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What changed in Cineverse Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Cineverse Corp.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+169 added−139 removedSource: 10-K (2025-06-30) vs 10-K (2024-07-01)

Top changes in Cineverse Corp.'s 2025 10-K

169 paragraphs added · 139 removed · 105 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeITEM 1. BUSINESS OVERVIEW Cineverse Corp. (“Cineverse”, “us”, “our”, "we", and “Company” refers to Cineverse Corp. and its subsidiaries unless the context otherwise requires) was incorporated in Delaware on March 31, 2000. Since our inception, we have played a significant role in the digital distribution revolution that continues to transform the media and entertainment landscape.
Biggest changeITEM 1. BUSINESS OVERVIEW Cineverse Corp. (“Cineverse”, “us”, “our”, "we", and “Company” refers to Cineverse Corp. and its subsidiaries unless the context otherwise requires) was incorporated in Delaware on March 31, 2000.
We believe our scaled channel portfolio, our superior capabilities in launching and managing channels at scale, and our strategic partnerships with key content owners and platforms will provide us a strategic advantage to gain considerable market share in the immediate future.
We believe our scaled channel portfolio, our superior capabilities in launching and managing channels at scale, and our strategic partnerships with key content owners and platforms will provide us with a strategic advantage to gain considerable market share in the immediate future.
The Company believes it is positioned to deliver sustained profitable growth in the future by executing on several key initiatives: • Content: Acquiring and distributing high-quality, curated content through SVOD, AVOD and linear FAST channels • Technology & Distribution: o Expanding streaming content business through its Matchpoint™ platform, o Launching and scaling our portfolio of enthusiast streaming channels. o Accelerating the Company’s device and platform reach and further establishing key strategic advantages through expanded partnership deals with connected streaming TV companies including Amazon, Samsung, Roku, YouTube TV and Vizio, as well as large OEM’s, cable companies and technology platforms including LG, Sling TV, and others. o Licensing film and TV content to every key player in OTT streaming ecosystem with Amazon, Apple, Netflix and Google. • Audience: Growing viewership and subscription numbers significantly beyond our current base of more than 82 million monthly viewers to potentially hundreds of millions of global viewers across billions of connected devices. • Financial Performance/Metrics: o Driving EBITDA through incremental revenue growth from technology product launches such as Matchpoint, expansion of distribution, improved monetization and partnerships, and continuous efforts on cost mitigation.
The Company believes it is positioned to deliver sustained profitable growth in the future by executing on several key initiatives: • Content : Acquiring and distributing high-quality, curated content through SVOD, AVOD and linear FAST channels • Technology and Distribution : o Expanding streaming content business through its Matchpoint™ platform, o Launching and scaling our portfolio of enthusiast streaming channels. o Accelerating the Company’s device and platform reach and further establishing key strategic advantages through expanded partnership deals with connected streaming TV companies including Amazon, Samsung, Roku, YouTube TV and Vizio, as well as large OEM’s, cable companies and technology platforms including LG, Sling TV, and others. o Licensing film and TV content to leading players in OTT streaming ecosystem with Amazon, Apple, Netflix and Google. • Audience: Growing viewership and subscription numbers significantly beyond our current base of more than 82 million monthly viewers to potentially hundreds of millions of global viewers across billions of connected devices. • Financial Performance/Metrics : o Driving EBITDA through incremental revenue growth from technology product launches such as Matchpoint™, expansion of distribution, improved monetization and partnerships, and continuous efforts on cost mitigation.
We believe that we are well positioned to succeed in the streaming channel business for the following key reasons: • More than 15 years of experience as a primary distributor of content to scale third party OTT platforms such as Netflix, Hulu, Amazon Prime, Tubi, Apple iTunes and more, and nearly seven years of history operating OTT channels with millions of downloads, hundreds of thousands of registered users, and hundreds of millions of discrete data points on our customer’s behavior and preferences; • The depth and breadth of our over 33,000 title film and television episode library; • Our digital assets and deep, long-standing relationships as launch partners that cover the major digital platforms and devices; • Our marketing expertise; • Our flexible releasing strategies, which differ from larger entertainment companies that need to protect their legacy businesses; • Our proprietary streaming technology enabling us to operate at scale and at lower operating costs than our competitors; and • Our experienced management team.
We believe that we are well positioned to succeed in the streaming channel business for the following key reasons: • More than 15 years of experience as a primary distributor of content to scale third-party OTT platforms such as Netflix, Hulu, Amazon Prime, Tubi, Apple iTunes and more, and nearly seven years of history operating OTT channels with millions of downloads, hundreds of thousands of registered users, and hundreds of millions of discrete data points on our customer’s behavior and preferences; • The depth and breadth of our over 71,000 title film and television episode library; • Our digital assets and deep, long-standing relationships as launch partners that cover the major digital platforms and devices; • Our marketing expertise; • Our flexible releasing strategies, which differ from larger entertainment companies that need to protect their legacy businesses; • Our proprietary streaming technology enables us to operate at scale and at lower operating costs than our competitors; and • Our experienced management team.
The Company has rights to a library of over 33,000 film & TV assets, has reached over 82 million streaming viewers, has over 1.4 million SVOD subscribers, and 25 million followers on social media. The Company is well positioned in a changing media and entertainment landscape.
The Company has rights to a library of over 71,000 film and TV assets, has reached over 82 million streaming viewers, has over 1.4 million SVOD subscribers, and 25 million followers on social media. The Company is well positioned in a changing media and entertainment landscape.
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 also pursues accretive M&A opportunities in order to grow profitably and fortify its competitive advantage. 1 As part of its M&A strategy, the Company: • Focuses on acquiring premium content and streaming channels; • Explores opportunities for new technology and other revenue channels including ecommerce, podcasts and merchandise; and • Leverages its proprietary tech platform (Matchpoint TM ), which allows for on-boarding multiple acquisitions concurrently.
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 also pursues accretive mergers and acquisitions ("M&A") opportunities in order to grow profitably and fortify its competitive advantage. 1 As part of its M&A strategy, the Company: • focuses on acquiring premium content and streaming channels; • explores opportunities for new technology and other revenue channels including e-commerce, podcasts and merchandise; and • leverages its proprietary tech platform (Matchpoint TM ), which allows for on-boarding multiple acquisitions concurrently.
The Company’s streaming technology platform, known as MatchpointTM, is a software-based streaming operating platform which provides clients with AVOD, SVOD, transactional video on demand ("TVOD") and linear capabilities, automates the distribution of content, and features a robust data analytics platform.
The Company’s streaming technology platform, known as Matchpoint TM , is a software-based streaming operating platform which provides clients with AVOD, SVOD, transactional video on demand ("TVOD") and linear capabilities, automates the distribution of content, and features a robust data analytics platform.
EMPLOYEES As of March 31, 2024 we had 179 employees, 176 full-time and 3 part time, on-leave, or temporaries. Of these employees, 74 are in operations, 16 are in sales and marketing, and 89 are in executive, finance, technology and administrative functions. There are 85 employees based in the United States and 94 employees based in India.
EMPLOYEES As of March 31, 2025, we had 218 employees, 213 full-time and 5 part time, on-leave, or temporary. Of these employees, 127 are in operations, 40 are in sales and marketing, and 51 are in executive, finance, technology and administrative functions. There are 101 employees based in the United States and 117 employees based in India.
Our common stock is listed on the Nasdaq Capital Market, or Nasdaq, under the symbol “CNVS.” On April 4, 2022, the Company received a letter from the Nasdaq indicating that the Company no longer met the Bid Price Rule.
Our common stock is listed on the Nasdaq Capital Market, or Nasdaq, under the symbol “CNVS.” 2 Our Strategy The shift from traditional entertainment consumption to streaming continues to accelerate.
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On June 7, 2023, The Nasdaq Stock Market LLC (“Nasdaq”) approved an additional extension through July 19, 2023, during which the Company may cure the previously-announced minimum bid price deficiency.
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In order to regain compliance with the Bid Price Rule, in addition to the initiation of the implementation of a stock repurchase program of up to 500 thousand shares in the open market over a 12 month period since announcement in March 2023, the Company has effected a reverse stock split.
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The Company has maintained its compliance with the $1.00 bid price requirement for continued listing on The Nasdaq Capital Market and remains subject to a one-year “Panel Monitor” as that term is defined by Nasdaq Listing Rule 5815(d)(4)(A) through June 30, 2024.
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On June 9, 2023, the Company effected a 1-for-20 reverse stock split of the Company's Class A common stock. All shares and price amounts in this report reflect the 1-for-20 reverse stock split. 2 Our Strategy The shift from traditional entertainment consumption to streaming continues to accelerate.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe have encountered and may continue to encounter the challenges, uncertainties and difficulties frequently experienced in new and rapidly evolving markets, including: • limited operating experience; • net losses; • lack of sufficient customers or loss of significant customers; • a changing business focus; • the downward trend in sales of physical DVD and Blu-ray discs; • rapidly-changing technology for some of the products and services we offer; and • difficulties in managing potentially rapid growth.
Biggest changeWe have encountered and may continue to encounter the challenges, uncertainties and difficulties frequently experienced in new and rapidly evolving markets, including: • limited operating experience; • net losses; • lack of sufficient customers or loss of significant customers; • a changing business focus; • increased competition; • our ability to significantly increase our subscriber base and retain customers; • our ability to enforce our contracts and collect receivables from third parties; • fluctuations in the use of the internet for the purchase of consumer goods and services such as those we offer; • the success of our content licensing to/from other media companies; • technical difficulties, system downtime or internet disruptions; • the downward trend in sales of physical DVD and Blu-ray discs; • our ability to successfully manage the integration of operations and technology resulting from possible future acquisitions; • rapidly changing technology for some of the products and services we offer; • difficulties in managing potentially rapid growth; and • general economic conditions and economic conditions specific to the internet, online commerce and the media industry.
Even if we identify appropriate acquisition candidates, we may be unable to negotiate successfully the terms of the acquisitions, finance them, integrate the acquired business into our then existing business, obtain required regulatory approvals, and/or attract and retain customers.
Even if we identify appropriate acquisition candidates, we may be unable to successfully negotiate the terms of the acquisitions, finance them, integrate the acquired business into our then existing business, obtain required regulatory approvals, and/or attract and retain customers.
CDF2 Holdings has entered into the a lease (the “CHG Lease”) pursuant to which CHG-Meridian U.S. Finance, Ltd. provided sale/leaseback financing for digital cinema projection systems that were partially financed as part of the Phase II deployment of our legacy digital equipment business.
CDF2 Holdings has entered into a lease (the “CHG Lease”) pursuant to which CHG-Meridian U.S. Finance, Ltd. provided sale/leaseback financing for digital cinema projection systems that were partially financed as part of the Phase II deployment of our legacy digital equipment business.
Our future success will also depend upon our ability to hire, train, integrate and retain qualified new employees and our inability to do so may have an adverse impact upon our business, financial condition, operating results, liquidity and prospects for growth. 7 Our success depends on external factors in the media industry.
Our future success will also depend upon our ability to hire, train, integrate and retain qualified new employees and our inability to do 7 so may have an adverse impact upon our business, financial condition, operating results, liquidity and prospects for growth. Our success depends on external factors in the media industry.
A significant outbreak of contagious diseases in the human population and resulting widespread health crisis could adversely affect the economies and financial markets of many countries, resulting in an economic downturn and reduced spending on media and technology.
A significant outbreak of contagious diseases in the human population and resulting in a widespread health crisis could adversely affect the economies and financial markets of many countries, resulting in an economic downturn and reduced spending on media and technology.
Any of the factors listed below could have a material adverse effect on an investment in our securities: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; • changes in the market’s expectations about our operating results; • success of competitors; • our operating results failing to meet the expectation of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning us, the market for digital and physical content, content distribution and entertainment in general; • operating and stock price performance of other companies that investors deem comparable to us; • our ability to market new and enhanced products on a timely basis; 10 • changes in laws and regulations affecting our business or our industry; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of debt; • the volume of shares of the Common Stock available for public sale; • any major change in our Board of Directors or management; • sales of substantial amounts of Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, international currency fluctuations and acts of war or terrorism.
Any of the factors listed below could have a material adverse effect on an investment in our securities: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; • changes in the market’s expectations about our operating results; • success of competitors; • our operating results failing to meet the expectations of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning us, the market for digital and physical content, content distribution and entertainment in general; • operating and stock price performance of other companies that investors deem comparable to us; • our ability to market new and enhanced products on a timely basis; • changes in laws and regulations affecting our business or our industry; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of debt; • the volume of shares of the Common Stock available for public sale; • any major change in our Board of Directors or management; • sales of substantial amounts of Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, international currency fluctuations and acts of war or terrorism.
We may be unable to prevent third parties from acquiring domain names that are similar to or diminish the value of our proprietary rights. 5 We maintain outstanding indebtedness, which could impair our ability to operate our business and react to changes in our business, remain in compliance with debt covenants and make payments on our debt.
We may be unable to prevent third-parties from acquiring domain names that are similar to or diminish the value of our proprietary rights. We maintain outstanding indebtedness, which could impair our ability to operate our business and react to changes in our business, remain in compliance with debt covenants and make payments on our debt.
The Board of Directors also has the power, without stockholder approval, to set the terms of any such series of preferred stock that may be issued, including voting rights, dividend rights, preferences over our Common Stock with respect to dividends or if we liquidate, dissolve or wind up our business and other terms.
The Board of Directors also has the power, without stockholder 11 approval, to set the terms of any such series of preferred stock that may be issued, including voting rights, dividend rights, preferences over our Common Stock with respect to dividends or if we liquidate, dissolve or wind up our business and other terms.
These restrictive covenants and provisions could limit our ability to obtain future financing, make needed capital expenditures, withstand a future downturn in our business or the economy in general, or otherwise conduct necessary corporate activities, and may prevent us from taking advantage of business opportunities that arise in the future.
These restrictive covenants and provisions could limit our ability to obtain future financing, make needed capital expenditures, withstand a future downturn in our business or the economy in general, or otherwise conduct necessary or advisable corporate activities, and may prevent us from taking advantage of business opportunities that arise in the future.
In order to compete effectively in each of these fields, we must differentiate ourselves from our competitors. Many of our current and potential competitors may have longer operating histories and greater financial, technical, marketing and other resources than we do, which may permit them to adopt aggressive pricing policies.
In order to compete effectively in each of these fields, we must differentiate ourselves from our competitors. 4 Many of our current and potential competitors may have longer operating histories and greater financial, technical, marketing and other resources than we do, which may permit them to adopt aggressive pricing policies.
Completing an acquisition and integrating an acquired business may require a significant diversion of management time and resources and may 4 involve assuming new liabilities. Any acquisition also involves the risks that the assets acquired may prove less valuable than expected and/or that we may assume unknown or unexpected liabilities, costs and problems.
Completing an acquisition and integrating an acquired business may require a significant diversion of management time and resources and may involve assuming new liabilities. Any acquisition also involves the risks that the assets acquired may prove less valuable than expected and/or that we may assume unknown or unexpected liabilities, costs and problems.
Any future issuance(s) of preferred stock could make the takeover of the company more difficult, discourage unsolicited bids for control of the 11 company in which our stockholders could receive premiums for their shares, dilute or subordinate the rights of holders of Common Stock and adversely affect the trading price of the Common Stock.
Any future issuance(s) of preferred stock could make the takeover of the Company more difficult, discourage unsolicited bids for control of the Company in which our stockholders could receive premiums for their shares, dilute or subordinate the rights of holders of Common Stock and adversely affect the trading price of the Common Stock.
To the extent that these options or warrants are exercised, or to the extent we issue additional shares of Common Stock in the future, as the case may be, there will be further dilution to holders of shares of the Common Stock. Our issuance of preferred stock could adversely affect holders of Common Stock.
To the extent that these warrants are exercised, or to the extent we issue additional shares of Common Stock in the future, as the case may be, there will be further dilution to holders of shares of the Common Stock. Our issuance of preferred stock could adversely affect holders of Common Stock.
Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing 12 or nature of our future offerings.
Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.
We have intellectual property consisting of: • rights to certain domain names; • registered service marks on certain names and phrases; • various unregistered trademarks and service marks; • film, television and other forms of viewing content; • know-how; and • rights to certain logos.
We have intellectual property consisting of: • rights to certain domain names; • registered service marks on certain names and phrases; • various unregistered trademarks and service marks; • film, television and other forms of viewing content; • know-how; and 5 • rights to certain logos.
Significant assumptions underlie this belief, including, among other things, that there will be no material 6 adverse developments in our business, liquidity or capital requirements.
Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity or capital requirements.
If we refinance our credit facilities, we cannot guarantee that any new credit facility will not contain similar covenants and restrictions. Cinedigm Digital Funding 2, LLC ("CDF2") and CDF2 Holdings, LLC ("CDF2 Holdings") are our indirect wholly-owned, non-consolidated variable interest entities ("VIEs") that are intended to be special purpose, bankruptcy remote entities.
If we refinance our credit facilities, we cannot guarantee that any new credit facility will not contain similar or other covenants and restrictions. Cinedigm Digital Funding 2, LLC ("CDF2") and CDF2 Holdings, LLC ("CDF2 Holdings") are our indirect wholly-owned, non-consolidated variable interest entities ("VIEs") that are intended to be special purpose, bankruptcy remote entities.
CDF2 Holding’s total stockholder’s deficit at March 31, 2024 was $59.2 million. We have no obligation to fund the operating loss or the deficit beyond our initial investment, and accordingly, we carried our investment in CDF2 Holdings at $0 as of March 31, 2024 and 2023.
CDF2 Holding’s total stockholder’s deficit as of March 31, 2025, was $59.2 million. We have no obligation to fund the operating loss or the deficit beyond our initial investment, and accordingly, we carried our investment in CDF2 Holdings at $0 as of March 31, 2025 and 2024.
Any such delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the loss of confidence in our financial stability by suppliers, customers and employees.
Any such delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in a loss of confidence in our financial stability by suppliers, customers and employees.
In the current fiscal year, we recognized $14 million of impairment, and we may be required to record additional charges to earnings during any period in which further impairment of our goodwill or other intangible assets is determined that could adversely affect our results of operations. If we do not manage our growth, our business will be harmed.
In the prior fiscal year, we recognized $14 million of impairment. We may be required to record additional charges to earnings during any period in which further impairment of our goodwill or other intangible assets is determined that could adversely affect our results of operations. If we do not manage our growth, our business will be harmed.
We may also need to expand our finance, administrative, client services and operations staffs and train and manage our growing employee base effectively. Our current and planned personnel, systems, procedures and controls may not be adequate to support our future operations. Our business, results of operations and financial position will suffer if we do not effectively manage our growth.
We may also need to expand our finance, administrative, client services and operations staff and train and manage our growing employee base effectively. Our current and planned personnel, systems, procedures and controls may not be adequate to support our future operations. Our business, results of operations and financial position may suffer if we do not effectively manage our growth.
A decrease in economic activity in the U.S. or in other regions of the world in which we do business could adversely affect demand for our content, thus reducing our revenue and earnings. Moreover, financial institution failures may cause us to incur increased expenses or make it more difficult either to financing of any future acquisitions, or financing activities.
A decrease in economic activity in the U.S. or in other regions of the world in which we do business could adversely affect demand for our content, thus reducing our revenue and earnings. Moreover, financial institution failures may cause us to incur increased expenses or make it more difficult either to finance future acquisitions, or finance operating activities.
General economic or other conditions could cause lower than expected revenues and earnings within our digital cinema, technology or content and entertainment businesses.
General economic or other conditions could cause lower than expected revenues and earnings within our technology or content and entertainment businesses.
The obligations and restrictions under the CHG Lease could have important consequences for CDF2 and CDF2 Holdings, including: • limiting our ability to obtain necessary financing in the future; • restricting us from incurring liens on the digital cinema projection systems financed and from subleasing, assigning or modifying the digital cinema projection systems financed; and • requiring them to dedicate a substantial portion of their cash flow to payments on their debt obligations, thereby reducing the availability of their cash flow for other uses.
The obligations and restrictions under the CHG Lease could have important consequences for CDF2 and CDF2 Holdings, including: • restricting us from incurring liens on the digital cinema projection systems financed and from subleasing, assigning or modifying the digital cinema projection systems financed; and • requiring them to dedicate a substantial portion of their cash flow to payments on their debt obligations, thereby reducing the availability of their cash flow for other uses.
The reduction of economic activity and reduced spending related to such outbreaks and actions taken by governments to mitigate the spread of a virus or other infectious agent could have a material impact on our earnings, cash flow and financial condition.
The reduction of economic activity and reduced spending related to such outbreaks and actions taken by governments to mitigate the spread of a virus or other infectious agent could have a material impact on our earnings, cash flow and financial condition. 15 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
In addition, we have outstanding a substantial number of options and warrants exercisable for shares of our Common Stock that may be exercised in the future. These factors could also make it more difficult for us to raise funds through future offerings of our equity securities. You will incur substantial dilution as a result of certain future equity issuances.
In addition, we have outstanding a substantial number of options and warrants that are exercisable for shares of our Common Stock that may be exercised in the future. These factors could also make it more difficult for us to raise funds through future offerings of our equity securities.
These provisions include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of the Board of Directors to elect a director to fill a vacancy created by the expansion of the Board of Directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on the Board of Directors; • the ability of the Board of Directors to determine to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the requirement that an annual meeting of stockholders may be called only by the Board of Directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • limiting the liability of, and providing indemnification to, our directors and officers; • controlling the procedures for the conduct and scheduling of stockholder meetings; and • providing that directors may be removed prior to the expiration of their terms by the Board of Directors only for cause.
The Company's Fifth Amended and Restated Certificate of Incorporation, as amended, and our Second Amended and Restated Bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of the Board of Directors. 12 These provisions include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of the Board of Directors to elect a director to fill a vacancy created by the expansion of the Board of Directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on the Board of Directors; • the ability of the Board of Directors to determine to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the requirement that an annual meeting of stockholders may be called only by the Board of Directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • limiting the liability of, and providing indemnification to, our directors and officers; and • controlling the procedures for the conduct and scheduling of stockholder meetings.
We currently have employment agreements with our Chief Executive Officer, our President and Chief Strategy Officer, our Chief Operating Officer and Chief Technology Officer, our Chief Legal Officer, and our Chief Financial Officer.
We currently have employment agreements with our Chief Executive Officer, our President and Chief Strategy Officer, our President of Technology and Chief Product Officer, our Chief Legal Officer, our Chief Financial Officer, our Chief Motion Pictures Officer, and our Chief People Officer.
Under ASC 350, Goodwill, a sustained decline in share price represents a triggering event which would require the Company to test for impairment and there may be a risk that the Company incurs expenses related to goodwill impairment.
Under ASC 350, Goodwill , a sustained 13 decline in share price represents a triggering event which would require the Company to test for impairment and there may be a risk that the Company incurs expenses related to goodwill impairment. The Company incurred Goodwill impairment of $14.0 million during the year ended March 31, 2024.
As a result, we could default on those obligations and in the event of such default, our lenders could accelerate our debt or take other actions that could restrict our operations. The foregoing risks would be intensified to the extent we borrow additional money or incur additional debt.
As a result, we could default on those obligations and in the event of such default, our lenders could accelerate our debt or take other actions that could restrict our operations.
The Company's share price has decreased since the end of its fiscal year ending March 31, 2023. A sustained decrease in share price may indicate a risk the Company’s goodwill may become impaired. On March 31, 2023, the Company's share price was $8.40 and had since declined to a share price of $1.39 as of March 31, 2024.
A sustained decrease in share price may indicate a risk the Company's goodwill may become impaired. On March 31, 2023, the Company's share price was $8.40. It had declined to a share price of $1.39 as of March 31, 2024, but partially recovered to a share price of $3.16 as of March 31, 2025.
The Company incurred Goodwill impairment of $14.0 million during the twelve months ended March 31, 2024, and there may be additional impairment incurred if there are further declines in the Company's share price. We have no present intention of paying dividends on our Common Stock.
No impairment was recognized during the current year ended March 31, 2025, due to stock price recovery. However, additional impairment may be incurred if there are future declines in the Company's share price. We have no present intention of paying dividends on our Common Stock.
Any share repurchase under this program will take the place of other use of Company funds and may not achieve the same level of return on investment. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Any share repurchase under this program will take the place of other use of Company funds and may not achieve the same level of return on investment. General Risk Factors We incur significant costs as a result of operating as a public company.
Our ability to generate cash is in part subject to general economic, financial, competitive, regulatory and other factors that are beyond our control.
Our ability either to make payments on or to refinance our indebtedness, or to fund planned capital expenditures and research and development efforts, will depend on our ability to generate cash in the future. Our ability to generate cash is in part subject to general economic, financial, competitive, regulatory and other factors that are beyond our control.
The limitations triggered by the September 15, 2020 and November 1, 2022 ownership changes were significantly less substantial than the limitation triggered by the November 1, 2017 ownership change, however. Global health threats may adversely affect our business. Our business could be adversely affected by the effects of a widespread outbreak of contagious disease, such as the outbreak of COVID-19.
The limitations triggered by the September 15, 2020 and November 1, 2022 ownership changes were significantly less substantial than the limitation triggered by the November 1, 2017 ownership change, however.
In March 2023, the Company approved a program to share repurchase program, which was renewed in February 2024. The Company will execute on this program if and when management perceives the share price of the Company's common stock to be attractive.
In March 2023, the Company approved a program to share repurchase program, which was renewed in February 2024 and subsequently, in February 2025.
If we cannot generate operating income or positive cash flows in the future, we will be unable to meet our working capital requirements. Many of our corporate actions may be influenced by our officers, directors and principal stockholders; these actions may benefit these principal stockholders more than our other stockholders.
If we cannot generate operating income or positive cash flows in the future, we will be unable to meet our working capital requirements. Our success will significantly depend on our ability to hire and retain key personnel.
We have a substantial number of options and warrants currently outstanding which may be immediately exercised for shares of Common Stock.
You will incur substantial dilution as a result of certain future equity issuances. We have warrants currently outstanding which may be immediately exercised to purchase 2.7 million shares of Common Stock.
As of March 31, 2024, though we had a positive working capital, defined as current assets less current liabilities, of $1.5 million, and cash and cash equivalents of $5.2 million, and total equity of $32.2 million, the Company used $10.6 million of net cash flows in operating activities.
We have incurred long-term losses and have financed our operations principally through equity investments and borrowings. As of March 31, 2025, we had a positive working capital, defined as current assets less current liabilities, of $3.6 million, and cash and cash equivalents of $13.9 million, and total equity of $37.8 million.
We may not be able to generate the amount of cash needed to fund our future operations. Our ability either to make payments on or to refinance our indebtedness, or to fund planned capital expenditures and research and development efforts, will depend on our ability to generate cash in the future.
The foregoing risks would be intensified to the extent we borrow additional money or incur additional debt. 6 We may not be able to generate the amount of cash needed to fund our future operations.
We are subject to cybersecurity risk We have controls in place to protect against and mitigate cyber security risk, including employee education and technological tools; however, actual or attempted security incidents or breaches, loss of data, or other disruptions could expose us to material liability and materially and adversely affect our business, financial condition, and our reputation. 9 R isks Related to Common Stock The liquidity of our Common Stock is uncertain; the limited trading volume of our Common Stock may depress the price of such stock or cause it to fluctuate significantly.
R isks Related to Our Common Stock The liquidity of our Common Stock is uncertain; the limited trading volume of our Common Stock may depress the price of such stock or cause it to fluctuate significantly.
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We have incurred long term losses and have financed our operations principally through equity investments and borrowings.
Added
The Company generated $17.4 million of net positive cash flows from operations for the year ended March 31, 2025.
Removed
As of June 17, 2024, our directors, executive officers and principal stockholders, those known by us to beneficially own more than 5% of the outstanding shares of our Common Stock, beneficially own, directly or indirectly, in the aggregate, approximately 20.8% of our outstanding Common Stock.
Added
In addition, the recently announced tariffs by the U.S. government, particularly if imposed on foreign movies or otherwise targeting the film industry, could affect our expenses and pricing.
Removed
These stockholders, as a group, may have significant influence over our business affairs, with the ability to influence matters requiring approval by our security holders, including elections of directors and approvals of mergers or other business combinations. Our success will significantly depend on our ability to hire and retain key personnel.
Added
RISKS RELATED TO INFORMATION TECHNOLOGY Any significant disruption in or unauthorized access to our computer systems or those of third-parties that we utilize in our operations, including relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of service, unauthorized access, harm to our reputation, disclosure or destruction of data, or theft of intellectual property, including digital content assets, which could adversely impact our business.
Removed
The Company's Fifth Amended and Restated Certificate of Incorporation, as amended, and our Second Amended and Restated Bylaws contain provisions that could have the effect of delaying or preventing changes in control or changes in our management without the consent of the Board of Directors.
Added
Our reputation and ability to attract, retain and serve our customers is dependent upon the reliable performance and security of our computer systems, mobile and other user applications, and those of third-parties that we utilize in our operations.
Added
These systems may be subject to cyber incident, adverse weather conditions, lack of maintenance due to human error or oversight, natural disasters, public health issues such as pandemics or endemics, terrorist attacks, power loss, telecommunications failures, cybersecurity risks and incidents, and other interruptions beyond our control.
Added
Interruptions in, or destruction or manipulation of, these systems, or with the internet in general, could make our service unavailable or degraded or otherwise hinder our ability to deliver streaming content.
Added
Service interruptions, errors in our software or the unavailability of computer systems or data used in our operations, delivery or user interface could diminish the overall attractiveness of our user service to existing and potential users. 9 Our computer systems, mobile and other applications and systems of third-parties we use in our operations are vulnerable to constantly evolving cybersecurity risks, including cyber-attacks and loss of integrity or availability, both from state-sponsored and individual activity, such as hacks, unauthorized access, computer viruses, denial of service attacks, electronic break-ins, malware, ransomware, insider threats, and misconfigurations in information systems, networks, software or hardware, errors and similar disruptions and destruction.
Added
Such systems have previously and may continue to periodically experience directed attacks intended to lead to interruptions, disruptions and delays in our service and operations as well as loss, misuse or theft of data or intellectual property.
Added
Any attempt by hackers to obtain our data or intellectual property (including digital content assets), disrupt our service, or otherwise access our systems, or those of third-parties we use, if successful, could harm our business, be expensive to remedy, expose us to potential liability and damage our reputation.
Added
We have implemented certain systems and processes to thwart hackers and protect our data and systems. There is no assurance that cyber incidents may not have a material impact on our service or systems in the future. Our insurance may not cover expenses related to such disruptions, losses or unauthorized access.
Added
Efforts to prevent hackers from disrupting our service or otherwise accessing our systems are expensive to implement and may limit the functionality of or otherwise negatively impact our service offering and systems. Any significant disruption to our service or access to our systems could result in a loss of users, liability and adversely affect our business and results of operations.
Added
We utilize our own communications and computer hardware systems located in those of a third-party web hosting provider. In addition, we utilize third-party “cloud” computing services in connection with our business operations. We also utilize third-party content delivery networks to help us stream content in high volume to Cineverse users over the internet.
Added
Problems faced by us or our third-party Web hosting, “cloud” computing, or other network providers, including technological or business-related disruptions, as well as cybersecurity threats, could adversely impact the experience of our users, resulting in a loss of users, which could adversely affect our business and results of operations.
Added
If the technology we use in operating our business fails, is unavailable, or does not operate to expectations, our business and results of operations could be adversely impacted. We utilize a combination of proprietary and third-party technology to operate our business.
Added
This includes the technology that we have developed to recommend and promote content to our consumers as well as enable fast and efficient delivery of content to our users and their various consumer electronic devices. We utilize third-party technology to help market our service, process payments and otherwise manage the daily operations of our business.
Added
If our technology or that of third-parties we utilize in our operations fails or otherwise operates improperly, including as a result of “bugs” in the development and deployment of software, our ability to operate our service, retain existing users and add new users may be impaired.
Added
We rely upon Amazon Web Services (“AWS”) and Google Cloud Platform (“GCP) to operate certain aspects of our service, and any disruption of or interference with our use of AWS or GCP would impact our operations and our business would be adversely affected.
Added
AWS provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a “cloud” computing service. We have designed our software and computer systems so as to utilize data processing, storage capabilities and other services provided by AWS. Currently, we run the vast majority of our computing on AWS.
Added
In addition, Amazon.com’s retail division competes with us for users, and Amazon.com could use, or restrict our use of, AWS to gain a competitive advantage against us.
Added
Because we rely heavily on AWS for computing infrastructure and we cannot easily switch our AWS operations to another cloud provider, any disruption of or interference with our use of AWS would impact our operations and our business would be adversely affected. 10 Interruptions or delays in service arising from our own systems or from our third-party vendors could impair the delivery of our service and harm our business.
Added
We rely on systems housed at those of third-party vendors, including network service providers and data center facilities, to enable viewers to stream our content in a dependable and efficient manner. We have experienced, and expect to continue to experience, periodic service interruptions and delays involving our own systems and those of our third-party vendors.
Added
We do not currently maintain live fail-over capability that would allow us to instantaneously switch our streaming operations from AWS to another cloud provider in the event of a service outage at AWS. We house the original or primary copy of our library database at off-site cloud locations.
Added
Our third-party vendors are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures and similar events. They also are subject to break-ins, hacking, denial of service attacks, sabotage, intentional acts of vandalism, terrorist acts, natural disasters, human error, the financial insolvency of our third-party vendors and other unanticipated problems or events.
Added
The occurrence of any of these events could result in interruptions in our service and the unauthorized access to, or alteration of, the content and data contained on our systems and that these third-party vendors store and deliver on our behalf.
Added
We do not exercise complete control over our third-party vendors, which makes us vulnerable to any errors, interruptions, or delays in their operations. Any disruption in the services provided by these vendors could have a significant adverse impact on our business reputation, customer relations and operating results.
Added
Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.
Added
The Company will execute on this program if and when our Board of Directors and management perceives the share price of the Company's common stock to be attractive and after taking into consideration market and business conditions, available cash and capital requirements.
Added
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, Nasdaq’s listing requirements and other applicable securities laws and regulations, and, as a result, we incur significant legal, accounting and other expenses that we would not incur if we were not a public company.
Added
The expenses incurred by public companies for reporting and corporate governance purposes have generally been increasing. We expect these rules and regulations to continue to increase our legal and financial compliance costs and to make some activities more difficult, time-consuming and costly.
Added
The demands associated with being a public company may disrupt regular operations of our business by diverting the attention of some of our senior management team away from revenue producing activities to management and administrative oversight, adversely affecting our ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing our businesses.
Added
Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to the delisting of our Common Stock, fines, sanctions and other regulatory action and potentially civil litigation. Any of these effects could harm our business, financial condition, and results of operations.
Added
Compliance obligations under the Sarbanes-Oxley Act require substantial financial and management resources. 14 Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls.
Added
For as long as we remain a smaller reporting company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.
Added
However, in the event we are deemed to be an accelerated filer or a large accelerated filer or otherwise no longer qualify as a smaller reporting company, we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.
Added
The maintenance of the internal control system to achieve compliance with the Sarbanes-Oxley Act may impose obligations on us and require substantial additional financial and management resources.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Removed
ITEM 1C. CYBERSECURITY We recognize the critical importance of maintaining the trust and confidence of customers, business partners, and employees toward our business and are committed to protecting the confidentiality, integrity, and availability of our business operations and systems.
Added
ITEM 1C. CYBERSECURITY We have established a comprehensive, enterprise-wide information security program designed to identify, protect against, detect, respond to, and manage reasonably foreseeable cybersecurity risks and threats. This program is seamlessly integrated into our overall risk management and internal control systems, subject to regular reviews by senior management.
Removed
Our board of directors is actively involved in oversight of our risk management activities, and cybersecurity represents an important element of our overall approach to risk management.
Added
By conducting regular risk assessments, we believe we effectively manage both internal and external cybersecurity threats. Our cybersecurity strategy is specifically tailored to our organization's size, scope, and business needs, emphasizing the protection of data.
Removed
We seek to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security, integrity, and availability of the information that we collect and store by identifying, preventing, and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.
Added
Our security infrastructure includes advanced tools and protocols, such as firewall protections, secure user authentication, and up-to-date antivirus and internet security software, which we believe are fundamental components of our operational protocols designed to mitigate vulnerabilities and efficiently address security incidents. We also periodically assess and manage cybersecurity risks associated with our third-party service providers.
Added
The ongoing improvement of our cybersecurity measures is overseen by our Senior Vice President of Corporate Systems. We do not employ or engage any third-parties for cybersecurity consulting or monitoring, aside from technical support teams from our application vendors. In the normal course of business, we proactively manage and monitor cybersecurity activities.
Added
To date, these efforts have successfully prevented any incidents that could materially affect our business strategy, operational results, or financial condition. We remain vigilant and are not currently aware of any threats that pose a material risk. We believe our detailed incident response procedures enable us to effectively manage and mitigate the impacts of security breaches.
Added
Continuous monitoring and post-incident analysis further refine our security strategies, enhancing our protective measures. Our Board and the Audit Committee provide oversight over our cybersecurity efforts and stay regularly informed on cybersecurity matters, including emerging risks and mitigation strategies, to ensure informed governance over our enterprise risk assessments and cybersecurity approach.
Added
Cybersecurity matters are discussed regularly with senior management, and any significant cybersecurity events are promptly reported to the Board.
Added
For additional information about cybersecurity risks, see Risk Factors, Any significant disruption in or unauthorized access to our computer systems or those of third-parties that we utilize in our operations, including relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of service, unauthorized access, harm to our reputation, disclosure or destruction of data, or theft of intellectual property, including digital content assets, which could adversely impact our business. 16

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of March 31, 2024, our leased Principal Executive Office address is 224 W. 35th St., Suite 500 #947, New York, NY 10001; however, we primarily operate as a company with a virtual workforce. We do not own any real estate or invest in real estate or related investments. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4.
Biggest changeITEM 2. PROPERTIES As of March 31, 2025, we maintain an address at 224 W. 35th St., Suite 500 #947, New York, NY 10001. However, we primarily operate as a company with a virtual workforce in the United States. Additionally, we entered into office lease arrangements, which expire in 2027, for our offices located in Kolkata, India.
Removed
MINE SAFETY DISCLOSURES Not applicable. 13 PART II
Added
We do not own any real estate or invest in real estate or related investments. ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 17 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−2 removed2 unchanged
Biggest changeRiley Securities, Inc. and under this plan repurchased 184,495 shares for a total of $188 thousand, gross of fees in May 2024. ITEM 6. [Reserved] 15
Biggest changeRiley Securities, Inc. and under these plans repurchased 215,265 shares for a total purchase price of $215 thousand, gross of fees, during the period from May through July 2024. The 10b-18 plan expired on May 8, 2025 and the 10b5-1 plan expired on May 31, 2024. ITEM 6. [Reserved] 18
Acquisitions pursuant to the stock repurchase program may be made through a combination of open market repurchases in compliance with Rule 14 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, privately negotiated transactions, and/or other transactions at the Company’s discretion.
Acquisitions pursuant to the stock repurchase program may be made through a combination of open market repurchases in compliance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, privately negotiated transactions, and/or other transactions at the Company’s discretion.
On February 29, 2024, the Board approved the renewal of the Company's stock repurchase program to purchase up to an aggregate of 500,000 shares of its outstanding Class A common stock.
On February 29, 2024, the Board approved the renewal of the Company's stock repurchase program to purchase up to an aggregate of 500,000 shares of its outstanding Common Stock.
As of June 20, 2024, there were 52 holders of record of our Common Stock, not including beneficial owners of our Common Stock whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.
As of June 20, 2025, there were 57 holders of record of our Common Stock, not including beneficial owners of our Common Stock whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.
In connection with the settlement of the Company’s fiscal year 2023 employee bonuses, the Company paid cash for the bonus-related payroll taxes upon the surrender to the Company by the employees of 222,761 shares to the Company.
PURCHASE OF EQUITY SECURITIES In connection with the settlement in fiscal year 2024 of the Company’s fiscal year 2023 employee bonuses, the Company paid cash for the bonus-related payroll taxes upon the surrender to the Company by the employees of 222,761 shares to the Company.
The following table shows the high and low sales prices per share of our Common Stock as reported by Nasdaq for the periods indicated, as adjusted for the June 2023 reverse stock split: For the Fiscal Year Ended March 31, 2024 2023 HIGH LOW HIGH LOW April 1 – June 30 $ 9.00 $ 1.91 $ 17.20 $ 9.80 July 1 – September 30 $ 1.86 $ 1.00 $ 15.40 $ 7.80 October 1 – December 31 $ 1.38 $ 1.01 $ 12.20 $ 7.60 January 1 – March 31 $ 2.35 $ 1.25 $ 12.20 $ 8.00 The reported closing price per share of our Common Stock as reported by Nasdaq on June 17, 2024 was $0.86 per share.
The following table shows the high and low sales prices per share of our Common Stock as reported by Nasdaq for the periods indicated, as adjusted for the June 2023 reverse stock split: For the Fiscal Year Ended March 31, 2025 2024 HIGH LOW HIGH LOW April 1 – June 30 $ 1.48 $ 0.79 $ 9.00 $ 1.91 July 1 – September 30 $ 1.10 $ 0.74 $ 1.86 $ 1.00 October 1 – December 31 $ 3.99 $ 0.97 $ 1.38 $ 1.01 January 1 – March 31 $ 4.74 $ 3.16 $ 2.35 $ 1.25 The reported closing price per share of our Common Stock as reported by Nasdaq on June 20, 2025 was $3.89 per share.
The stock repurchase program, which is subject to certain consents, will expire on March 1, 2025 unless otherwise modified by the Board at any time in its sole discretion. In May 2024, the Company entered into a 10b5-1 repurchase plan with B.
The stock repurchase program, which is subject to certain consents, will expire on March 1, 2025 unless otherwise modified by the Board at any time in its sole discretion.
The holders of our Series A 10% Non-Voting Cumulative Preferred Stock are entitled to receive dividends. There were $89 thousand of cumulative dividends in arrears on our Preferred Stock at March 31, 2024. SALES OF UNREGISTERED SECURITIES On September 17, 2021, the Company acquired substantially all of the assets of Bloody Disgusting, LLC (“Bloody Disgusting”).
The holders of our Series A 10% Non-Voting Cumulative Preferred Stock are entitled to receive dividends. There were $89 thousand of cumulative dividends in arrears on our Preferred Stock as of March 31, 2025.
Removed
On February 29, 2024, the Company issued 84,610 shares of Common Stock as a deferred earnout payment of consideration for the acquisition, pursuant to Section 4(a)(2) of the Securities Act. On March 25, 2022, the Company acquired substantially all of the equity of Asian Media Rights, LLC d/b/a Digital Media Rights (“DMR”).
Added
Subsequently, on February 28, 2025, the Board has approved the renewal for another year, expiring on March 31, 2026, unless otherwise modified by the Board at any time in its sole discretion. In May 2024, the Company entered into 10b5-1 and 10b-18 trading plans with B.
Removed
On March 28, 2024, the Company issued 2,284,496 shares of Common Stock as a deferred earnout payment of consideration for the acquisition, pursuant to Section 4(a)(2) of the Securities Act. PURCHASE OF EQUITY SECURITIES There were no repurchases of shares of our Common Stock made by us or on our behalf during the year ended March 31, 2024 and 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe decrease was primarily driven by a $7.0 million reduction in royalties and participation expenses from lower revenue and a $2.3 million decrease in estimated OTT royalty accrual as of March 31, 2024, $3.1 million in fulfillment and manufacturing costs associated with the decline in the Company's physical distribution business, a $1.9 million decrease in the Company's costs associated with the Company's reserves against advances to partners, and a $0.6 million decrease related to the estimated Bloody Disgusting earnout liability based on fiscal year 2024 performance. 21 Selling, General and Administrative Expenses For the Fiscal Year Ended March 31, 2024 2023 $ Change % Change Compensation expense 17,756 $ 20,190 $ (2,434 ) (12 )% Corporate expenses 3,762 5,538 (1,777 ) (32 )% Share-based compensation 1,439 4,807 (3,368 ) (70 )% Other operating expenses 4,947 6,284 (1,337 ) (21 )% Selling, General and Administrative $ 27,904 $ 36,819 $ (8,915 ) (24 )% During the twelve months ended March 31, 2024, the Company's SG&A decreased by $8.9. million relative to the twelve months ended March 31, 2023.
Biggest changeDirect operating margin % declined from 61% for the year ended March 31, 2024 to 50% for the year ended March 31, 2025 primarily due to $3.8 million of non-recurring revenue in the prior year related to run-off of the Company's legacy digital cinema business which had a 100% direct operating margin and theatrical revenues related to Terrifier 3 that had direct operating margins lower than 50%. 24 Selling, General and Administrative Expenses For the Fiscal Year Ended March 31, As a % of Revenue 2025 2024 $ Change % Change 2025 2024 Compensation expense $ 17,176 $ 17,756 $ (580 ) (3 )% 22 % 36 % Corporate expenses 3,354 3,762 (408 ) (11 )% 4 % 8 % Share-based compensation 1,925 1,439 486 34 % 2 % 3 % Other operating expenses 5,229 4,947 282 6 % 7 % 10 % Selling, General and Administrative $ 27,684 $ 27,904 $ (220 ) (1 )% 35 % 57 % Selling, general and administrative expenses for the year ended March 31, 2025 decreased by $0.2 million relative to the year ended March 31, 2024, primarily due to: (i) lower compensation expense due to change in the Company's employment mix as a result of a greater investment in Cineverse Services India, and (ii) lower severance costs, offset by higher share-based compensation.
The assessment for recoverability is based primarily on our ability to recover the carrying value of our long-lived and finite-lived assets from expected future undiscounted net cash flows. If the total of expected future undiscounted net cash flows is less than the total carrying value of the assets the asset is deemed not to be recoverable and possibly impaired.
The assessment for recoverability is based primarily on our ability to recover the carrying value of our long-lived and finite-lived assets from expected future undiscounted net cash flows. If the total expected future undiscounted net cash flows is less than the total carrying value of the assets the asset is deemed not to be recoverable and possibly impaired.
Contract Assets and Liabilities We generally record a receivable related to revenue or a unbilled revenue (contract asset) when we have an unconditional right to invoice and receive payment. Unbilled revenue includes an accrued revenue, the right to which has been earned at the period end based on completed performance.
Contract Assets and Liabilities We generally record a receivable related to revenue or an unbilled revenue (contract asset) when we have an unconditional right to invoice and receive payment. Unbilled revenue includes an accrued revenue, the right to which has been earned at the period end based on completed performance.
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 includes payments related to the sale of DVDs with future release dates or subscription dues paid in advance.
We record deferred revenue (contract liability) when cash payments are received or due in advance of our performance, even if the amounts are refundable. Deferred revenue includes payments related to the sale of DVDs with future release dates or subscription dues paid in advance.
In accordance with process outlined in ASC 350, the Company first determined that its finite long-lived assets were recoverable. The impairment was quantified using a market multiple approach which utilized information from comparable businesses.
In accordance with the process outlined in ASC 350, the Company first determined that its finite long-lived assets were recoverable. The impairment was quantified using a market multiple approach which utilized information from comparable businesses.
The resumption of active trading status represented renewed availability of quoted, unadjusted prices in active markets for identical assets, upon which the Company can execute a sale and readily access pricing information at the measurement date. Accordingly, the Company has presented the fair value of its Metaverse shares held as of March 31, 2024 within the Level 1 grouping.
The resumption of active trading status represented renewed availability of quoted, unadjusted prices in active markets 25 for identical assets, upon which the Company can execute a sale and readily access pricing information at the measurement date. Accordingly, the Company has presented the fair value of its Metaverse shares held as of March 31, 2024 within the Level 1 grouping.
While our business benefits from the winter holiday season, we believe the seasonality of the movie and streaming landscape, 25 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.
While our business benefits from the winter holiday season, we believe the seasonality of the movie and streaming landscape, 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.
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 23 financial performance of the business because management believes it provides additional information with respect to the performance of its fundamental business activities.
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.
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; and • which party has discretion in establishing the price for the specified good or service. 19 Shipping and Handling Shipping and handling costs are incurred to move physical goods (e.g., DVDs and Blu-ray Discs) to customers.
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; and • which party has discretion in establishing the price for the specified good or service. 22 Shipping and Handling Shipping and handling costs are incurred to move physical goods (e.g., DVDs and Blu-ray Discs) to customers.
The Company’s streaming technology platform, known as MatchpointTM, is a software-based streaming operating platform which provides clients with AVOD, SVOD, transactional video on demand ("TVOD") and linear capabilities, automates the distribution of content, and features a robust data analytics platform. Risks and Uncertainties Our business and prospects are exposed to numerous risks and uncertainties. For more information, see “Item 1A.
The Company’s streaming technology platform, known as Matchpoint™, is a software-based streaming operating platform which provides clients with AVOD, SVOD, transactional video on demand ("TVOD") and linear capabilities, automates the distribution of content, and features a robust data analytics platform. Risks and Uncertainties Our business and prospects are exposed to numerous risks and uncertainties. For more information, see “Item 1A.
For the years ended March 31, 2024 and 2023, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance of satisfying performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.
For the years ended March 31, 2025 and 2024, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance of satisfying performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.
For the year ended March 31, 2024, the change in net cash used in operating activities was primarily driven by a net loss of $21.3 million and decreases from the Company's operating assets and liabilities ($11.5 million), offset by the non-cash goodwill impairment charge of $14.0 million, depreciation and amortization of $3.8 million, and the non-cash change in the valuation of the Company's investment in Metaverse which is recognized in earnings ($4.3 million).
Cashflows for the previous fiscal year For the year ended March 31, 2024, the change in net cash used in operating activities was primarily driven by a net loss of $21.3 million and decreases from the Company's operating assets and liabilities ($11.5 million), offset by the non-cash goodwill impairment charge of $14.0 million, depreciation and amortization of $3.8 million, and the non-cash change in the valuation of the Company's investment in Metaverse which is recognized in earnings ($4.3 million).
After the principal of the T3 Loan is paid in full, T3 Lender will be entitled to receive 15% of all royalties earned by the Company on the Film under its distribution agreements for the Film until T3 Lender has received 1.75 times the full commitment amount of $3,666,000, consisting of the principal amount plus interest and fees advanced to T3 Borrower, plus any extension interest.
After the principal of the T3 Loan is paid in full, the T3 Lender will be entitled to receive 15% of all royalties earned by the Company on the Film under its distribution agreements for the Film until the T3 Lender has received 1.75 times the full commitment amount of $3,666,000, consisting of the principal amount plus interest and fees advanced to T3 Borrower ("Participation Interest"), plus any extension interest, if applicable.
Under the Line of Credit Facility, the Company is subject to certain financial and nonfinancial covenants including terms which require the Company to maintain certain metrics and ratios, maintain certain minimum cash on hand, and to report financial information to our lender on a periodic basis.
Under the Line of Credit Facility, the Company is subject to certain financial and non-financial covenants including terms which require the Company to maintain certain metrics and ratios, to maintain certain minimum cash on hand, and to report financial information to our lender on a periodic basis.
During the year ended March 31, 2024, the Company sold 220,550,005 of its original 362,307,397 million shares held as of March 31, 2023, which resulted in a realized loss of $0.3 thousand during the twelve months ended March 31, 2024.
During the year ended March 31, 2024, the Company sold 220,550,005 of its original 362,307,397 million shares held as of March 31, 2023, which resulted in a realized loss of $0.3 thousand during the year ended March 31, 2024.
Impact of Inflation The impact of inflation on our operations has not been significant to date. However, there can be no assurance that a sustained high rate of inflation in the future would not have an adverse impact on our operating results. 26
Impact of Inflation The impact of inflation on our operations has not been significant to date. However, there can be no assurance that a sustained high rate of inflation in the future would not have an adverse impact on our operating results. 28
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.
We believe that Adjusted EBITDA is a performance measure and not a liquidity measure, and therefore a reconciliation between net income from continuing operations and Adjusted EBITDA has been provided in the financial results.
Property and Equipment, net and Intangible Assets, net We review the recoverability of our long-lived assets and finite-lived intangible assets, when events or conditions occur that indicate a possible impairment exists.
Intangible Assets, net We review the recoverability of our long-lived assets and finite-lived intangible assets, when events or conditions occur that indicate a possible impairment exists.
As of March 31, 2024 and March 31, 2023, the tax credit receivable of $1.7 and $2.1 million, respectively, has been included in the Employee retention tax credit line on the Company's Consolidated Balance Sheet. The Company received notification during the second quarter of fiscal year 2024 that its ERTC claim was under examination with the Internal Revenue Service ("IRS").
As of March 31, 2025 and 2024, the tax credit receivable of $0.1 and $1.7 million, respectively, has been included in the Employee retention tax credit line on the Company's Consolidated Balance Sheet. The Company received notification during the second quarter of fiscal year 2024 that its ERTC claim was under examination with the Internal Revenue Service ("IRS").
Adjusted EBITDA should not be considered as an alternative to loss 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.
Adjusted EBITDA should not be considered as an alternative to income from operations or net income from continuing operations as an indicator of performance or as an alternative to cash flows from operating 26 activities as an indicator of cash flows, in each case as determined in accordance with GAAP, or as a measure of liquidity.
In the years ended March 31, 2024 and 2023, no impairment charges were recorded to intangible assets. 18 REVENUE RECOGNITION We determine revenue recognition by: • identifying the contract, or contracts, with the customer; • identifying the performance obligations in the contract; • determining the transaction price; • allocating the transaction price to performance obligations in the contract; and • recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.
In the years ended March 31, 2025 and 2024, no impairment charges were recorded to intangible assets. 21 REVENUE RECOGNITION We determine revenue recognition by: • identifying the contract, or contracts, with the customer; • identifying the performance obligations in the contract; • determining the transaction price; • allocating the transaction price to performance obligations in the contract; and • recognizing revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.
Goodwill impairment For the twelve months ended March 31, 2024, the Company recognized an impairment on its carrying value of goodwill in the amount of $14.0 million following a sustained depressed share price for the Company's fiscal year 2024, which was deemed a triggering event.
Goodwill impairment No impairment was recognized for the year ended March 31, 2025. For the year ended March 31, 2024, the Company recognized an impairment on its carrying value of goodwill in the amount of $14.0 million following a sustained depressed share price for the Company's fiscal year 2024, which was deemed a triggering event.
Cash flows used in investing activities of $0.5 million were driven by the acquisition of long-lived fixed and intangible assets, partially offset by cash received from the sale of Company shares in Metaverse.
Cash flows used in investing activities of $0.5 million were driven by the acquisition of long-lived assets, partially offset by cash received from the sale of Company shares in Metaverse.
Deferred revenue which is short term in nature, carried a balance as of March 31, 2024 and 2023 of $0.4 million and $0.2 million, respectively.
Deferred revenue that is short term in nature, carried a balance as of March 31, 2025 and 2024 of $0.2 million and $0.4 million, respectively.
Contractual Obligations The following table summarizes our significant recognized contractual obligations as of March 31, 2024 (in thousands): Payments Due Contractual Obligations Total 2025 2026 2027 2028 2029 Thereafter Operating lease obligations $ 905 $ 423 $ 200 $ 210 $ 72 $ — $ — In addition, the Company presents its unrecognized commitments to content partners in the notes to the Financial Statements, Note 6 - Commitments and Contingencies.
Contractual Obligations The following table summarizes our significant recognized contractual obligations as of March 31, 2025 ( in thousands ): Payments Due Contractual Obligations Total 2026 2027 2028 Operating lease obligations $ 482 $ 200 $ 210 $ 72 In addition, the Company presents its unrecognized commitments to content partners in the notes to the Financial Statements, Note 8 - Commitments and Contingencies .
The Company qualified for the employee retention credit beginning in June 2020 for qualified wages through September 2021 and filed a cash refund claim during the fiscal year ended March 31, 2023 in the amount of $2.5 million in the Employee retention tax credit line on the Company’s Consolidated Statements of Operations.
The Company qualified for the employee retention credit beginning in June 2020 for qualified wages through September 2021 and filed a cash refund claim during the fiscal year ended March 31, 2023, in the amount of $2.5 million.
Corporate expenses declined by $1.8 million primarily decreased due to a corporate focus on reducing third-party costs due to the Company's cost-saving initiatives, including $1.1 million in consulting and service providers and legal costs in the amount of $0.9 million.
Corporate expenses declined by $0.4 million primarily decreased due to a corporate focus on reducing third-party costs due to the Company's cost-saving initiatives, including consulting and service providers and legal costs.
Please see Note 5 - Debt for further information regarding the Company's Line of Credit Facility. 16 On June 16, 2023, the Company issued and sold 2,150,000 thousand shares of Common Stock, 516,667 thousand prefunded warrants, and warrants to purchase up to 2,666,667 thousand shares of Common Stock at a combined public offering price of $3.00 per share and accompanying warrant for aggregate gross proceeds of approximately $7.4 million, after deducting placement agent fees and other offering expenses in the amount of $0.6 million.
In June, 2023, the Company issued and sold 2,150,000 shares of Common Stock, 516,667 prefunded warrants, and warrants to purchase up to 2,666,667 shares of Common Stock at a combined public offering price of $3.00 per share and accompanying warrant for aggregate gross proceeds of approximately $7.4 million, after deducting placement agent fees and other offering expenses in the amount of $0.6 million.
The Consolidated Appropriations Act (the "Appropriations Act") extended and expanded the availability of the employee retention credit through December 31, 2021. The Appropriations Act amended the employee retention credit to be equal to 70% of qualified wages paid to employees during the 2021 fiscal year.
The Appropriations Act amended the employee retention credit to be equal to 70% of qualified wages paid to employees during the 2021 fiscal year.
The Company is party to a Loan, Guaranty, and Security Agreement, as amended to date, with East West Bank (“EWB”) providing for a revolving line of credit (the “Line of Credit Facility”) of $7.5 million, guaranteed by substantially all of our material subsidiaries and secured by substantially all of our and such subsidiaries’ assets.
The Company is party to a Loan, Guaranty, and Security Agreement, as amended on April 8, 2025, with East West Bank ("EWB") providing for a $12.5 million Line of Credit Facility and expandable to $15.0 million, guaranteed by substantially all of our material subsidiaries and secured by substantially all of our and our subsidiaries’ assets.
On April 5, 2024, Cineverse Terrifier LLC (“T3 Borrower”), a wholly-owned subsidiary of the Company entered into a Loan and Security Agreement with BondIt LLC (“T3 Lender”) and the Company, as a guarantor (the “T3 Loan Agreement”).
Please see Note 7 - Debt for further information regarding the Company's Line of Credit Facility. On April 5, 2024, Cineverse Terrifier LLC (“T3 Borrower”), a wholly-owned subsidiary of the Company entered into a Loan and Security Agreement with BondIt LLC (“T3 Lender”) and the Company, as a guarantor (the “T3 19 Loan Agreement”).
The T3 Loan bears no interest until the maturity date other than an interest advance equal to $576,000 at the closing of the T3 Loan on April 5, 2024.
The T3 Loan bears no interest until the maturity date other than an interest advance equal to $576,000 at the closing of the T3 Loan on April 5, 2024. The interest advance was recorded as a discount on the T3 Loan at inception and will be amortized to interest expense and increase the loan amount over its term.
The Company may also undertake equity or debt offerings, if necessary and opportunistically available, for further capital needs. 17 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”).
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”).
See Note 8 - Subsequent Events for further information. 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 FBR, Inc. (“B.
All common warrants were issued as immediately exercisable and 2,654 thousand common warrants remain outstanding as of March 31, 2025. 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 FBR, Inc. (“B.
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 and non-recurring items.
Income Tax Expense For the year ended March 31, 2025, the Company had income tax expense of $106 thousand consisting of $62 thousand of current U.S. state income taxes, $51 thousand of current foreign income taxes, offset by the recognition of a $7 thousand deferred foreign tax benefit 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 and non-recurring items.
Streaming and digital revenue decreased by $3.1 million, driven by a $6.6 million decrease in AVOD from the headwinds faced in the advertising market, partially offset by a $2.7 million increase in SVOD and a $0.6 million increase from digital revenue as the Company continued to see the benefits from recent years' acquisitions, such as DMR, Fandor and Bloody Disgusting, which have contributed value-accretive libraries, distribution platforms and technologies.
Further, the Company continued to see the benefits from recent years' acquisitions, such as DMR, Fandor and Bloody Disgusting, which have contributed value-accretive libraries, distribution platforms and technologies. Base distribution revenue increased by $23.4 million mainly due to Terrifier 3 theatrical release in October 2024.
The Company will continue to invest in content development and acquisition, from which it believes it will obtain an appropriate return on its investment. As of March 31, 2024 and March 31, 2023, short term content advances were $9.3 million and $3.7 million, respectively, and content advances, net of current portion were, $2.6 million and $1.4 million, respectively.
For the year ended March 31, 2024, the Company sold 176,751 shares for $1.1 million in net proceeds, after deduction of commissions and fees. The ATM Sales Agreement terminated on January 6, 2024. The Company will continue to invest in content development and acquisition, from which it believes it will obtain an appropriate return on its investment.
Our capital requirements will depend on many factors, and we may need to use capital resources and obtain additional capital. We believe our cash and cash equivalent balances as of March 31, 2024 (See Note 8 - Subsequent Events) will be sufficient to support our operations for at least twelve months from the filing of this report.
We believe our cash and cash equivalents and availability under our Line of Credit Facility as of March 31, 2025 will be sufficient to support our operations for at least twelve months from the filing of this report.
The fair value of the shares held as of March 31, 2024 was $0.4 million, with associated losses of $4.3 million recognized during the fiscal year ended March 31, 2024. Employee Retention Tax Credit The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") provided an employee retention credit that was a refundable tax credit against certain employment taxes.
Employee Retention Tax Credit The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") provided an employee retention credit that was a refundable tax credit against certain employment taxes. The Consolidated Appropriations Act (the "Appropriations Act") extended and expanded the availability of the employee retention credit through December 31, 2021.
Following is the reconciliation of our consolidated net loss to Adjusted EBITDA (in thousands): For the Fiscal Year Ended March 31, 2024 2023 Net loss $ (21,265 ) $ (9,694 ) Add Back: Income tax expense 10 119 Depreciation and amortization 3,771 3,763 Interest expense 1,066 1,290 Loss from equity investment in Metaverse 4,299 1,828 Provision for credit losses — 54 Stock-based compensation 1,439 4,470 Employee retention tax credit — (2,475 ) Other (income) expense, net (140 ) 13 Net income attributable to noncontrolling interest (142 ) (39 ) Goodwill impairment 14,025 — Transition-related costs 1,335 541 Mergers and acquisition costs — 207 Adjusted EBITDA $ 4,398 $ 76 Recent Accounting Pronouncements See Note 2 - Basis of Presentation and Summary of Significant Accounting Policies to our consolidated financial statements included herein. 24 Cash Flow Changes in our cash flows were as follows (in thousands): For the Fiscal Year Ended March 31, 2024 2023 Net cash used in operating activities (10,593 ) $ (8,797 ) Net cash used in investing activities (531 ) (1,271 ) Net cash provided by financing activities 9,138 4,158 Net change in cash and cash equivalents $ (1,985 ) $ (5,910 ) As of March 31, 2024 and 2023, we had cash balances of $5.2 million and $7.2 million, respectively.
Following is the reconciliation of our consolidated net income (loss) to Adjusted EBITDA (in thousands): For the Fiscal Year Ended March 31, 2025 2024 Net income (loss) $ 3,764 $ (21,265 ) Add Back: Income tax expense 106 10 Depreciation and amortization (1) 4,138 3,771 Interest expense 4,365 1,066 (Gain) loss from equity investment in Metaverse (176 ) 4,299 Stock-based compensation 1,925 1,439 Other expense (income), net (135 ) (140 ) Net income attributable to noncontrolling interest (162 ) (142 ) Goodwill impairment — 14,025 Transition-related costs (2) 92 1,335 Adjusted EBITDA $ 13,917 $ 4,398 (1) - Includes $341 of amortization included in direct operating expenses on our Consolidated Statements of Operations for the year ended March 31, 2025.
Risk Factors” in this report. Liquidity We have incurred net losses historically and a net loss for the year ended March 31, 2024 of $21.8 million. As of March 31, 2024, we had an accumulated deficit of $504.2 million and net cash used in operating activities for the fiscal year ended March 31, 2024 was $10.6 million.
Risk Factors” in this report. Liquidity and Capital Resources We have incurred net losses historically. For the year ended March 31, 2025, we have net income attributable to common stockholders of $3.2 million.
As of March 31, 2023, the fair value was $5.2 million, resulting in a decrease in fair value of $1.8 million for the year ended March 31, 2023. On November 6, 2023, Metaverse's stock resumed trading on The Stock Exchange of Hong Kong Limited.
Gain (loss) from equity investment in Metaverse On November 6, 2023, Metaverse's stock resumed trading on The Stock Exchange of Hong Kong Limited.
For the year ended March 31, 2023, net cash used by operating activities was primarily driven by a net loss ($9.7 million), offset by non-cash expenses of stock based compensation ($4.4 million), allowance against advances, a decrease in the valuation of the Company's investment in Metaverse, and non-cash interest expense.
Cashflows for the current fiscal year For the year ended March 31, 2025, the change in net cash provided by operating activities was primarily driven by a net income of $3.8 million, increases from the Company's operating assets and liabilities ($7.0 million), and add-backs relating to non-cash items, particularly: (i) depreciation and amortization of $3.8 million, and (ii) stock-based compensation of $1.9 million.
The Line of Credit Facility bears interest at a rate equal to 1.5% above the prime rate, equal to 10.00% as of March 31, 2024. In June 2024, the Company was notified in writing by EWB that it intends to extend the maturity date of the Line of Credit Facility to September 15, 2025, subject to definitive documentation.
The Line of Credit Facility bears interest at a rate equal to 1.25% above the prime rate, equal to 8.75% as of March 31, 2025. The Line of Credit Facility matures on April 8, 2028. As of March 31, 2025, $0 was outstanding on the Line of Credit Facility.
Though we have working capital of $1.5 million, we may continue to generate net losses for the foreseeable future.
As of March 31, 2025, we had an accumulated deficit of $500.9 million and net cash provided by operations for the fiscal year ended March 31, 2025 was $17.4 million. Although we have positive working capital of $3.6 million as of March 31, 2025, we may continue to generate net losses for the foreseeable future.
Determining the cost of an acquisition may require judgment in certain circumstances depending on the nature of the asset transferred as consideration. 20 Results of Operations for the Fiscal Years Ended March 31, 2024 and 2023 (in thousands, except where noted below) Revenues For the Fiscal Year Ended March 31, 2024 2023 $ Change % Change Streaming and digital $ 37,312 $ 40,423 $ (3,111 ) (8 )% Base distribution 5,259 13,341 $ (8,082 ) (61 )% Podcast and other 2,718 2,213 $ 505 23 % Other non-recurring 3,842 12,049 $ (8,207 ) (68 )% Total Revenue $ 49,131 $ 68,026 $ (18,895 ) (28 )% For the twelve months ended March 31, 2024, the Company's revenue declined by $18.9 million.
We identify and record as a reduction to the liability any expenses that are to be reimbursed to us by such studios or content producers. 23 Results of Operations for the Fiscal Years Ended March 31, 2025 and 2024 (in thousands, except where noted below) Revenues For the Fiscal Year Ended March 31, As a % of Revenue 2025 2024 $ Change % Change 2025 2024 Streaming and digital $ 44,408 $ 37,312 $ 7,096 19 % 57 % 76 % Base distribution 28,614 5,259 23,355 444 % 37 % 11 % Podcast and other 4,893 2,718 2,175 80 % 6 % 6 % Other non-recurring 266 3,842 (3,576 ) (93 )% — % 8 % Total Revenue $ 78,181 $ 49,131 $ 29,050 59 % 100 % 100 % For the year ended March 31, 2025, the Company's revenue increased by $29.1 million.
Removed
As of March 31, 2024, $6.4 million was outstanding on the Line of Credit Facility.
Added
If the T3 Loan is extended as noted above, the T3 Loan will bear interest at a rate of 1.44% per month. The T3 Borrower may prepay the obligations under the T3 Loan, in full or in part, without penalty or premium.
Removed
For the twelve months ended March 31, 2024, the Company sold 176,751 thousand shares for $1.1 million in net proceeds, respectively, after deduction of commissions and fees. The ATM Sales Agreement has expired in accordance with its terms.
Added
The proceeds under the T3 Loan Agreement were used for the funding under the Company’s distribution arrangements for the film titled Terrifier 3 (the “Film”). The T3 Loan Agreement contains customary covenants, representation and warranties and events of default. The T3 Loan, including interest of $576 thousand, was repaid in advance during the quarter ended December 31, 2024.
Removed
We identify and record as a reduction to the liability any expenses that are to be reimbursed to us by such studios or content producers.
Added
The T3 Loan is secured by a first priority interest in all of T3 Borrower’s rights and interest in the Film and the distribution agreements, including the proceeds to the T3 Borrower from the distribution of the Film. In April 2025, the Company paid the T3 Lender $700,000 in Participation Interest.
Removed
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.
Added
As of March 31, 2025 and 2024, short term content advances were $6.7 million and $9.3 million, respectively, and content advances, net of current portion were, $4.1 million and $2.6 million, respectively. 20 Our capital requirements will depend on many factors, and we may need to use existing capital resources and/or undertake equity or debt offerings, if necessary and opportunistically available, for further capital needs.
Removed
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.
Added
Streaming and digital revenue improved by $7.1 million, primarily due to: (i) $3.3 million license fee revenue recorded during the period related to the licensing of the Dog Whisperer and Terrifier 3 contents, and (ii) net favorable impact of other content releases' timing relative to the same period in the prior year.
Removed
The decrease was driven by the decrease in Other non-recurring revenue, related to the run-off of the Company's legacy digital cinema business. Following the legacy business' active operations' run-off at the end of fiscal year 2023, the Company had $0.5 million of digital system sales, with the remaining $3.3 million revenue relating to the recognition of previously constrained variable consideration.
Added
Podcast and other revenue grew by $2.2 million primarily due to revenue increases from direct advertising. The decrease in other and non-recurring revenue related to the run-off of the Company's legacy digital cinema business. The Company does not anticipate material future revenue related to this business.
Removed
The Company does not anticipate this revenue to recur at a substantial level in fiscal year 2025 and beyond.
Added
Direct Operating Expenses For the Fiscal Year Ended March 31, As a % of Revenue 2025 2024 $ Change % Change 2025 2024 Direct operating expenses $ 38,776 $ 19,131 $ 19,645 103 % 50 % 39 % The increase of $19.6 million in Direct Operating Expenses for the year ended March 31, 2025, compared to the same period of 2024 primarily relates to the impact of Terrifier 3.
Removed
In addition, the Company experienced a $8.1 million decline in the Company's base distribution, driven by a $3.8 million decline in theatrical revenue following fiscal year 2023's theatrical success with films such as Terrifier 2, a $3.0 million decrease in DVD and related supply chain revenue, as the Company has shifted its focus away from the physical business.
Added
Specifically, the increase is due to the net effect of the following changes: (i) $16.9 million higher royalty expense, (ii) $0.9 million increase in marketing costs, (iii) $1.0 million theatrical distribution fees to our service provider, (iv) $1.8 million higher license participations and advertising pool impression costs, offset by (v) $1.5 million lower SaaS subscription fees.
Removed
Direct Operating Expenses For the Fiscal Year Ended March 31, 2024 2023 $ Change % Change Direct operating expenses $ 19,131 $ 36,364 $ (17,233 ) (47 )% For the twelve months ended March 31, 2024, the Company's direct operating expenses decreased $17.2 million.
Added
Depreciation and Amortization For the Fiscal Year Ended March 31, As a % of Revenue 2025 2024 $ Change % Change 2025 2024 Amortization of intangible assets $ 3,226 $ 3,196 $ 30 1 % 4 % 7 % Depreciation of property and equipment 571 575 (4 ) (1 )% 1 % 1 % Depreciation and Amortization $ 3,797 $ 3,771 $ 26 1 % 5 % 8 % Amortization and depreciation expense have remained relatively consistent for the year ended March 31, 2025, compared to the year ended March 31, 2024, as the Company's intangible focused investment mix has remained consistent over the past year.
Removed
The decrease was primarily related to a decrease in share-based expense of $3.4 million as a result of the US-based workforce reduction, a decline in stock price, and a number of legacy awards tranches fully vesting.
Added
Interest expense Interest expense increased by $3.3 million to $4.4 million for the year ended March 31, 2025 primarily due to: (i) $2.7 million interest participation relating to the T3 Loan (which was obtained and repaid during the fiscal year), (ii) higher drawings on our line of credit and (ii) increased interest rates in 2024.
Removed
Compensation expense also declined primarily due to a $2.1 million decrease in employee wage, tax, and benefit-related expenses as a result of the lower cost from a shift in employees to Cineverse Services India, and a reduction in the Company's bonus expense of $1.1 million based on fiscal year 2024 performance, partially offset by a $0.5 million increase in severance expense.
Added
The fair value of the shares held as of March 31, 2024 was $0.4 million, with associated losses of $4.3 million recognized during the fiscal year ended March 31, 2024. During the year ended March 31, 2025, we sold our remaining 141,757,392 Metaverse shares, resulting in a gain of $0.2 million.
Removed
Other operating expense declined by $1.3, which includes $0.9 million from decreased legal settlement costs and $0.8 million reduction in direct marketing campaigns.
Added
(2) - Primarily employee severance costs and expenses associated with the wind-down of our legacy Digital Cinema operations. Recent Accounting Pronouncements See Note 2 - Basis of Presentation and Summary of Significant Accounting Policies to our Consolidated Financial Statements included herein.
Removed
Depreciation and Amortization For the Fiscal Year Ended March 31, 2024 2023 $ Change % Change Amortization of intangible assets $ 3,196 $ 2,888 $ 308 11 % Depreciation of property and equipment 575 875 (300 ) (34 )% Depreciation and Amortization $ 3,771 $ 3,763 $ 8 0 % Depreciation expense decreased primarily due to the remainder of our digital cinema assets reaching the conclusion of their ten-year useful lives during the fiscal year ended March 31, 2023.
Added
Cash Flow Changes in our cash flows were as follows (in thousands): For the Fiscal Year Ended March 31, 2025 2024 Net cash provided by (used in) operating activities $ 17,411 (10,592 ) Net cash used in investing activities (635 ) (531 ) Net cash (used in) provided by financing activities (8,002 ) 9,138 Net Change in Cash and Cash Equivalents $ 8,774 $ (1,985 ) As of March 31, 2025 and 2024, we had cash and cash equivalents of $13.9 million and $5.2 million, respectively.
Removed
Amortization expense has continued to increase as a result of the Company's shift away from the physical business to its focus on content-related spend, including $0.2 million from the amortization of capitalized content costs.
Added
Cash used in investing activities of $0.6 million were driven by the acquisition of long-lived assets, partially offset by cash received from the sale of Company shares in Metaverse. 27 Cash used in financing activities of $8.0 million was primarily due to the net $6.4 million repayments of the Line of Credit Facility, repayment of our $3.1 million T3 Loan (which was obtained during the 2025 fiscal year), $0.4 million net payment of deferred acquisition consideration, $0.6 million final earnout payment and $0.2 million used to repurchase outstanding shares.
Removed
The Company does not anticipate any material change to future operating cash flows as a result of the impairment recognized. 22 Interest expense Interest expense decreased by $0.2 million to $1.1 million for the twelve months ended March 31, 2024 primarily as a result of lower deferred and earnout consideration accretion related to the acquisitions of Bloody Disgusting and DMR.
Removed
Loss from equity investment in Metaverse, a related party Following the halting of trading on The Stock Exchange of Hong Kong Limited in April 2022, the Company valued our equity investment in Metaverse as of March 31, 2023 using a market approach and categorized it as a Level 3 investment (See Note 2, Basis of Presentation and Summary of Significant Accounting Policies ).
Removed
Income Tax Expense For the year ended March 31, 2024, the Company had income tax expense of $10 thousand consisted of $35 thousand of current foreign income taxes , offset by the recognition of a $14 thousand deferred tax benefit, and a tax benefit of $11 thousand for a return to provision adjustment related to U.S. state income taxes.
Removed
The Company's changes in working capital also contributed to cash used operations, highlighted by a decrease in accounts payable and accrued expenses by $18.0 million, offset by a decrease in accounts receivable by $9.9 million, due to the continued growth in streaming.
Removed
Cash flows used in investing activities consisted of purchases of property and equipment of $0.7 million, and expenditures to acquire intangible assets of $0.6 million. Cash flows provided by financing activities consisted of drawdowns under the line of credit of $31.0 million and corresponding repayments of $26.0 million.
Removed
Additionally, the Company paid $0.7 million in acquisition-related liabilities and $0.2 million for deferred financing fees.

Other CNVS 10-K year-over-year comparisons