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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

 

November 10, 2022

(Date of earliest event reported)

 

Cinedigm Corp.

(Exact name of registrant as specified in its charter)

 

Delaware   001-31810   22-3720962
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

244 Fifth Avenue, Suite M289, New York, NY   10001
(Address of principal executive offices)   (Zip Code)

 

212-206-8600

(Registrant’s telephone number, including area code)

 

 

(Former name or former address, if changed since last report)

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transmission period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Class A Common Stock   CIDM   Nasdaq Capital Market

 

 

 

 

 

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On November 10, 2022, Cinedigm Corp. (the “Company”) amended its 2017 Equity Incentive Plan (the “Plan Amendment”) to increase the number of shares authorized for issuance thereunder from 18,098,270 to 25,098,270.

 

The foregoing description of the Plan Amendment is qualified in its entirety by reference to such amendment, which is filed herewith as Exhibit 10.1.

 

Item 5.07

Submission of Matters to a Vote of Security Holders.

 

(a) At the Annual Meeting of Stockholders of the Company held on November 10, 2022 (the “Annual Meeting”), the stockholders of the Company voted on four proposals. Proxies for the Annual Meeting were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. There was no solicitation of proxies in opposition to management’s nominees as listed in the proxy statement and all of management’s nominees were elected to our Board of Directors.

 

(b) Details of the voting are provided below:

 

Proposal 1:

 

To elect five (5) members of the Company’s Board of Directors to serve until the 2023 Annual Meeting of Stockholders (or until successors are elected or directors resign or are removed).

 

   Votes For   Votes
Withheld
   Broker
Non-Votes
 
Christopher J. McGurk   52,576,925    2,716,813    44,228,317 
Ashok Amritraj   50,714,763    4,578,975    44,228,317 
Peter C. Brown   44,697,385    10,596,353    44,228,317 
Patrick W. O’Brien   51,037,482    4,256,256    44,228,317 
Peixin Xu   39,767,271    15,526,467    44,228,317 

 

Proposal 2:

 

   Votes For   Votes
Against
   Abstentions   Broker
Non-Votes
 
To approve by non-binding vote, executive compensation.
   43,861,506    10,270,152    1,162,080    44,228,317 

 

Proposal 3:

 

   Votes For   Votes
Against
   Abstentions   Broker
Non-Votes
 
To approve an amendment to the Company's 2017 Equity Incentive Plan to increase the total number of shares of Class A Common Stock available for issuance thereunder.   41,978,169    12,382,870    932,699    44,228,317 
                     

 

Proposal 4:

 

   Votes For   Votes
Against
   Abstentions   Broker
Non-Votes
 
To ratify the appointment of EisnerAmper LLP as our independent auditors for the fiscal year ending March 31, 2023.   96,734,744    1,992,004    795,307    N/A 

 

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Item 8.01. Other Events.

 

On November 10, 2022, Christopher J. McGurk, the Chairman and Chief Executive Officer of the Company, delivered remarks at the Annual Meeting. The remarks are attached hereto as Exhibit 99.1. A video shown during the remarks is available at https://cinedigm.com/cineverse-preview/.

 

Item 9.01

Financial Statements and Exhibits.

 

Exhibit No.   Description
     
10.1   Amendment No. 6 to the 2017 Equity Incentive Plan.
99.1   Remarks delivered by Christopher J. McGurk on November 10, 2022.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURE

 

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: November 14, 2022

 

By:  /s/ Gary S. Loffredo
  Name: Gary S. Loffredo
  Title: President, Chief Operating Officer, General Counsel & Secretary

 

 

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Exhibit 10.1

 

AMENDMENT NO. 6

TO

CINEDIGM CORP. 2017 EQUITY INCENTIVE PLAN

 

AMENDMENT NO. 6, dated as of November 10, 2022 (this “Amendment”), to the 2017 Equity Incentive Plan (as amended, the “Plan”) of Cinedigm Corp., a Delaware corporation (the “Corporation”).

 

WHEREAS, the Corporation maintains the Plan, effective as of August 31, 2017; and

 

WHEREAS, the Board of Directors of the Corporation deems it to be in the best interest of the Corporation and its stockholders to amend the Plan in order to increase the maximum number of shares of the Corporation’s Class A Common Stock, par value $.001 per share, which may be issued and sold under the Plan from 18,098,270 shares to 25,098,270 shares.

 

NOW, THEREFORE, BE IT RESOLVED the Plan is hereby amended as follows:

 

1. The first sentence of Section 4.1(a) shall be revised and amended to read as follows:

 

“The maximum number of Shares available for issuance to Participants under this Plan, inclusive of Shares issued and Shares underlying outstanding awards granted on or after the Effective Date, is 25,098,270 Shares, which includes 128,270 unused Shares carried over from the Existing Incentive Plan.”

 

2. This Amendment shall be effective as of the date first set forth above.

 

3. In all respects not amended, the Plan is hereby ratified and confirmed and remains in full force and effect.

 

  CINEDIGM CORP.
     
  By: /s/ Gary S. Loffredo
  Name: Gary S. Loffredo
  Title: President, Chief Operating Officer, General

 

Exhibit 99.1

 

Remarks delivered by Christopher J. McGurk, the Chairman and Chief Executive Officer of Cinedigm Corp., at the 2022 Annual Meeting of Stockholders on November 10, 2022:

 

Thank you all again for joining us at the Cinedigm Annual Meeting of Stockholders today. Let me now give a brief update on our strong business performance in fiscal year 2022 and a look into the extremely positive business momentum that has carried the Company into fiscal year 2023 and continues to accelerate as we implement Cinedigm’s unique business strategy.

 

First though, before getting into a recap of our fiscal year 2022 performance, I’d like to start by applauding the huge success of our 360-degree approach to horror -- the hottest genre in the entertainment business. Cinedigm acquired Bloody Disgusting, a major online horror brand, and the Screambox horror streaming channel in 2021, and one year later, that investment has definitely paid off. As you have certainly read about over the past month, our acquisition and release of the low-budget, artfully-crafted indie phenomenon Terrifier 2 has led to an incredible amount of buzz around the film and its iconic central character Art the Clown. Critically acclaimed and the best reviewed horror movie in years, Terrifier 2 has generated more than $10 million at the domestic box office despite virtually no traditional release marketing effort, in large part due to our extremely effective viral marketing and PR approach through Bloody Disgusting.

 

Terrifier 2 also launched on our Screambox streaming channel on Halloween, driving increased traffic of +250% with subscriptions up +295% over the channel’s previous high month. While we will have a more accurate understanding of the film’s big upside impact on our results over the next few quarters, following its exclusive run on Screambox and as it flows into the other ancillary markets, the tremendous success of Terrifier 2 has made a compelling statement about Cinedigm’s leadership and capabilities in the lucrative horror space, which hopefully will lead to more breakout titles in the future. In fact, beyond Terrifier 2, we are committed to growing horror across podcasts, editorial, film and TV acquisitions, and all distribution channels from theatrical to SVOD and FAST.

 

Now, let’s get into our performance. Cinedigm has continued to perform very strongly from a financial standpoint in contrast to many other players in our sector who have faced some headwinds due in large part to their single-channel and/or single revenue model strategies. In fiscal year 2022, we grew our streaming revenues by triple digits (including triple digit advertising revenue growth), and ended the year with no debt, having fully eliminated more than $50 million in debt since the start of the pandemic, with more than $13 million in cash on hand and the strongest balance sheet position we have ever been in.

 

We have generated these stellar results because Cinedigm’s extraordinary executive team is delivering exactly what we have promised: rolling up 7 streaming content and channel acquisitions, including the aforementioned Bloody Disgusting; expanding our enthusiast channel portfolio to 30 channels; building our content library into one of the largest modern streaming libraries in the world; leveraging our highly automated proprietary Matchpoint distribution platform across multiple revenue streams; and taking advantage of our 5-year presence in the high-growth FAST channel and ad-supported streaming business (while many other players in the business, including Netflix, are just now scrambling to get started in that lucrative space).

 

 

 

 

Importantly, through organic streaming growth and our acquisition efforts, through which we acquired 15 new streaming channels and distribution rights to more than 17,000 new films and TV episodes, we reached the scale necessary to launch several new internal, high-margin, low-investment business initiatives that will generate at least $50 million in annual revenues steady state and ensure sustainable long-term profitability.

 

These initiative are:

 

Cineverse, our flagship streaming service, which we launched in September and includes our growing portfolio of free, ad-supported linear channels and more than 12,000 titles in a Matchpoint-powered universe with enhanced content discovery capabilities along with the best user experience in the streaming business. Cineverse is THE key initiative to drive home our goal of becoming the “Spotify of independent streaming content.

 

The second initiative is the Cinedigm Podcast Network, already 30 podcasts and 66 million downloads strong with a goal to reach over 100 podcasts in the next 24 months;

 

The third initiative is Cinedigm Ad Solutions, which is already capturing even more of the revenue in the exploding ad-supported streaming business; and

 

The fourth initiative is Matchpoint 2.0, which has been successfully rolling out and is already generating significant new revenue opportunities via SaaS offerings and content aggregation.

 

These initiatives are driving results that over-index industry growth and validate our business strategy.

 

In fact, I am incredibly proud of our results in fiscal year 2022, during which total revenues grew 78% to $56.1 million, led by overall streaming channel growth of 108% and ad-supported revenue growth of 147%. Adjusted EBITDA for the year was $11 million, an increase of $13.9 million over the prior year. Our net income for the full year was $1.8 million versus a net loss in the prior year.

 

We also ended the year with a 46,000 title content library, one of the largest global streaming libraries in the world; a 30-channel portfolio of enthusiast streaming brands highlighted by channels like The Bob Ross Channel (in both English and Spanish), Dove Channel, Fandor, RetroCrush, and Screambox, a robust content licensing business that involves every major streaming player including Netflix, Amazon and Hulu; and full ownership of a proprietary streaming and content aggregation technology in Matchpoint that is second to none in the business.

 

Cleary, those results and business initiatives underscore that Cinedigm has established itself as a leading independent player in the streaming technology and content space.

 

Moving on to fiscal year 2023, our laser-like focus on implementing our unique business strategy is already paying off with even greater business momentum.

 

In the first fiscal quarter of 2023, we grew our streaming revenues by 98% on top of triple digit growth in the prior year and our ad-supported streaming revenues by 131%. On a two-year basis, our streaming revenues were up 455%.

 

We expect these record results will continue for the foreseeable future, and look forward to reporting our progress and continued momentum on our second fiscal quarter earnings call on November 15th, next Tuesday.

 

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We also look forward to providing an update next week on our growth and progress with our cost streamlining initiatives, which will help achieve our goal of hitting sustainable profitability over the next couple of quarters. It’s important to note that our Second Quarter earnings will not include any impact at all from the terrific performance of Terrifier 2, which debuted in on October 6th. We expect a very significant upside from the film’s breakout performance in our fiscal Third Quarter, ending December 31, 2022, and in the quarters beyond that

 

I’d also like to take a moment to comment on everyone’s continued frustration with what we believe is an extremely undervalued Cinedigm share price. Despite market conditions and investor sentiments, it is difficult for all of us to view our depressed equity value when we have performed so strongly and our business strategy is clearly working so well. Despite that, I remain extremely bullish on Cinedigm’s outlook over the near and long-term from both a revenue growth and profitability standpoint. Our results have and will continue to stand for themselves in the face of whatever negative market sentiments continue to be spun, in many cases, by short-sellers and others who seek to take advantage of the still fearful investment environment. So, while we will continue to consider and pursue all options including a stock buyback to encourage a fairer valuation, I remain optimistic that as investors wake up to our strong performance, unique and successful strategy, as well as a big upcoming financial boost from Art the Clown and Terrifier 2, this issue will take care of itself organically.

 

Finally, let me wrap up these remarks by acknowledging the efforts of all the Company’s employees in helping to build Cinedigm into the premier independent content streaming and technology company it is today. Our employees remain Cinedigm’s greatest asset, and I want to thank each and every one of them for their dedication and hard work. I also want to thank our Board of Directors for their continued support and insightful guidance.

 

And I want to thank all our stockholders for your trust, patience and continued support of Cinedigm.

 

Thank you.

 

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