awards.

Actual results could

differ from these estimates.

CASH EQUIVALENTS, AND RESTRICTED CASH

consider all highly liquid investments with an original maturity of three months or less to be “cash equivalents.” We

maintain bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation’s

insured limits.

We periodically assess the financial condition of the institutions and believe that the risk of any loss is minimal.

Our Prospect Loan required that we maintain specified cash balances that are restricted to repayment of interest thereunder.

Note 5 - Notes Payable for information about our restricted cash balances.

cash equivalents, and restricted cash consisted of the following:

BASIS OF PRESENTATION AND CONSOLIDATION

Our consolidated financial statements include

the accounts of Cinedigm and its wholly-owned and majority-owned subsidiaries.

All intercompany transactions and balances have been eliminated

in consolidation.

Investments in which we do not have a controlling

interest or are not the primary beneficiary, but have the ability to exert significant influence, are accounted for under the equity method

of accounting.

Noncontrolling interests for which we have been determined to be the primary beneficiary are consolidated and recorded

as net loss attributable to noncontrolling interest.

See Note 3 - Other Interests to the Consolidated Financial Statements

for a discussion of our noncontrolling interests.

USE OF ESTIMATES

The preparation of consolidated financial statements

in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates

and assumptions that affect the assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated

financial statements and the reported amounts of revenue and expenses during the reporting period.

Such estimates include the adequacy

of accounts receivable reserves, return reserves, inventory reserves, recovery of advances, assessment of goodwill impairment, long-lived

and finite-lived assets impairment and estimated amortization lives, fair value for asset acquisitions and business combinations, valuation

allowances for income taxes and stock awards.

Actual results could differ from these estimates.

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

We consider all highly liquid investments with

an original maturity of three months or less to be “cash equivalents.” We maintain bank accounts with major banks, which from

time to time may exceed the Federal Deposit Insurance Corporation’s insured limits.

We periodically assess the financial condition

of the institutions and believe that the risk of any loss is minimal.

Our Prospect Loan required that we maintain specified cash balances

that are restricted to repayment of interest thereunder.

See Note 5 - Notes Payable for information about our restricted cash balances.

Cash, cash equivalents, and restricted cash consisted

of the following:

(in thousands)

September 30,

and Cash Equivalents

INVESTMENT IN STARRISE, A RELATED PARTY

February 14, 2020, the Company acquired an approximately 11.5 % interest in Starrise, a leading publicly traded Chinese entertainment

company whose ordinary shares are listed on the Stock Exchange of Hong Kong.

The Company acquired such interest as a strategic investment

and in a private transaction from a shareholder of Starrise that is related to our major shareholders.

When we acquired the Starrise

stock, our then-majority affiliated stockholders also maintained a significant beneficial interest in Starrise.

Upon consummation of

the transaction on February 14, 2020, the Company recorded an initial investment of approximately $ 25.1 million, which is the fair market

value of the Starrise shares on the transaction date on the Stock Exchange of Hong Kong, in exchange for the Company’s common stock

of $ 11.2 million, valued as of the date of the issuance of the Common Stock.

The difference in value of shares received in Starrise and

shares issued by the Company was deemed as contributed capital and recorded in additional paid-in capital.

April 10, 2020, the Company purchased an additional 15 % interest in Starrise in a private transaction from shareholders of Starrise that

are affiliated with the then-major shareholder of the Company.

The Company recorded an additional equity investment of approximately

$ 28.2 million, which is the fair market value of the Starrise shares on the transaction date on the Stock Exchange of Hong Kong,

in exchange for the Common Stock of $ 11.0 million, valued at the date of the issuance of the Common Stock.

The difference in the

value of shares received in Starrise and shares issued by the Company was deemed as contributed capital and recorded in additional paid-in

This transaction was also recorded as an equity investment in Starrise.

Company has made an irrevocable election to apply the fair value accounting option under ASC 825-10, Financial Instruments , as

it relates to its equity investment in Starrise.

The Company’s investment in Starrise is marked to market and recorded at fair

The stock is traded on the Hong Kong Stock exchange with readily available pricing that is classified as Level 1 in the

fair value hierarchy.

The Company has established a policy that consistently uses either the closing price of last active trades or the

latest bid price when there is no active trades, unadjusted at the last day of each reporting period, as the most relevant and representative

input to the Level 1 fair value measures of its investment holdings.

As of September 30, 2021 and March 31, 2021, the value of our equity

investment in Starrise, using the readily determinable fair value inputs from the market pricing of the Stock Exchange of Hong Kong, was

approximately $ 7.4 million and $ 6.4 million, respectively, resulting in a change in fair value of approximately $ 1.0 million and

($ 35.6 ) million for the six months ended September 30, 2021 and 2020 respectively, on our consolidated statement of operations.

1 and May 5, 2021, the Company sold 80,000 and 600,000 Starrise’s ordinary shares, respectively for a total amount of $ 11 thousand.

At September 30, 2021 and March 31, 2021, the Company owned 362,307,397 and 362,987,397 ordinary shares or 18 % and 26 % of Starrise, respectively.

the three and six months ended September 30, 2020, the Company entered into agreements with certain vendors to transfer 7,116,100 and

16,122,315 Starrise shares to satisfy outstanding liabilities with these vendors.

Upon the sale of the Starrise shares by the vendors,

with certain restrictions on sales unless the Company gives consent to sell, if the proceeds do not satisfy the amount due to the vendor,

the Company is liable for the balance owed.

There were no such transactions during the six months ended September 30, 2021.

was no gain or loss resulting from these transactions for the three and six months ended September 30, 2021 and 2020.

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.

record accounts receivable, long-term in connection with activation fees that we earn from our digital cinema equipment (the “Systems”)

deployments that have extended payment terms.

Cash and Cash Equivalents

Restricted Cash

EQUITY INVESTMENT IN STARRISE, A RELATED PARTY

On February 14, 2020, the Company acquired an

approximately 11.5 % interest in Starrise, a leading publicly traded Chinese entertainment company whose ordinary shares are listed on

the Stock Exchange of Hong Kong.

The Company acquired such interest as a strategic investment and in a private transaction from a shareholder

of Starrise that is related to our major shareholders.

When we acquired the Starrise stock, our then-majority affiliated stockholders

also maintained a significant beneficial interest in Starrise.

Upon consummation of the transaction on February 14, 2020, the Company

recorded an initial investment of approximately $ 25 million, which is the fair market value of the Starrise shares on the transaction

date on the Stock Exchange of Hong Kong, in exchange for the Company’s common stock of $ 11.2 million, valued as of the date of the

issuance of the Common Stock.

The difference in value of shares received in Starrise and shares issued by the Company was deemed as contributed

capital and recorded in additional paid-in capital.

On April 10, 2020, the Company purchased an additional

15 % interest in Starrise in a private transaction from shareholders of Starrise that are affiliated with the then-major shareholder of

The Company recorded an additional equity investment of approximately $ 28.2 million, which is the fair market value

of the Starrise shares on the transaction date on the Stock Exchange of Hong Kong, in exchange for the Common Stock of $ 11.0 million,

valued at the date of the issuance of the Common Stock.

The difference in the value of shares received in Starrise and shares issued by

the Company was deemed as contributed capital and recorded in additional paid-in capital.

This transaction was also recorded as an equity

investment in Starrise.

The Company has made an irrevocable election to

apply the fair value accounting option under ASC 825-10, Financial Instruments , as it relates to its equity investment in Starrise.

The Company’s investment in Starrise is marked to market and recorded at fair value.

The stock is traded on the Hong Kong

Stock exchange with readily available pricing that is classified as Level 1 in the fair value hierarchy.

The Company has established a

policy that consistently uses either the closing price of last active trades or the latest bid price when there is no active trades, unadjusted

at the last day of each reporting period, as the most relevant and representative input to the Level 1 fair value measures of its investment

As of December 31, 2021 and March 31, 2021, the

value of our equity investment in Starrise, using the readily determinable fair value inputs from the market pricing of the Stock Exchange

of Hong Kong, was approximately $ 7.9 million and $ 6.4 million, respectively, resulting in a change in fair value of approximately $ 1.5 million

and ($ 42.4 ) million for the nine months ended December 31, 2021 and 2020 respectively, on our consolidated statement of operations.

April 1 and May 5, 2021, the Company sold 80,000 and 600,000 Starrise ordinary shares, respectively for a total amount of $ 11 thousand.

At December 31, 2021 and March 31, 2021, the Company owned 362,307,397 and 362,987,397 ordinary shares or 17 % and 26 % of Starrise, respectively.

NON-MONETARY TRANSACTIONS

During the three and nine months ended December

31, 2020, the Company entered into agreements with certain vendors to transfer 5,139,762 and 14,184,765 Starrise ordinary shares to satisfy

outstanding liabilities with these vendors.

Upon the sale of the Starrise shares by the vendors, with certain restrictions on sales unless

the Company gave consent to sell, if the proceeds did not satisfy the amount due to the vendor, the Company was liable for the balance

Pursuant to such agreements, the Company reduced the amount payable to its vendors by $ 0.8 million as of December 31, 2020.

were no such transactions during the nine months ended December 31, 2021.

There was no gain or loss resulting from these

transactions for the three and nine months ended December 31, 2021 and 2020.

ACCOUNTS RECEIVABLE

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.

are recorded primarily on a specific identification basis.

We record accounts receivable, long-term in connection

with activation fees that we earn from our digital cinema equipment (the “Systems”) deployments that have extended payment

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

Advances, which are recorded within prepaid and other

current assets on 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.

Advances, which are recorded within prepaid and

other current assets on 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.

Impairments and accelerated amortization related to advances were $ 0.4 million

and $ 0 million, respectively, for the three months ended September 30, 2021 and 2020.

and $ 0.3 million, respectively, for the three months ended December 31, 2021 and 2020.

Impairments and accelerated amortization related

to advances were $ 0.4 million and $ 0.04 million, respectively, for the six months ended September 30, 2021 and 2020.

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:

equipment and software

cinema projection systems

and equipment

capitalize costs associated with software developed or obtained for internal use when the preliminary project stage is completed, and

it is determined that the software will provide significantly enhanced capabilities and modifications.

These capitalized costs are included

in property and equipment and include external direct cost of services procured in developing or obtaining internal-use software and

personnel and related expenses for employees who are directly associated with, and who devote time to internal-use software projects.

Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended use.

the software is ready for its intended use, the costs are amortized over the useful life of the software.

Post-configuration training

and maintenance costs are expensed as incurred.

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

maintenance costs are charged to expense as incurred.

to advances were $ 0.8 million and $ 0.3 million, respectively, for the nine months ended December 31, 2021 and 2020.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less

accumulated depreciation and amortization.

Depreciation expense is recorded using the straight-line method over the estimated useful lives

of the respective assets as follows:

Computer equipment and software

Internal use software

Digital cinema projection systems

Machinery and equipment

Furniture and fixtures

We capitalize costs associated with software developed

or obtained for internal use when the preliminary project stage is completed, and it is determined that the software will provide significantly

enhanced capabilities and modifications.

These capitalized costs are included in property and equipment and include external direct cost

of services procured in developing or obtaining internal-use software and personnel and related expenses for employees who are directly

associated with, and who devote time to internal-use software projects.

Capitalization of these costs ceases once the project is substantially

complete and the software is ready for its intended use.

Once the software is ready for its intended use, the costs are amortized over

the useful life of the software.

Post-configuration training and maintenance costs are expensed as incurred.

Leasehold improvements are amortized over the

shorter of the lease term or the estimated useful life of the leasehold improvements.

Repair and maintenance costs are charged to expense

Major renewals, improvements and additions are capitalized.

Upon the sale or other

disposition of any property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts

and the gain or loss on disposal is included in the consolidated statements of operations.

VALUE MEASUREMENTS

fair value measurement disclosures are grouped into three levels based on valuation factors:

1 – quoted prices in active markets for identical investments

2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

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

and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are

generated by market transactions involving identical or comparable assets or liabilities.

equity investment in Starrise is in Hong Kong dollars and was translated into US dollars as of September 30, 2021 and March 31, 2021

at an exchange rate of 7.8 and 7.8 Hong Kong Dollars to 1 US Dollar, respectively.

The fair value of this equity investment is measured

by the unadjusted market pricing of Starrise on the Stock Exchange of Hong Kong.

following tables summarize the levels of fair value measurements of our financial assets and liabilities as of September 30, 2021 and

March 31, 2021:

As of September 30, 2021

Upon the sale or other disposition of any property and equipment,

the cost and related accumulated depreciation and amortization are removed from the accounts and the gain or loss on disposal is included

in the consolidated statements of operations.

FAIR VALUE MEASUREMENTS

The fair value measurement disclosures are grouped

into three levels based on valuation factors:

Level 1 – quoted prices in active markets for identical investments

Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

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

Assets and liabilities measured at fair value

on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving

identical or comparable assets or liabilities.

The equity investment in Starrise is in Hong Kong

dollars and was translated into US dollars as of December 31, 2021 and March 31, 2021 at an exchange rate of 7.8 and 7.8 Hong Kong Dollars

to 1 US Dollar, respectively.

The fair value of this equity investment is measured by the unadjusted market pricing of Starrise on the

Stock Exchange of Hong Kong.

The earnout consideration on purchase of Bloody

Disgusting business (Note 4) is determined according to the probability-based method to the estimated the value of the earnout based

on the premise that there are different probabilities to achieve different forecasts and therefore the defined earnout metric targets.

Under this method, weighted-average earnout payments for each earnout period were estimated based on the probability of each forecast

The resultant weighted-average earnout payments are discounted to a present value.

The following tables summarize the levels of fair

value measurements of our financial assets and liabilities as of December 31, 2021 and March 31, 2021:

As of December 31, 2021

(in thousands)

investment in Starrise, at fair value

Equity investment in Starrise, at fair value

Current portion of earnout consideration on purchase of a business

Earnout consideration on purchase of a business, net of current portion

As of March 31, 2021

(in thousands)

investment in Starrise, at fair value

cash and cash equivalents, accounts receivable, unbilled revenue and accounts payable and accrued expenses are financial instruments

and are recorded at cost in the consolidated balance sheets.

The estimated fair values of these financial instruments approximate their

carrying amounts because of their short-term nature.

OF LONG-LIVED AND FINITE-LIVED ASSETS

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

a possible impairment exists.

The assessment for recoverability is based primarily on our ability to recover the carrying value of our

long-lived and finite-lived assets from expected future undiscounted net cash flows.

If the total of expected future undiscounted net

cash flows is less than the total carrying value of the asset, the asset is deemed not to be recoverable and possibly impaired.

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

An impairment loss will

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

Fair value is determined by computing

the expected future discounted cash flows.

During the three and six months ended September 30, 2021 and 2020, no impairment charge

was recorded from operations for long-lived assets or finite-lived assets.

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

Goodwill is tested for impairment

on an annual basis or more often if warranted by events or changes in circumstances indicating that the carrying value may exceed fair

value, also known as impairment indicators.

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

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

regard to its operations.

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

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

that will have a material effect on our consolidated financial position or results of operations.

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.

goodwill impairment charge was recorded in the six months ended September 30, 2021 and 2020.

amounts of goodwill and accumulated impairment charges that we have recorded are as follows:

Restricted cash

Equity investment in Starrise, at fair value

Our cash and cash equivalents, accounts receivable,

unbilled revenue and accounts payable and accrued expenses are financial instruments and are recorded at cost in the consolidated balance

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

IMPAIRMENT OF LONG-LIVED AND FINITE-LIVED ASSETS

We review the recoverability of our long-lived

assets and finite-lived intangible assets, when events or conditions occur that indicate a possible impairment exists.

The assessment

for recoverability is based primarily on our ability to recover the carrying value of our long-lived and finite-lived assets from expected

future undiscounted net cash flows.

If the total of expected future undiscounted net cash flows is less than the total carrying value

of the asset, the asset is deemed not to be recoverable and possibly impaired.

We then estimate the fair value of the asset to determine

whether an impairment loss should be recognized.

An impairment loss will be recognized if the asset’s fair value is determined

to be less than its carrying value.

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

During the three

and nine months ended December 31, 2021 and 2020, no impairment charge was recorded from operations for long-lived assets or finite-lived

Goodwill is the excess of the purchase price paid

over the fair value of the net assets of an acquired business.

Goodwill is tested for impairment on an annual basis or more often if warranted

by events or changes in circumstances indicating that the carrying value may exceed fair value, also known as impairment indicators.

Inherent in the fair value determination for each

reporting unit are certain judgments and estimates relating to future cash flows, including management’s interpretation of current

economic indicators and market conditions, and assumptions about our strategic plans with regard to its operations.

To the extent additional

information arises, market conditions change, or our strategies change, it is possible that the conclusion regarding whether our remaining

goodwill is impaired could change and result in future goodwill impairment charges that will have a material effect on our consolidated

financial position or results of operations.

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.

No goodwill impairment charge was recorded in the nine months ended

December 31, 2021 and 2020.

Gross amounts of goodwill and accumulated impairment

charges that we have recorded are as follows:

(In thousands)

March 31, 2021

from business combinations – see Note 4

at September 30, 2021

determine revenue recognition by:

the contract, or contracts, with the customer;

the performance obligations in the contract;

the transaction price;

the transaction price to performance obligations in the contract;

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 (e.g., DVDs and Blu-ray Discs) or when the content is available for subscription on the digital platform or available

on the point-of-sale for transactional and video on demand 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 are recorded net of transaction taxes assessed by governmental authorities such as sales value-added taxes and other similar

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.

Equipment Business

Cinema Equipment Business consists of financing vehicles and administrators for 1,813 Systems installed nationwide in our first deployment

phase (“Phase I Deployment”) to theatrical exhibitors and for 3,009 Systems installed domestically and internationally in

our second deployment phase (“Phase II Deployment”).

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

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

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.

Cinema Equipment Business also provides monitoring, data collection, serial data verification and management services to this segment,

as well as to exhibitors who purchase their own equipment, in order to collect virtual print fees (“VPFs”) from motion picture

studios and distributors and Alternative Content Fees (“ACFs”) from alternative content providers, and to distribute those

fees to theatrical exhibitors (collectively, “Services”).

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.

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

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 the

title first plays for general audience viewing in a digital projector equipped movie theatre.

The Phase 1 Deployment’s and Phase

2 Deployments performance obligations for revenue recognition are met at this time.

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, is achieved.

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.

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 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:

Goodwill at March 31, 2021

Goodwill from business combinations – see Note 4

Goodwill at December 31, 2021

REVENUE RECOGNITION

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

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 (e.g., DVDs and Blu-ray Discs)

or when the content is available for subscription on the digital platform or available on the point-of-sale for transactional and video

on demand 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 are 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.

Cinema Equipment Business

Our Cinema Equipment Business consists of financing

vehicles and administrators for 1,631 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to

theatrical exhibitors and for 2,978 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 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,

data collection, serial data verification and management services to this segment, as well as to exhibitors who purchase their own equipment,

in order to collect virtual print fees (“VPFs”) from motion picture studios and distributors and Alternative Content Fees

(“ACFs”) from alternative content providers, and to distribute those fees to 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.

VPFs 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 the title first plays for general audience viewing in

a digital projector equipped movie theatre.

The Phase 1 Deployment’s and Phase 2 Deployments performance obligations for revenue

recognition are met at this 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.

Under the terms of our standard cinema equipment

licensing agreements, exhibitors will continue to have the right to use our Systems through the end of the term of the licensing agreement,

after which time, they have the option to:

(1) return the Systems to us;

(2) renew their

license agreement for successive one-year terms;

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

Cinedigm recognizes revenue once the customer takes possession of the

systems and is predicated on Cinedigm’s receipt of sale proceeds.

Such sales were as originally contemplated as the conclusion

of the digital cinema deployment plan.

Total system sales revenue recognized were $ 2.2 million and $ 15 thousand, during the three

months ended September 30, 2021 and 2020, respectively.

Total system sales revenue recognized were $ 7.8 million and $ 91 thousand, during

the six months ended September 30, 2021 and 2020, respectively.

Revenues 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 II Deployment

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 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.

Entertainment Business

earns fees for the distribution of content in the home entertainment markets via several distribution channels, including digital, video

on demand (“VOD” or “OTT Streaming and Digital”), and physical goods (e.g., DVDs and Blu-ray Discs) (“Physical

Revenue” or “Base Distribution Business”).

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/free ad-supported

streaming TV (“FAST”) on the digital platforms, and shipment of DVDs 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 reserved for sales returns and other allowances are recorded based upon historical experience.

As permitted by these agreements, we typically pursue the sale of the Systems

to such exhibitors.

Cinedigm recognizes revenue once the customer takes possession of the Systems and Cinedigm received the sale proceeds.

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

Total system sales revenue recognized

was $ 1.3 million and $ 66 thousand, during the three months ended December 31, 2021 and 2020, respectively.

Total system sales revenue

recognized was $ 9.1 million and $ 157 thousand, during the nine months ended December 31, 2021 and 2020, respectively.

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 Phase II of 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 II Deployment 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 division 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

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

at that time the related VPF fees are due which is at the time the movies are displayed on screens utilizing our Systems installed in

movie theatres.

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

and distributors.

Content & Entertainment Business

CEG earns fees for the distribution of content

in the home entertainment markets via several distribution channels, including digital, video on demand (“VOD” or “OTT

Streaming and Digital”), and physical goods (e.g., DVDs and Blu-ray Discs) (“Physical Revenue” or “Base Distribution

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/free ad-supported streaming TV (“FAST”)

on the digital platforms, and shipment of DVDs 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.

Physical goods reserved 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 are 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 for each revenue stream based on the transfer of control of goods and services.

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.

Shipping and Handling

Shipping and handling costs are incurred to move

physical goods (e.g., DVDs 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.

Credit Losses

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.

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.

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

If actual future returns and allowances

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

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.

Agent Considerations

determine whether revenue should be reported on a gross or net basis for each revenue stream based on the transfer of control of goods

and services.

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;

which party has discretion

in establishing the price for the specified good or service.

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

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.

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 is variable consideration as part of the transaction

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

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.

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.

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 as of September 30, 2021 was $ 0.2 million.

For the three and six months ended September 30, 2021 and

2020, respectively, 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 three months ended September 30, 2021 and 2020, $ 0.3 million

and $ 0.7 million, respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the period.

During the six months ended September 30, 2021 and 2020, $ 0.8 million and $ 1.3 million, respectively, of revenue was recognized that

was included in the deferred revenue balance at the beginning of the period.

As of September 30, 2021, the aggregate amount of contract

revenue allocated to unsatisfied performance obligations was $ 0.2 million.

We recognized this balance in full by October 31, 2021.

Participations

and royalties payable

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.

Disaggregation

Company disaggregates revenue into different revenue categories for the Cinema Equipment and CEG Businesses.

The Cinema Equipment

Business revenue categories are:

Phase I Deployment revenue, Phase II Deployment revenue, Services, and Digital System Sales, and

the Content & Entertainment Business revenue categories are:

Base Distribution Business and OTT Streaming and

following tables present the Company’s revenue categories for the three and six months ended September 30, 2021 and 2020 (in thousands):

We record accounts receivable, long-term in connection

with activation fees that we earn from Systems deployments that have extended payment terms.

Such accounts receivable are discounted to

their present value at prevailing market rates.

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.

Deferred revenue pertaining to our Content &

Entertainment Business includes amounts related to the sale of DVDs 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 as of December 31, 2021 was $ 0.3

For the three and nine months ended December 31, 2021 and 2020, respectively, 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 three months ended December 31, 2021

and 2020, $ 0.3 million and $ 1.2 million, respectively, of revenue was recognized that was included in the deferred revenue balance at

the beginning of the period.

During the nine months ended December 31, 2021 and 2020, $ 0.6 million and $ 2.5 million, respectively,

of revenue was recognized that was included in the deferred revenue balance at the beginning of the period.

As of December 31, 2021, the

aggregate amount of contract revenue allocated to unsatisfied performance obligations was $ 0.3 million.

This amount is to be recognized

during January and February of 2022.

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.

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.

Disaggregation of Revenue

The Company disaggregates revenue into different

revenue categories for the Cinema Equipment and CEG Businesses.

The Cinema Equipment Business revenue categories are:

Phase I Deployment

revenue, Phase II Deployment revenue, Services, and Digital System Sales, and the Content & Entertainment Business revenue categories

Base Distribution Business and OTT Streaming and Digital.

The following tables present the Company’s

revenue categories for the three and nine months ended December 31, 2021 and 2020 (in thousands):

Three Months Ended

September 30,

Six Months Ended

September 30,

Nine Months Ended

Cinema Equipment Business:

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Total Content & Entertainment Business revenue

OPERATING COSTS

operating costs consist of operating costs such as cost of goods sold, fulfillment expenses, shipping costs, property taxes and insurance

on Systems, royalty expenses, impairments of advances, and marketing and direct personnel costs.

Company issues stock-based awards to employees and non-employees, generally in the form of restricted stock, restricted stock units,

stock appreciation rights and performance stock units.

The Company accounts for its stock-based compensation awards in accordance with

FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”).

ASC 718 requires all stock-based payments,

including grants of stock options and restricted stock units and modifications to existing stock options, to be recognized in the consolidated

statements of operations and comprehensive loss based on their fair values.

The Company measures the compensation expense of employee

and nonemployee services received in exchange for an award of equity instruments based on the fair value of the award on the grant date.

That cost is recognized on a straight-line basis over the period during which the employee and nonemployee is required to provide service

in exchange for the award.

The fair values of options and stock appreciation rights are calculated as of the date of grant using the

Black-Scholes option pricing model based on key assumptions such as stock price, expected volatility and expected term.

The Company’s

estimates of these assumptions are primarily based on the trading price of the Company’s stock, historical data, peer company data

and judgment regarding future trends and factors.

Company accounts for income taxes using the asset and liability method.

DIRECT OPERATING COSTS

Direct operating costs consist of operating costs

such as cost of goods sold, fulfillment expenses, shipping costs, property taxes and insurance on Systems, royalty expenses, impairments

of advances, and marketing and direct personnel costs.

STOCK-BASED COMPENSATION

The Company issues stock-based awards to employees

and non-employees, generally in the form of restricted stock, restricted stock units, stock appreciation rights and performance stock

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

Compensation (“ASC 718”).

ASC 718 requires all stock-based payments, including grants of stock options and restricted

stock units and modifications to existing stock options, to be recognized in the consolidated statements of operations and comprehensive

loss based on their fair values.

The Company measures the compensation expense of employee and nonemployee services received in exchange

for an award of equity instruments based on the fair value of the award on the grant date.

That cost is recognized on a straight-line

basis over the period during which the employee and nonemployee is required to provide service in exchange for the award.

The fair values

of options and stock appreciation rights are calculated as of the date of grant using the Black-Scholes option pricing model based on

key assumptions such as stock price, expected volatility and expected term.

The Company’s estimates of these assumptions are primarily

based on the trading price of the Company’s stock, historical data, peer company data and judgment regarding future trends and factors.

accounts for income taxes using the asset and liability method.

Under this method, deferred tax assets and liabilities are recognized

for the future tax consequences attributable to operating loss and tax credit carryforwards and for differences between the carrying

amounts of existing assets and liabilities and their respective tax bases.

for the future tax consequences attributable to operating loss and tax credit carryforwards and for differences between the carrying amounts

of existing assets and liabilities and their respective tax bases.

allowances are established when management is unable to conclude that it is more likely than not that some portion, or all, of the deferred

1 unchanged sentence

The Company is primarily subject to income taxes in the United States.

Company accounts for uncertain tax positions in accordance with an amendment to ASC Topic 740-10, Income Taxes (Accounting

accounts for uncertain tax positions in accordance with an amendment to ASC Topic 740-10, Income Taxes (Accounting

for Uncertainty in Income Taxes) , which clarified the accounting for uncertainty in tax positions.

8 unchanged sentences

The Company has no uncertain tax positions.

INCOME/LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS

and diluted net loss per common share has been calculated as follows:

and diluted net loss per common share attributable to common stockholders

loss attributable to common stockholders

average number of common stock outstanding during the period

issued and treasury stock repurchased during the period are weighted for the portion of the period that they are outstanding.

issued and any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding.

had a net income for the six months ended September 30, 2021, and therefore the impact of potentially dilutive common shares from outstanding

stock options, stock appreciation rights, and warrants, totaling 3,219,141 shares for the six months ended September 30, 2021, respectively,

were included in the computations of diluted earnings per share.

For the three months ended September 30, 2021, 11,937,243 potentially

dilutive shares have been excluded from the diluted loss per share as their impact would have been antidilutive.

We had a net loss for

the three months ended September 30, 2021 and therefore no dilution as basic and diluted loss per share are the same for the period.

The calculation of diluted net income per share for the six months ended September 30, 2021 does not include the impact of 8,718,102

potentially dilutive shares relating to stock options, stock appreciation rights, and warrants as their impact would have been

anti-dilutive as their exercise prices are above the Company’s average Common Stock price during the period.

incurred net losses for the three and six months ended September 30, 2020, and therefore the impact of potentially dilutive common shares

from outstanding stock options and warrants, totaling 3,940,138 shares as of September 30, 2020, respectively, were excluded from the

computations of loss per share as their impact would have been anti-dilutive.

COMPREHENSIVE

INCOME (LOSS)

of the three and six months ended September 30, 2021 and 2020, comprehensive income (loss) consisted of net loss and foreign currency

translation adjustments.

ISSUED ACCOUNTING PRONOUNCEMENTS

December 18, 2019, the FASB issued ASU 2019-12, “ Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, ”

which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The update also

simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance to improve consistent application.

The amendment

in this update is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

adoption is permitted.

The Company adopted this guidance on April 1, 2021 and the adoption of this ASU did not have a material impact

on our consolidated financial statements.

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

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

NET INCOME/LOSS PER SHARE ATTRIBUTABLE TO COMMON

Basic and diluted net loss per common share has

been calculated as follows:

Basic and diluted net loss per common share attributable to common stockholders

Net loss attributable to common stockholders

Weighted average number of common stock outstanding during the period

Stock issued and treasury stock repurchased during

the period are weighted for the portion of the period that they are outstanding.

Shares issued and any shares that are reacquired during

the period are weighted for the portion of the period that they are outstanding.

We had net income for the nine months ended December 31, 2021, and

therefore the impact of potentially dilutive common shares from outstanding stock options, stock appreciation rights, and warrants, totaling

3,603,491 shares for the nine months ended December 31, 2021, respectively, was included in the computations of diluted earnings per share.

For the three months ended December 31, 2021, 12,088,473 potentially dilutive shares have been excluded from the diluted loss per share

as their impact would have been antidilutive.

We had a net loss for the three months ended December 31, 2021 and therefore no dilution

as basic and diluted loss per share are the same for the period.

The calculation of diluted net income per share for the nine months

ended December 31, 2021 does not include the impact of 8,484,982 potentially dilutive shares relating to stock options, stock appreciation

rights, and warrants as their impact would have been anti-dilutive as their exercise prices are above the Company’s average Common

Stock price during the period.

We incurred net losses for the three and nine

months ended December 31, 2020, and therefore the impact of potentially dilutive common shares from outstanding stock options and warrants,

totaling 9,040,138 shares as of December 31, 2020, were excluded from the computations of loss per share as their impact would have been

anti-dilutive.

COMPREHENSIVE INCOME (LOSS)

As of the three and nine months ended December

31, 2021 and 2020, comprehensive income (loss) consisted of net loss and foreign currency translation adjustments.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

On December 18, 2019, the FASB issued ASU 2019-12,

“ Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, ” which simplifies the accounting for income

taxes by removing certain exceptions to the general principles in Topic 740.

The update also simplifies GAAP for other areas of Topic

740 by clarifying and amending existing guidance to improve consistent application.

The amendment in this update is effective for fiscal

years beginning after December 15, 2020, and interim periods within those fiscal years.

Early adoption is permitted.

The Company adopted

this guidance on April 1, 2021 and the adoption of this ASU did not have a material impact on our 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 fiscal 2023.

The Company is currently evaluating

the effect that ASU 2016-13 will have on its consolidated financial statements and related disclosures.

OTHER INTERESTS

in CDF2 Holdings

indirectly own 100 % of the common equity of CDF2 Holdings, LLC (“CDF2 Holdings”), which was created for the purpose of capitalizing

on the conversion of the exhibition industry from film to digital technology.

CDF2 Holdings assists its customers in procuring the equipment

necessary to convert their systems to digital technology by providing financing, equipment, installation and related ongoing services.

Holdings is a Variable Interest Entity (“VIE”), as defined in Accounting Standards Codification Topic 810 (“ASC 810”),

“Consolidation.” ASC 810 requires the consolidation of VIEs by an entity that has a controlling financial interest in the

VIE which entity is thereby defined as the primary beneficiary of the VIE.

To be a primary beneficiary, an entity must have the power

to direct the activities of a VIE that most significantly impact the VIE’s economic performance, among other factors.

we indirectly, wholly own CDF2 Holdings, we, a third party that also has a variable interest in CDF2 Holdings, and an independent third

party manager must mutually approve all business activities and transactions that significantly impact CDF2 Holdings’ economic

We have therefore assessed our variable interests in CDF2 Holdings and determined that we are not the primary beneficiary

of CDF2 Holdings.

As a result, CDF2 Holdings’ financial position and results of operations are not consolidated in our financial

position and results of operations.

In completing our assessment, we identified the activities that we consider most significant to the

economic performance of CDF2 Holdings and determined that we do not have the power to direct those activities, and therefore we account

for our investment in CDF2 Holdings under the equity method of accounting.

of September 30, 2021 and March 31, 2021, our maximum exposure to loss, as it relates to the non-consolidated CDF2 Holdings entity, represents

accounts receivable for service fees under a master service agreement with CDF2 Holdings.

Such accounts receivable was $ 0.5 million and

$ 0.3 million as of September 30, 2021 and March 31, 2021, respectively, which are included in accounts receivable, net on the accompanying

consolidated balance sheets.

accompanying Consolidated Statements of Operations include $ 0.3 million and $ 36 thousand of digital cinema servicing revenue from CDF2

Holdings for the six months ended September 30, 2021 and 2020, respectively.

The accompanying Consolidated Statements of Operations include

$ 0.2 million and $ 27 thousand of digital cinema servicing revenue from CDF2 Holdings for the three months ended September 30, 2021 and

2020, respectively.

Stockholders’ Deficit of CDF2 Holdings at September 30, 2021 and March 31, 2021 was $ 51.5 million and $ 46.3 million,

respectively.

We have no obligation to fund the operating loss or the stockholders’ deficit beyond our initial investment of $ 2.0

million and, accordingly, our investment in CDF2 Holdings as of September 30, 2021 and March 31, 2021 is carried at $ 0 .

Interest in CONtv

own an 85 % interest in CON TV, LLC, a worldwide digital network that creates original content, and sells and distributes on-demand digital

content on the Internet and other consumer digital distribution platforms, such as gaming consoles, set-top boxes, handsets, and tablets.

Investment in CDF2 Holdings

We indirectly own 100 % of the common equity of

CDF2 Holdings, LLC (“CDF2 Holdings”), which was created for the purpose of capitalizing on the conversion of the exhibition

industry from film to digital technology.

CDF2 Holdings assists its customers in procuring the equipment necessary to convert their systems

to digital technology by providing financing, equipment, installation and related ongoing services.

CDF2 Holdings is a Variable Interest Entity (“VIE”),

as defined in Accounting Standards Codification Topic 810 (“ASC 810”), “Consolidation.” ASC 810 requires the consolidation

of VIEs by an entity that has a controlling financial interest in the VIE which entity is thereby defined as the primary beneficiary of

To be a primary beneficiary, an entity must have the power to direct the activities of a VIE that most significantly impact the

VIE’s economic performance, among other factors.

Although we indirectly, wholly own CDF2 Holdings, we, a third party that also has

a variable interest in CDF2 Holdings, and an independent third party manager must mutually approve all business activities and transactions

that significantly impact CDF2 Holdings’ economic performance.

We have therefore assessed our variable interests in CDF2 Holdings

and determined that we are not the primary beneficiary of CDF2 Holdings.

As a result, CDF2 Holdings’ financial position and results

of operations are not consolidated in our financial position and results of operations.

In completing our assessment, we identified the

activities that we consider most significant to the economic performance of CDF2 Holdings and determined that we do not have the power

to direct those activities, and therefore we account for our investment in CDF2 Holdings under the equity method of accounting.

As of December 31, 2021 and March 31, 2021, our

maximum exposure to loss, as it relates to the non-consolidated CDF2 Holdings entity, represents accounts receivable for service fees

under a master service agreement with CDF2 Holdings.

Such accounts receivable was $ 0.7 million and $ 0.3 million as of December 31,

2021 and March 31, 2021, respectively, which are included in accounts receivable, net on the accompanying consolidated balance sheets.

The accompanying Consolidated Statements of Operations

include $ 0.5 million and $ 83 thousand of digital cinema servicing revenue from CDF2 Holdings for the nine months ended December 31, 2021

and 2020, respectively.

The accompanying Consolidated Statements of Operations include $ 0.2 million and $ 47 thousand of digital cinema

servicing revenue from CDF2 Holdings for the three months ended December 31, 2021 and 2020, respectively.

Total Stockholders’ Deficit of CDF2 Holdings

at December 31, 2021 and March 31, 2021 was $ 52.9 million and $ 46.3 million, respectively.

We have no obligation to fund the

operating loss or the stockholders’ deficit beyond our initial investment of $ 2.0 million and, accordingly, our investment in CDF2

Holdings as of December 31, 2021 and March 31, 2021 is carried at $ 0 .

Majority Interest in CONtv

We own an 85 % interest in CON TV, LLC, a worldwide

digital network that creates original content, and sells and distributes on-demand digital content on the Internet and other consumer

digital distribution platforms, such as gaming consoles, set-top boxes, handsets, and tablets.

BUSINESS COMBINATION

FoundationTV,

May 12, 2021, the Company entered into a stock purchase agreement (the “Foundation Stock Purchase Agreement”) with FoundationTV,

(“FoundationTV”), to buy all of FoundationTV´s issued and outstanding stock in consideration of an aggregate of

$5.2 million, of which $0.7 million was paid in cash and 1,483,129 shares of Common Stock, which were valued at $2.5 million, were issued

at closing stock price of $1.69 on the closing date of June 9, 2021, and an additional $2.0 million will be paid in eight equal installments

of one installment on each six month anniversary of closing over forty-eight months, and a final lump sum payment of $225 thousand on

the four year anniversary of the closing;

reduced by $0.2 million settlement of a prior relationship.

The Foundation Stock Purchase Agreement

contained certain conditions to closing, including that the Company obtain approval of its stockholders, applicable lenders, and regulatory

authorities, as applicable, and representations and warranties and covenants as are customary for transactions of this type.

9, 2021, the FoundationTV acquisition was consummated.

The Company incurred transaction cost $ 36 thousand during the six months ended

September 30, 2021.

As of September 30, 2021, the deferred consideration is presented according to the agreed-upon cash payments, including

a $ 0.5 million short-term payable and a long-term payable for $ 1.5 million.

FoundationTV, Inc.

On May 12, 2021, the Company entered into a stock purchase agreement

(the “Foundation Stock Purchase Agreement”) with FoundationTV, Inc.

(“FoundationTV”), to buy all of FoundationTV´s

issued and outstanding stock in consideration of an aggregate of $5.2 million, of which $0.7 million was paid in cash and 1,483,129 shares

of Common Stock, which were valued at $2.5 million, were issued at closing stock price of $1.69 on the closing date of June 9, 2021, and

an additional $2.0 million will be paid in eight equal installments of one installment on each six month anniversary of closing over forty-eight

months, and a final lump sum payment of $225 thousand on the four year anniversary of the closing, reduced by $0.2 million settlement

of a prior relationship.

The Foundation Stock Purchase Agreement contained certain conditions to closing, including that the Company obtain

approval of its stockholders, applicable lenders, and regulatory authorities, as applicable, and representations and warranties and covenants

as are customary for transactions of this type.

On June 9, 2021, the FoundationTV acquisition was consummated.

The Company incurred transaction

costs of $ 36 thousand during the nine months ended December 31, 2021.

As of December 31, 2021, the deferred consideration initially measured

by bringing to present value the agreed-upon cash payments discounted by a 3 % rate, includes a $ 0.5 million short-term payable and a long-term

payable for $ 1.5 million.

Purchase Price

Allocation of purchase

Developed technology

Total purchase price

Allocation of purchase price

developed technology acquired in this transaction has a useful life of 10 years.

During the three and six months ended September 30,

2021, the Company recorded $ 80 thousand in amortization expense related to the developed technology acquired in the acquisition.

the amortization expense per year for the developed technology acquired in the business combination:

Disgusting, LLC.

On September 17, 2021, the Company entered into

an asset purchase agreement (the “Bloody Disgusting Asset Purchase Agreement”) with Bloody Disgusting, LLC (“Bloody

Disgusting”), to buy substantially all of the assets of Bloody Disgusting, in consideration of an aggregate of $7.8 million, of

which $4.0 million was paid in cash and 1,039,501 shares of Common Stock, which were valued at $2.3 million, were issued at closing stock

price of $2.23 on the closing date of September 17, 2021, and $1.5 million as of the fair value of the earnout liability, related to earnout

targets, as defined, to be met as of March 2022, March 2023 and March 2024.

The Bloody Disgusting Asset Purchase Agreement contained certain

conditions to closing and representations and warranties and covenants as are customary for transactions of this type.

On September 17,

2021, the Bloody Disgusting acquisition was consummated.

The Company incurred transaction cost $40 thousand during the six months ended

September 30, 2021.

Developed technology

Total allocation of purchase price

The developed technology acquired in this transaction

has a useful life of 10 years.

During the three and nine months ended December 31, 2021, the Company recorded $ 80 thousand and $ 160 thousand

in amortization expense related to the developed technology acquired in the acquisition.

Below is the amortization expense per year for the developed technology

acquired in the business combination:

2022 (remaining)

Bloody Disgusting, LLC

On September 17, 2021, the Company entered into an asset purchase agreement

(the “Bloody Disgusting Asset Purchase Agreement”) with Bloody Disgusting, LLC (“Bloody Disgusting”), to buy substantially

all of the assets of Bloody Disgusting, in consideration of an aggregate of $7.8 million, of which $4.0 million was paid in cash and 1,039,501

shares of Common Stock, which were valued at $2.3 million, were issued at closing stock price of $2.23 on the closing date of September

17, 2021, and $1.5 million as of the fair value of the earnout liability, related to earnout targets, as defined, to be met as of March

2022, March 2023 and March 2024.

The fair value of the earnout liability was estimated considering the weighted probability of scenarios

on the earnout metrics possible outcomes during the earnout period.

The Bloody Disgusting Asset Purchase Agreement contained certain conditions

to closing and representations and warranties and covenants as are customary for transactions of this type.

On September 17, 2021, the

Bloody Disgusting acquisition was consummated.

The Company incurred transaction costs of $40 thousand during the nine months ended December

During the three months ended December 31, 2021, the Company finalized the measurement of the assets acquired.

Purchase Price

Provisional allocation of purchase price

Total purchase price

Allocation of purchase price

Current assets

Advertiser relationships

allocation of purchase price

advertiser relationships acquired in this transaction has a useful life of 12 years and the trade name acquired has a useful life of

During the three and six months ended September 30, 2021, the Company recorded $ 0 in amortization expense related to the intangible

assets acquired.

Due to proximately of the closing date to the end of the quarter, the Company did not record any amortization expense

during the three months ended September 30, 2021 related to the advertiser relationships and trade name acquired in the business combination.

the amortization expense per year for the intangible assets acquired in the business combination:

Total allocation of purchase price

The advertiser relationships acquired in this

transaction has a useful life of 12 years and the trade name acquired has a useful life of 10 years.

During the three and nine months

ended December 31, 2021, the Company recorded $ 105 thousand in amortization expense related to the intangible assets acquired.

Below is the amortization expense per year for the intangible assets

acquired in the business combination:

Advertiser relationships

1 unchanged sentence

NOTES PAYABLE

payable consisted of the following:

non-recourse notes payable

non-recourse notes payable, net of unamortized debt issuance costs and debt discounts

recourse notes payable

recourse notes payable, net of unamortized debt issuance costs and debt discounts

notes payable, net of unamortized debt issuance costs

debt is generally defined as debt whereby the lenders’ sole recourse with respect to defaults, is limited to the value of the asset,

which is collateral for the debt.

Certain of our subsidiaries are liable with respect to, and their assets serve as collateral for, certain

indebtedness for which our assets and the assets of our other subsidiaries that are not parties to the transaction are generally not

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.

February 2013, our Cinedigm DC Holdings, LLC (“CDCH”), Access Digital Media, Inc (“AccessDM”) and Access Digital

Cinema Phase 2, Corp.

(“Phase 2 DC”) subsidiaries entered into a term loan agreement (the “Prospect Loan” or

the “Term Loan Agreement”) with Prospect Capital Corporation (“Prospect”), pursuant to which CDCH borrowed $ 70.0

The Prospect Loan included interest at LIBOR plus 9.0 % (with a 2.0 % LIBOR floor), which was payable in cash, and at an additional

2.50 % accrued as an increase to the aggregate principal amount of the Prospect Loan until the Prospect Loan was paid off, at which time

all accrued interest became payable in cash.

of CDCH accounts receivable were deposited into accounts designated to pay certain operating expenses, principal, interest, fees, costs

and expenses relating to the Prospect Loan.

On a quarterly basis, if there was excess cash flow, it was used for prepayment of the Prospect

We also maintained a debt service fund under the Prospect Loan for future principal and interest payments.

As of September 30,

2021, and March 31, 2021, the debt service fund had a balance of $ 0 and $ 1.0 million, which was classified as part of restricted cash

on our Consolidated Balance Sheets.

March 4, 2021, CDCH, AccessDM, Phase 2 DC, Christie/AIX, Inc., Cinedigm Digital Funding I, LLC, certain Lenders, and Prospect Capital

Corporation, as administrative agent and collateral agent, entered into Amendment No.

3 (the “Amendment”) to the Term Loan

Agreement dated February 28, 2013.

Under the Amendment, the maturity date of the loan under the Term Loan Agreement was extended to March

As a condition to the effectiveness of the Amendment, CDCH paid $ 3,500,000 to Prospect to reduce the outstanding principal

amount of the Loan.

Prospect Loan was secured by, among other things, a first priority pledge of the stock of CDF2 Holdings, our wholly-owned unconsolidated

subsidiary, the stock of AccessDM, owned by DC Holdings, and the stock of our Phase 2 DC subsidiary, and was also guaranteed by AccessDM

and Phase 2 DC.

We provided limited financial support to the Prospect Loan not to exceed $ 1.5 million per year in the event financial

performance did not meet certain defined benchmarks.

Prospect Loan contained customary representations, warranties, affirmative covenants, negative covenants and events of default.

a series of payments between April 30 and July 9, 2021 , the

Company paid in full the Prospect Loan outstanding non-recourse debt amount by paying an aggregate principal amount of $ 7.8 million.

Pre-payment of the Prospect Loan was permissible without penalty.

following table summarizes the activity related to the Prospect Loan:

Loan, at issuance

unamortized debt issuance costs and debt discounts

current portion

long term portion

Facility and Cinedigm Revolving Loans

March 30, 2018, the Company entered into 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 “Credit Facility”) 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.

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.

July 3, 2019, the Company entered into the EWB Amendment to the Credit Facility.

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 Credit Facility.

On June 25, 2020, the Company signed amendment No.

4 with East West Bank

to extend the maturity of the Credit Facility to June 30, 2021 and waive events of default provisions.

On June 22, 2021, the maturity

date of the Credit Facility was extended to September 28, 2021.

During this extension period, until an amendment is entered into, we

are not able to access any additional borrowings under the Credit Facility.

The September 28, 2021 expiration date has passed and

no amendment has been entered into as of the date of filing of this Quarterly Report on Form 10-Q.

of September 30, 2021 and March 31, 2021, there was $ 0 and $ 2.0 million outstanding, respectively, and there was no availability

under the Credit Facility based on the Company’s borrowing base as of September 30, 2021.

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”).

Loan matures on April 10, 2022 (the “PPP 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 PPP 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 were intended to be eligible for forgiveness, subject to the provisions of the CARES Act and could be

subject to repayment.

On July 7, 2021, the Company received notification from the lender that the U.S.

Small Business Administration

had approved the Company’s PPP Loan forgiveness application for the entire PPP Loan amount and accrued interest effective June

Notes payable consisted of the following:

(In thousands)

Prospect Loan

Total non-recourse notes payable

Total non-recourse notes payable, net of unamortized debt issuance costs and debt discounts

Credit Facility

Total recourse notes payable

Total recourse notes payable, net of unamortized debt issuance costs and debt discounts

Total notes payable, net of unamortized debt issuance costs

Non-recourse debt is generally defined as debt

whereby the lenders’ sole recourse with respect to defaults is limited to the value of the asset, which is collateral for the debt.

Certain of our subsidiaries are liable with respect to, and their assets serve as collateral for, certain indebtedness for which our assets

and the assets of our other subsidiaries that are not parties to the transaction are generally not liable.

We have referred to this indebtedness

as “non-recourse debt” because the recourse of the lenders is limited to the assets of specific subsidiaries.

Such indebtedness

includes the Prospect Loan.

Prospect Loan

In February 2013, our Cinedigm DC Holdings, LLC

(“CDCH”), Access Digital Media, Inc (“AccessDM”) and Access Digital Cinema Phase 2, Corp.

(“Phase 2 DC”)

subsidiaries entered into a term loan agreement (the “Prospect Loan” or the “Term Loan Agreement”) with Prospect

Capital Corporation (“Prospect”), pursuant to which CDCH borrowed $ 70.0 million.

The Prospect Loan included interest at LIBOR

plus 9.0 % (with a 2.0 % LIBOR floor), which was payable in cash, and at an additional 2.50 % accrued as an increase to the aggregate principal

amount of the Prospect Loan until the Prospect Loan was paid off, at which time all accrued interest became payable in cash.

Collections of CDCH accounts receivable were deposited

into accounts designated to pay certain operating expenses, principal, interest, fees, costs and expenses relating to the Prospect Loan.

On a quarterly basis, if there was excess cash flow, it was used for prepayment of the Prospect Loan.

We also maintained a debt service

fund under the Prospect Loan for future principal and interest payments.

As of December 31, 2021, and March 31, 2021, the debt service

fund had a balance of $ 0 and $ 1.0 million, respectively, which was classified as part of restricted cash on our Consolidated Balance Sheets.

On March 4, 2021, CDCH, AccessDM, Phase 2 DC,

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

agent, entered into Amendment No.

3 (the “Prospect Amendment”) to the Term Loan Agreement.

Under the Prospect Amendment,

the maturity date of the loan under the Term Loan Agreement was extended to March 31, 2022.

As a condition to the effectiveness of the

Amendment, CDCH paid $ 3,500,000 to Prospect to reduce the outstanding principal amount of the Loan.

The Prospect Loan was secured by, among other

things, a first priority pledge of the stock of CDF2 Holdings, our wholly-owned unconsolidated subsidiary, the stock of AccessDM, owned

by DC Holdings, and the stock of our Phase 2 DC subsidiary, and was also guaranteed by AccessDM and Phase 2 DC.

We provided limited financial

support to the Prospect Loan not to exceed $ 1.5 million per year in the event financial performance did not meet certain defined benchmarks.

The Prospect Loan contained customary representations,

warranties, affirmative covenants, negative covenants and events of default.

Upon a series

of payments between April 30 and July 9, 2021 , the Company paid in full the Prospect Loan

outstanding non-recourse debt amount by paying an aggregate principal amount of $ 7.8 million.

Pre-payment of the Prospect Loan was

permissible without penalty.

The following table summarizes the activity related

to the Prospect Loan:

(In thousands)

Prospect Loan, at issuance

Payments to date

Prospect Loan, gross

Less unamortized debt issuance costs and debt discounts

Prospect Loan, net

Less current portion

Total long term portion

Credit Facility and Cinedigm Revolving Loans

On March 30, 2018, the Company entered into 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 “Credit Facility”) 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

Interest under the Credit Facility is due monthly

at a rate elected by the Company of either 0.5 % plus Prime Rate or 3.25 % above LIBOR Rate established by the lender.

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

Facility (the “EWB Amendment”).

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

Credit Facility.

On June 25, 2020, the Company and East West Bank amended the Credit Facility to extend the maturity of the Credit Facility

to June 30, 2021 and waive events of default provisions.

On June 22, 2021, the maturity date of the Credit Facility was extended to September

During this extension period, unless an amendment had been entered into, we were not able to access any additional borrowings

under the Credit Facility.

The September 28, 2021 expiration date has passed and the agreement was not extended.

As of December 31, 2021 and March 31, 2021, there

was $ 0 and $ 2.0 million outstanding, respectively, and there was no availability under the Credit Facility based on the Company’s

borrowing base as of December 31, 2021.

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 “PPP

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 PPP 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 were intended to be eligible

for forgiveness, subject to the provisions of the CARES Act, and could be subject to repayment.

On July 7, 2021, the Company received

notification from the lender that the U.S.

Small Business Administration had approved the Company’s PPP Loan forgiveness application

for the entire PPP Loan amount and accrued interest effective June 30, 2021.

STOCKHOLDERS’ EQUITY

the six months ended September 30, 2021, we issued 2,883,907 shares of Common Stock which consists of the issuance of Common Stock for

Authorized Class A Common Stock

On October 11, 2021, the Company filed a Certificate

of Amendment to the Fifth Amended and Restated Certificate of Incorporation, pursuant to which the number of shares of Class A common

stock authorized for issuance was increased to 275,000,000 shares.

During the nine months ended December 31, 2021, we

issued 8,642,648 shares of Common Stock which consist of the sale of shares of our Class A common stock, issuance of Common Stock for

business combination, the issuances of Common Stock in payment of preferred stock dividends and in payment of board retainer fees.

dividends in arrears on preferred stock were $ 0.2 million and $ 0.1 million as of September 30, 2021 and March 31, 2021.

we paid the preferred stock dividends in arrears in the form of 53,278 shares of Class A common stock.

have treasury stock, at cost, consisting of 1,315,851 and 1,313,836 shares of Class A common stock at September 30, 2021 and March 31,

2021, respectively.

EQUITY INCENTIVE PLANS

Based Compensation Awards

issued under our 2000 Equity Incentive Plan (the “2000 Plan”) may be in any of the following forms (or a combination thereof)

(i) stock option awards;

(ii) stock appreciation rights;

PREFERRED STOCK

Cumulative dividends in arrears on preferred stock

were $ 0.1 million and $ 0.1 million as of December 31, 2021 and March 31, 2021, respectively.

In May 2021 and October 2021, we paid preferred

stock dividends in arrears in the form of 53,278 and 102,697 shares of Class A common stock, respectively.

TREASURY STOCK

We have treasury stock, at cost, consisting of

1,315,851 and 1,313,836 shares of Class A common stock at December 31, 2021 and March 31, 2021, respectively.

CINEDIGM’S EQUITY INCENTIVE PLANS

Stock Based Compensation Awards

Awards issued under our 2000 Equity Incentive

Plan (the “2000 Plan”) may be in any of the following forms (or a combination thereof) (i) stock option awards;

appreciation rights;

(iii) stock or restricted stock or restricted stock units;

or (iv) performance

The 2000 Plan provides for the granting of incentive stock options (“ISOs”) with exercise prices not less than the

fair market value of our Common Stock on the date of grant.

ISOs granted to shareholders having more than 10 % of the total combined voting

power of the Company must have exercise prices of at least 110 % of the fair market value of our Common Stock on the date of grant.

and non-statutory stock options granted under the 2000 Plan are subject to vesting provisions, and exercise is subject to the continuous

service of the participant.

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

compensation committee.

On November 1, 2017, upon the consummation of the initial equity investment in Cinedigm by Bison, as a result

of which there was a change of control of the Company, all stock options (incentive and non-statutory) and shares of restricted stock

were vested immediately and the options became fully exercisable.

connection with the grants of stock options and shares of restricted stock under the 2000 Plan, we and the participants have executed

stock option agreements and notices of restricted stock awards setting forth the terms of the grants.

The 2000 Plan provided for the

issuance of up to 2,380,000 shares of Common Stock to employees, outside directors and consultants.

of September 30, 2021, there were 218,837 stock options outstanding in the 2000 Plan with weighted average exercise price of $ 14.48 and

a weighted average contract life of 1.67 years.

As of March 31, 2021, there were 261,587 shares pursuant to stock options outstanding

in the Plan with weighted average exercise price of $ 14.99 and a weighted average contract life of 2.11 years.

A total of 42,500 options

expired and 250 options forfeited during the three and six months ended September 30, 2021.

outstanding under the 2000 Plan as of September 30, 2021 is as follows:

of September 30, 2021

Average Remaining Life in Years

Average Exercise Price

Intrinsic Value

or (iv) performance awards.

The 2000 Plan provides for

the granting of incentive stock options (“ISOs”) with exercise prices not less than the fair market value of our Common Stock

on the date of grant.

ISOs granted to shareholders having more than 10 % of the total combined voting power of the Company must have exercise

prices of at least 110 % of the fair market value of our Common Stock on the date of grant.

ISOs and non-statutory stock options granted

under the 2000 Plan are subject to vesting provisions, and exercise is subject to the continuous service of the participant.

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

On November 1,

2017, upon the consummation of the initial equity investment in Cinedigm by Bison, as a result of which there was a change of control

of the Company, all stock options (incentive and non-statutory) and shares of restricted stock were vested immediately and the options

became fully exercisable.

In connection with the grants of stock options

and shares of restricted stock under the 2000 Plan, we and the participants have executed stock option agreements and notices of restricted

stock awards setting forth the terms of the grants.

The 2000 Plan provided for the issuance of up to 2,380,000 shares of Common Stock

to employees, outside directors and consultants.

As of December 31, 2021, there were 217,837 stock

options outstanding in the 2000 Plan with weighted average exercise price of $ 14.49 and a weighted average contract life of 1.42 years.

As of March 31, 2021, there were 261,587 shares pursuant to stock options outstanding in the Plan with weighted average exercise price

of $ 14.99 and a weighted average contract life of 2.11 years.

A total of 43,500 options expired and 250 options forfeited during the three

and nine months ended December 31, 2021.

Options outstanding under the 2000 Plan as of

December 31, 2021 is as follows:

As of December 31, 2021

Range of Prices

Options Outstanding

Weighted Average Remaining Life in Years

Weighted Average Exercise Price

Aggregate Intrinsic Value

(In thousands)

1 unchanged sentence

$ 14.00 - $ 24.40

analysis of all options exercisable under the 2000 Plan as of September 30, 2021 is presented below:

An analysis of all options exercisable under the

2000 Plan as of December 31, 2021 is presented below:

Options Exercisable

Weighted Average

Remaining Life in Years

Weighted Average

Exercise Price

Intrinsic Value

Aggregate Intrinsic Value

(In thousands)

August 2017, the Company adopted the 2017 Equity Incentive Plan (the “2017 Plan).

The 2017 Plan replaced the 2000 Plan, and applies

to employees and directors of, and consultants to, the Company.

The 2017 Plan provided for the issuance of up to 2,108,270 shares of

Class A common stock, in the form of various awards, including stock options, stock appreciation rights, stock, restricted stock, restricted

stock units, performance awards and cash awards.

The Compensation Committee of the Company’s Board of Directors (the “Board”)

is authorized to administer the 2017 Plan and make grants thereunder.

The approval of the 2017 Plan did not affect awards already granted

under the 2000 Plan.

On December 4, 2019, upon shareholder approval, the 2017 Plan was amended to increase the maximum number of shares

of Class A common stock authorized for issuance thereunder from 2,108,270 shares to 4,098,270 .

October 23, 2020, the Company amended its 2017 Plan to increase the number of shares authorized for issuance thereunder from 4,098,270

to 14,098,270 .

October 11, 2021, the Company amended its 2017 Plan to increase the number of shares authorized for issuance thereunder from 14,098,270

to 18,098,270 .

the six months ended September 30, 2021, the Company granted 1,409,000 stock appreciation rights (“SARs”).

were granted under the Company’s 2017 Equity Incentive Plan (the “2017 Plan), except for 600,000 SARs granted an officer

of the Company as an inducement grant.

All SARs issued have an exercise price equal to the fair value of the Company’s Class A

common stock on the date of grant and a maturity date of 10 years.

The SARs were valued on the grant date utilizing an option pricing

model, as follows:

May 23, 2021 – September 13, 2021

May 23, 2031 – March 31, 2034

In August 2017, the Company adopted the 2017 Equity

Incentive Plan (the “2017 Plan).

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

to, the Company.

The 2017 Plan provided for the issuance of up to 2,108,270 shares of Class A common stock, in the form of various awards,

including stock options, stock appreciation rights, stock, restricted stock, restricted stock units, performance awards and cash awards.

The Compensation Committee of the Company’s Board of Directors (the “Board”) is authorized to administer the 2017 Plan

and make grants thereunder.

The approval of the 2017 Plan did not affect awards already granted under the 2000 Plan.

On December 4, 2019,

upon shareholder approval, the 2017 Plan was amended to increase the maximum number of shares of Class A common stock authorized for issuance

thereunder from 2,108,270 shares to 4,098,270 .

On October 23, 2020, the Company amended its 2017

Plan to increase the number of shares authorized for issuance thereunder from 4,098,270 to 14,098,270 .

On October 11, 2021, the Company amended its 2017

Plan to increase the number of shares authorized for issuance thereunder from 14,098,270 to 18,098,270 .

During the nine months ended December 31, 2021, the Company granted

1,807,625 stock appreciation rights (“SARs”).

The SARs were granted under the Company’s 2017 Equity Incentive Plan

(the “2017 Plan), except for 600,000 SARs granted to an officer of the Company as an inducement grant.

All SARs issued have an exercise

price equal to the fair value of the Company’s Class A common stock on the date of grant and a maturity date of 10 years.

were valued on the grant date utilizing an option pricing model, as follows:

May 23, 2021 – November 30,

Maturity Date:

May 23, 2031 – November 30,

Exercise price:

$ 1.29 - $ 2.56

110.32 % - 114.42 %

Discount rate:

0.96 % - 1.50 %

Expected term:

6 – 6.5 years

appreciation rights outstanding under the 2017 Plan as of September 30, 2021 is as follows:

As of September 30, 2021

Stock appreciation rights outstanding under the

2017 Plan as of December 31, 2021 is as follows:

As of December 31, 2021

Range of Prices

7 unchanged sentences

$ 1.71 - $ 2.10

An analysis of all stock appreciation rights exercisable under the

2017 Plan as of September 30, 2021 is presented below:

$ 2.23 - $ 2.56

An analysis of all stock appreciation rights exercisable

under the 2017 Plan as of December 31, 2021 is presented below:

Options Exercisable

Weighted Average

Remaining Life in Years

Weighted Average

Exercise Price

Intrinsic Value

Aggregate Intrinsic Value

(In thousands)

and director stock-based compensation expense related to our stock-based awards was as follows:

September 30,

Employee and director stock-based compensation

expense related to our stock-based awards was as follows:

Three Months Ended

Nine Months Ended

(In thousands)

general and administrative

SARs outstanding are as follows:

September 30,

SARs Outstanding

March 31, 2021

SARs Outstanding September 30, 2021

was $ 1 thousand and $ 1 thousand of stock-based compensation recorded for the six months ended September 30, 2021 and 2020, respectively,

related to employees’ restricted stock awards.

There was $ 0 thousand and $ 1 thousand of stock-based compensation recorded

for the three months ended September 30, 2021 and 2020, respectively, related to employees’ restricted stock awards.

There was $ 193 thousand and $ 131 thousand

of stock-based compensation for the six months ended September 30, 2021 and 2020, respectively, related to board of directors.

$ 71 thousand and $ 65 thousand of stock-based compensation for the three months ended September 30, 2021 and 2020, respectively, related

to board of directors.

During the six months ended September 30, 2021, the Company issued 35,714 shares to the board of directors.

GRANTED OUTSIDE CINEDIGM’S EQUITY INCENTIVE PLAN

October 2013, we issued options outside of the 2000 Plan to 10 individuals who became employees as a result of a business combination.

The employees received options to purchase an aggregate of 62,000 shares of our Class A Common Stock at an exercise price of $ 17.50 per

The options were fully vested as of October 2017 and expire 10 years from the date of grant, if unexercised.

As of September 30,

2021, 12,500 of such options remained outstanding.

following table presents information about outstanding warrants to purchase shares of our Class A common stock as of September 30, 2021.

All of the outstanding warrants are fully vested and exercisable.

issued in connection with Convertible Notes exchange transaction

December 2021

Warrant issued to BEMG in connection with a term loan agreement

Selling, general and administrative

Total SARs outstanding are as follows:

SARs Outstanding March 31, 2021

Total SARs Outstanding December 31, 2021

There was $ 1 thousand and $1thousand of

stock-based compensation recorded for the nine months ended December 31, 2021 and 2020, respectively, related to employees’

restricted stock awards.

There was $ 0 thousand and $1thousand of stock-based compensation recorded for the three months ended

December 31, 2021 and 2020, respectively, related to employees’ restricted stock awards.

There was $ 290 thousand and $ 131 thousand of

stock-based compensation for the nine months ended December 31, 2021 and 2020, respectively, related to board of directors.

was $ 107 thousand and $ 65 thousand of stock-based compensation for the three months ended December 31, 2021 and 2020,

respectively, related to board of directors.

During the nine months ended December 31, 2021, the Company issued 245,887 shares to

the board of directors.

OPTIONS GRANTED OUTSIDE CINEDIGM’S EQUITY

INCENTIVE PLAN

In October 2013, we issued options outside of

the 2000 Plan to 10 individuals who became employees as a result of a business combination.

The employees received options to purchase

an aggregate of 62,000 shares of our Class A Common Stock at an exercise price of $ 17.50 per share.

The options were fully vested as of

October 2017 and expire 10 years from the date of grant, if unexercised.

As of December 31, 2021, 12,500 of such options remained outstanding.

The following table presents information about

outstanding warrants to purchase shares of our Class A common stock as of December 31, 2021.

All of the outstanding warrants are fully

vested and exercisable.

Exercise price

5-year Warrant issued to BEMG in connection with a term loan agreement

December 2022

for the purchase of 52,500 shares of Common Stock expired unexercised during the three months ended September 30, 2021.

Warrants for the purchase of 298,519 shares of

Common Stock expired unexercised during the nine months ended December 31, 2021.

COMMITMENTS AND CONTINGENCIES

time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities.

Although the results of litigation and claims cannot be predicted with certainty, the Company does not believe it is party to any other

claim or litigation the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably

expected to have a material adverse effect on its business.

Regardless of the outcome, litigation can have an adverse impact on the Company

because of defense and settlement costs, diversion of management resources and other factors.

operate from leased properties under non-cancelable operating lease agreements, certain of which contain escalating lease clauses.

Company leases office space under operating leases.

The Company’s portfolio of leases is primarily related to real estate and since

most of our leases do not provide a readily determinable implicit rate, the Company estimated its incremental borrowing rate to discount

the lease payments based on information available at either the implementation date of Topic 842 or at lease commencement for leases

entered into thereafter.

table below presents the lease-related assets and liabilities recorded on the balance sheet as of September 30, 2021:

From time to time, the Company may be subject to various legal proceedings

and claims that arise in the ordinary course of its business activities.

Although the results of litigation and claims cannot be predicted

with certainty, the Company does not believe it is party to any claim or litigation the outcome of which, if determined adversely to the

Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on its business.

Regardless of

the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources

and other factors.

We operate from leased properties under non-cancelable

operating lease agreements, certain of which contain escalating lease clauses.

The Company leases office space under operating

The Company’s portfolio of leases is primarily related to real estate and since most of our leases do not provide a readily

determinable implicit rate, the Company estimated its incremental borrowing rate to discount the lease payments based on information available

at either the implementation date of Topic 842 or at lease commencement for leases entered into thereafter.

The table below presents the lease-related assets

and liabilities recorded on the balance sheet as of December 31, 2021 and March 31, 2021:

(In thousands)

Classification

on the Balance Sheet

lease right-of-use asset

Classification on the Balance Sheet

Operating lease right-of-use asset

Operating leases – current portion

Operating leases - long-term

operating lease liabilities

table below presents certain information related to lease costs for leases:

Operating leases – long-term portion

Total operating lease liabilities

The table below presents certain information related

to lease costs for leases:

Nine months Ended

(In thousands)

table below presents supplemental cash flow information related to leases:

Operating lease cost

Total lease cost

Other Information

The table below presents supplemental cash flow

information related to leases:

Nine months Ended

(In thousands)

paid for amounts included in the measurement of lease liabilities

cash flows used for operating leases

arrangement minimum guaranty

September 1, 2021 the Company extended a video works distribution arrangement providing a non-refundable and fully-recoupable advance

minimum participation guaranty for a total amount of $ 3.5 million, where $ 1.5 million is payable no later than November 1, 2021, $ 1.0

million at the first year anniversary of the arrangement and $ 0.9 million on the second-year anniversary of the arrangement.

These payments

are subject to the selection of video works released by the Company whose initial commercial date occurs during the arrangement year.

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows used for operating leases

Distribution arrangement minimum guaranty

On September 1, 2021 the Company extended a video

works distribution arrangement providing a non-refundable and fully-recoupable advance minimum participation guaranty for a total amount

of $ 3.5 million, where $ 1.5 million is payable no later than November 1, 2021, $ 1.0 million at the first year anniversary of the arrangement

and $ 0.9 million on the second-year anniversary of the arrangement.

These payments are subject to the selection of video works released

by the Company whose initial commercial date occurs during the arrangement year.

The Company paid the first advance on October 22, 2021.

SUPPLEMENTAL CASH FLOW INFORMATION

September 30,

Nine Months Ended

(In thousands)

interest paid

investing and financing activities:

dividends on preferred stock

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

of Class A common stock to Starrise, a related party

capital under the Starrise transaction, a related party

of second lien loan with Class A common stock

of note payable

accrued in connection with addition of property and equipment

of Class A common stock for business combination

shares used to pay down vendors

shares acquired for withholding taxes

consideration in purchase of a business

Cash interest paid

Income taxes paid

noncash investing and financing activities:

Accrued dividends on preferred stock

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

Issuance of Class A common stock to Starrise, a related party

Contributed capital under the Starrise transaction, a related party

Settlement of second lien loan with Class A common stock

Conversion of note payable

Class A common stock to be issued in connection with the asset acquisition

Issuance of Class A common stock for business combination

Starrise shares used to pay down vendors

Treasury shares acquired for withholding taxes

Deferred consideration in purchase of a business

Earnout consideration in purchase of a business

SEGMENT INFORMATION

operate in two reportable segments:

Cinema Equipment Business and Content & Entertainment Business.

Our segments were determined

based on the economic characteristics of our products and services, our internal organizational structure, the manner in which our operations

are managed and the criteria used by our CODM to evaluate performance, which is generally the segment’s operating income (loss)

before depreciation and amortization.

We operate in two reportable segments:

Equipment Business and Content & Entertainment Business.

Our segments were determined based on the economic characteristics of our

products and services, our internal organizational structure, the manner in which our operations are managed and the criteria used by

our CODM to evaluate performance, which is generally the segment’s operating income (loss) before depreciation and amortization.

Operations of:

6 unchanged sentences

We collaborate with producers and other content owners to market, source, curate and distribute independent content to targeted and under-served audiences in theatres and homes, and via mobile and emerging platforms.

following tables present certain financial information related to our reportable segments and Corporate:

of September 30,

The following tables present certain financial

information related to our reportable segments and Corporate:

As of December 31, 2021

(In thousands)

Equipment Business

& Entertainment Business

of March 31, 2021

Cinema Equipment Business

Content & Entertainment Business

As of March 31,

(In thousands)

Equipment Business

& Entertainment Business

of Operations

September 30,

& Entertainment

operating (exclusive of depreciation and amortization shown below)

general and administrative

of corporate overhead

for (recovery of) doubtful accounts

and amortization of property and equipment

of intangible assets

operating expenses

(loss) from operations

following employee and director stock-based compensation expense related to our stock-based awards is included in the above amounts as

Cinema Equipment Business

Content & Entertainment Business

Statements of Operations

Three Months Ended December 31, 2021

(in thousands)

& Entertainment

general and administrative

stock-based compensation

of Operations

Months Ended September 30,

Content & Entertainment

Direct operating (exclusive of depreciation and amortization shown below)

Selling, general and administrative

Allocation of corporate overhead

Provision for (recovery of) doubtful accounts

Depreciation and amortization of property and equipment

Amortization of intangible assets

Total operating expenses

Income (loss) from operations

The following employee and director stock-based

compensation expense related to our stock-based awards is included in the above amounts as follows:

(In thousands)

& Entertainment

operating (exclusive of depreciation and amortization shown below)

general and administrative

of corporate overhead

of doubtful accounts

and amortization of property and equipment

of intangible assets

operating expenses

from operations

following employee and director stock-based compensation expense related to our stock-based awards is included in the above amounts as

& Entertainment

general and administrative

stock-based compensation

of Operations

Ended September 30,

& Entertainment

operating (exclusive of depreciation and amortization shown below)

general and administrative

of corporate overhead

of) provision for doubtful accounts

and amortization of property and equipment

of intangible assets

operating expenses

Content & Entertainment

Direct operating

Selling, general and administrative

Total stock-based compensation

Statements of Operations

Three Months Ended

December 31, 2020

(in thousands)

Content & Entertainment

Direct operating (exclusive of depreciation and amortization shown below)

Selling, general and administrative

Allocation of corporate overhead

Provision for doubtful accounts

Depreciation and amortization of property and equipment

Amortization of intangible assets

Total operating expenses

Loss from operations

following employee and director stock-based compensation expense related to our stock-based awards is included in the above amounts as

The following employee and director stock-based

compensation expense related to our stock-based awards is included in the above amounts as follows:

Content & Entertainment

Direct operating

Selling, general and administrative

Total stock-based compensation

Statements of Operations

Nine Months Ended December 31, 2021

(in thousands)

& Entertainment

general and administrative

stock-based compensation

of Operations

Months Ended September 30,

Content & Entertainment

Direct operating (exclusive of depreciation and amortization shown below)

Selling, general and administrative

Allocation of corporate overhead

(Recovery of) provision for doubtful accounts

Depreciation and amortization of property and equipment

Amortization of intangible assets

Total operating expenses

Income (loss) from operations

The following employee and director stock-based

compensation expense related to our stock-based awards is included in the above amounts as follows:

(In thousands)

& Entertainment

operating (exclusive of depreciation and amortization shown below)

general and administrative

of corporate overhead

for doubtful accounts

and amortization of property and equipment

of intangible assets

operating expenses

(loss) from operations

following employee and director stock-based compensation expense related to our stock-based awards is included in the above amounts as

& Entertainment

general and administrative

stock-based compensation

We calculate income tax expense based upon an

annual effective tax rate forecast, including estimates and assumptions.

We recorded an income tax benefit of approximately $ 487 thousand

and $ 550 thousand for the three and six months ended September 30, 2021.

Content & Entertainment

Direct operating

Selling, general and administrative

Total stock-based compensation

Statements of Operations

Nine Months Ended

December 31, 2020

(in thousands)

Content & Entertainment

Direct operating (exclusive of depreciation and amortization shown below)

Selling, general and administrative

Allocation of corporate overhead

Recovery for doubtful accounts

Depreciation and amortization of property and equipment

Amortization of intangible assets

Total operating expenses

Income (loss) from operations

The following employee and director stock-based

compensation expense related to our stock-based awards is included in the above amounts as follows:

Content & Entertainment

Direct operating

Selling, general and administrative

Total stock-based compensation

We calculate income tax expense

based upon an annual effective tax rate forecast, including estimates and assumptions.

We recorded an income tax benefit of approximately

$ 181 thousand for the three and six months ended September 30, 2020.

We have not recorded tax benefits on our loss before income taxes

because we have provided for a full valuation allowance that offsets potential deferred tax assets resulting from net operating loss

carry forwards, reflecting our inability to use such loss carry forwards.

$ 26 thousand and $ 576 thousand for the three and nine months ended December 31, 2021, respectively.

We recorded an

income tax benefit of approximately $ 0 and $ 181 thousand for the three and nine months ended December 31, 2020, respectively.

have not recorded tax benefits on our loss before income taxes because we have provided for a full valuation allowance that offsets potential

deferred tax assets resulting from net operating loss carry forwards, reflecting our inability to use such loss carry forwards.

Our effective

tax rate for the six months ended September 30, 2021 and 2020 was negative 12.4 % and 0.4 %, respectively.

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law.

The Act contains several

new or changed income tax provisions, including but not limited to the following:

increased limitation threshold for determining deductible

interest expense;

tax rate for the nine months ended December 31, 2021 and 2020 was negative 14.0 % and 0.3 %, respectively.

27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law.

The Act contains several new or

changed income tax provisions, including but not limited to the following:

increased limitation threshold for determining deductible interest

class life changes to qualified improvements (in general, from 39 years to 15 years);

and the ability to carry back

net operating losses incurred from tax years 2018 through 2020 up to the five preceding tax years.

The Company has evaluated the

new tax provisions of the CARES Act and determined the impact to be either immaterial or not applicable.

and the ability to carry back net operating

losses incurred from tax years 2018 through 2020 up to the five preceding tax years.

The Company has evaluated the new tax provisions

of the CARES Act and determined the impact to be either immaterial or not applicable.

SUBSEQUENT EVENTS

Class A Common Stock

October 11, 2021, the Company filed a Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation, pursuant

to which the number of shares of Class A common stock authorized for issuance was increased to 275,000,000 shares.

Incentive Plan

11, 2021, the Company amended its 2017 Equity Incentive plan to increase the number of shares authorized for issuance thereunder from

14,098,270 to 18,098,270 .

Stock Purchase Agreement

In October 2021, we entered into a Common Stock

Purchase Agreement (the “Equity Line Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights

Agreement”) with B.

Riley Principal Capital, LLC (“B.

Riley Principal Capital”).

Pursuant to the Equity Line Purchase

Agreement, the Company has the right to sell to B.

Riley Principal Capital up to the lesser of (i) $ 50,000,000 of newly issued shares

of Common Stock and (ii) the Exchange Cap (as defined below) (subject to certain conditions and limitations), from time to time during

the 24-month period from and after the October 21, 2021.

Sales of Common Stock pursuant to the Equity Line Purchase Agreement, and the

timing of any sales, are solely at the option of the Company, and the Company is under no obligation to sell any securities to B.

Principal Capital under the Equity Line Purchase Agreement.

As consideration for B.

Riley Principal Capital’s commitment to purchase

shares of Common Stock at the Company’s direction upon the terms and subject to the conditions set forth in the Equity Line Purchase

Agreement, upon execution of the Equity Line Purchase Agreement, the Company issued 210,084 shares of Common Stock to B.

Riley Principal

Capital (the “Commitment Shares”).

The purchase price of the shares of Common Stock that we elect to sell to B.

Riley Principal

Capital pursuant to the Equity Line Purchase Agreement will be determined by reference to the volume weighted average price of the Common

Stock (“VWAP”) during the applicable purchase date, less a fixed 5% discount to such VWAP.

Pursuant to the Registration Rights

Agreement, the Company filed a Registration Statement on Form S-1 that was declared effective by the Securities and Exchange Commission

on October 21, 2021 (File No.

333-260210) for the resale by B.

Riley Principal Capital of up to 25,210,084 shares of Common Stock (including

the Commitment Shares) acquired pursuant to the Equity Line Purchase Agreement.

During October and November 2021 ,

we sold 5,300,000 shares of Common Stock under the Equity Line Purchase Agreement.

Net proceeds from such sales totaled $ 12.4 million.

Equity purchase announcement

On January 4, 2022, the Company entered into an Equity Purchase Agreement

among the Company, and David Chu, Augustine Hong, Helen Hong, Michael Hong, Justin Lee, Steven Park, and Kingsoon Ong (collectively, the

“Sellers”) and David Chu as representative of the Sellers (the “DMR Agreement”) to acquire all of the outstanding

membership interests of Asian Media Rights, LLC d/b/a Digital Media Rights (“DMR”), a diversified specialty streaming, advertising,

and content distribution company with significant expertise in building audiences for global content in North America (the “DMR

Transaction”).

The DMR Transaction is subject to certain closing conditions, including satisfactory financial and legal diligence,

and the parties are working toward closing the transaction.

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

What changed 10-Q

Item 1. Financial Statements