What changed in Cineverse Corp.'s 10-K — 2023 vs 2024

Since our inception, we have played a significant role in the digital distribution revolution that continues to transform the media and entertainment landscape. Cineverse delivers high-quality, curated content through subscription video on demand ("SVOD"), dedicated ad-supported ("AVOD"), ad-supported streaming linear ("FAST") channels, social video streaming services, and audio podcasts.

The Company currently reaches over 72 million monthly active users across streaming apps, FAST linear channels, third party services, social video, and browser based services. The Company has rights to a library of over 58,000 film & TV assets, 26 different enthusiast streaming brands including 16 live streaming channels, and over 1.23 million SVOD subscribers.

The Company’s services are available to consumers on an addressable footprint of an estimated 1.1 billion streaming devices. Cineverse has been a technological pioneer over its history and continues to be one today.

Through its world-class, proprietary streaming technology, the Company has become a partner of choice for content producers, rights holders, and major media companies seeking to launch web, mobile, and connected TV streaming services to monetize their content in the streaming ecosystem.

The Company is well positioned in a changing media and entertainment landscape.

Cineverse is capitalizing on an evolving competitive environment where the top of the streaming industry is consolidating including competitors such as Netflix, Amazon Prime, Hulu and Disney Plus while Cineverse has a complimentary offering as a leading 1 independent distributor with a focus on the enthusiast segment of the market.

Based on publicly accessible data and internal Company research, less than 3% of the total content listed on IMDB released since 1950 is available on the top 10 global streaming services.

Given our extensive experience in operating and distributing enthusiast content, and the ability to centralize operations and reduce operating costs due to our proprietary technology, the Company has developed an M&A roll-up strategy with a focus on enthusiast channels, content, and supporting technology. Over the past several years, the Company has acquired numerous channels and content libraries.

The Company will continue to pursue accretive M&A opportunities in order to grow profitably and fortify its competitive advantage.

Some of the evolving consumer habits that are driving consumption of streaming and OTT content include: • Continued “cord-cutting” resulting in an increase in SVOD & AVOD migration, • Consumer preference towards third party channels and content platforms, • The rapid adoption of connected televisions and other dedicated streaming devices, • A rapid rise in consumption of ad-based content, and • Increasing demand for underserved content.

On June 7, 2023, Cineverse Corp. filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Company's Fifth Amended and Restated Certificate of Incorporation (the "Reverse Split Charter Amendment"), pursuant to which the Company effected a 1-for-20 reverse stock split of the Company's Class A common stock.

We are unique among most independent distributors because of our direct relationships with thousands of digital as well as physical retail locations, including Walmart, Target, Apple, Netflix and Amazon, as well as the national Video on Demand platforms.

Our library of films and television episodes encompasses award winning documentaries from Docurama Films®, acclaimed independent films, festival picks and a wide range of content from brand name suppliers, including NFL, Konami and Hallmark.

Additionally, we are leveraging our infrastructure, technology, content and distribution expertise to rapidly and cost effectively build and expand our streaming digital network businesses, which operates as Cineverse Networks. The Company owns, operates and has the right to operate 64 different enthusiast streaming brands including 16 current live streaming channels under a wide array of business models.

The timeline for planning and launching a channel varies from months to years and is also dependent on carriage conversations with a wide array of platforms and distributors.

Through our rapidly expanding base of distribution arrangements, Cineverse has an estimated addressable device footprint of 1.1 billion devices on a global basis. Our focus in the near term will be to expand our market position in the FAST and AVOD divisions of the streaming industry, taking advantage of the shift in television advertising revenue to the OTT market.

CINEMA EQUIPMENT SEGMENT Our Cinema Equipment segment was launched in 2005 and served as a financing vehicle and administrator for digital equipment systems (the “Systems”) installed nationwide in our first deployment phase to theatrical exhibitors (“Phase I Deployment”) and for Systems installed domestically and internationally in our second deployment phase (“Phase II Deployment”).

We retained ownership of 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 did not retain ownership of the Systems and residual cash flows after the completion of cost recoupment and the expiration of the exhibitor master license agreements.

The Cinema Equipment segment also provided monitoring, collection, verification and management services to exhibitors who purchased their own equipment and collected and disbursed virtual print fees (“VPFs”) and alternative content fees (“ACFs”) from motion picture studios and distributors and movie and theatrical exhibitors (collectively, “Services”).

For those Systems for which we retained ownership, under the terms of our standard cinema equipment licensing agreements provide that after expiration the exhibitors have the option to: (1) return the Systems to us; (2) renew 4 their license agreement for successive one-year terms; or (3) purchase the Systems from us at fair market value.

As permitted by these agreements, we have begun, and expect to continue, to pursue the sale of the Systems to such exhibitors. Such sales were as originally contemplated as the conclusion of the digital cinema deployment plan. System sales for the years ended March 31, 2023 and 2022 were $11.8 million and $16.1 million, respectively.

Beginning in December 2015, certain of our Systems began to reach the conclusion of their 10-year deployment payment period with certain distributors and, therefore, revenue ceased to be recognized on such Systems.

As of March 31, 2023, our Phase I Deployment and Phase II Deployment agreements with certain major studios have reached their conclusion and we do not expect any material revenues to be generated in the Cinema Equipment segment except for System Sales.

For the years ended March 31, 2023 and 2022, our Cinema Equipment segment Services revenues were $0.3 million and $2.1 million, respectively. ENVIRONMENTAL The nature of our business does not subject us to environmental laws in any material manner. EMPLOYEES As of March 31, 2023 we had 168 employees, 165 full-time and 3 part time or temporaries.

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