What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-16 compared with 2022-02-14 · 508 added, 693 removed, 206 unchanged (85% of the section changed)

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should

14 unchanged sentences

In addition to our pioneering role in transitioning

approximately 12,000 movie screens from traditional analog film prints to digital distribution, we have become a leading distributor

of independent content, both through organic growth and acquisitions.

We distribute digital and physical products for major brands such

as the Hallmark Channel, Televisa, ITV, Nelvana, ZDF, Konami, NFL, NHL and Aniplex.

We collaborate with producers, international and

domestic content creators of movies, television series and short form content to market, source, curate and distribute quality content

to targeted audiences through (i) existing and emerging digital home entertainment platforms, including but not limited to, Apple, Amazon

Prime, Netflix, Hulu, Xbox, Tubi, Roku, Pluto TV, and cable video-on-demand (“VOD”), and (ii) physical goods, including DVD

and Blu-ray Discs, to Walmart, Target, Amazon and others.

approximately 12,000 movie screens from traditional analog film prints to digital distribution, we have become a leading distributor of

independent content, both through organic growth and acquisitions.

We distribute products for major brands such as Hallmark, Televisa,

ITV, Nelvana, ZDF, Konami, NFL, and Scholastic, as well as leading international and domestic content creators, movie producers, television

producers and other short-form digital content producers.

We collaborate with producers, major brands and other content owners to market,

source, curate and distribute quality content to targeted audiences through (i) existing and emerging digital home entertainment platforms,

including but not limited to Apple iTunes, Amazon Prime, Netflix, Hulu, Xbox, Pluto, Tubi and most video-on-demand (“VOD”)

and free ad-supported television (“FAST”) streaming platforms, as well as (ii) physical goods, including DVD and Blu-ray Discs.

We report our financial results in two primary

1 unchanged sentence

(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 several international

It also provides fee-based support to over 4,609 movie screens as well as directly to exhibitors and other third-party customers

in the form of monitoring, billing, collection and verification services.

Our Content & Entertainment segment is a market leader

(1) ancillary market aggregation and distribution of entertainment content and (2) branded and curated over-the-top (“OTT”)

digital network business providing entertainment channels and applications.

Beginning in December 2015, certain of our cinema

equipment began to reach the conclusion of their 10-year deployment payment period with certain distributors and, therefore, Virtual

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

The cinema equipment business segment consists of the non-recourse, financing vehicles and administrators for our

digital cinema equipment (the “Systems”) installed in movie theatres throughout North America and Australia.

It also provides

fee-based support to over 1,082 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.

Beginning in December 2015, certain of our

cinema equipment began to reach the conclusion of their 10-year deployment payment period with certain distributors and, therefore, Virtual

Print Fee (“VPF”) revenues ceased to be recognized on such Systems, related to such distributors.

Furthermore, because the

11 unchanged sentences

to such exhibitors.

Cinedigm recognizes revenue once the customer takes possession of the systems and is predicated on Cinedigm’s

receipt of sale proceeds.

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

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

We are structured so that our cinema equipment

business segment operates independently from our Content & Entertainment business.

As of December 31, 2021, we had no non-recourse

outstanding debt principal that relates to, and is serviced by, our cinema equipment business.

We had no outstanding debt principal,

as of December 31, 2021 that is attributable to our Content & Entertainment segment and Corporate.

As of June 30, 2022, we had approximately $0.0

million of non-recourse outstanding debt principal that relates to, and is serviced by, our cinema equipment business.

We have approximately

$0.0 million of outstanding debt principal, as of June 30, 2022 that is attributable to our Content & Entertainment and Corporate

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.

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

rentals and purchases.

As part of our Cinema Equipment business, the

Company earns revenue when movies are exhibited in theatres.

As vaccines became readily available and COVID-19 cases decreased, major

studios continued to release tentpole films in the theatrical markets as box office results steadily showed improvement in the three

months ending December 31, 2021.

However, the number of wide releases remains below pre-pandemic levels in this quarter as studios

continue to shuffle release dates and test theatrical windows.

The Canadian government tightened Movie Theatre restrictions amid

a Covid surge due to the Omicron variant as well as shuttering all Quebec theatres during this quarter.

Movie theatres in the U.S.

remained open and continued to follow NATO CinemaSafe protocols in an effort to help reinforce consumer confidence in the safety of the

theatrical moviegoing experience

Longer term, there may be a shift in consumer

preference towards digital consumption over theatrical viewing.

Studios may reduce their theatrical slates to tentpoles and certain genres

releasing other content directly on their own streaming services first.

If fewer movies are released theatrically, this shift to digital

viewing reduces 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 closures, which impact the Cinema Equipment

In connection with the CEG business, if

larger branded companies choose to make their content available earlier on their own streaming platforms, this could limit our ability

to monetize this content on a transactional digital basis, as consumers can access it via the company’s own streaming platform

such as Hallmark Movies Now.

However, most content suppliers including filmmakers and producers, do not have their own streaming platforms

and rely on us for distribution through our digital home entertainment business and OTT digital networks.

As a result, this risk

is limited, and our digital distribution capabilities and digital networks provide us with the opportunity to take advantage of this

consumer shift towards digital consumption.

Over the first year and a half of the COVD-19

pandemic, film and TV production slowed-down and independent producers and filmmakers had to either suspend or delay their productions

due to rising infection rates and the high costs of appropriate COVID-19 production protocols.

As a result, there are fewer available

films to acquire, so our pipeline for content from completed films and co-productions has been negatively impacted.

with the rise of new variants, productions may be at risk again of shutting down, being delayed or having prohibitive COVID-compliant

costs which would further limit available content to acquire.

The COVID-19 pandemic has also resulted in an

acceleration of cord-cutting, and, as more consumers move away from cable and satellite, this could lead to a decrease in cable/satellite

TV VOD revenues, as well as a decrease in licensing fees as Pay One window budgets shift from licensing and towards originals.

However, given the overall shift towards digital consumption, these risks may be offset by increased revenues from transactional, subscription

and ad supported/FAST platforms, including our own owned and operated digital network business.

We have incurred net losses historically and have an accumulated deficit

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

We may continue to generate net losses for the foreseeable

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

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

Company paid in full the Prospect Loan (as defined below) non-recourse debt amount by paying an aggregate principal amount of $7.8 million.

As of December 31, 2021 there was $0 million principal outstanding and there was no availability under the Credit Facility which expired

on September 28, 2021.

Net cash provided by operating activities for the nine months ended December 31, 2021 was $4.7 million.

these conditions and the Company´s financing strategies, the Company entered into the transactions described below:

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.

We have incurred net losses historically and net

loss for the three months ended June 30, 2022 of $6.0 million.

As of June 30, 2022, we had an accumulated deficit of $478.4 million

and negative working capital of $7.6 million.

Net cash used in operating activities for the three months ended June 30, 2022 was $1.2

Based on these and prior conditions, the Company entered into the following transactions described below.

Capital Raises

On 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 our Class A common

stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $1.25 per share, in a registered direct offering,

On May 20, 2020, the Company entered into

a securities purchase agreement (the “Securities Purchase Agreement”) with certain investors (the “Investors”)

for the purchase and sale of 10,666,666 shares of the Common Stock, at a purchase price of $0.75 per share, in a registered direct offering,

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

on July 10, 2020 (File No.

333-239710) (the “2020 Shelf Registration Statement”) and an applicable prospectus supplement.

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

The aggregate gross proceeds for the sale were approximately $7.0 million.

net proceeds to the Company from the sale, after deducting the fees of the placement agent but before paying the Company’s estimated

offering expenses, was approximately $6.5 million.

on May 14, 2020 (File No.

333-238183) and an applicable prospectus supplement.

The closing of the sale occurred on May 22, 2020.

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

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

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

In 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” and, together with A.G.P., the “Sales Agents”), pursuant to which the Company may offer and

sell, from time to time, through the Sales Agents, shares of Common Stock at the market prices prevailing on Nasdaq at the time of the

sale of such shares.

Riley” and, together with A.G.P., the “Sales Agents”), pursuant to which the Company may offer and sell,

from time to time, through the Sales Agents, shares of Common Stock at the market prices prevailing on Nasdaq at the time of the sale

of such shares.

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

Any sales of shares made under the

ATM Sales Agreement will be made pursuant to the 2020 Shelf Registration Statement for an aggregate offering price of up to $30 million.

During the quarter ended December 31, 2021, we did not sell any shares of Common Stock under the ATM Sales Agreement.

The 2020 Shelf

Registration Statement is unavailable to us, and accordingly we cannot sell any shares of Common Stock under the ATM Sales Agreement,

until September 1, 2022.

On July 16, 2020, the Company entered into a

securities purchase agreement with certain investors for the purchase and sale of 7,213,334 shares of Class A common stock, par value

Any sales of shares made under the ATM

Sales Agreement will be made pursuant the 2020 Shelf Registration Statement, for an aggregate offering price of up to $30 million.

proceeds from such sales totaled $18.6 million.

No sales under the ATM Sales Agreement were made during the three months ended June 30,

On July 16, 2020, the Company entered into

a securities purchase agreement with certain investors for the purchase and sale of 7,213,334 shares of Common Stock, par value $0.001

per share, at a purchase price of $1.50 per share, in a registered direct offering, pursuant to the 2020 Shelf Registration Statement

3 unchanged sentences

was approximately $10.8 million.

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

before paying the Company’s estimated offering expenses, is approximately $10.1 million.

On May 20, 2020, the Company entered into a securities

purchase agreement (the “Securities Purchase Agreement”) with certain investors (the “Investors”) for the purchase

and sale of 10,666,666 shares of the Class A common stock, at a purchase price of $0.75 per share, in a registered direct offering, pursuant

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

14, 2020 (File No.

333-238183) and an applicable prospectus supplement.

The closing of the sale occurred on May 22, 2020.

The aggregate

gross proceeds for the sale was $8.0 million.

The net proceeds to the Company from the sale, after deducting the fees of the placement agents but before

paying the Company’s estimated offering expenses, is approximately $10.1 million.

On 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 Common Stock at

a purchase price of $1.25 per share, in a registered direct offering, pursuant to an effective shelf registration statement on Form S-3

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

333-239710) (the “2020 Shelf Registration

Statement”) and an applicable prospectus supplement.

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

The aggregate gross proceeds

for the sale was approximately $7.0 million.

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

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

As of December 31, 2021, there is still approximately

$38.0 million remaining unsold under the 2020 Shelf Registration Statement.

Sale of Cinematic Equipment

On March 17, 2021, the Company entered into two separate agreements

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

(“AMC”), The agreements included the sale in tranches of

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

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

A portion of the total proceeds were used

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

Equity Investment in a Related Party

On December 27, 2019, the Company entered into, and on February 14,

2020 amended, (see Note 2 – Summary of Significant Accounting Policies ), a stock purchase agreement (as so amended, the “Starrise

Stock Purchase Agreement”) with BeiTai Investment LP (“BeiTai”), a related party for accounting purposes of Cinedigm

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

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

Share Acquisition”).

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

BeiTai 21,646,604 shares of Common Stock in consideration therefor.

The Starrise shares received were valued at approximately $25 million

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

On April 10, 2020, the Company, in accordance with the

terms of the Starrise Stock Purchase Agreement, terminated its obligation to purchase Starrise ordinary shares from Aim Right under the

Starrise Stock Purchase Agreement.

On April 10, 2020, the Company entered into another

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

Global Investment SPC – Bison Global No.

1 SP, Huatai Investment LP, Antai Investment LP, Mingtai Investment LP and Shangtai Asset

Management LP – all of which are related parties to the Company, to buy an aggregate of 223,380,000 outstanding Starrise ordinary

shares from them and for the Company to issue to them an aggregate of 29,855,081 shares of Common Stock as consideration therefor (the

“April Starrise Share Acquisition”).

On April 15, 2020, the April Starrise Share Acquisition was consummated and this transaction

was also recorded as an equity investment in Starrise.

Starrise’s ordinary shares (HK 1616) are listed on the main board

of the Stock Exchange of Hong Kong Limited.

Based on the closing price of HKD 0.159 per share on February 11, 2022, calculated at an exchange

rate of 7.8 Hong Kong Dollars to 1 US dollar, the market value of Cinedigm’s ownership in Starrise ordinary shares was approximately

$7.4 million.

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

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

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

from East West Bank, the Company’s existing lender, pursuant to the Paycheck Protection Program (the “PPP Loan”) of

the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The PPP Loan matures on April 10, 2022 (the “PPP

Maturity Date”), accrues interest at 1% per annum and may be prepaid in whole or in part without penalty.

No interest payments

are due within the initial six months of the PPP Loan.

The interest accrued during the initial six-month period is due and payable, together

with the principal, on the PPP Maturity Date.

The Company used all proceeds from the PPP Loan to retain employees, maintain payroll and

make lease and utility payments to support business continuity throughout the COVID-19 pandemic, which amounts are 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 ending June 30, 2021.

Upon a series of payments between April 30 and

July 9, 2021, the Company paid in full the Prospect Loan (as defined in Note 5 – Notes Payable ) 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.

Common Stock Purchase Agreement

In October 2021, we entered into a Common Stock

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

Agreement”) with B.

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

In October 2021, we entered into a Common

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

Rights Agreement”) with B.

Riley Principal Capital, LLC (“B.

Riley Principal Capital”).

Pursuant to the Equity Line Purchase

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

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

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

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

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

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

Principal Capital under the Equity Line Purchase Agreement.

As consideration for B.

Riley Principal Capital’s commitment to purchase

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

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

Pursuant to the Equity Line

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

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

issued shares of Common Stock and (ii) the Exchange Cap (as defined 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 B.

Riley Principal

Capital (the “Commitment Shares”).

Capital under the Equity Line Purchase Agreement.

As consideration for B.

Riley Principal Capital’s commitment to purchase shares

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

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

Riley Principal Capital

(the “Commitment Shares”).

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

Riley Principal

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

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

Pursuant to the Registration Rights

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

on October 21, 2021 (File No.

Riley Principal Capital

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

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

Pursuant to the Registration Rights Agreement,

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

21, 2021 (File No.

333-260210) for the resale by B.

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

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

During October and November 2021, we sold 5,300,000 shares

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 the year ended March 31, 2022, we sold 5,300,000 shares

of Common Stock under the Equity Line Purchase Agreement.

Net proceeds from such sales totaled $12.4 million.

No sales under the Equity

Line Purchase Agreement were made during the three months ended June 30, 2022.

As of June 30, 2022, there is still approximately

$38.0 million available under the 2020 Shelf Registration Statement, and $37.6 million available under the Equity Line Purchase Agreement,

to raise additional capital.

Sale of Cinematic Equipment

On March 17, 2021, the Company entered into

two separate agreements (the “AMC Equipment Purcahse Agreements”) for the sale of cinematic equipment to American Multi-Cinema,

The agreement included the sale in tranches of a total of 2,369 cinematic projectors starting in March 2021

throughout January 2023 for a total cash consideration of $10.8 million.

As of June 30, 2022, the Company recognized revenue for $10.3

A portion of the total proceeds was utilized to pay off the remaining Prospect note payable.

Equity Investment in 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 shareholder.

shareholder also maintains 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 Company.

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.

2022, trading of Metaverse’s ordinary shares was halted on the Hong Kong Stock Exchange.

This investment was previously a level

1 investment as the shares were being actively traded in a marketplace, but with the trading of the shares being halted the Company needed

to reassess the fair value level of the investment.

Without an active market where the shares are being traded, the investment no longer

qualifies as a level 1.

As of June 30, 2022, Metaverse’s stock valuation is based on a evaluated offer received from an independent

third party to purchase our shares and trending assessment of market pricing and is categorized as Level 3 based on unobservable inputs.

As the value of the investment in Metaverse is being determined by an offer to purchase the shares from an independent

third party, the value of the investment may need to be reduced or fully written off should the offer be rescinded.

We believe the combination of:

(i) our cash and cash equivalent balances

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

months from the filing of this report.

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.

and cash equivalent balances at June 30, 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.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared

in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

In connection with

the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments

Our consolidated financial statements are

prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

In connection

with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments

that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures.

6 unchanged sentences

cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed

in Note 2 - Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements, Financial Statements

and Supplementary Data , of this Quarterly Report on Form 10-Q.

Management believes that the following accounting policies are the

most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s most difficult,

subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.

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

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less

accumulated depreciation and amortization.

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

lives of the respective assets as follows:

Computer equipment and software

Internal use software

Digital cinema projection systems

Machinery and equipment

Furniture and fixtures

Leasehold improvements are being amortized over

the shorter of the lease term or the estimated useful life of the improvement.

Maintenance and repair costs are charged to expense as

Major renewals, improvements and additions are capitalized.

Software developed or purchased for internal

use by the Company is capitalized and amortized over its estimated useful life.

Changes in these estimates could result in impairment

in the value of the asset.

Useful lives are determined based on an estimate

of either physical or economic obsolescence, or both.

During the three and nine months ended December 31, 2021 and 2020, we have neither

made any revisions to estimated useful lives, nor recorded any impairment charges on our property, equipment and internal use software.

Our significant accounting policies are discussed in Note 2 – Summary

of Significant Accounting Policies , of the Notes to Consolidated Financial Statements, included in Item 1, Condensed Consolidated

Financial Statements (Unaudited) , of this Quarterly Report on Form 10-Q.

Management believes that the following accounting policies

are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s

most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently

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

FAIR VALUE ESTIMATES

Goodwill, Finite-Lived Assets and Long-Lived

We evaluate our goodwill for impairment in the

fourth quarter of each fiscal year (as of March 31), or whenever events or changes in circumstances indicate the fair value of a reporting

unit is below its carrying amount.

The determination of whether or not goodwill has become impaired involves a significant level of judgment

in the assumptions underlying the approach used to determine the value of our reporting units.

Inherent in the fair value determination

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

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

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

whether goodwill is impaired could change and result in future goodwill impairment charges that could have a material adverse effect

on our consolidated financial position or results of operations.

The Company has the option to assess goodwill

for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair value of a reporting

unit is less than its carrying amount or to perform the quantitative impairment test.

The quantitative test involves comparing the

estimated fair value of a reporting unit with its respective book value, including goodwill.

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.

During the three and nine months ended December

31, 2021 and 2020, there were no impairment charges recorded on goodwill.

In 2021, we elected to conduct a qualitative goodwill assessment

and in 2020 we conducted a quantitative goodwill assessment.

In determining fair value, we used various assumptions, including expectations

of future cash flows based on projections or forecasts derived from analysis of business prospects, economic or market trends and any

regulatory changes that may occur.

We estimated the fair value of the reporting unit using a net present value methodology, which is

dependent on significant assumptions related to estimated future discounted cash flows, discount rates and tax rates.

Certain of the

estimates and assumptions that we used in determining the value of our CEG reporting unit are discussed in Note 2 - Summary of

Significant Accounting Policies .

Goodwill, Intangible and Long-Lived

Goodwill is the excess of the purchase price

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

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

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

Inherent in the fair value determination for

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

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

To the extent

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

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

consolidated financial position or results of operations.

The Company has the option

to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair

value of a reporting unit is less than its carrying amount or to perform the quantitative impairment test.

We review the recoverability of our long-lived

12 unchanged sentences

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

During the three months ended June 30, 2022

and 2021, no impairment charge was recorded to intangible assets.

Investment in Metaverse

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 three months ended June 30, 2022 and 2021, the company recorded a charge of

$1,256 and ($334) in the company’s investment in Metaverse.

REVENUE RECOGNITION

Adoption of ASU Topic 606, “Revenue

from Contracts with Customers”

We 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.

● identifying

the contract, or contracts, with the customer;

● identifying

the performance obligations in the contract;

● determining

the transaction price;

the transaction price to performance obligations in the contract;

● recognizing

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

We recognize revenue in the amount that reflects

the consideration we expect to receive in exchange for the services provided, sales of physical products (e.g., DVDs and Blu-ray Discs)

the consideration we expect to receive in exchange for the services provided, sales of physical products (DVD’s 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

5 unchanged sentences

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.

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

theatrical exhibitors and for 2,978 Systems installed domestically and internationally in our second deployment phase (“Phase II

Deployment”).

We retain ownership of our digital cinema equipment

(the “Systems”) and the residual cash flows related to the Systems in Phase I Deployment after the end of the 10-year deployment

payment period.

For certain Phase II Deployment Systems, we do

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

Our Cinema Equipment Business consists of financing vehicles and administrators for 434 Systems installed nationwide in our first deployment

phase (“Phase I Deployment”) to theatrical exhibitors and for 648 Systems installed domestically and internationally in our

second deployment phase (“Phase II Deployment”).

We retain 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.

For certain Phase II Deployment Systems, we

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

and at the expiration of the exhibitor master license agreements.

The Cinema Equipment Business also provides monitoring,

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

in order to collect virtual print fees (“VPFs”) from motion picture studios and distributors and ACFs from alternative content

providers, and to distribute those fees to theatrical exhibitors (collectively, “Services”).

The Cinema Equipment Business also provides

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

own equipment, in order to collect virtual print fees (“VPFs”) from motion picture studios and distributors and Alternative

Content Fees (“ACFs”) from alternative content providers, and to distribute those fees to theatrical exhibitors (collectively,

VPFs are earned, net of administrative fees,

1 unchanged sentence

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

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

One VPF is payable for every

digital title initially displayed per System.

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

using the Systems in any given accounting period.

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

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

performance obligations have been substantially met at that time.

Phase II Deployment’s agreements with distributors

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

however, Phase

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

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

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

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

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

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

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

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

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

One VPF is payable for every digital

title initially displayed per System.

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

the Systems in any given accounting period.

VPF revenue is recognized in the period the title first plays for general audience viewing

in a digital projector equipped movie theatre.

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

recognition are met at this time.

Phase II Deployment’s agreements with

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

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

6 unchanged sentences

to such exhibitors.

Cinedigm recognizes revenue once the customer takes possession of the systems and is predicated on Cinedigm’s

receipt of sale proceeds.

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.

sales revenue recognized were $1.3 million and $66 thousand, during the three months ended December 31, 2021 and 2020, respectively.

system sales revenue recognized were $9.1 million and $157 thousand, during the nine months ended December 31, 2021 and 2020, respectively.

Revenues earned in connection with up front exhibitor

contributions are deferred and recognized over the expected cost recoupment period.

Total system revenue was $1.2 million

and $5.6 million, during the three months ended June 30, 2022 and 2021, respectively.

Revenues earned in connection with up front

exhibitor contributions are deferred and recognized over the expected cost recoupment period.

Exhibitors who purchased and own Systems using

their own financing in Phase II of the Cinema Equipment Business paid us an upfront activation fee of approximately $2.0 thousand per

screen (the “Exhibitor-Buyer Structure”).

Upfront activation fees were recognized in the period in which these Systems were

delivered and ready for content, as we had no further obligations to the customer after that time and collection was reasonably assured.

In addition, we recognize activation fee revenue of between $1.0 thousand and $2.0 thousand on Phase II Deployment Systems and for Systems

installed by CDF2 Holdings, a related party, (See Note 3 - Other Interests ) upon installation and such fees are generally collected

upfront upon installation.

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

fee equal to 10% of the VPFs collected.

their own financing in Phase II of the Cinema Equipment Business paid us an upfront activation fee of approximately $2.0 thousand

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

Upfront activation fees were recognized in the period in which these Systems

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

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

for Systems installed by CDF2 Holdings, a related party, (See Note 3 – Other Interests ) upon installation and such fees

are generally collected upfront upon installation.

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

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

The Cinema Equipment Business earns an administrative

fee of approximately 5% of VPFs collected and, in addition, earns an incentive service fee equal to 2.5% of the VPFs earned by Phase

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

fee of approximately 5% of VPFs collected and, in addition, earns an incentive service fee equal to 2.5% of the VPFs earned

by Phase 1 DC.

This administrative fee is related to the collection and remittance of the VPFs and the performance obligation is satisfied

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

10 unchanged sentences

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.

The Company considers the delivery

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

Physical Revenue is recognized after deducting

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

Physical goods reserves for sales returns and

other allowances are recorded based upon historical experience.

include the delivery of content for transactional, subscription and ad supported/free ad-supported streaming TV (“FAST”) on

the digital platforms, and shipment of DVDs and Blu-ray Discs.

Revenue is recognized at the point in time when the performance obligation

is satisfied, which is when the content is available for subscription on the digital platform, at the time of shipment for physical goods,

or point-of-sale for transactional and VOD services as the control over the content or the physical title is transferred to the customer.

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

Physical revenue

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

Physical goods reserved for sales returns

and other allowances are recorded based upon historical experience.

If actual future returns and allowances differ from past experience,

adjustments to our allowances may be required.

CEG also has contracts for the theatrical distribution

of third party feature movies and alternative content.

CEG’s distribution fee revenue and CEG’s participation in box office

receipts 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.

CEG also has contracts for the theatrical

distribution of third party feature movies and alternative content.

CEG’s distribution fee revenue and CEG’s participation

in box office receipts are recognized at the time a feature movie and alternative content are viewed.

CEG has the right to receive or

bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable

at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative

content’s theatrical release date.

Principal Agent Considerations

We determine whether revenue should be reported

on a gross or net basis for each revenue stream based on the transfer of control of goods and services.

Key indicators that we use in

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

● which party is primarily responsible

for fulfilling the promise to provide the specified good or service;

● which party has discretion

in establishing the price for the specified good or service.

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.

Shipping and handling costs are incurred to

move physical goods (e.g., DVDs and Blu-ray Discs) to customers.

We recognize all shipping and handling costs as an expense in cost of

goods sold because we are responsible for delivery of the product to our customers prior to transfer of control to the customer.

Credit Losses

We maintain reserves for potential credit losses

on accounts receivable.

We review the composition of accounts receivable and analyze historical bad debts, customer concentrations, customer

credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.

are recorded primarily on a specific identification basis.

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.

Reserves are recorded primarily on a specific identification basis.

Our CEG segment recognizes accounts receivable,

3 unchanged sentences

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

We record accounts receivable, long-term in connection

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

We record accounts receivable, long-term in

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

Such accounts receivable are discounted

to their present value at prevailing market rates.

The outstanding balances on these arrangements are insignificant and hence the impact

of significant financing would be insignificant.

Contract Liabilities

We generally record a receivable related to revenue

when we have an unconditional right to invoice and receive payment, and we record deferred revenue (contract liability) when cash payments

are received or due in advance of our performance, even if amounts are refundable.

We generally record a receivable related to

revenue when we have an unconditional right to invoice and receive payment, and we record deferred revenue (contract liability) when cash

payments are received or due in advance of our performance, even if amounts are refundable.

Deferred revenue pertaining to our Content

5 unchanged sentences

have extended payment terms.

The ending deferred revenue balance as of December 31, 2021 was $0.3

For the three and nine months ended December 31, 2021 and 2020, respectively, the additions to our deferred revenue balance were

primarily due to cash payments received or due in advance of satisfying performance obligations, while the reductions to our deferred

revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in

the ordinary course of business.

During the three months ended December 31, 2021 and 2020, $0.3 million

and $1.2 million, respectively, of revenue was recognized that was included in the deferred revenue balance at the beginning of the period.

During the nine months ended December 31, 2021 and 2020, $0.6 million and $2.5 million, respectively, of revenue was recognized that

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

As of December 31, 2021, the aggregate amount of contract

revenue allocated to unsatisfied performance obligations was $0.3 million.

This amount is to be recognized among January and February

The ending deferred revenue balance, including

current and non-current balances, as of June 30, 2022 was $0.4 million.

For the three months ended June 30, 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.

Participations and royalties payable

1 unchanged sentence

owned content, we record participations payable, which represent amounts owed to the distributor under revenue-sharing arrangements.

When we provide content distribution services, we record accounts payable and accrued expenses to studios or content producers for royalties

we provide content distribution services, we record accounts payable and accrued expenses to studios or content producers for royalties

owed under licensing arrangements.

1 unchanged sentence

by such studios or content producers.

ASSET ACQUISITIONS

An asset acquisition is an acquisition of

an asset, or a group of assets, that does not meet the definition of a business as substantially all of the fair value of the gross assets

acquired are concentrated in a single or group of similar, identifiable assets.

Asset acquisitions are accounted for by using the cost

accumulation model whereby the cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on a

relative fair value basis.

Determining and valuing intangible assets requires judgment.

BUSINESS COMBINATIONS

A business combination is an acquisition of business.

Business combinations are accounted by allocating the fair value of the purchase price of the assets acquired and liabilities assumed.

Results of Operations for the Three Months

Ended December 31, 2021 and 2020

For the Three Months Ended December 31,

The Company accounts for acquisitions in accordance

with FASB ASC 805, “Business Combinations” (“ASC 805”), and goodwill in accordance with ASC 350, “ Intangibles

— Goodwill and Other” (“ASC 350”).

The excess of the purchase price over the estimated fair value of

net assets acquired in a business combination is recorded as goodwill.

ASC 805 specifies criteria to be used in determining whether intangible

assets acquired in a business combination must be recognized and reported separately from goodwill.

Amounts assigned to goodwill and other

identifiable intangible assets are based on independent appraisals or internal estimates.

ASC 805 defines the acquirer in a business

combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date

as the date the acquirer achieves control.

ASC 805 requires an acquirer to recognize the assets acquired, the liabilities assumed, and

any noncontrolling interest in the acquirer (if any) at the acquisition date, measured at their fair values as of that date.

requires the acquirer to recognize contingent consideration (if any) at the acquisition date, measured at its fair value at that date.

Results of Operations for the Fiscal Three

Months Ended June 30, 2022 and 2021

For the Three Months Ended June 30,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

The revenues in the Content & Entertainment

Business segment increased by 33% for the three months ended December 31, 2021 compared to the three months ended December 31, 2020.

The increase is attributed to organic growth and the addition of new streaming channels.

In addition, the Company deployed new advertising

technology from our streaming partner Amagi, which had a material impact on the Company’s advertising fill and click-per-thousand

impression (“CPM”) rates.

The revenues in the Cinema Equipment Business segment increased by 126% for the three

months ended December 31, 2021 compared to the three months ended December 31, 2020, primarily due to the terms of ongoing digital projector

sales to exhibitors in the Cinedigm Equipment Business deployments.

Content & Entertainment Business

generated by our Cinema Equipment Business segment decreased as a result of the lower system revenue and eligible VPF systems.

system revenue recognized was $1.2 million and $5.6 million, during the quarter ended June 30, 2022 and 2021, respectively.

increase in Blockbuster content released during the period ending June 30, 2022 showed a return to pre-pandemic results;

this was offset by an 80% decrease in eligible VPF systems

for the same period last year.

Revenue in the Content & Entertainment Business segment increased by 38% for the quarter ended June

30, 2022 compared to the quarter ended June 30, 2021.

The increase is consistent with the addition of seven new streaming channels related

to Bloody Disgusting and DMR business acquisitions and four managed channel additions of The Country Network, Real Madrid TV, El Rey and

The Only Way is Essex as well as an increase in the number of advertising partners

Direct Operating Expenses

For the Three Months Ended December 31,

For the Three Months Ended June 30,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

The decrease in direct operating expenses in

the three months ended December 31, 2021 for the Cinema Equipment Business compared to the prior year period was primarily due to a decrease

in property tax liabilities as assets were sold.

The increase in direct operating expenses in the three months ended December 31, 2021

for the Content & Entertainment Business compared to the prior year period was primarily due to significant increase in revenue share

to the OTT managed channels due to continued growth in revenue and distribution of $1,787 thousand as well as additive owned channel

expense for Fandor, Screambox and Bloody Disgusting of $153 thousand.

Content & Entertainment Business

in direct operating expenses in the quarter ended June 30, 2022 for the Cinema Equipment Business compared to the prior period was primarily

due to a decrease in property taxes as a result of system sales.

The increase in direct operating expenses in the three months ended June

30, 2022 for the Content & Entertainment Business compared to the prior year was primarily due to $0.2 million

higher license and royalty costs, $0.3 million increase related to DVD manufacturing and fulfillment, $0.7 million

higher content and production costs related to continued growth in revenue and distribution, $0.3 million

higher personnel and contractors, and $0.2 million related

to the film restoration, conversion and website content production costs.

Additionally, $0.8 million

in Software as a service (“SaaS”) expense resulted from the DMR acquisition was realized during the three months ended June

Selling, General and Administrative Expenses

For the Three Months Ended December 31,

For the Three Months Ended June 30,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

Selling, general and administrative expenses for

the three months ended December 31, 2021 increased by $2.4 million primarily due to a $2.5 million increase in bonus incentive expense,

additional personnel and stock-based compensation to management and employees, partially offset by $0.1 million less legal expense and

$0.1 million less computer expense.

Bad Debt expense

The bad debt benefit recovery was $378 thousand

and $70 thousand for the three months ended December 31, 2021 and 2020, respectively.

These amounts are related to Cinema Equipment Business

and Content & Entertainment accounts that are deemed uncollectable.

Depreciation and Amortization Expense on Property

and Equipment

For the Three Months Ended December 31,

Content & Entertainment Business

general and administrative expenses for the quarter ended June 30, 2022 increased by $3.7 million primarily due to $2.2 million

increase in personnel costs from the acquisitions of Screambox, DMR and Bloody Disguising, $0.7 million

in legal expenses primarily related to a legal settlement ,

and $0.5 million in professional consulting services.

Recovery of Doubtful Accounts

of doubtful accounts was $3 thousand and $0.1 million

for the fiscal three months ended June 30, 2022 and 2021, respectively.

Depreciation and Amortization Expense on

Property and Equipment

For the Three Months Ended June 30,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

Content & Entertainment Business

Depreciation and amortization expense decreased

in our Cinema Equipment Business Segment as the majority of our digital cinema projection systems reached the conclusion of their ten-year

useful lives during the year ended March 31, 2021, leading to a lower fixed asset balance to be depreciated in the three months ended

December 31, 2021.

Content & Entertainment depreciation and amortization expense is higher due to newly developed internal software

programs placed in service and an increase in streaming-related content acquisitions.

Interest expense, net

For the Three Months Ended December 31,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

Interest expense in the Cinema Equipment Business

segment decreased primarily as a result of satisfying debt balances compared to the prior period on the Prospect Loan.

Interest expense

in our Corporate segment decreased as a result of eliminating the loan balances from our Credit Facility.

Income Tax Benefit

We recorded income tax

benefits of approximately $26 thousand and $0 for the three months ended December 31, 2021 and 2020, respectively.

Our effective tax rate

for the three months ended December 31, 2021 and 2020 was 3.8% and 0%, respectively.

Adjusted EBITDA

We define Adjusted EBITDA to be earnings before

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

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

certain other items.

Consolidated Adjusted EBITDA (including the results

of Cinema Equipment Business segment) for the three months ended December 31, 2021 increased by $434 thousand compared to the three months

ended December 31, 2020.

Adjusted EBITDA from our Cinema Equipment Business segment increased by $1.2 million primarily due to the terms

of ongoing digital projector sales to related exhibitors in the Cinedigm deployments.

Adjusted EBITDA from the Content & Entertainment

business and Corporate segment decreased by $792 thousand for the three months ended December 31, 2021 compared to the three months ended

December 31, 2020, due to the bonus incentive expense and additional headcount.

Adjusted EBITDA is not a measurement of financial

performance under GAAP and may not be comparable to other similarly titled measures of other companies.

We use Adjusted EBITDA as a financial

metric to measure the financial performance of the business because management believes it provides additional information with respect

to the performance of its fundamental business activities.

For this reason, we believe Adjusted EBITDA will also be useful to others,

including its stockholders, as a valuable financial metric.

We present Adjusted EBITDA because we believe

that Adjusted EBITDA is a useful supplement to net loss from continuing operations as an indicator of operating performance.

believe that Adjusted EBITDA is a financial measure that is useful to both management and investors when evaluating our performance and

comparing our performance with that of our competitors.

We also use Adjusted EBITDA for planning purposes and to evaluate our financial

performance because Adjusted EBITDA excludes certain incremental expenses or non-cash items, such as stock-based compensation charges,

that we believe are not indicative of our ongoing operating performance.

We believe that Adjusted EBITDA is a performance

measure and not a liquidity measure, and therefore a reconciliation between net loss from continuing operations and Adjusted EBITDA has

been provided in the financial results.

Adjusted EBITDA should not be considered as an alternative to income from operations or net loss

from continuing operations as an indicator of performance or as an alternative to cash flows from operating activities as an indicator

of cash flows, in each case as determined in accordance with GAAP, or as a measure of liquidity.

In addition, Adjusted EBITDA does not

take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows.

intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance

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

Following is the reconciliation of our consolidated

net loss to Adjusted EBITDA:

For the Three Months

Ended December 31,

($ in thousands)

Income tax expense (benefit)

Depreciation and amortization of property and equipment

Amortization of intangible assets

Loss on extinguishment of note payable

Interest expense, net

Change in fair value on equity investment in Starrise

Acquisition, integration and other expense

Recovery benefit of doubtful accounts

Stock-based compensation

Net income attributable to noncontrolling interest

Adjusted EBITDA

Adjustments related to the Cinema Equipment Business

Depreciation and amortization of property and equipment

useful lives during the quarter ended June 30, 2022 and 2021

Amortization of intangible assets

Stock-based compensation and expenses

Acquisition, integration and other expense

Provision for doubtful accounts

Income from operations

Adjusted EBITDA from non-cinema equipment business

Results of Operations for the Nine Months

Ended December 31, 2021 and 2020

For the Nine Months Ended December 31,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

The revenues in the Content & Entertainment

Business segment increased by 32% for the nine months ended December 31, 2021 compared to the nine months ended December 31, 2020.

increase is attributed to the addition of several new streaming channels, organic growth in existing channels, and an expansion of the

Company’s distribution with new and existing Smart TV platforms.

In addition, the Company deployed new advertising technology from

our streaming partner Amagi, which had a material impact on the Company’s advertising fill and click-per-thousand impression (“CPM”)

The revenues in the Cinema Equipment Business segment increased by 435% for the nine months ended December 31, 2021

compared to the nine months ended December 31, 2020.

Cinema Equipment Business segment increased primarily due to the terms of ongoing

digital projector sales to related exhibitors in the Cinedigm deployments.

Direct Operating Expenses

For the Nine Months Ended December 31,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

The increase in direct operating expenses in

the nine months ended December 31, 2021 for the Cinema Equipment Business compared to the prior year period was primarily due to an increase

in property tax obligations in the beginning of the fiscal year for the Cinedigm owned projector assets.

The increase in direct operating

expenses in the nine months ended December 31, 2021 for the Content & Entertainment Business compared to the prior year period was

primarily due to higher streaming and delivery costs driven by increases in revenue and distribution for managed channels, partially

offset by a decrease in manufacturing and fulfillment of physical sales.

Selling, General and Administrative Expenses

For the Nine Months Ended December 31,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

Selling, general and administrative expenses

for the nine months ended December 31, 2021 increased by $5.6 million primarily due to a $4.9 million increase in bonus incentive expense,

additional personnel and stock-based compensation to management and employees, $0.5 million for legal and accounting fees related to

securities reporting and consulting, and $0.2 million for remote-working equipment and computer expense.

Bad Debt expense

The bad debt benefit recovery was $418 thousand

and $123 thousand for the nine months ended December 31, 2021 and 2020, respectively.

These amounts are related to Cinema Equipment Business

and Content & Entertainment accounts that are deemed uncollectable.

Depreciation and Amortization Expense on Property

and Equipment

For the Nine Months Ended December 31,

For the Three Months Ended June 30,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

Depreciation and amortization expense decreased

in our Cinema Equipment Business Segment as the majority of our digital cinema projection systems reached the conclusion of their ten-year

useful lives during the year ended March 31, 2021 leading to a lower fixed asset balance to be depreciated in the nine months ended December

Content & Entertainment depreciation and amortization expense is higher for the newly developed internal software programs

placed in service this year and an increase in streaming-related content acquisitions.

Content & Entertainment Business

and Content & Entertainment Business amortization expense on intangible assets is $111 thousand lower due Customer Contracts asset

being fully amortized, saving $0.4 million, partially offset

by $0.2 million higher amortization expense related to the

DMR acquisition and Cinedigm India.

Interest expense, net

For the Nine Months Ended December

For the Three Months Ended June 30,

($ in thousands)

Cinema Equipment Business

Content & Entertainment

Interest expense in the Cinema Equipment Business

segment decreased primarily as a result of eliminating debt balances compared to the prior period on the Prospect Loan.

Interest expense

in our Corporate segment decreased as a result of eliminating the loan balance from our Credit Facility, and other loans, in addition

to the conversion of certain notes into shares of Class A common stock in the prior year period.

Content & Entertainment Business

Interest expense in our Corporate segment

increased as a result of deferred and earnout consideration accretion related to the acquisition of Bloody Disgusting, FoundationTV and

Changes in fair value in Metaverse

April 1, 2022, trading of Metaverse’s ordinary shares was halted on the Hong Kong Stock Exchange.

investment was previously a level 1 investment as the shares were being actively traded in a marketplace, but with the trading of the

shares being halted the Company needed to reassess the fair value level of the investment.

Without an active market where the shares are

being traded, the investment no longer qualifies as a level 1.

As of June 30, 2022, Metaverse’s

stock valuation is based on an evaluated offer received from an independent third party to purchase our shares and trending assessment

of market pricing and is categorized as Level 3 based on unobservable inputs.

Income Tax Benefit

We recorded income tax

benefits of approximately $576 thousand and $181 thousand for the nine months ended December 31, 2021 and 2020, respectively.

Our effective tax rate

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

recorded income tax expense of $0 for the three months ended

June 30, 2022.

We recorded an income tax benefit of approximately $63 thousand for the three months ended June 30, 2021.

effective tax rate for the three months ended June 30, 2022 and 2021 was zero and negative 1.2%, respectively.

Net Income/Loss attributable

to common shareholders

For the Three Months Ended June 30,

($ in thousands)

Cinema Equipment Business

Content & Entertainment Business

Adjusted EBITDA

1 unchanged sentence

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

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

certain other items.

Consolidated Adjusted EBITDA (including the results

of Cinema Equipment Business segment) for the nine months ended December 31, 2021 increased by $7.9 million compared to the nine months

ended December 31, 2020.

Adjusted EBITDA from our Cinema Equipment Business segment increased primarily due to the terms of ongoing digital

projector sales to related exhibitors in the Cinedigm deployments.

Adjusted EBITDA from the Content & Entertainment business and

Corporate segment decreased by $1.7 million for the nine months ended December 31, 2021 compared to the nine months ended December 31,

2020, due to additional costs associated with the growth of streaming and digital business based on higher volume for streaming

due to the pandemic and adding additional channels and content compared to the prior period.

restructuring, transition and acquisitions expense, net, goodwill impairment and certain other items.

Consolidated Adjusted

EBITDA (including the results of Cinema Equipment Business segment) for the three months ended June 30, 2022 decreased by $7.7 million

compared to the three months ended June 30, 2021.

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

a decrease in systems sales and eligible VPF systems.

Adjusted EBITDA from the Content & Entertainment Business and Corporate decreased

by $2.3 million for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, due to an increase of

$2.8 million in direct operating expense and $3.1 million higher selling, general and administrative expenses, versus previous year

despite a $3.4 million increase in Streaming digital revenue, adding channels, and acquisitions, and $0.4 million in

one-time acquisition cost adjustments.

Adjusted EBITDA is not a measurement of financial

6 unchanged sentences

We present Adjusted EBITDA because we believe

that Adjusted EBITDA is a useful supplement to net loss from continuing operations as an indicator of operating performance.

believe that Adjusted EBITDA is a financial measure that is useful both to management and investors when evaluating our performance and

comparing our performance with that of our competitors.

that Adjusted EBITDA is a useful supplement to net income (loss) from continuing operations as an indicator of operating performance.

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

and comparing our performance with that of our competitors.

We also use Adjusted EBITDA for planning purposes and to evaluate our financial

11 unchanged sentences

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

Following is the reconciliation of our consolidated

net loss to Adjusted EBITDA:

For the Nine Months

Ended December 31,

Following is the reconciliation

of our consolidated net loss to Adjusted EBITDA:

For the Three Months Ended

($ in thousands)

Net income (loss)

Income tax benefit

Income tax (income) expense

Depreciation and amortization of property and equipment

Amortization of intangible assets

(Gain) loss on forgiveness of PPP loan and extinguishment of note payable

(Gain) Loss on extinguishment of note payable

Interest expense, net

Change in fair value on equity investment in Starrise

Acquisition, integration and other expense

Recovery benefit of doubtful accounts

Stock-based compensation

Net income attributable to noncontrolling interest

Intangible impairment

Change in fair value on equity investment in Metaverse

Other expense, net

Recovery of doubtful accounts

Stock-based compensation and expenses

Net income (loss) attributable to noncontrolling interest

Adjusted EBITDA

3 unchanged sentences

Stock-based compensation and expenses

Acquisition, integration and other expense

Provision for doubtful accounts

Other expense

Recovery of doubtful accounts

Income from operations

Adjusted EBITDA from non-cinema equipment business

Recent Accounting Pronouncements

See Note 2 - Summary of Significant Accounting

Policies to our consolidated financial statements included herein.

Adjusted (negative EBITDA) from Content & Entertainment Business and Corporate

Recent Accounting

Pronouncements

See Note 2 - Summary of Significant

Accounting Policies to our consolidated financial statements included herein.

Changes in our cash flows were as follows:

For the Nine Months

Ended December 31,

For the Three Months Ended

($ in thousands)

Net cash provided (used in) by operating activities

Net cash (used in) provided by investing activities

Net cash (used in) provided by financing activities

Net change in cash, cash equivalents, and restricted cash

As of December 31, 2021, we had cash and cash

equivalents of $20.2 million.

As of December 31, 2020, we had cash, cash equivalents,

Net cash (used in) provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

Net decrease in cash and cash equivalents

As of June 30, 2022, we had cash and cash

equivalents balances of $11.5 million.

As of June 30, 2021, we had cash, cash equivalents,

and restricted cash balances of $14.4 million.

For the nine months ended December 31, 2021, net cash provided by operating

activities was primarily driven by income from operations, excluding non-cash expenses such as depreciation, amortization, provision for

doubtful accounts and stock-based compensation, including other changes in working capital.

Additionally, during the nine months ended

December 31, 2021, the Company paid down $32.6 million to vendors at both Content & Entertainment and Corporate.

Operating cash flows

from Content& Entertainment are typically higher during our fiscal third and fourth quarters, resulting from revenues earned during

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

In addition, we make advances on theatrical

releases and to certain home entertainment distribution clients for which initial expenditures are generally recovered within six to twenty

For the nine months ended December 31, 2021 revenues from the sale of digital projections Systems was $9.1 million.

For the nine months ended December 31, 2020, net cash provided by operating

activities was primarily driven by loss from operations, excluding non-cash expenses such as depreciation, amortization, recovery for

doubtful accounts and stock-based compensation, offset by changes in working capital.

Additionally, during the nine months ended December

31, 2020, the Company paid down $22.0 million to vendors at both the CEG and Corporate.

Cash received from VPFs declined from the previous

year period as Phase I Deployment Systems in our Cinema Equipment Business reached the conclusion of their deployment payment period with

certain major studios.

Changes in accounts receivable from our studio customers largely impact cash flows from operating activities and

vary based on the seasonality of movie release schedules by the major studios.

Operating cash flows from CEG are typically higher during

our fiscal third and fourth quarters, resulting from revenues earned during the holiday season, and lower in the other two quarters as

we pay royalties on such revenues.

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

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

Cash flows were also impacted as a result

of COVID-19, as during the nine months ended December 31, 2020, theatres in many major markets remained closed throughout the third quarter

causing the majority of major studios to move wide releases scheduled for the three months ended December 31, 2020 to future dates;

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

digital cinema business earns a VPF when a movie is first played on a System, the temporary theatre closures resulting from the COVID-19

pandemic resulted in reduced revenues.

For the nine months ended December 31, 2021,

cash flows used in investing activities consisted of purchases of property and equipment of $292 thousand and the purchase of two businesses

of $4.8 million related to the business combination for FoundationTV and the asset acquisition of Bloody Disgusting (as defined below).

For the nine months ended December 31, 2020,

cash flows used in investing activities consisted of proceeds from the sale of Starrise shares of $0.8 million, purchases of property

and equipment of $0.3 million, the sale of property and equipment of $0.2 million, and the purchase of intangible assets of $0.7 million

related to the asset acquisition.

For the nine months ended December 31, 2021, net

cash flows from financing activities consisted $12.4 million received in connection with the issuance of Class A common Stock, and cash

flow used for payments of the remaining outstanding balances of approximately $7.8 million in notes payable and $2.0 million in Credit

For the nine months ended December 31, 2020,

cash flows provided by financing activities consisted of payments of approximately $22.4 million in notes payable, offset by $12.8 million

from Credit Facility draw, $36.2 million received in connection with the issuance of Class A Common Stock and the exercise of warrants,

and $2.2 million received pursuant to the Payment Protection Program of the Coronavirus Aid, Relief and Economic Security Act.

We may continue to generate net losses for the

foreseeable future primarily due to depreciation and amortization, marketing and promotional activities and content acquisition and marketing

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

For the three months ended June 30, 2022, net cash provided by operating

activities is primarily driven by income from operations, excluding non-cash expenses such as depreciation, amortization, recovery for

doubtful accounts and stock-based compensation, gain on extinguishment of note payable, including other changes in working capital.

Additionally,

during the three months ended June 30, 2022, the Company increased accounts payable by $5.4 million to vendors.

Accounts receivable

increased due to growth in streaming and acquisitions of Bloody Disgusting, Screambox and DMR.

Cash received from VPFs decreased from

the previous period in alignment with the decrease in eligible VPF systems.

Changes in accounts receivable from our studio customers

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

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

the holiday season, and seasonally lower in the other two quarters.

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

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

For the three months ended June 30, 2021,

net cash provided by operating activities is primarily driven by income from operations, excluding non-cash expenses such as depreciation,

amortization, provision for doubtful accounts and stock-based compensation, including other changes in working capital.

Additionally,

during the three months ended June 30, 2021, the Company paid down $8.1 million to vendors at both CEG and Corporate.

Cash received from

VPFs declined from the previous period as Phase I Deployment Systems in our Cinema Equipment Business reached the conclusion of their

deployment payment periods with certain major studios.

Changes in accounts receivable from our studio customers largely impact cash flows

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

This was further impacted

by the decrease in eligible VPF systems.

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

reduction of eligible VPF systems resulted in reduced revenues.

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

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

on such revenues.

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

initial expenditures are generally recovered within six to twelve months.

For the three months ended June 30, 2022 revenues from the sale

of digital projections Systems was $1.2 million.

For the three months ended June 30, 2022,

cash flows used in investing activities consisted of purchases of property and equipment of $0.1 million.

For the three months ended June 30, 2021,

cash flows used in investing activities consisted of purchases of property and equipment of $40 thousand and the purchase of a business

of $1.0 million related to the business combination for FoundationTV.

For the three months ended June 30, 2022,

cash flows provided by financing activities consisted of payments of approximately $0.3 million in notes payable.

For the three months ended June 30, 2021,

cash flows used in financing activities consisted of payments of approximately $4.8 million in notes payable and $1.6 million in Credit

Facility repayments.

Contractual Obligations

The following table summarizes our significant

contractual obligations as of June 30, 2022:

Contractual Obligations (in thousands)

Operating lease obligations

We may continue to generate net losses for

the foreseeable future primarily due to depreciation and amortization, marketing and promotional activities and content acquisition and

marketing costs.

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

if necessary.

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

however, we may need to raise additional capital for working

capital as deemed necessary.

Failure to generate additional revenues, raise additional capital or manage discretionary spending could

have an adverse effect on our financial position, results of operations or liquidity.

Revenues from our Cinema Equipment Business

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

movies by the motion picture studios.

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

winter holiday season.

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

The timing of

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

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

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

seasonality of motion picture exhibition is becoming less pronounced as the motion picture studios are releasing movies somewhat

more evenly throughout the year.

however, we may need to raise additional capital

for working capital as deemed necessary.

Failure to generate additional revenues, raise additional capital or manage discretionary spending

could have an adverse effect on our financial position, results of operations or liquidity.

Revenues from our Cinema Equipment Business derived from the collection

of VPFs from motion picture studios are seasonal, coinciding with the timing of releases of movies by the motion picture studios.

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

The unexpected emergence of

a hit movie during other periods can alter the traditional trend.

The timing of movie releases can have a significant effect on our results

of operations, and the results of one quarter are not necessarily indicative of results for the next quarter or any other quarter.

CEG benefits from the winter holiday season, we believe the seasonality of motion picture exhibition, is becoming less pronounced as the

motion picture studios are releasing movies somewhat more evenly throughout the year.

Off-balance sheet arrangements

We are not a party to any off-balance sheet arrangements,

other than CDF2 Holdings, LLC (“CDF2 Holdings”), our wholly-owned unconsolidated subsidiary.

As discussed further in Note

3 - Other Interests to the Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q,

we hold a 100% equity interest in CDF2 Holdings, which is an unconsolidated variable interest entity (“VIE”), which wholly

owns Cinedigm Digital Funding 2, LLC;

We are not a party to any off-balance sheet arrangements other than

as discussed in Note 2 – Summary of Significant Accounting Policies, Basis of Presentation and Consolidation and Note

3 - Other Interests to the Condensed Consolidated Financial Statements (Unaudited) included in Item 1 of this Quarterly

Report on Form 10-Q, we hold a 100% equity interest in CDF2 Holdings, which is an unconsolidated variable interest entity (“VIE”),

which wholly owns Cinedigm Digital Funding 2, LLC;

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

Impact of Inflation

The impact of inflation on our operations has

not been significant to date.

The impact of inflation on our operations

has not been significant to date.

However, there can be no assurance that a high rate of inflation in the future would not have an adverse

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-Q

Item 2. Management’s Discussion and Analysis