What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-07-01 compared with 2021-07-30 · 1290 added, 1338 removed, 339 unchanged (89% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets at March 31, 2021 and 2020

Consolidated Statements of Operations for the fiscal years ended March 31, 2021 and 2020

Consolidated Statements of Comprehensive Loss for the fiscal years ended March 31, 2021 and 2020

Consolidated Statements of Equity (Deficit) for the fiscal years ended March 31, 2021 and 2020

Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2021 and 2020

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CINEDIGM CORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID# 274 ) F-1

Consolidated Balance Sheets at March 31, 2022 and 2021 F-3

Consolidated Statements of Operations for the fiscal years ended March 31, 2022 and 2021 F-4

Consolidated Statements of Comprehensive Income (Loss) for the fiscal years ended March 31, 2022 and 2021 F-5

Consolidated Statements of Equity (Deficit) for the fiscal years ended March 31, 2022 and 2021 F-6

Consolidated Statements of Cash Flows for the fiscal years ended March 31, 2022 and 2021 F-8

Notes to Consolidated Financial Statements F-9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and Stockholders of

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balance sheets of Cinedigm Corp.

(the “Company”) as of March 31, 2021 and 2020, and the related consolidated statements of

operations, comprehensive loss, equity(deficit), and cash flows for each of the years in the two-year period ended March 31, 2021, and

the related notes.

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position

of the Company as of March 31, 2021 and 2020, and the consolidated results of its operations and its cash flows for each of the years

in the two-year period ended March 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”) as of March 31, 2022 and 2021, and the related consolidated statements

of operations, comprehensive income (loss), stockholders’ equity (deficit), and cash flows for each of the years then ended, and the

related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of March 31, 2022 and 2021, and the results of their

operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the

United States of America.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is

a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the

audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on

the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion

on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to

the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our

especially challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our

opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate

opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue recognition – Content & Entertainment

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

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

Depending on the nature of the agreements

with the platform and content providers, the fee rate that is earned varies.

The Company’s performance obligations include the delivery

of content for transactional, subscription and ads supported on the digital platforms, and shipment of DVDS and Blu-Ray disks.

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 of physical goods, or point-of-sale for transactional and VOD services as the control

over the content or the physical titles 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 revenue reductions, which are accounted for as variable consideration.

Revenue is determined to be reported on a gross or net basis

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

Total CEG revenues for the year ended March 31, 2021 was

$28.2 million.

We identified revenue recognition for CEG as a critical

audit matter due the level of judgement and estimation required by management in the recognition of fees earned from customers and estimation

of revenues accrued at period end.

As such, there is a degree of auditor judgement and subjectivity, and significant audit effort and

audit procedures to address management’s revenue recognition for CEG.

Fees earned are a based on a percentage of the net amounts received from customers, when the Company is an agent in the transaction

and represents the entire amount received from the customer when the Company is considered the principal.

The Company’s performance

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

of DVDS and Blu-Ray disks.

Revenue is recognized when the content is available for subscription on the digital platform, at the time of

shipment of physical goods, or point-of-sale for transactional and VOD services as the control over the content or the physical titles

is transferred to the customer.

Physical revenue is recognized after deducting the reserves for sales returns and revenue reductions,

which are accounted for as variable consideration.

Total CEG revenues for the year ended March 31, 2022 $37.9 million.

We identified revenue recognition for CEG as a

critical audit matter due the level of judgement and estimation required by management in the recognition of fees earned from customers

and estimation of revenues accrued at period end;

this in turn led to a high degree of auditor judgment, subjectivity, and effort in performing

procedures and evaluating audit evidence related to management’s determination of management’s revenue recognition for CEG.

Addressing the matter involved performing procedures

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We obtained an

understanding and evaluated the design of the Company’s controls over the revenue recognition of CEG.

We gained an understanding

of the Company’s role as either principal or agent in the revenue streams and management’s determination of revenue streams

as either gross or net based on the transfer of control for the good and service.

Our audit procedures included, among others, comparing

the revenue recognized to third party statements/reports, which can include sales, cash receipts, returns, revenue deductions, advance

payments, advance recoupments, expenses, and other information, to reconcile to the revenue recognized or the net amounts in which fees

are calculated on, as determined by the underlying contracts or third party statements for a sample of transactions.

We also tested the

mathematical accuracy of management's calculations of revenue and the associated timing of revenue recognized in the financial statements,

understanding and evaluated the design of the Company’s controls over the revenue recognition of CEG, including obtaining and evaluating

the service auditor’s report relating to controls over the third party information used by management in estimating digital revenue.

We gained an understanding of the Company’s role as either principal or agent in the revenue streams and management’s determination

of revenue streams as either gross or net based on the transfer of control for the good and service.

Our audit procedures included, among

others, comparing the revenue recognized to third party statements/reports, which can include sales, cash receipts, returns, revenue deductions,

advance payments, advance recoupments, expenses, and other information, to reconcile to the revenue recognized or the net amounts in which

fees are calculated on, as determined by the underlying contracts or third party statements for a sample of transactions.

We also tested

the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements,

as well as the Company’s estimation process, on a sample basis, for revenues accrued at period end.

Valuation of Intangible Assets Acquired in

Business Combinations

in Note 4, the Company completed three business combinations during the year ended March 31, 2022.

The business combinations were accounted

for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)

Topic 805, Business Combinations.

Accordingly, the purchase prices of each acquisition

were allocated to the assets acquired and liabilities assumed based on their respective fair values, including intangible assets aggregating

to $14.9 million.

valued the acquired intangible assets, comprised of developed technology, advertiser relationships, and channels and platform, at fair

value on the date of the acquisitions using income approaches.

The methods used to estimate fair value required management to make significant

estimates and assumptions related to the forecasts of future cash flows, customer attrition rates, discount rates, and royalty rates.

the accounting for acquisitions was complex due to the significant estimation uncertainty in determining the fair values of identified

intangible assets.

The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying

assumptions about future performance of the acquired businesses and due to the limited historical data on which to base these assumptions.

audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased

extent of effort, including the use of professionals with specialized skill and knowledge to assist in performing these procedures and

evaluating the audit evidence obtained.

We obtained an understanding and evaluated the design of the Company’s controls over its

accounting for acquisitions.

procedures also included evaluating the appropriateness of the valuation models, and testing the completeness, accuracy and relevance

of the underlying data used in the models, and testing the reasonableness of the forecasts of future cash flows, attrition rates, discount

rates, and royalty rates for the intangible assets acquired.

We assessed the reasonableness of management’s forecasts of future

cash flows by comparing the projections to historical results.

We also evaluated whether the estimated future cash flows were consistent

with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in

evaluating the reasonableness of the valuation models and significant assumptions, including the discount and royalty rates that were

independently developed using publicly available market data for comparable companies.

/s/ EisnerAmper LLP

We have served as the Company’s auditor since

We have served as the Company’s auditor

EISNERAMPER LLP

Iselin, New Jersey

July 29, 2021

BALANCE SHEETS

thousands, except for share and per share data)

CINEDIGM CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

Current assets

Cash and cash equivalents

Accounts receivable, net

Inventory, net

Cash and cash

Accounts receivable, net of allowance of $ 2,921 and $ 2,876 , respectively

Unbilled revenue

Prepaid and other current assets

and other current assets

Total current assets

Restricted cash

Equity investment in Starrise, a related party, at fair value

Property and equipment, net

Operating lease right-of use assets

Equity investment in A Metaverse

Company, a related party, at fair value

Property and equipment,

Operating lease right-of

use assets, net

Intangible assets, net

Other long-term assets

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

long-term assets

AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable and accrued expenses

Accounts payable and accrued

Current portion of notes payable, including unamortized debt discount and debt issuance costs of $ 0 and $ 460 , respectively (see Note 5)

Current portion of notes payable, non-recourse including unamortized debt discount of $ 0 and $ 763 , respectively (see Note 5)

Current portion of deferred

consideration on purchase of business

Current portion of earnout

consideration on purchase of business

Operating lease liabilities

Current portion of deferred revenue

portion of deferred revenue

Total current liabilities

Operating lease liabilities, net of current portion

Deferred revenue, net of current portion

Other long-term liabilities

Total liabilities

Commitments and contingencies (see Note 8)

Stockholders’ Equity (Deficit)

Deferred consideration on

purchase – net of current portion

Earnout consideration on

purchase – net of current portion

Operating lease liabilities,

net of current portion

long-term liabilities

Commitments and contingencies

Stockholders’ Equity

Preferred stock, 15,000,000 shares authorized;

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Treasury stock, at cost;

1,313,836 Class A common shares at March 31, 2021 and 2020.

1,315,851 and 1,313,836 Class A common shares at March 31, 2022 and 2021, respectively.

Accumulated deficit

Accumulated other comprehensive (loss) income

Total stockholders’ equity (deficit) of Cinedigm Corp.

Deficit attributable to noncontrolling interest

Total equity (deficit)

Total liabilities and equity (deficit)

accompanying Notes to Consolidated Financial Statements

STATEMENTS OF OPERATIONS

thousands, except for share and per share data)

other comprehensive loss

Total stockholders’

equity of Cinedigm Corp.

attributable to noncontrolling interest

liabilities and equity

See accompanying Notes to Consolidated Financial

CINEDIGM CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share data)

For the Fiscal Year Ended

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Selling, general and administrative

(Recovery) Provision for doubtful accounts

Depreciation and amortization of property and equipment

Amortization of intangible assets

Intangible impairment

Total operating expenses

Loss from operations

Interest income

Interest income, net

Interest expense

Changes in fair value of equity investment in Starrise, a related party

Loss in extinguishment of note payable

Changes in fair value of equity investment in Metaverse, a related party

Income (loss) on extinguishment of note payable

Other expense, net

Loss from operations before income taxes

Income tax benefit (expense)

Net income (loss) attributable to noncontrolling interest

Net loss attributable to controlling interests

Net income (loss) from operations before income taxes

Income tax benefit

Net income (loss)

Net (loss) income attributable to noncontrolling

Net income (loss) attributable to controlling interests

Preferred stock dividends

Net loss attributable to common stockholders

Net loss per Class A common stock attributable to common stockholders - basic and diluted:

Net loss attributable to common stockholders

Net income (loss) attributable to common stockholders

Net income (loss) per Class A common stock attributable to common stockholders - basic:

Weighted average number of Class A common stock outstanding:

basic and diluted

accompanying Notes to Consolidated Financial Statements

STATEMENTS OF COMPREHENSIVE LOSS

Net income (loss) per Class A common stock attributable to common stockholders - diluted:

Weighted average number of Class A common stock outstanding:

See accompanying Notes to Consolidated Financial

CINEDIGM CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

For the Fiscal Year Ended

Other comprehensive (loss) income:

Net income (loss)

Other comprehensive loss:

foreign exchange translation

Comprehensive loss

comprehensive income (loss) attributable to noncontrolling interest

Comprehensive loss attributable to controlling interests

accompanying Notes to Consolidated Financial Statements

STATEMENTS OF EQUITY (DEFICIT)

thousands, except share data)

Comprehensive income (loss)

comprehensive (loss) income attributable to noncontrolling interest

Comprehensive income (loss) attributable to controlling interests

See accompanying Notes to Consolidated Financial

CINEDIGM CORP.

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

(In thousands, except

Preferred Stock

Other Comprehensive (Loss)

Total Stockholders’

Non-Controlling

Balances as of

March 31, 2019

Comprehensive

Stockholders’

as of March 31, 2020

$ ( 410,904 )

Foreign exchange translation

Issuance of Class A common

stock for third party professional services

Issuance of Class A common

stock to Bison

Issuance of Class A common

stock in connection with the Starrise transaction, a related party

Contributed capital under the

Starrise transaction, a related party

Fair value of conversion feature

in connection with convertible note

Stock-based compensation

Preferred stock dividends paid

with common stock

exchange translation

of Class A common stock in connection with public offerings

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

capital under the Metaverse transaction, a related party

stock issued in connection with conversion of Convertible Notes and second lien loans

of warrants for Class A common stock

A common stock to be issued in connection with asset acquisitions

of f Class A common stock for third party professional services

stock dividends paid with common stock

as of March 31, 2021

$ ( 474,080 )

accompanying Notes to Consolidated Financial Statements

STATEMENTS OF EQUITY (DEFICIT)

thousands, except share data)

See accompanying Notes to Consolidated Financial

CINEDIGM CORP.

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

(In thousands, except share data)

Preferred Stock

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Stockholders’

Balances as of March 31, 2020

March 31, 2021

$ ( 474,080 )

Foreign exchange translation

Issuance of Class A common stock

in connection with public offerings

Issuance of Class A common stock

in connection with the Starrise transaction, a related party

Contributed capital under the Starrise

transaction, a related party

Common stock issued in connection

with conversion of Convertible Notes and second lien loans

Stock-based compensation

Exercise of warrants for Class A

Class A common stock to be issued

in connection with asset acquisitions

Issuance of f Class A common stock

for third party professional services

Preferred stock dividends paid with

Balances as of March 31, 2021

exchange translation

compensation and expenses

of common stock in connection with business combinations

stock dividends paid in stock

stock in connection with taxes withheld from employees

stock dividends accrued

of common stock for third party equity purchase commitment

of common stock in connection with performance stock units

of common stock in connection with ATM raises, net

as of March 31, 2022

$ ( 472,310 )

accompanying Notes to Consolidated Financial Statements

STATEMENTS OF CASH FLOWS

For the Fiscal Year Ended March 31,

See accompanying Notes to Consolidated Financial

CINEDIGM CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

For the Fiscal Year Ended

Cash flows from operating activities:

Adjustments to reconcile net loss to cash provided by operating activities:

Net income (loss)

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

Depreciation and amortization of property and equipment and amortization of intangible assets

Changes in fair value of equity investment in Starrise

Deferred income tax

Impairment of prepaid advances

Impairment of intangibles

Changes in fair value of equity investment in Metaverse

Loss from sale of property and equipment

Amortization of debt issuance costs included in interest expense

(Recovery) Provision for doubtful accounts

Reserve (recovery) for inventory reserve

Stock-based compensation and expenses

Loss on extinguishment of note payable

Interest expense for deferred consideration

Change in fair value of earnout for earnout consideration

(Gain) loss on extinguishment of note payable

Accretion and PIK interest expense added to note payable

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

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Deferred revenue

Net cash (used in) provided by operating activities

Net cash provided (used in) by operating activities

Cash flows from investing activities:

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Purchase of intangible assets

Purchase of business, net of cash acquired

Proceeds from the sale of property and equipment

Sale of equity investment shares

Sale of equity investment securities

Net cash used in investing activities

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Payments of notes payable

(Repayments) proceeds under revolving credit agreement, net

Repayments under revolving credit agreement, net

Proceeds from PPP Loan

Net proceeds from issuance of Class A common stock

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net change in cash, cash equivalents and restricted cash

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Cash, cash equivalents and restricted cash at end of year

accompanying Notes to Consolidated Financial Statements

TO CONSOLIDATED FINANCIAL STATEMENTS

See accompanying Notes to Consolidated Financial

CINEDIGM CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 6,200 movie screens

in both North America and several international countries.

and Uncertainties

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

for the year.

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

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

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

As part of our Cinema Equipment business, the Company

earns revenue when movies are exhibited in theaters.

Many movie theaters in the United States closed during the spring of 2020 and remained

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

The majority of major studios shifted films out of the fiscal year to

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

Films released during the year had box office

results below pre-Covid expectations due to theater closure, limited capacity and new commercial models that permitted viewing day and

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

To the extent films are

not shown in theaters, we do not earn revenue.

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

Studios may reduce

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

This decision

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

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

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

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

We have incurred net losses historically and have

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

Net cash used in operating

activities for the fiscal year ended March 31, 2021 was $ 20 million.

Cinedigm Corp.

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

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 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 music and 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.

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 year

ended March 31, 2022, 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.

Many movie theaters in the United States slowly re-opened with limited capacities through March 31, 2022.

majority of major studios resumed blockbuster films releases during the year which showed an encouraging return of consumer confidence

for the theatrical experience.

As vaccines became readily available and COVID cases decreased, major studios resumed theatrical releases

and there was an uptick in box-office revenue during the period ending March 31, 2022.

We have incurred net losses historically and have net income of $ 2.3

million for the year ended March 31, 2022.

We also have an accumulated deficit of $ 472.3 million and negative working capital of

$ 4.8 million as of March 31, 2022.

Net cash provided by operating activities for the fiscal year ended March 31, 2022 was $ 4.9 million.

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

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

Based on these conditions, the

Company entered into the following transactions described below:

February 2, 2021, the Company entered into a securities purchase agreement with a single institutional investor for the purchase and

sale of 5,600,000 shares of the Company’s Class A common stock for net proceeds of $ 6.5 million.

July 2020, we entered into an At-the-Market sales agreement (the “ATM Sales Agreement”) with certain sales agents (the “Sales

Agents”), pursuant to which the Company may offer and sell, from time to time, through the Sales Agents, shares of Common Stock

at the market prices prevailing on The Nasdaq Global Market at the time of the sale of such shares.

The Company is not obligated to sell

any shares under the ATM Sales Agreement.

Any sales of shares made under the ATM Sales Agreement will be made pursuant to an effective

registration statement on Form S-3 filed by the Company with the Securities and Exchange Commission on July 6, 2020, for an aggregate

offering price of up to $ 30 million.

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

Net proceeds from such sales totaled $ 18.6 million.

July 16, 2020, the Company entered into a securities purchase agreement for the sale of 7,213,334 shares of Class A common stock at a

purchase price of $ 1.50 per share, in a registered direct offering, pursuant to an effective shelf registration statement on Form S-3

and an applicable prospectus supplement.

This registration statement covers offerings of up to an aggregate offering price of $ 75.0 million.

The Company closed the transaction on July 20, 2020.

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

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

May 20, 2020, the Company entered into a securities purchase agreement with certain investors for the purchase and sale of 10,666,666

shares of the Company’s Class A common stock, at a purchase price of $ 0.75 per share, in a registered direct offering, pursuant

to an effective shelf registration statement on Form S-3 and an applicable prospectus supplement.

Company closed the transaction on May 22, 2020.

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

of the placement agents but before paying the Company’s estimated offering expenses, were approximately $ 7.1 million.

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

described below:

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.

(“AMC”), the agreements included the

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

of $ 10.8 million.

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

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

Investment in Starrise, a related party transaction

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”)

and Aim Right Ventures Limited (“Aim Right”), two shareholders of Starrise Media Holdings Limited, a leading Chinese entertainment

company (“Starrise”), to buy from them an aggregate of 410,901,000 outstanding Starrise ordinary shares (the “Share

Acquisition”).

On February 14, 2020, the Company purchased 162,162,162 of the Starrise ordinary shares from BeiTai and issued BeiTai

21,646,604 shares of Class A common stock as consideration.

April 10, 2020, the Company, in accordance with the terms of the Starrise Stock Purchase Agreement, terminated its obligation to purchase

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

On April 10, 2020, the Company entered

into another stock purchase agreement (the “April Stock Purchase Agreement”) with five (5) shareholders of Starrise - Bison

Global Investment SPC - Bison Global No.

1 SP (“Bison Global”), Huatai Investment LP, Antai Investment LP, Mingtai Investment

LP (“Mingtai”) and Shangtai Asset Management LP - to buy an aggregate of 223,380,000 outstanding Starrise ordinary shares

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

therefore (the “April Share Acquisition”).

On April 15, 2020, the April Share Acquisition was consummated and recorded as

an equity investment in Starrise and is a related party transaction.

As of March 31, 2021, the Company owns 362,987,397 shares

in Starrise or approximately 26 %.

Starrise’s ordinary shares (HK 1616) are

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

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

calculated at an exchange rate of $7.7698 Hong Kong Dollars to 1 US dollar, the Cinedigm’s ownership in Starrise

ordinary shares was approximately $7.0 million.

On June 22, 2021, the maturity date of the East

West Credit Facility (as defined in Note 6 - Notes Payable) with East West Bank was extended from June 30, 2021 to September 28,

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

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.

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

Company used all proceeds from the PPP Loan to retain employees, maintain payroll and make lease and utility payments to support

business continuity throughout the COVID-19 pandemic, which amounts are intended to be eligible for forgiveness, subject to the

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

On January 5, 2021, the Company submitted its application for

forgiveness and, as of June 30, 2021, obtained forgiveness for the full amount as discussed on Note 12 – Subsequent

June 2, 2020, the Company exchanged 33,465 shares of Class A common stock in exchange for $ 61,000 of second lien loan

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

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

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

The surrendered Second Lien Loans were immediately canceled.

was consummated on June 24, 2020.

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

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

A consent fee of $ 100,000

was paid in connection with this extension.

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

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

The exchanged Second Lien Notes were immediately cancelled.

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

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

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

Pursuant to the December Exchange Agreements, the Company issued an

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

of principal amount of Second Lien Notes.

The exchanged Second Lien Notes were immediately cancelled.

January 2021, the Company entered into exchange agreements with holders of the Second Lien Loan to exchange $ 2,389,650 of Second Lien

Loans for 2,517,574 shares of Class A Common Stock.

The exchanged Second Lien Notes were immediately cancelled.

February 2021, the Company entered into exchange agreements with one holder of the Second Lien Loan to exchange $500,000 of Second Lien

Loans for 425,290 shares of Class A Common Stock.

The exchanged Second Lien Notes were immediately cancelled.

February 9, 2021, the Company prepaid all of the outstanding Second Lien Loans.

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

in Note 6 - Notes Payable ).

Among other things, the Letter Amendment amended the Note, effective as of March 4, 2020, to extend

the maturity date of the Bison Convertible note to March 4, 2021.

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

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

This note will continue in full

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

date of this note, if it so elects.

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

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

with the terms of the Notes.

Accordingly, the Notes have been extinguished.

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

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

See Note 6- Notes Payable .

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

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

(“Prospect”), entered into Amendment No.

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

(the “Term Loan Agreement”).

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

was extended to March 31, 2022.

believe the combination of:

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

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

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

the filing of this document.

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

additional 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.

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 million.

For the year ended March 31, 2022, the Company recognized aggregate revenue for

$9.9 million.

A portion of the total proceeds were used to pay down the remaining outstanding balance of the Prospect Loan notes

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.

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.

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 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.

Stock Purchase Agreement

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”).

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 in the Equity Line Purchase Agreement), 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

Riley 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

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.

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 March 31, 2022 and (ii) expected cash flow from operations, will be sufficient for our operations

and capital needs, for at least 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 4 - 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, intangible asset impairment and estimated amortization lives, fair value for asset acquisitions,

valuation allowances for income taxes and stock awards.

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 at fair value

where we have elected the fair value option.

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 digital revenue,

accounts receivable reserves, return reserves, inventory reserves, recovery of advances, assessment of goodwill impairment, intangible

asset 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.

RECLASSIFICATIONS

Certain amounts related to cash advances classified

as current assets in the prior year consolidated balance sheet have been reclassified to long-term assets to conform to the presentation

of the current period as follows:

(as reported)

Reclassification

(as reclassified)

Prepaid and other current assets

Total current asset

Other long-term assets

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

requires that we maintain specified cash balances that are restricted to repayment of interest thereunder.

See Note 6- Notes Payable

for information about our restricted cash balances.

cash equivalents, and restricted cash consisted of the following:

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)

1 unchanged sentence

Restricted Cash

INVESTMENT IN STARRISE, A RELATED PARTY

February 14, 2020, the Company acquired an approximately 11.5 % interest in Starrise Media Holdings Limited (“Starrise”),

a leading publicly traded Chinese entertainment company whose ordinary shares are listed on the Stock Exchange of Hong Kong.

acquired such interest as a strategic investment and in a private transaction from a shareholder of Starrise that is related to our major

shareholders.

Our major shareholders also maintain a significant beneficial interest ownership 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 Class A common stock of the Company.

The difference in value of shares

received in Starrise and shares issued by the Company is 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 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

Company’s common stock of $ 11.0 million, valued at the date of the issuance of the Class A common stock of the Company.

difference in the value of shares received in Starrise and shares issued by the Company is deemed as contributed capital and recorded

in additional paid-in capital.

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

Company has accounted for these investments under the equity method of accounting as the Company can exert significant influence

over Starrise with its direct ownership and affiliation with the Company’s majority shareholders.

The Company has made an

irrevocable election to apply the fair value 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.

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.

the year ended March 31, 2021, the Company sold 8,370,000 of Starrise shares for net proceeds of approximately $ 0.8 million which

resulted in a loss on sale of approximately $ 73 thousand.

of March, 31, 2021 and 2020, 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 $ 6.4 million and $ 23.4 million, respectively,

resulting in a change in fair value of approximately $ 43.5 million for the year ended March 31, 2021, on our consolidated

statement of operations.

At March 31, 2021, the Company owned 362,987,397 shares or 26 % of Starrise.

the year ended March 31, 2021, respectively, the Company entered into agreements with certain vendors to transfer 14,184,765 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.

Pursuant to such agreements, the Company reduced the amount payable to its vendors by $ 0.8 million as of March

was no gain or loss resulting from these transactions for the year ended March 31, 2021.

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.

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

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 $ 0.3 million and $ 0.9 million, respectively, for the years ended March 31, 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:

EQUITY INVESTMENT IN A METAVERSE COMPANY, A RELATED PARTY

On February 14, 2020, the Company acquired an

approximately 11.5 % interest in A Metaverse Company (“Metaverse”), a leading publicly traded Chinese entertainment company,

formerly Starrise Media Holdings Limited, 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 Metaverse

that is related to our major shareholders.

Our major shareholders also maintain a significant beneficial interest ownership in Metaverse.

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 Metaverse 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 of the Company.

The difference

in value of shares received in Metaverse and shares issued by the Company is deemed as contributed capital and recorded in additional

paid-in capital.

On April 10, 2020, the Company purchased an additional

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

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

Metaverse shares on the transaction date on the Stock Exchange of Hong Kong, in exchange for the Company’s common stock of $ 11.0 million,

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

The difference in the value of shares received in Metaverse and

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

This transaction was also recorded

as an equity investment in Metaverse.

The Company has accounted for these investments

under the equity method of accounting as the Company can exert significant influence over Metaverse with its direct ownership and affiliation

with the Company’s majority shareholders.

The Company has made an irrevocable election to apply the fair value option under ASC

825-10, Financial Instruments , as it relates to its equity investment in Metaverse.

During the years ended March 31, 2022 and March 31, 2021, the Company

sold 680,000 shares of Metaverse shares for net proceeds of approximately $ 12.3 thousand and 8,370,000 of Metaverse shares for net proceeds

of approximately $ 0.8 million, respectively, which resulted in a loss on sale of approximately $ 1 thousand and $ 73 thousand,

respectively.

As of March, 31, 2022 and 2021, the value of our equity investment

in Metaverse, using the readily determinable fair value method from the quoted trading price of the Stock Exchange of Hong Kong, was approximately

$ 7.03 million and $ 6.44 million, respectively, resulting in a change in fair value of approximately $ 0.59 million for the year ended March

At March 31, 2022, the Company owned 362,307,397 shares or 17 % of Metaverse.

Equity Investment in Metaverse, a related party transaction

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 “Metaverse 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 A Metaverse Company,

a leading Chinese entertainment company (“Metaverse”), formerly Starrise Media Holdings Limited, to buy from them an aggregate

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

On February 14, 2020, the Company

purchased 162,162,162 of the Metaverse 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 Metaverse shares received

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

10, 2020, the Company, in accordance with the terms of the Stock Purchase Agreement, terminated its obligation to purchase Metaverse ordinary

shares from Aim Right under the Metaverse Stock Purchase Agreement.

On April 10, 2020, the Company

entered into another stock purchase agreement (the “April Metaverse Stock Purchase Agreement”) with five (5) shareholders

of Metaverse - 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 Metaverse

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 Metaverse Share Acquisition”).

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

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

Metaverse’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 .152 per share on March

31, 2022, calculated at an exchange rate of 7.83 Hong Kong Dollars to 1 US dollar, the market value of Cinedigm’s ownership in Metaverse

ordinary shares was approximately $7.03 million.

On April 1, 2022, trading of Metaverse’s ordinary shares was halted.

NON-MONETARY TRANSACTIONS

year ended March 31, 2020, the Company entered into agreements with certain vendors to transfer 5,139,762 and 14,184,765 Metaverse

ordinary shares to satisfy outstanding liabilities with these vendors.

Upon the sale of the Metaverse 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 owed.

Pursuant to such agreements, the Company reduced the amount payable to its vendors by $ 0.8 million

as of March 31, 2021.

There were no such transactions during the year ended March 31, 2022.

There was no gain or loss resulting

from these transactions for the year ended March 31, 2022 and 2021.

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 Systems deployments that have extended payment terms.

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

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 $ 1.2 million and $ 0.3 million, for

the years ended March 31, 2022 and 2021, respectively.

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

Computer equipment and software

3 unchanged sentences

Furniture and fixtures

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.

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:

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)

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 March 31, 2021 and 2020 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 March 31, 2021and,

As of March 31, 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.

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

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 years ended March 31,

2022 and 2021, the Company assessed the future performance of titles included in the customer list intangible asset, which resulted in

an impairment charge of $ 2.0 million and $ 0 was recorded from operations for long-lived assets or finite-lived assets.

INTANGIBLE ASSETS

Intangible assets are stated at cost less accumulated amortization.

For intangible assets that have finite lives, the assets are amortized using the straight-line method over the estimated useful lives

of the related assets.

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

event occurs.

During the years ended March 31, 2022 and 2021, we recorded an impairment of $ 2.0 million and $ 0 for our customer relationships,

respectively.

Amortization expense is recorded using the straight-line method over

the estimated useful lives of the respective assets as follows:

Content Library

Customer Relationships

Theatre Relationship

Supplier Agreements

Intangible Assets

The Company’s intangible assets include the following on March

Content Library

Customer Relationships

Theatre Relationship

Supplier Agreements

Intangible Assets

Total Intangible Assets

The Company’s intangible assets include

the following on March 31, 2021:

Content Library

Customer Relationships

Theatre Relationship

Total Intangible Assets

Below is the amortization expense

per year for the intangible assets:

FAIR VALUE MEASUREMENTS

The 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)

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 Metaverse is in Hong Kong dollars and was

translated into US dollars as of March 31, 2022 and 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 quoted market price of Metaverse on the Stock Exchange of Hong Kong.

The adjustment

to fair value of this investment resulted in a gain of $ 585 and loss of $ 4,518 for the years ended March 31, 2022 and 2021, respectively.

The following tables summarize the levels of fair

value measurements of our financial assets and liabilities as of March 31, 2022 and, 2021:

March 31, 2022

(in thousands)

Restricted cash

Equity investment in Starrise, at fair value

Equity investment in Metaverse, at fair value

Current portion of earnout consideration on purchase of a business

Long term portion of earnout consideration on purchase of a business

As of March 31, 2021

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Restricted cash

Equity 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.

At March 31, 2021 and 2020, the estimated fair value of our fixed rate

debt approximated its carrying amounts.

We estimated the fair value of debt based upon current interest rates available to us at the

respective balance sheet dates for arrangements with similar terms and conditions.

Based on borrowing rates currently available to us

for loans with similar terms, the fair value of the variable rate debt is $ 7.8 million and lease obligations approximates fair value.

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 years ended March 31, 2021 and 2020, no impairment charge was recorded from

operations for long-lived assets or finite-lived assets.

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

Equity investment in Metaverse, 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 sheets.

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

ASSET ACQUISITIONS

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

to the assets acquired on the basis of relative fair values.

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.

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

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

If, however, the fair value of the reporting

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

goodwill impairment charge was recorded in the years ended March 31, 2021 and 2020.

In 2021, we conducted a qualitative assessment of

goodwill considering the favorable developments in the equity and credit markets and the improvement on financial performance of the

in 2020, we elected to conduct a quantitative goodwill assessment as of March 31, 2020.

In determining fair value, we used

various assumptions, including expectations of future cash flows based on projections or forecasts derived from analysis of business

prospects, economic or market trends and any regulatory changes that may occur.

We estimated the fair value of the reporting unit using

a net present value methodology, which is dependent on significant assumptions related to estimated future discounted cash flows, discount

rates and tax rates.

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

An asset acquisition is an acquisition of an asset, or a group of assets,

that does not meet the definition of a business.

Asset acquisitions are accounted for by using the cost accumulation model whereby the

cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values.

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.

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.

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.

reassessed goodwill impairment on its annual measurement date of March 31, 2022 by performing a qualitative analysis and determined that

it was not more likely than not that the fair value of its reporting unit is less than its carrying amount.

No goodwill impairment charge

was recorded in the years ended March 31, 2022 and 2021.

Gross amounts

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

(In thousands)

Accumulated impairment charges

Goodwill at March 31, 2021 and 2020

determine revenue recognition by:

identifying the contract,

or contracts, with the customer;

identifying the performance

obligations in the contract;

determining the transaction

allocating the transaction

price to performance obligations in the contract;

recognizing revenue when,

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

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

physical products (DVDs and Blu-ray 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.

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

We do not adjust the promised amount of consideration

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

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

We have in the past entered

into arrangements in connection with activation fees due from our System deployments that had extended payment terms.

The outstanding

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

Equipment Business

Our Cinema Equipment Business consists of financing

vehicles and administrators for 3,122 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to

theatrical exhibitors and for 3,104 Systems installed domestically and internationally in our second deployment phase (“Phase II

Deployment”).

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

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

For certain Phase II Deployment Systems, we do

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

and at the expiration of the exhibitor master license agreements.

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

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

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

VPFs are earned, net of administrative fees,

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

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

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

One VPF is payable for every

digital title initially displayed per System.

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

using the Systems in any given accounting period.

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

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

performance obligations have been substantially met at that time.

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.

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:

Goodwill at March 31, 2021

Goodwill from business combinations – see Note 4

Goodwill at March 31, 2022

PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following:

(In thousands)

Accounts payable

Amounts due to producers, net

Accrued compensation and benefits

Accrued taxes (refund) payable

Interest payable

Accrued other expenses

Total accounts payable and accrued expenses

AND OTHER CURRENT ASSETS

and other current assets consisted of the following:

(In thousands)

Non-trade accounts receivable

Due from producers

Prepaid insurance

Other prepaid expenses

Total prepaid and other current assets

Impairments and accelerated amortization related

to advances were $ 1.2 million and $ 0.3 million, for the years ended March 31, 2022 and 2021, respectively.

REVENUE RECOGNITION

Payment terms and conditions vary by customer and typically provide

net 30 to 90 day terms.

We do not adjust the promised amount of consideration for the effects of a significant financing component when

we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for

that product or service will be one year or less.

We have in the past entered into arrangements in connection with activation fees due

from our System deployments that had extended payment terms.

The outstanding balances on these arrangements are insignificant and hence

the impact of significant financing would be insignificant.

Cinema Equipment Business

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

phase (“Phase I Deployment”) to theatrical exhibitors and for Systems installed domestically and internationally in our second

deployment phase (“Phase II Deployment”).

ownership of our Systems and the residual cash flows related to the Systems in Phase I Deployment after the end of the 10 -year deployment

payment period.

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.

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”).

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.

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, 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, 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.

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

Cinedigm completed

the sale of 2,177 and 152 digital projection Systems, respectively, for an aggregate sales price of approximately $ 6.7 million and $ 1.6 million,

and recognized revenue of $ 600 thousand and $ 1.4 million, during the years ended March 31, 2021 and 2020, respectively.

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 4 - Other Interests ) upon installation

and such fees are generally collected upfront upon installation.

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

for which it earns an administrative fee equal to 10 % of the VPFs collected (the “Services”).

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

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

executed was $ 6.1 million and $ 6.7 million, during the year ended March

31, 2022 and 2021, 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 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.

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.

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Content & Entertainment Business

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

on demand (“VOD”) (“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/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.

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 Business”).

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

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 content is available

for subscription on the digital platform (the company’s digital content is considered functional IP), at the time of shipment for

physical goods, or point-of-sale for transactional and VOD services as the control over the content or the physical title is transferred

to the customer.

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

Physical Revenue

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

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

Physical revenue from the sale of physical goods is recognized after deducting the reserves for sales returns and other allowances, which

are accounted for as variable consideration.

Reserves for potential sales

returns of physical goods 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.

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

If actual future returns and allowances differ

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

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

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.

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.

The Company follows the five-step model established by ASC 606 when

preparing its assessment of revenue recognition

Principal Agent Considerations

Revenue earned by our CEG business from the delivery of digital content

and physical goods may be recognized gross or net depending on the terms of the arrangement.

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.

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.

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

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

maintain reserves for potential credit losses on accounts receivable.

We review the composition of accounts receivable and analyze historical

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

on a gross or net basis based on each revenue stream.

Key indicators that we use in evaluating gross versus net treatment include, but

are not limited to, the following:

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

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

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.

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.

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

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.

The outstanding balances on these arrangements

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

Contract Liabilities

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.

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

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

For the year ended

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

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

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

the years ended March 31, 2021 and 2020, $ 1.6 million and $ 4.2 million, respectively of revenue was recognized that was included in the

deferred revenue balance at the beginning of the period.

As of March 31, 2021, the aggregate amount of contract revenue allocated to

unsatisfied performance obligations was $ 0.9 million.

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

The ending deferred revenue balance, including current and non-current

balances, as of March 31, 2022 was $ 0.2 million.

For the year ended March 31, 2022, 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.

For year ended March 31, 2022 and March 31, 2021, there was $ 11,792,210 and $ 14,433,054 , respectively,

included in accounts payable that represents a refund liability, a portion or all of which may be recognized as revenue upon completion

of audit periods.

During the year ended March 31, 2022, $ 813 thousand of revenue was

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

During the year ended March 31, 2022, $ 3.9

million of revenue was recognized that was included in the accounts payable balance as constrained variable consideration at the beginning

The Company recognized the revenue related once the uncertainty associated with the variable consideration was resolved.

Participations

and royalties payable

we use third parties to distribute company owned content, we record participations payable, which represent amounts owed to the distributor

use third parties to distribute company owned content, we record participations payable, which represent amounts owed to the distributor

under revenue-sharing arrangements.

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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:

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

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 Digital.

For the year ended March

31, 2021, the Company further refined its reporting within the revenue categories of the Content & Entertainment Business resulting

in the update of Disaggregated Revenues for the Base Distribution Business and OTT Streaming and Digital previously reported amounts

of $ 19,222 and $ 7,328 , respectively for the year ended March 31, 2020 to the amounts disclosed in the table below.

following tables present the Company’s revenue categories for the year ended March 31, 2021 and 2020 (in thousands):

The following

tables present the Company’s revenue categories for the years ended March 31, 2022 and 2021 (in thousands):

Cinema Equipment Business:

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Content & Entertainment Business:

Base Distribution Business

Physical Goods

OTT Streaming and Digital

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.

The Company issues

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

Concentrations

For the fiscal year ended March 31, 2022, two customers, Amazon

and Distribution Solutions each represented 18 % and 25 % respectively of CEG’s revenues and approximately 6 % and 8 %, respectively,

of our consolidated revenues.

For the fiscal year ended March 31, 2021, Amazon and Distribution Solutions

represented 15 % and 22 % respectively of CEG’s revenues and approximately 9 % and 13 %, respectively, of our consolidated Revenues.

DIRECT OPERATING COSTS

Direct operating costs consist of operating

costs such as cost of revenue, 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 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 value of

options on the date of grant is calculated using the Black-Scholes option pricing model based on key assumptions such as stock price,

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.

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the Company’s stock, historical data, peer company data and judgment regarding future trends and factors.

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

(In thousands)

Selling, general and administrative

the year ended March 31, 2021, the Company granted 7,692,323 stock appreciation rights (“SARs”).

The SARs were granted

under the Company’s 2017 Equity Incentive Plan (the “2017 Plan).

All SARs issued have an exercise price equal to the fair

value of the Company’s 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:

November 19, 2020 – February 17, 2021

November 19, 2030 – February 17, 2031

value of class A common stock on grant date:

$ 0.54 - $ 1.97

91.05 % - 93.12 %

0.88 % - 1.59 %

was $ 1.6 million and $ 441 thousand of stock-based compensation recorded for the year ended March 31, 2021 and 2020, respectively,

relating to these SARs.

SARs outstanding are as follows:

SARs Outstanding March 31, 2020

Total SARs Outstanding March 31, 2021

are 696,050 units of performance stock units (“PSU”) which were granted on July 26, 2018 fully vested that were settled during

the year ended March 31, 2021.

There was no stock-based compensation recorded related to these units for the year ended March 31, 2021

and there was a cumulative adjustment of $ 166 thousand of stock-based compensation recorded for the year ended March 31, 2020.

the year ended March 31, 2021, the vested PSU’s were settled for 693,647 shares of Class A common stock.

In addition, the Company

issued 689,364 shares of Class A common stock as a bonus to employees.

The Company recorded $ 786 thousand as stock compensation

expense related to the bonus awards based on the $ 1.14 Class A common share value on the date of grant during the year ended March 31,

addition, during the year ended March 31, 2021, the Company granted and issued 320,000 shares of Class A common stock to the Company’s

Chief Executive Officer as a compensatory bonus.

The shares were valued on the date of grant utilizing the fair value of the Company’s

class A common stock.

The Company recognized stock compensation of $ 166 thousand for the issuance.

was $ 5 thousand and $ 4 thousand of stock-based compensation recorded for the years ended March 31, 2021 and 2020, respectively,

related to employees’ restricted stock awards.

was $ 239 thousand and $ 263 of stock-based compensation for the years ended March 31, 2021 and 2020 related to board of directors.

September 1, 2020, we issued 80,000 shares of Class A common stock to Ronald L.

Chez as a bonus payable to him under the Strategic Investor

Agreement between the Company and him dated as of April 3, 2017.

During the year ended March 31, 2021, we recognized an expense of $ 71 thousand

based on the stock price of the Class A common stock on the date of grant.

Company 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.

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

tax asset will ultimately be realized.

The Company 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.

Valuation allowances are established

when management is unable to conclude that it is more likely than not that some portion, or all, of the deferred tax asset will ultimately

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

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

This amendment provides that the

tax effects from an uncertain tax position can be recognized in the financial statements only if the position is “more-likely-than-not”

to be sustained were it to be challenged by a taxing authority.

The assessment of the tax position is based solely on the technical merits

of the position, without regard to the likelihood that the tax position may be challenged.

The Company 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.

This amendment provides that the tax effects from an uncertain

tax position can be recognized in the financial statements only if the position is “more-likely-than-not” to be sustained

were it to be challenged by a taxing authority.

The assessment of the tax position is based solely on the technical merits of the position,

without regard to the likelihood that the tax position may be challenged.

If an uncertain tax position meets the “more-likely-than-not”

threshold, the largest amount of tax benefit that is more than 50 % likely to be recognized upon ultimate settlement with the taxing authority

threshold, the largest amount of tax benefit that is more than 50 % likely to be recognized upon ultimate settlement with the taxing

authority is recorded.

The Company has no uncertain tax positions.

LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS

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

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

Basic net income (loss) per common share attributable to common stockholders

Net loss attributable to common stockholders

Weighted 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.

incurred net losses for the years ended March 31, 2021 and 2020, and therefore the impact of potentially dilutive common shares from

outstanding stock options and warrants, totaling 11,127,539 shares and 4,117,323 shares as of March 31, 2021 and 2020, respectively,

were excluded from the computations of loss per share as their impact would have been anti-dilutive.

COMPREHENSIVE

of the year ended March 31, 2021 and 2020, comprehensive loss consisted of net loss and foreign currency translation adjustments.

ISSUED ACCOUNTING PRONOUNCEMENTS

August 2018, the FASB issued ASU No.

2018-13, “ Fair Value Measurement (Topic 820):

Disclosure Framework—Changes to the

Disclosure Requirements for Fair Value Measurement ”.

The amendments in ASU 2018-13 modify the disclosure requirements associated

with fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits.

amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop

Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the

most recent interim or annual period presented in the initial fiscal year of adoption.

All other amendments should be applied retrospectively

to all periods presented upon their effective date.

The amendments are effective for all entities for fiscal years beginning after December

15, 2019, and interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim period.

of this ASU on April 1, 2020 did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU No.

“ Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .” ASU 2020-04

provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference LIBOR

or another reference rate if certain criteria are met.

The amendments of ASU No.

2020-04 are effective immediately, as of March 12, 2020,

and may be applied prospectively to contract modifications made and hedging relationships entered into on or before December 31, 2022.

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):

Diluted net income (loss) per common share attributable to common stockholders

Net loss attributable to common stockholders

Weighted average number of common stock outstanding during the period plus potential dilutive shares

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.

had net income for the year ended March 31, 2022, and therefore the impact of potentially dilutive common shares from outstanding stock

options, stock appreciation rights, and warrants, totaling 3,184,247 shares for the year ended March 31, 2022, respectively, was included

in the computations of diluted earnings per share.

The calculation of diluted net income per share for the year ended March 31, 2022

does not include the impact of 6,156,432 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

We incurred a net loss for the

year ended March 31, 2021, and therefore the impact of potentially dilutive common shares from outstanding stock options and warrants,

totaling 11,127,539 shares as of March 31, 2021, were excluded from the computations of loss per share as their impact would

have been anti-dilutive.

COMPREHENSIVE LOSS

For the year ended March 31, 2022 and 2021, comprehensive loss consisted

of net loss and foreign currency translation adjustments.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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.

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

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.

We are currently assessing the impact this pronouncement may have on our consolidated financial statements.

CONSOLIDATED BALANCE SHEET COMPONENTS

receivable, net consisted of the following:

(In thousands)

Trade receivables

Allowance for doubtful accounts

Total accounts receivable

AND OTHER CURRENT ASSETS

and other current assets consisted of the following:

(In thousands)

Non-trade accounts receivable

Due from producers

Prepaid insurance

Other prepaid expenses

Total prepaid and other current assets

AND EQUIPMENT

and equipment, net consisted of the following:

(In thousands)

Leasehold Improvements

Computer equipment and software

Internal Use Software

Construction in Process

Digital Cinema Projection Systems

Machinery and Equipment

Furniture and Fixtures

Less - Accumulated Depreciation and Amortization

Total property and equipment, net

depreciation and amortization of property and equipment was $ 4.4 million and $ 6.6 million for the years ended March 31, 2021 and 2020,

respectively.

assets, net consisted of the following:

As of March 31, 2021

(In thousands)

Gross Carrying Amount

Accumulated Amortization

Useful life (years)

Customer relationships and contracts

Theatre relationships

Content library

As of March 31, 2020

(In thousands)

Gross Carrying Amount

Accumulated Amortization

Useful life (years)

Customer relationships and contracts

Theatre relationships

Content library

expense related to intangible assets was $ 2.5 million and $ 2.8 million for the years ended March 31, 2021 and 2020, respectively.

on identified intangible assets that are subject to amortization as of March 31, 2021, we expect future amortization expense for each

period to be as follows:

(In thousands) Fiscal years ending March 31,

PAYABLE AND ACCRUED EXPENSES

payable and accrued expenses consisted of the following:

(In thousands)

Accounts payable

Amounts due to producers, net

Accrued compensation and benefits

Accrued taxes (refund) payable

Interest payable

Accrued other expenses

Total accounts payable and accrued expenses

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

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.

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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”),

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

2 unchanged sentences

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 March 31, 2021 and 2020, 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 $ 0.3 million and

$ 0.4 million as of March 31, 2021 and 2020, respectively, which are included in accounts receivable, net on the accompanying

consolidated balance sheets.

accompanying Consolidated Statements of Operations include $ 128 thousand of digital cinema servicing revenue from CDF2 Holdings

for the year ended March 31, 2021.

The accompanying Consolidated Statements of Operations include $ 1.1 million of digital cinema

servicing revenue from CDF2 Holdings for the year ended March 31, 2020.

Stockholders’ Deficit of CDF2 Holdings at March 31, 2021 and 2020 was $ 46.3 million and $ 31.8 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 March 31, 2021 and 2020 is carried at $ 0 .

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 March 31, 2022 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 $ 0.8 million and $ 0.3 million

as of March 31, 2022 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 $ 0.8 million and $ 128 thousand of digital cinema servicing revenue from CDF2 Holdings for the

year ended March 31, 2022 and 2021, respectively.

Total Stockholders’

Deficit of CDF2 Holdings at March 31, 2022 and March 31, 2021 was $ 55.6 million and $ 46.3 million, respectively.

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 March 31, 2022 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.

ASSET ACQUISTION

December 21, 2020, the Company acquired substantially all of the assets of The Film Detective, LLC (“TFD”), a leading content

distributor and streaming channel company focused on classic film and television programming.

The purchase price for the TFD acquisition

was $ 750,000 in cash and 2,504,592 shares of the Company’s Class A common stock at $ 0.74 per share or $ 1,853,000 , as of the acquisition

In addition, TFD may be entitled to receive earnout amounts of up to an aggregate of $ 1,600,000 for the four years beginning

on April 1, 2021, payable in cash or with respect to a portion thereof, at the Company’s discretion and subject to certain conditions,

in shares of Common Stock.

This acquisition is accounted for as an asset acquisition as substantially all of the value acquired resides

in a single group of assets.

Accordingly, the acquisition cost related to the transaction is capitalized and the potential earnout will

only be recognized when the contingency is probable and estimable in the future.

As of March 31, 2021 the Company determined that the

potential earnout was not probable.

Acquired intangible assets include TFD’s content library, distribution contracts, trade name

and other and the final fair value allocation was as follows:

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.

in Roundtable

On March 15, 2022, the Company

entered into a stock purchase agreement with Roundtable Entertainment Holdings, Inc.

(“Roundtable”) pursuant to which the

Company purchased 500 shares of Roundtable Series A Preferred Stock and warrants to purchase 100 shares of Roundtable Common Stock (together,

the “Roundtable Securities”).

The Company paid the purchase price for the Roundtable Securities by issuing to Roundtable 316,937

shares of Common Stock is based on the closing price of the company on the date of the purchase.

The Company recorded $ 0.2 million for

the purchase of the Roundtable Securities which is included in other long-term assets on the consolidated balance sheet.

The investment

in the Roundtable Securities was made in connection with a proposed collaboration with Roundtable regarding production and distribution

of streaming content including the launch of high profile branded enthusiast streaming channels.

The Roundatble investment was accounted for using the cost method.

FoundationTV,

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 year ended March 31, 2022.

31, 2022, 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.

FoundationTV is included as a part

of the Content & Entertainment segment.

Purchase Price

Total purchase price

Allocation of purchase price

Developed technology

Deferred tax liability

Total allocation of purchase

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

During the year ended March 31, 2022, the

Company recorded $ 240 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:

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 $1.7 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

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.

Disgusting, LLC is included as a part of the Content & Entertainment segment.

Purchase Price

Total purchase price

Allocation of purchase price

Current assets

Advertiser relationships

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 year months ended March 31, 2022, the Company recorded $ 211 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:

relationships

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 “Transaction”).

On March 25, 2022, the Company executed the

Amended and Restated Equity Purchase Agreement (the “A&R DMR Agreement”) among the Company, the Sellers and David Chu

as representative of the Sellers that amended and restated the DMR Agreement.

Pursuant to the A&R DMR Agreement, the purchase price

for the Transaction is $ 14,794,000 , subject to working capital and other adjustments, consisting of (1) $ 8,000,000 in cash

paid at the closing of the Transaction and (ii) $ 8,400,000 paid, at the Company’s option, in either cash or Common Stock at its

then market value, as follows:

(a) $3,000,000 on the first anniversary of the closing of the Transaction, (b) $3,000,000 on the second

anniversary of the closing of the Transaction, and (c) $2,400,000 on the third anniversary of the closing of the Transaction.

is included as a part of the Content & Entertainment segment.

Purchase Price

Total purchase price

Allocation of purchase price

Cash and cash equivalents

Accounts receivable

Prepaid expense

Other receivables

Right of use asset - operating

Furniture & fixtures

Computers and related equipment

Channel & platform

Content rights

Investment in Kor TV

Short term liabilities

Long term liabilities

Total allocation of purchase price

The content library acquired

in this transaction has a useful life of 13 years and channel acquired has a useful life of 13 years.

During the year

ended March 31, 2022, the Company recorded $ 0 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:

Content Library

Distribution Contracts

January 2021, the Company acquired Fandor’s tradename, which specializes in independent film streaming service for a total of $ 745

thousand in cash.

In February 2021, the Company acquired Screambox’s trademark, a horror streaming service, for $1.8 million consisting

of cash of $650 thousand, $850 thousand by issuance of 593,534 Class A common shares at a price of $1.4321 plus an amount held in escrow

for $200 thousand for future issuance of Class A common shares.

In March 2021, the Company acquired Films Around the World’s classic

film content library for a total of $ 257 thousand in cash.

Cinedigm estimates the useful life of these acquired assets is 3 years.

are asset acquisitions where substantially all the value is ascribed to a single asset.

The amounts of revenue and net loss for the acquired companies included

in the Company's consolidated statement of operations for the period ending in March 31, 2022 are as follows:

(In thousands)

Proforma Information (Unaudited)

The unaudited proforma information in the table below summarizes

the combined results of operations for the Company and its acquisitions of Foundation TV, Inc., Bloody Disgusting, LLC and DMR as if

these acquisitions had been included in the consolidated results of the Company since April 1, 2020 for the each of the two entire

years ended March 31, 2022 and 2021:

(In thousands)

Net Income (Loss)

NOTES PAYABLE

payable consisted of the following:

Notes payable consisted of the following:

March 31, 2022

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(In thousands)

Current Portion

Long Term Portion

Current Portion

Long Term Portion

Prospect Loan

Total non-recourse notes payable

Unamortized debt issuance costs and debt discounts

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

Bison Note Payable

Second Lien Loans

Credit Facility

Mingtai Convertible Note

Total recourse notes payable

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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.

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.

February 2013, our DC Holdings, AccessDM and Phase 2 DC subsidiaries entered into a term loan agreement (the “Prospect Loan”)

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

The Prospect Loan bears

interest at LIBOR plus 9.0 % (with a 2.0 % LIBOR floor), which is payable in cash, and at an additional 2.50 % to be accrued as an increase

to the aggregate principal amount of the Prospect Loan until the Prospect Loan is paid off, at which time all accrued interest will be

payable in cash.

of DC Holdings accounts receivable are 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 is excess cash flow, it is used for prepayment of the

Prospect Loan.

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

In February 2013, our subsidiaries

Cinedigm DC Holdings, LLC (“CDCH”), Access Digital Media, Inc (“AccessDM”) and Access Digital Cinema Phase 2,

(“Phase 2 DC”) 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.

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 March 31, 2022,

2021, and 2020 , the debt service fund had a balance of $ 1.0 million, which is classified as part of restricted cash on our Consolidated

Balance Sheets.

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

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

(“Prospect”), entered into Amendment No.

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

(the “Term Loan Agreement”).

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

was extended to March 31, 2022.

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 matures on March 31, 2022 and may be accelerated upon a change in control (as defined in the agreement) or other events

of default as set forth therein and would be subject to mandatory acceleration upon insolvency of DC Holdings.

We are permitted to pay

the full outstanding balance of the Prospect Loan at any time after the second anniversary of the initial borrowing, subject to the following

prepayment penalties:

● 5.0 % of the principal amount prepaid between the second and third anniversaries of issuance;

● 4.0 % of the principal amount prepaid between the third and fourth anniversaries of issuance;

● 3.0 % of the principal amount prepaid between the fourth and fifth anniversaries of issuance;

● 2.0 % of the principal amount prepaid between the fifth and sixth anniversary of issuance;

● 1.0 % of the principal amount prepaid between the sixth and seventh anniversaries of issuance;

No penalty if the balance

of the Prospect Loan, including accrued interest, is prepaid thereafter.

Prospect Loan is 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 is also guaranteed by AccessDM

and Phase 2 DC.

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

performance does not meet certain defined benchmarks.

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

following table summarizes the activity related to the Prospect Loan:

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.

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.

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

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.

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)

March 31, 2022

Prospect Loan, at issuance

5 unchanged sentences

Total long term portion

December 2017, the Company entered into a loan with Bison for $ 10.0 million (the “Bison Loan”) and issued Warrants to

purchase 1,400,000 shares of the Company’s Class A common stock.

See Note 7 - Stockholders’ Equity (Deficit) for

further discussion of the warrants.

loan was made in accordance with the Stock Purchase Agreement between the Company and Bison Entertainment Investment Limited, another

affiliate of Bison, entered into on June 29, 2017.

July 20, 2018, the Company entered into a term loan agreement (the “2018 Loan Agreement”) with Bison Global, pursuant to

which the Company borrowed from Bison Global $ 10.0 million (the “2018 Loan”), the proceeds of which were used to pay

off the Bison Loan.

The 2018 Loan has a one ( 1 ) year term that may be extended by mutual agreement of Bison Global

and the Company and bears interest at 5 % per annum, payable quarterly in cash.

On July 12, 2019, we entered into a Termination Agreement

for the 2018 Loan and at the same time entered into a $ 10.0 million convertible note with Bison Global (the “Bison Convertible

Convertible Note

Bison Convertible Note has a term ending on March 4, 2021, and bears interest at 5 % per annum.

The principal is due on March 4,

Convertible Note had a term ending on March 4, 2021, and bears interest at 5 % per annum.

The principal was due on March 4, 2021,

in cash or in shares of Common Stock, or a combination of cash and Common Stock, at the Company’s option.

The Bison Convertible

Note is convertible at the Company’s option, at any time prior to payment in full of the principal balance and all accrued interest

Note was convertible at the Company’s option, at any time prior to payment in full of the principal balance and all accrued interest

of the note, to convert this note in whole or in part, into fully paid and nonassessable shares of the Company’s Class A common

The Bison Convertible Note is Convertible into 6,666,666 shares of Company’s Class A common stock, based on initial

conversion price of $ 1.50 per share.

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

and warranties.

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

On April 15, 2020, the Company executed

a letter amendment to the Bison Convertible Note dated July 12, 2019, amending the Bison Convertible Note, effective as of March 4, 2020,

to change the maturity date of the note to March 4, 2021.

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

outstanding debt balance.

September 11, 2020, Bison Global converted the Bison Convertible Note in full into an aggregate of 6,666,667 shares of Common

Stock at a conversion price of $ 1.50 per share.

On September 11, 2020, Bison

Global converted the Bison Convertible Note in full into an aggregate of 6,666,667 shares of Common Stock at a conversion price

of $ 1.50 per share.

Accordingly, the Bison Convertible Note has been extinguished.

In accordance with

ASC 470, the Company recognized a loss on extinguishment of $ 285 thousand related to unamortized debt issuance costs for the nine

months ended December 31, 2020.

Secured Lien Loans

July 14, 2016, we entered into a Second Lien Loan Agreement (the “Second Lien Loan Agreement”), under which we may borrow

up to $ 15.0 million (the “Second Lien Loans”), subject to certain limitations imposed on us regarding the number of shares

that we may issue in connection with the loans.

The Second Lien Loan Agreement included balances borrowed from Ronald L.

Chez, at that

time a member of the Board of Directors.

Chez resigned from the Board of Directors in April 2017, and became a strategic advisor

to the Company through September 2020.

The Second Lien Loans bear interest at 12.75 %, payable 7.5 % in cash and 5.25 % in cash or in kind

at our option.

Before the June 30, 2019 maturity date, on June 28, 2019, the Company entered into a consent agreement with lenders of

the Second Lien Loans to an extension of the Second Lien Loans pursuant to which (i) the Company paid down a portion of the outstanding

principal amount plus accrued interest to date, and (ii) the maturity date of the remaining outstanding principal amount of the Second

Lien Loans was extended to September 30, 2019.

addition, under the terms of the Second Lien Loan Agreement, we are required to issue 98,000 shares of our Class A common stock for every

$ 1.0 million borrowed, subject to pro rata adjustments.

As of March 31, 2021, we have issued 906,450 shares of Class A common stock

cumulatively under the Second Lien Loan Agreement.

The Second Lien Loans may be prepaid without premium or penalty and contain customary

covenants, representations and warranties.

The obligations under the Second Lien Loans are guaranteed by certain of our existing and

future subsidiaries.

We have pledged substantially all of our assets, except those assets related to our digital cinema deployment business,

to secure payment on the Second Lien Loans.

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

329,501 shares of its Class A common stock in exchange for $ 842 thousand principal amount and accrued and unpaid interest of Second Lien

Loans with the holders of such notes.

The surrendered notes were immediately canceled and the Company recognized a gain on extinguishment

of $ 23 thousand.

Exchange Agreement included a true-up clause.

The true-up clause stated that if the gross proceeds from the sale of the Company’s

Class A common stock are less than $ 758 thousand, the Company shall pay up to an aggregate maximum of $ 50 thousand of such shortfall

in cash, and, with respect to any balance of the shortfall remaining after the cash payment, shall issue such additional number of shares

of common stock not to exceed, together with the Shares, 1,000,000 shares equal in value, based on the closing price of the common stock.

July 2, 2020, in accordance with the true-up clause, an additional 33,465 shares of Class A common stock ($ 61 thousand

based on the stock price of the Company’s Class A common stock on the date of issue) were issued as a true-up adjustment pursuant

to the Exchange Agreement.

In addition, the Company paid an additional $ 50 thousand in July 2020.

On June 26, 2020, the Company entered into a consent

agreement to extend the maturity date to September 30, 2020 and grant the Company options to extend further to March 31, 2021 and then

to June 30, 2021.There was a consent fee of $ 100,000 paid in connection with this extension.

On September 21, 2020, the Company extended

the maturity date to March 31, 2021 upon payment of a fee of $ 50,000 .

On February 9, 2021, the Company prepaid all of the outstanding

obligations in respect of principal, interest, fees and expenses under the Second Lien Loan Agreement, and the Second Lien Loan Agreement

was terminated.

November 19, 2020, the Company issued 452,499 shares of Common Stock in exchange for $ 247 thousand of principal and interest of Second

The exchanged Second Lien Notes were immediately cancelled and the Company recorded a gain on extinguishment of $ 5 thousand.

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

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

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

Pursuant to the December Exchange Agreements, the Company issued an

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

thousand of principal and interest of Second Lien Notes.

The exchanged Second Lien Notes were immediately cancelled and the Company recorded

a loss on extinguishment of $ 545 thousand.

January 21, 2021, the Company entered into an exchange agreement (the “Exchange Agreement”) with a holder of notes under

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

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

Pursuant to the Exchange Agreement, the Company issued an aggregate of 1,247,626

shares of its Class A common stock, par value $ 0.001 per share Common Stock in exchange for an aggregate of $ 1,289,650 of principal

amount of Second Lien Notes.

The exchanged Second Lien Notes were immediately cancelled and the Company recorded a loss on extinguishment

of $ 341 thousand.

two separate exchanges with another holder of Second Lien Notes, on January 14, 2021 and January 21, 2021, the Company issued 689,500

shares and 580,448 shares (an aggregate of 1,269,948 shares) of Class A Common Stock in exchange for $ 500,000 and $ 600,000 (an aggregate

of $ 1,100,000 ) principal amount of Second Lien Notes.

The exchanged Second Lien Notes were immediately cancelled and the Company recorded

a loss on extinguishment of $ 247 thousand.

an exchange with another holder of Second Lien Notes, on February 2, 2021, the Company issued 425,290 shares of Class A Common Stock

in exchange for $ 500,000 principal amount of Second Lien Notes and the Company recorded a loss of $ 59 thousand.

In accordance with ASC 470, the Company recognized

a loss on extinguishment of $ 285 thousand related to unamortized debt issuance costs for the nine months ended December 31, 2020.

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,

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.

As of March 31, 2021 and

2020, there was $ 2.0 million and $ 14.5 million outstanding, respectively, and there was $ 6.3 million available, under

the Credit Facility based on the Company’s borrowing base as of March 31, 2021.

On 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

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.

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.

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 28, 2021 .

Convertible Note

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

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

The $ 5.0 million

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

Mingtai Convertible Note is convertible into 3,333,333 shares of the Company’s Class A common stock, based on initial

conversion price of $ 1.50 per share.

On October 9, 2019, the Company signed an extension, for one additional year from the original

maturity date to be due on October 9, 2020.

Mingtai Convertible Note is convertible at the option of the Lender, or the Company, at any time prior to payment in full of the principal

balance, and all accrued interest of this Convertible Note in whole, or in part, into fully paid and non-assessable shares of Company’s

Class A common stock at the conversion rate of $ 1.50 .

conversion prior to maturity by Mingtai, or the Company, we may elect to settle such conversion in shares of our Class A common stock,

cash or a combination thereof.

Upon the maturity date, the Company has the option to pay in Class A common shares convertible at the

greater of the closing price of the Class A common stock or $ 1.10 .

As a result of our cash conversion option, we separately accounted

for the value of the embedded conversion option as a debt discount (with an offset to additional paid-in capital) of $ 270 thousand.

The value of the embedded conversion option was determined based on the estimated fair value of the debt without the conversion feature,

which was determined using market comparables to estimate the fair value similar nonconvertible debt;

the debt discount is being amortized

to interest expense using the effective interest method over the one year term of the Mingtai Convertible Note.

September 11, 2020, Mingtai converted the Notes in full into an aggregate of 3,333,333 shares of Common Stock at a conversion

price of $ 1.50 per share.

Accordingly, the Note has been extinguished.

In accordance with ASC 470, the Mingtai Convertible Note

was analyzed for potential debt extinguishment.

The discount on the note had been fully accreted prior to conversion, resulting in no

gain or loss from extinguishment.

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

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.

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.

31, 2022 and March 31, 2021, there was $ 0 and $ 2.0 million outstanding, respectively.

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

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

as discussed on Note 12 – Subsequent Events .

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 June 30, 2021.

For the year ended March

31, 2022, the Company recognized a gain on extinguishment of note payable of $ 2,178 in the statement of operations for the forgiveness

of PPP loan principal and interest.

STOCKHOLDERS’ EQUITY (DEFICIT)

During the year ended March 31, 2021, we issued

104,326,689 shares of Class A common stock which consists of the sale of 28,405,840 shares of our Class A common stock, 29,855,081 in

connection with the Starrise transaction, 23,480,000 shares of our Class A common stock in registered direct offerings, issuance of Class

A common stock in asset acquisitions, settlement of the outstanding second lien loans, issuance of restricted shares to employees, directors,

consultants and third parties, and the issuances of Class A common stock for warrants exercised and preferred stock dividends.

8, 2021, the Company cancelled 35,714 shares of Class A common stock issued to a board director that resigned from the board before such

shares vested.

June 24, 2020, the Company issued 329,501 shares of Common Stock in exchange for $ 842,000 of principal amount of Second Lien Notes.

exchanged Second Lien Notes were immediately cancelled.

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

(“A.G.P.”) and B.

Riley FBR, Inc.

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

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

on The Nasdaq Global Market at the time of the sale of such shares.

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

Any sales of shares made under the Sales Agreement will be made pursuant to an effective registration statement on Form S-3 filed by

the Company with the SEC on July 6, 2020, for an aggregate offering price of up to $ 30 million.

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

Net proceeds from such sales

totaled $ 18.6 million.

Proceeds were used to strengthen our liquidity and working capital position.

September 1, 2020, we issued 80,000 shares of Class A common stock to Ronald L.

Chez as a bonus payable to him under the Strategic Investor

Agreement between the Company and him dated as of April 3, 2017.

We recognized an expense of $ 71 thousand based on the stock price of

the Class A common stock on the date of grant.

October 23, 2020, 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 200,000,000 shares.

November 19, 2020, the Company issued 452,499 shares of Common Stock in exchange for $ 247,108 of principal amount of Second Lien Notes.

The exchanged Second Lien Notes were immediately cancelled.

December 4, 2020, the Company entered into Exchange Agreements with certain holders of the Second Lien Loans.

Pursuant to the Exchange

Agreements, the Company issued an aggregate of 2,776,284 shares of its Class A common stock, par value $ 0.001 per share Common Stock

in exchange for an aggregate of $ 1,386,106 of principal amount of Second Lien Notes.

The exchanged Second Lien Notes were immediately

The exchange was consummated on December 4, 2020.

January 14, 2021 and January 21, 2021, the Company issued 689,500 shares, 580,448 shares, and 1,247,626 shares (an aggregate of 2,517,574

shares) of Class A Common Stock in exchange for $ 500,000 , $ 600,000 and $ 1,289,650 (an aggregate of $ 2,389,650 ) principal amount of Second

The exchanged Second Lien Notes were immediately cancelled.

an exchange with another holder of Second Lien Notes, on February 2, 2021, the Company issued 425,290 shares of Class A Common Stock

in exchange for $ 500,000 principal amount of Second Lien Notes.

dividends in arrears on preferred stock were $ 0.1 million as of March 31, 2021 and 2020.

In May 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 a cost, consisting of 1,313,836 shares of Class A common stock at March 31, 2021 and 2020.

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 Common Stock authorized for issuance was increased to 275,000,000 shares.

year ended March 31, 2022, the Company issued 9,085,016 shares of Common Stock which consist of the sale of shares of our Common

Stock, issuance of Common Stock for business combinations, the issuances of Common Stock in payment of preferred stock dividends and in

payment of board retainer fees, and the issuance of Common Stock as payment pursuant to a Stock Purchase Agreement (See Note 3).

Cumulative dividends in arrears

on preferred stock were $ 0.1 million and $ 0.1 million as of March 31, 2022 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 Common Stock,

respectively.

treasury stock, at cost, consisting of 1,315,851 and 1,313,836 shares of Common Stock at March 31, 2022 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;

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;

(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 Class A 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 Class A Common Stock on the date

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.

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 Class A Common Stock to employees, outside directors and consultants.

of March 31, 2021, there were 261,587 stock options outstanding in the Plan with weighted average exercise price of $ 14.99 and a weighted

average contract life of 2.11 years.

As of March 31, 2020, there were 272,766 shares pursuant to stock options outstanding in the Plan

with weighted average exercise price of $ 15.00 and a weighted average contract life of 3.11 years.

August 2017, the Company adopted 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 does not affect awards already granted under the 2000 Plan.

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 Equity Incentive Plan to increase the number of shares authorized for issuance thereunder

from 4,098,270 to 14,098,270 .

analysis of all options outstanding under the 2000 Plan as of March 31, 2020 is as follows:

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.

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.

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 March 31, 2022, there were 217,337 stock options outstanding

in the 2000 Plan with weighted average exercise price of $ 14.49 and a weighted average contract life of 1.54 years.

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 44,000 options expired and 250 options

forfeited during the year ended March 31, 2022.

Options outstanding under the 2000 Plan as of

March 31, 2022 is as follows:

As of March 31, 2022

3 unchanged sentences

Weighted Average Exercise Price

Aggregate Intrinsic Value (In thousands)

Aggregate Intrinsic Value

(In thousands)

$ 14.00 - $ 24.40

An analysis of all options exercisable under

the 2000 Plan as of March 31, 2022 is presented below:

Options Exercisable

Weighted Average

Remaining Life in Years

Weighted Average

Exercise Price

Aggregate Intrinsic Value

(In thousands)

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 Common Stock, in the form of various

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

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.

4, 2019, upon shareholder approval, the 2017 Plan was amended to increase the maximum number of shares of 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 year ended March 31, 2022, the Company granted 2,025,250 stock

appreciation rights (“SARs”).

The SARs were granted under 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

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 – November 30,

Maturity Date:

May 23, 2031 – November

Exercise price:

$ 1.29 - $ 2.56

94.56 % - 114.42 %

analysis of all options exercisable under the 2000 Plan as of March 31, 2021 is presented below:

Options Exercisable

Discount rate:

0.96 % - 1.63 %

Expected term:

6 – 6.5 years

Stock appreciation rights outstanding under the

2017 Plan as of March 31, 2022 is as follows:

As of March 31, 2022

Range of Prices

SARs Outstanding

Weighted Average Remaining Life in Years

2 unchanged sentences

(In thousands)

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 March 31, 2021,

12,500 of such options remained outstanding.

December 2010, we issued options to purchase 450,000 shares of Class A Common Stock outside of the 2000 Plan as part of our Chief Executive

Officer’s initial employment agreement with the Company.

Such options have exercise prices per share between $ 15.00 and $ 50.00 ,

were vested as of December 2013 and expired in December 2020.

As of March 31, 2021, none of such options remained outstanding.

following table presents information about outstanding warrants to purchase shares of our Class A common stock as of March 31, 2021.

All of the outstanding warrants are fully vested and exercisable.

Amount outstanding

price per share

Strategic management service provider

Warrants issued in connection with Convertible Notes exchange transaction

December 2021

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

$ 0.54 - $ 0.74

$ 1.16 - $ 1.47

$ 1.71 - $ 2.10

$ 2.23 - $ 2.56

An analysis of all stock appreciation rights

exercisable under the 2017 Plan as of March 31, 2022 is presented below:

SAR Exercisable

Weighted Average

Remaining Life in Years

Weighted Average

Exercise Price

Aggregate Intrinsic Value

(In thousands)

Total SARs outstanding are as follows:

SARs Outstanding March 31, 2021

Total SARs Outstanding March 31, 2022

In addition, in during the year ended March 31, 2022, the Company granted

performance stock unit awards under the 2017 Plan to employees of the Company that vest upon certain performance goals being achieved.

Upon vesting the award shares are issued to the employee.

Following is the activity for performance stock unit awards:

Weighted Average Grant Date Fair Value

Unvested balance at April 1, 2021

Unvested balance at March 31, 2022

During the year ended March 31, 2022, 366,056 shares were issued for

vested awards and 255,219 are to be issued as of March 31, 2022.

Employee and director stock-based compensation

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

(In thousands)

Selling, general and administrative

There was $ 1 and $ 5 thousand of stock-based compensation

recorded for the year ended March 31, 2022 and 2021, respectively, related to employees’ restricted stock awards.

There was $ 386 thousand and $ 293 thousand of stock-based

compensation for the year ended March 31, 2022 and 2021, respectively, related to board of directors.

During the year ended March 31,

2022, the Company issued 280,690 restricted shares to non-employee 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 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 March 31, 2022, 12,500 of

such options remained outstanding.

The following table presents information about

outstanding warrants to purchase shares of our Common Stock as of March 31, 2022.

All of the outstanding warrants are fully vested and

Exercise price

5-year Warrant issued to Bison Entertainment and Media Group(“ BEMG”) in connection with a term loan agreement

December 2022

warrants issued in connection with the Second Lien Loans (See Note 6- Notes Payable ) to Ronald L.

Chez, at the time a member of

our Board of Directors, contain a cashless exercise provision and customary anti-dilution rights.

On June 4, 2020, Ronald L.

Chez exercised

all such warrants to purchase 236,889 shares of Class A common stock in connection with the Second Lien Loans, resulting in gross proceeds

of $ 301 thousand.

Warrants for the purchase of 298,519 shares

of Common Stock expired unexercised during the year ended March 31, 2022.

COMMITMENTS AND CONTINGENCIES

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 March31, 2021

We operate from leased properties under non-cancelable

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

The Company leases office space under an operating lease.

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 March 31, 2022 and March 31,

(In thousands)

Classification on the Balance Sheet

March 31, 2022

Operating lease right-of-use asset

2 unchanged sentences

Total operating lease liabilities

Weighted-average discount rate (1)

adoption of the new lease standard, discount rates used for existing leases were established at April 1, 2019.

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

The weighted average life remaining is 35 months and

the weighted average interest rate 3.38 %.

The table below presents certain information related to lease costs

(In thousands)

1 unchanged sentence

Total lease cost

table below presents supplemental cash flow information related to leases:

Other Information

The table below presents supplemental cash flow

information related to leases:

(In thousands)

1 unchanged sentence

Operating cash flows used for operating leases

Company terminated an office lease in Los Angeles in April 2020 and a lease for office equipment was terminated in June 2020.

removed the right-of-use assets of $ 927 thousand and the lease liabilities of $ 1.0 million as of June 30, 2020.

The estimated future

lease liabilities are not expected to be material for the remaining outstanding office and equipment leases.

SUPPLEMENTAL CASH FLOW INFORMATION

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.

Hyde Park Agreement

On January 5, 2022, the Company entered into a letter agreement with Hyde

Park Entertainment, Inc.

(“Hyde Park”), pursuant to which the Company and Hyde Park are collaborating on the development,

production and/or distribution of a project based on the novel Audition by Ryu Murakami (the “Audition Project”).

of the Company and Hyde Park owns 50 % of the rights in connection with the Audition Project.

The Company paid $ 100 thousand to Hyde Park

plus $ 26 thousand in legal fees to counsel for the Audition project.

Ashok Amritraj, a director of the Company, is the Chairman and CEO

of Hyde Park and has an interest in 100 % of the revenues of Hyde Park.

Ashok Amritraj is a current board member and related party to the Company.

SUPPLEMENTAL CASH FLOW INFORMATION AND DISCLOSURE OF NON-CASH

INVESTMENTING AN FINANCING ACTIVITY

(In thousands)

3 unchanged sentences

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

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

Contributed capital under the Starrise transaction, a related party

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

Contributed capital under the Metaverse transaction, a related party

Settlement of second lien loan with Class A common stock

Settlement of note payable with Class A common stock

Conversion of note payable

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

Right-of-use assets and operating lease liability recorded upon adoption of ASU 842, net

Amounts accrued in connection with addition of property and equipment

Starrise shares used to pay down vendors

Metaverse shares used to pay down vendors

Issuance of Class A common stock for business combination

Deferred consideration in purchase of a business

Earnout consideration in purchase of a business

Treasury shares acquired for withholding taxes

SEGMENT INFORMATION

operate in two reportable segments:

We 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.

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:

Products and services provided:

Cinema Equipment Business Financing vehicles and administrators for 3,122 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 3,104 Systems installed domestically and internationally in our second deployment phase (“Phase II Deployment”).

Cinema Equipment Business Financing vehicles and administrators for 696 Systems installed

nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 2,147 Systems installed

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

We retain ownership of the Systems and the residual cash flows related to the Systems in Phase I Deployment after the repayment of all non-recourse debt at the expiration of exhibitor master license agreements.

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.

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

as to exhibitors who purchase their own equipment, and also collects and disburses VPFs from motion picture studios, distributors and

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

The Cinema Equipment Business segment also provides monitoring, collection, verification and management services to this segment, as well as to exhibitors who purchase their own equipment, and also collects and disburses VPFs from motion picture studios, distributors and ACFs from alternative content providers, movie exhibitors and theatrical exhibitors (collectively, “Services”).

Content & Entertainment Business Leading independent streaming company of content and channels.

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:

The following tables present certain financial

information related to our reportable segments and Corporate:

As of March 31, 2022

13 unchanged sentences

Allocation of corporate overhead

Recovery for doubtful accounts

Provision for (recovery of) doubtful accounts

Intangible Impairment

Depreciation and amortization of property and equipment

1 unchanged sentence

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

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)

10 unchanged sentences

Allocation of corporate overhead

Provision for doubtful accounts

Provision for (recovery of) doubtful accounts

Depreciation and amortization of property and equipment

Amortization of intangible assets

Amortization and impairment of intangible assets

Total operating expenses

Income (loss) from operations

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

Content & Entertainment

The following employee and director stock-based compensation expense

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

Entertainment

Direct operating

1 unchanged sentence

Total stock-based compensation

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

We recorded an income

tax benefit from operations of $ 0.3 million and income tax expense of $ 0.3 million for the years ended March 31,

2021 and 2020, respectively, primarily for state income taxes in our Cinema Equipment Business and Corporate segments.

The income tax

benefit for the year ended March 31, 2021 was mainly related to changes in estimates from timing of the income tax provisions to the

income tax fillings to state income tax expense.

The income tax expense for the year ended March 31, 2020 was mainly related to taxable

income at the state level and timing differences related to fixed asset depreciation.

following table presents the components of income tax benefit (expense):

We recorded income tax (benefit)

of $( 0.8 ) million from operations and an income tax (benefit) of $( 0.3 ) million for the years ended March 31,

2022 and 2021, respectively.

For the year ended March 31, 2022, the $( 0.8 ) income tax benefit primarily related to a net change of deferred

tax liability resulted from the finalization of the acquisition of Foundation TV.

The deferred tax liability was offset by a release of

the Company’s valuation allowance.

The Company also recorded income tax expense of $ 0.1 , which was mainly related to taxable income

at the state level and timing differences related to fixed asset depreciation.

The income tax benefit for the year ended March 31, 2021

was mainly related to changes in estimates from the timing of the income tax provision to the income tax return filings, related to state

income tax expense.

The following table presents

the components of income tax benefit (expense):

For the Fiscal Year

3 unchanged sentences

Income tax benefit (expense)

deferred taxes consisted of the following:

taxes consisted of the following:

As of March 31,

13 unchanged sentences

Net deferred tax

have provided a valuation allowance equal to our net deferred tax assets for the years ended March 31, 2021 and 2020.

We are required to recognize all or a portion of our deferred tax assets if we believe that it is more likely than not that such assets

will be realized, given the weight of all available evidence.

We assess the realizability of the deferred tax assets at each interim

and annual balance sheet date.

In assessing the need for a valuation allowance, we considered both positive and negative evidence, including

recent financial performance, projections of future taxable income and scheduled reversals of deferred tax liabilities.

The net change

in the valuation allowance of $ 13.4 million during the fiscal year ended March 31, 2021 was mainly due to increases in

the deferred tax asset related to our investment in Starrise, a related party, and increases in the net operating loss carryforward.

The net change in the valuation allowance of $ 1.5 million during the fiscal year ended March 31, 2020, was mainly due to the recording

of a deferred tax liability related to our investment in Starrise, offset by an increase in other deferred tax assets.

We will continue

to assess the realizability of the deferred tax assets at each interim and annual balance sheet date based upon actual and forecasted

operating results.

of March 31, 2021, we had federal and state net operating loss carryforwards of approximately $ 52.6 million available

in the United States of America (“U.S.”) and approximately $ 1.1 million in Australia to reduce future taxable income.

federal and state net operating loss carryforwards of approximately $ 22.2 and $ 52.6 million, respectively, generally begin to expire

federal net operating loss carryforwards that were generated during the years ended March 31, 2020 and 2021, of approximately

$ 30.4 million, do not expire.

The Australian net operating loss carryforward of $ 1.1 million, does not expire.

the provisions of the Internal Revenue Code, certain substantial changes in our ownership may result in a limitation on the amount of

net operating losses that may be utilized in future years.

During the year ended March 31, 2018, approximately $ 233.5 million of

our net operating losses became subject to limitation under Internal Revenue Code Section 382 in connection with the consummation in

November 2017 of the transactions under the Stock Purchase Agreement with Bison.

Approximately $ 209.0 million of our net operating

losses will not be able to be utilized because of the ownership change.

Future significant ownership changes could cause a portion or

all of our remaining net operating losses to expire before utilization.

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

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.

differences between the United States statutory federal tax rate and our effective tax rate are as follows:

We have provided a valuation

allowance equal to our net deferred tax assets for the years ended March 31, 2022 and 2021.

We are required to recognize

all or a portion of our deferred tax assets if we believe that it is more likely than not that such assets will be realized, given the

weight of all available evidence.

We assess the realizability of the deferred tax assets at each interim and annual balance sheet date.

In assessing the need for a valuation allowance, we considered both positive and negative evidence, including recent financial performance,

projections of future taxable income and scheduled reversals of deferred tax liabilities.

The net change in the valuation allowance of

$ 2.2 million during the fiscal year ended March 31, 2022 was mainly due to increases in the deferred tax asset related to the net operating

loss carryfoward and other timing differences.

The net change in the valuation allowance of $ 13.4 million during the fiscal

year ended March 31, 2021 was mainly due to increases in the deferred tax asset related to our investment in Starrise, a related

party, and increases in the net operating loss carryforward.

We will continue to assess the realizability of the deferred tax assets at

each interim and annual balance sheet date based upon actual and forecasted operating results.

As of March 31, 2022,

we had federal and state net operating loss carryforwards of approximately $ 55.2 million available in the United States

of America (“U.S.”) to reduce future taxable income.

federal and state net operating loss carryforwards of approximately

$ 22.6 and $ 55.2 million, respectively, generally begin to expire in 2026.

federal net operating loss carryforwards that

were generated during the years ended March 31, 2020, 2021, and 2022 of approximately $ 32.6 million, do not expire.

Under the provisions of the Internal

Revenue Code, certain substantial changes in our ownership may result in a limitation on the amount of net operating losses that may be

utilized in future years.

During the year ended March 31, 2018, approximately $ 233.5 million of our net operating losses

became subject to limitation under Internal Revenue Code Section 382 in connection with the consummation in November 2017 of the transactions

under the Stock Purchase Agreement with Bison.

Approximately $ 209.0 million of our net operating losses will not be able

to be utilized because of the ownership change.

Future significant ownership changes could cause a portion or all of our remaining net

operating losses to expire before utilization.

On 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;

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.

The differences between the United

States statutory federal tax rate and our effective tax rate are as follows:

For the fiscal years

5 unchanged sentences

Non-deductible expenses

Net operating loss decrease under IRC 382

Effect of tax reform

Executive officer compensation limitation – Section 162(m)

PPP loan forgiveness

Losses from non-consolidated entities

Income tax benefit /(expense)

file income tax returns in the U.S.

We file income tax returns in

federal jurisdiction, various U.S.

states, and Australia.

For federal income tax purposes, our fiscal

2018 through 2021 tax years remain open for examination by the tax authorities under the normal three-year statute of limitations.

state and Australian tax purposes, our fiscal 2017 through 2021 tax years generally remain open for examination by most of the tax

authorities under a four-year statute of limitations.

Purchase Agreement

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

(“FoundationTV”), to buy all of FoundationTV´s issued and outstanding stock and for the Company to exchange in consideration

an aggregate of $5,125,000, of which $1 million was paid in cash and issue 1,483,129 shares of Class A common stock were issued for a

total of $2 million in consideration therefor at closing in June 9, 2021 and an additional $1.9 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.

The Stock Purchase Agreement contains 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 Stock Acquisition was consummated.

On a series of payments between April 30 and

July 9, 2021, the Company paid in full the prospect loan non-recourse debt amount by paying an aggregate principal amount of $ 7.8

Pre-payment of the Prospect loan is permissible without penalty.

Loan Forgiveness

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 as of June 30, 2021.

The forgiveness of the PPP

Loan will be recognized during the Company’s fiscal quarter ending June 30, 2021.

For federal income tax purposes, our fiscal 2019 through 2022 tax years

remain open for examination by the tax authorities under the normal three-year statute of limitations.

state and Australian

tax purposes, our fiscal 2018 through 2022 tax years generally remain open for examination by most of the tax authorities under a four-year

statute of limitations.

SUBSEQUENT EVENTS

On April 1, 2022, trading of Metaverse’s ordinary shares was

halted on the Hong Kong Stock Exchange.

Unless and until trading is reinstated, the Company will not be able to obtain any readily available

information or observable inputs on the quoted market prices of Metaverse’s stock and therefore will need to change the valuation

methodology of its investments in Metaverse.

OTHER INFORMATION

1 unchanged sentence

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data