PART I - FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, cash flows, and equity, along with detailed notes explaining the company's accounting policies, financial condition, and specific transactions for the period ended June 30, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20at%20June%2030%2C%202024%20and%20March%2031%2C%202024) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2024 | March 31, 2024 | | :-------------------- | :------------ | :------------- | | Cash and cash equivalents | $3,955 | $5,167 | | Accounts receivable, net | $9,262 | $8,667 | | Total current assets | $31,531 | $32,721 | | Total Assets | $62,342 | $64,378 | | Total current liabilities | $32,429 | $31,249 | | Total Liabilities | $32,905 | $32,227 | | Total equity | $29,437 | $32,151 | - The company's total assets decreased from **$64.38 million** to **$62.34 million**, while total liabilities increased from **$32.23 million** to **$32.91 million**, leading to a decrease in total equity from **$32.15 million** to **$29.44 million** as of June 30, 2024, compared to March 31, 2024[4](index=4&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20Months%20ended%20June%2030%2C%202024%20and%202023) This section details the company's revenues, expenses, and net loss over specific periods, reflecting operational performance Unaudited Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | Revenues | $9,127 | $12,980 | | Total operating expenses | $11,905 | $15,697 | | Operating loss | $(2,778) | $(2,717) | | Net loss | $(3,050) | $(3,536) | | Net loss attributable to common stockholders | $(3,162) | $(3,638) | | Basic Net loss per share | $(0.20) | $(0.37) | | Diluted Net loss per share | $(0.20) | $(0.37) | - Revenues decreased by **29.7%** from **$12.98 million** in Q1 2023 to **$9.13 million** in Q1 2024. Despite the revenue decline, the net loss attributable to common stockholders improved from **$(3.64) million** to **$(3.16) million**, and basic/diluted net loss per share improved from **$(0.37)** to **$(0.20)** year-over-year[5](index=5&type=chunk) [Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income%20for%20the%20Three%20Months%20ended%20June%2030%2C%202024%20and%202023) This section presents the company's net loss and other comprehensive income items, showing total comprehensive loss Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | Net loss | $(3,050) | $(3,536) | | Foreign exchange translation | $55 | $(78) | | Net income attributable to noncontrolling interest | $(23) | $(14) | | Comprehensive loss | $(3,018) | $(3,628) | - The comprehensive loss for the three months ended June 30, 2024, was **$(3.02) million**, an improvement from **$(3.63) million** in the prior year, primarily due to a lower net loss and positive foreign exchange translation[6](index=6&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20ended%20June%2030%2C%202024%20and%202023) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary (in thousands) | Cash Flow Activity (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(1,714) | $(3,260) | | Net cash used in investing activities | $(423) | $(272) | | Net cash provided by financing activities | $925 | $8,509 | | Net change in cash and cash equivalents | $(1,212) | $4,977 | | Cash and cash equivalents at end of period | $3,955 | $12,129 | - Net cash used in operating activities improved to **$(1.71) million** in Q1 2024 from **$(3.26) million** in Q1 2023. However, net cash provided by financing activities significantly decreased from **$8.51 million** to **$0.93 million**, leading to a net decrease in cash and cash equivalents of **$(1.21) million** in Q1 2024, compared to a **$4.98 million** increase in Q1 2023[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statements of Equity](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Equity%20for%20the%20Three%20Months%20ended%20June%2030%2C%202024%20and%202023) This section tracks changes in the company's equity components, including stock, capital, and accumulated deficit Equity Component (in thousands) | Equity Component (in thousands) | March 31, 2024 | June 30, 2024 | | :------------------------------ | :------------- | :------------ | | Preferred Stock Amount | $3,559 | $3,559 | | Common Stock Amount | $194 | $194 | | Treasury Amount | $(11,978) | $(12,166) | | Additional Paid-In Capital | $545,996 | $546,554 | | Accumulated Deficit | $(504,153) | $(507,315) |\ | Total Stockholders' Equity | $33,273 | $30,536 | | Total Equity | $32,151 | $29,437 | - Total stockholders' equity decreased from **$33.27 million** to **$30.54 million** from March 31, 2024, to June 30, 2024, primarily due to the net loss of **$(3.07) million** and treasury stock acquisitions of **$(188) thousand**, partially offset by stock-based compensation and common stock issuances[9](index=9&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations of the company's accounting policies, financial condition, and specific transactions [1. Nature of Operations and Liquidity](index=10&type=section&id=1.%20NATURE%20OF%20OPERATIONS%20AND%20LIQUIDITY) This section describes the company's business, operational context, and current liquidity position - Cineverse Corp. is a streaming technology and entertainment company operating a portfolio of owned/operated streaming channels, a global content distributor, and a proprietary SaaS platform (Matchpoint™) for OTT app development and content distribution[11](index=11&type=chunk)[57](index=57&type=chunk) - The company received a Nasdaq Listing Qualifications staff letter on July 10, 2024, indicating non-compliance with the minimum bid price requirement (**$1** per share) and has **180 days** (until January 6, 2025) to regain compliance[11](index=11&type=chunk) - As of June 30, 2024, the company had an accumulated deficit of **$507.3 million** and a negative working capital of **$0.9 million**, with a net loss of **$3.2 million** attributable to common stockholders for the three months ended June 30, 2024[12](index=12&type=chunk)[58](index=58&type=chunk) - The company has a **$7.5 million** revolving Line of Credit Facility with East West Bank, with **$4.8 million** outstanding as of June 30, 2024, and a term loan of up to **$3.67 million** for the 'Terrifier 3' film, with **$3.1 million** outstanding as of June 30, 2024[12](index=12&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) - The company believes its cash and cash equivalent balances as of June 30, 2024, will be sufficient to support operations for at least **twelve months**[13](index=13&type=chunk)[60](index=60&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=12&type=section&id=2.%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the accounting principles, estimates, and policies used in preparing the financial statements - The financial statements are prepared in conformity with GAAP, are unaudited, and include all normal recurring adjustments. Management makes estimates and judgments affecting reported amounts, with actual results potentially differing[14](index=14&type=chunk)[61](index=61&type=chunk) - The company manages its operations as **one reporting segment**[18](index=18&type=chunk) - The Employee Retention Tax Credit (ERTC) receivable was **$0.1 million** as of June 30, 2024, down from **$1.7 million** as of March 31, 2024, following a **$1.7 million** cash receipt in June 2024[18](index=18&type=chunk) Intangible Assets, Net (in thousands) | Intangible Asset | June 30, 2024 Net | March 31, 2024 Net | | :------------------------------- | :---------------- | :----------------- | | Content Library | $2,607 | $2,641 | | Advertiser Relationships and Channel | $9,653 | $10,062 | | Customer Relationships | $750 | $818 | | Software | $2,240 | $2,320 | | Tradenames, Trademarks and Patents | $834 | $855 | | Capitalized Content | $2,154 | $1,632 | | **Total Intangible Assets** | **$18,238** | **$18,328** | - No goodwill impairment charges were recorded for the three months ended June 30, 2024 and 2023, following a **$14.0 million** charge in the fiscal year ended March 31, 2024[23](index=23&type=chunk) Fair Value Measurements (in thousands) | Item | June 30, 2024 Total | March 31, 2024 Total | | :--------------------------------- | :------------------ | :------------------- | | Equity investment in Metaverse, at fair value | $162 | $362 | | Current portion of earnout consideration | $180 | $180 | Disaggregated Revenue by Source (in thousands) | Revenue Source | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | Streaming and digital | $7,703 | $10,114 | | Podcast and other | $1,043 | $429 | | Base distribution | $351 | $1,158 | | Other non-recurring | $30 | $1,279 | | **Total Revenue** | **$9,127** | **$12,980** | - One customer represented **39%** and **26%** of consolidated revenues for the three months ended June 30, 2024 and 2023, respectively[33](index=33&type=chunk) Basic and Diluted Net Loss Per Share (in thousands, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net loss attributable to Common Stockholders | $(3,162) | $(3,638) | | Weighted-average shares of Common Stock outstanding | 15,702 | 9,879 | | Basic Net Loss Per Share | $(0.20) | $(0.37) | | Diluted Net Loss Per Share | $(0.20) | $(0.37) | [3. Other Interests](index=21&type=section&id=3.%20OTHER%20INTERESTS) This section details the company's investments in other entities and related financial interests - The company indirectly owns **100%** of CDF2 Holdings, a Variable Interest Entity (VIE), but is not the primary beneficiary. Its maximum exposure to loss from CDF2 Holdings is **$0** as of June 30, 2024[40](index=40&type=chunk) - Cineverse holds an investment in Roundtable Holdings, Inc. (Roundtable Securities) valued at **$0.2 million**, accounted for using the cost method as the company owns less than **20%** and does not exert significant influence[43](index=43&type=chunk) [4. Stockholders' Equity](index=22&type=section&id=4.%20STOCKHOLDERS'%20EQUITY) This section provides an overview of changes in the company's equity, including stock issuances and repurchases - During Q1 2024, the company issued **93 thousand shares** of Common Stock, including **64 thousand** for preferred stock dividends and **29 thousand** for acquisition compensation. In Q1 2023, **2,337 thousand shares** were issued, primarily from a direct offering and ATM sales[42](index=42&type=chunk) - Cumulative dividends in arrears on Series A Preferred Stock were **$89 thousand** as of June 30, 2024, paid in Common Stock[42](index=42&type=chunk) - Treasury stock increased to **473 thousand shares** (cost **$12.17 million**) as of June 30, 2024, from **289 thousand shares** (cost **$11.98 million**) as of March 31, 2024, due to the acquisition of **184 thousand shares** through a Rule 10b5-1 trading plan[42](index=42&type=chunk)[9](index=9&type=chunk) - Stock-based compensation expense was **$0.5 million** for both the three months ended June 30, 2024 and 2023[45](index=45&type=chunk) [5. Debt](index=23&type=section&id=5.%20DEBT) This section details the company's outstanding debt obligations, including credit facilities and term loans - The company has a **$7.5 million** revolving Line of Credit Facility with East West Bank, bearing interest at **1.5%** above the prime rate (**10.00%** as of June 30, 2024), extended to September 15, 2025. **$4.8 million** was outstanding as of June 30, 2024[46](index=46&type=chunk) - A Term Loan for up to **$3.67 million** was entered into on April 5, 2024, for the 'Terrifier 3' film, with a maturity date of April 1, 2025. It bears no interest until maturity, except for a **$576 thousand** interest advance paid at closing. **$3.1 million** was outstanding as of June 30, 2024[48](index=48&type=chunk) - The company provided a guarantee for the T3 Loan, capped at **$1.5 million**, which is subordinated to the Line of Credit Facility[48](index=48&type=chunk) [6. Commitments and Contingencies](index=24&type=section&id=6.%20COMMITMENTS%20AND%20CONTINGENCIES) This section outlines the company's contractual obligations, lease commitments, and potential liabilities - Cineverse operates as a virtual company with **one domestic operating lease** (subleased to a third party, expiring January 2025) and **two operating leases** for its India operations (expiring July 2027)[49](index=49&type=chunk) Operating Lease Liabilities and Commitments (in thousands) | Metric | June 30, 2024 | March 31, 2024 | | :-------------------------- | :------------ | :------------- | | Noncurrent Lease Assets | $725 | $834 | | Current Operating Lease Liabilities | $338 | $401 | | Noncurrent Operating Lease Liabilities | $418 | $462 | | Total Operating Lease Liabilities | $756 | $863 | | Fiscal Year Ending March 31 | Operating Lease Commitments | | :-------------------------- | :-------------------------- | | 2025 | $308 | | 2026 | $200 | | 2027 | $210 | | 2028 | $72 | | Total Lease Payments | $790 | - The company recognized **$45 thousand** and **$44 thousand** of income from its subleasing arrangement for the three months ended June 30, 2024 and 2023, respectively[49](index=49&type=chunk) [7. Income Taxes](index=25&type=section&id=7.%20INCOME%20TAXES) This section discusses the company's income tax expense, deferred taxes, and effective tax rate - Income tax expense was **$7 thousand** for the three months ended June 30, 2024, down from **$20 thousand** in the prior year, primarily attributable to taxable income in India related to transfer pricing[54](index=54&type=chunk) - The company has a **full valuation allowance** offsetting potential deferred tax assets due to net operating loss carryforwards, reflecting an inability to use such losses[54](index=54&type=chunk) - The effective tax rate was **(0.2)%** for the three months ended June 30, 2024, compared to **(0.6)%** for the same period in 2023[54](index=54&type=chunk) [Recently Issued Accounting Pronouncements](index=21&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section discusses new accounting standards issued by FASB and their potential impact on the company's financial reporting - FASB issued ASU 2023-07 (Segment Reporting) effective for fiscal years beginning after December 15, 2023, requiring incremental segment expense disclosures. The company is assessing its impact[41](index=41&type=chunk) - FASB issued ASU 2023-09 (Income Taxes Disclosures) effective for annual periods beginning after December 15, 2024, requiring specific tax categories in rate reconciliation. The company is evaluating its adoption method and impact[41](index=41&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, liquidity, and results of operations for the three months ended June 30, 2024, compared to the prior year, including a detailed breakdown of revenue and expense changes, and a reconciliation of Adjusted EBITDA [Business Overview](index=26&type=section&id=Business%20Overview) This section describes the company's strategic transformation and its core business operations in streaming technology and content distribution - Cineverse has transformed from a digital cinema equipment and physical content distributor to a leading independent streaming company, focusing on owned/operated streaming channels, global content distribution, and its proprietary Matchpoint™ SaaS platform[57](index=57&type=chunk) - The Matchpoint™ platform offers AVOD, SVOD, TVOD, and linear capabilities, automates content distribution, and provides robust data analytics[57](index=57&type=chunk) - The company distributes content for major brands like Hallmark, ITV, NFL, and Highlander across various digital platforms (e.g., Apple iTunes, Amazon Prime, Netflix, Hulu, Xbox, Pluto, Tubi) and physical goods (DVD/Blu-ray)[57](index=57&type=chunk) [Financial Condition and Liquidity](index=26&type=section&id=Financial%20Condition%20and%20Liquidity) This section assesses the company's current financial health, working capital, and ability to meet short-term and long-term obligations - As of June 30, 2024, the company reported an accumulated deficit of **$507.3 million** and a working capital deficit of **$0.9 million**, with a net loss attributable to common stockholders of **$3.2 million** for the three months ended June 30, 2024[58](index=58&type=chunk) - Net cash used in operating activities for the three months ended June 30, 2024, was **$1.7 million**, including a **$2.0 million** incremental investment in content[58](index=58&type=chunk) - The company maintains a **$7.5 million** revolving Line of Credit Facility with East West Bank, with **$4.8 million** outstanding as of June 30, 2024, and a term loan of up to **$3.67 million** for the 'Terrifier 3' film, with **$3.1 million** outstanding[58](index=58&type=chunk)[60](index=60&type=chunk) - The company believes its cash and cash equivalent balances as of June 30, 2024, are sufficient to support operations for at least **twelve months**, but may pursue equity or debt offerings opportunistically for further capital needs[60](index=60&type=chunk) [Critical Accounting Estimates](index=27&type=section&id=Critical%20Accounting%20Estimates) This section highlights key accounting policies and management judgments that significantly impact the financial statements - The company's financial statements rely on significant accounting policies and management's assumptions and estimates, particularly for revenue recognition, allowance for credit losses, goodwill and intangible asset impairments, and share-based compensation expense[61](index=61&type=chunk)[63](index=63&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202024%2C%20and%202023) This section analyzes the company's revenue and expense performance for the three months ended June 30, 2024, compared to the prior year Revenue Performance (in thousands) | Revenue Source | Q1 2024 ($) | Q1 2023 ($) | Change ($) | % Change | | :-------------------- | :---------- | :---------- | :--------- | :------- | | Streaming and digital | 7,703 | 10,114 | (2,411) | (24)% | | Podcast and other | 1,043 | 429 | 614 | 143% | | Base distribution | 351 | 1,158 | (807) | (70)% | | Other non-recurring | 30 | 1,279 | (1,249) | (98)% | | **Total Revenue** | **9,127** | **12,980** | **(3,853)**| **(30)%**| - Total revenue declined by **$3.9 million** (**30%**) year-over-year, primarily due to a **$2.4 million** decrease in Streaming and digital revenue (driven by content release timing and changes in direct advertising sales) and a **$1.2 million** decrease in other non-recurring revenue from legacy cinema equipment sales[63](index=63&type=chunk) - Podcast and other revenue significantly increased by **$0.6 million** (**143%**) due to the success of the Bloody Disgusting podcast content[63](index=63&type=chunk) - Direct operating expenses decreased by **$2.5 million** (**36%**), driven by reduced licensing, royalty, and participation expenses (**$1.7 million**) and lower manufacturing/fulfillment charges due to declining physical sales[63](index=63&type=chunk)[64](index=64&type=chunk) - Selling, general and administrative expenses decreased by **$1.3 million** (**17%**), mainly due to a **$0.4 million** reduction in compensation expenses (change in employment mix) and a **$0.7 million** decrease in corporate expenses (consulting, legal, PR fees)[66](index=66&type=chunk) - Interest expense increased by **$0.1 million** to **$0.4 million**, primarily due to the Terrifier 3 term loan interest[66](index=66&type=chunk) [Adjusted EBITDA](index=30&type=section&id=Adjusted%20EBITDA) This section presents a non-GAAP measure of the company's operating performance, excluding specific non-cash and non-recurring items - Adjusted EBITDA is a non-GAAP financial metric used to measure the financial performance of the business, excluding interest, taxes, depreciation and amortization, stock-based compensation, and other non-recurring items[69](index=69&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | | :----------------------------------- | :---------- | :---------- | | Net loss | (3,050) | (3,536) | | Add Back: | | | | Income tax expense | 7 | 20 | | Depreciation and amortization | 863 | 822 | | Interest expense | 431 | 295 | | Loss from equity investment in Metaverse | 3 | — | | Stock-based compensation | 470 | 409 | | Other (income) expense, net | (163) | 36 | | Net income attributable to noncontrolling interest | (23) | (14) | | Transition-related costs | 27 | 468 | | **Adjusted EBITDA** | **(1,435)** | **(1,500)** | - Adjusted EBITDA improved slightly to **$(1.44) million** in Q1 2024 from **$(1.50) million** in Q1 2023[70](index=70&type=chunk) [Cash Flow](index=31&type=section&id=Cash%20Flow) This section summarizes the company's cash generation and usage across operating, investing, and financing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2024 ($) | Q1 2023 ($) | | :---------------------------------- | :---------- | :---------- | | Net cash used in operating activities | (1,714) | (3,260) | | Net cash used in investing activities | (423) | (272) | | Net cash provided by financing activities | 925 | 8,509 | | **Net Change In Cash and Cash Equivalents** | **(1,212)** | **4,977** | - Net cash used in operating activities decreased due to lower loss from operations (excluding non-cash expenses), decreased unbilled revenue, collection of ERTC claim, and increased accounts payable, partially offset by content advances[72](index=72&type=chunk) - Net cash used in investing activities increased due to higher expenditures for long-lived intangible and fixed assets, partially offset by proceeds from the sale of equity investment securities[72](index=72&type=chunk) - Net cash provided by financing activities significantly decreased due to lower proceeds from the line of credit and the absence of large common stock issuances seen in the prior year, despite proceeds from the Terrifier 3 term loan[72](index=72&type=chunk) [Off-balance sheet arrangements](index=31&type=section&id=Off-balance%20sheet%20arrangements) This section describes the company's involvement with unconsolidated entities and potential off-balance sheet obligations - The company holds a **100%** equity interest in CDF2 Holdings, an unconsolidated Variable Interest Entity (VIE), but is not the primary beneficiary[72](index=72&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the company's disclosure controls and procedures, including their definition, management's evaluation of their effectiveness, and any changes in internal control over financial reporting [Definition and Limitations of Disclosure Controls and Procedures](index=32&type=section&id=Definition%20and%20Limitations%20of%20Disclosure%20Controls%20and%20Procedures) This section defines the scope and inherent limitations of the company's disclosure controls and procedures - Disclosure controls and procedures are designed to reasonably ensure that information required for SEC reports is recorded, processed, summarized, and reported timely, and communicated to management for disclosure decisions[74](index=74&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=32&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section presents management's assessment of the effectiveness of the company's disclosure controls and procedures - As of June 30, 2024, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective in providing reasonable assurance for timely and accurate information disclosure[75](index=75&type=chunk) [Changes in Internal Control Over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports any material changes in the company's internal control over financial reporting during the period - There have been **no material changes** in the company's internal control over financial reporting during the three months ended June 30, 2024[76](index=76&type=chunk) PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, debt defaults, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms the absence of any material legal proceedings involving the company - No legal proceedings were reported[76](index=76&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to the Risk Factors disclosed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2024[77](index=77&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details unregistered sales of equity securities, specifically shares issued for an acquisition, and outlines the company's share repurchase activities under its approved Rule 10b-18 plan - On April 1, 2024, the company issued **29,741 shares** of Common Stock as a deferred payment for the acquisition of Christian Channel, pursuant to Section 4(a)(2) of the Securities Act[78](index=78&type=chunk) Open Market Repurchases of Class A Common Shares (May 2024) | Period | Total Number of Shares Purchased | Average Price Per Share | Total Number of Shares Purchased as Part of Publicly announced Plans | Maximum Shares that May yet be purchased under the Plan or Programs | | :---------- | :------------------------------- | :---------------------- | :----------------------------------------------------------------- | :------------------------------------------------------------------ | | May 2024 | 184,495 | $1.02 | 184,495 | 315,505 | | **Total** | **184,495** | **$1.02** | **184,495** | **315,505** | - The Board approved the renewal of a stock repurchase program on February 29, 2024, to purchase up to **500,000 shares** of Common Stock, expiring March 1, 2025[78](index=78&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults on senior securities have occurred - No defaults upon senior securities were reported[78](index=78&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company's operations - Mine Safety Disclosures are not applicable[78](index=78&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This section confirms there is no additional material information to report - No other information was reported[78](index=78&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed as part of the Form 10-Q, including various agreements and certifications - Key exhibits include the Guaranty Agreement, Loan and Security Agreement, Amendment No. 3 to Amended and Restated Loan, Guaranty and Security Agreement, and Officer's Certificates (Sections 302 and 906 of Sarbanes-Oxley Act)[80](index=80&type=chunk) [Signatures](index=35&type=section&id=Signatures) This section contains the official certifications and signatures of the company's principal executive and financial officers - The report was signed by Christopher J. McGurk, Chief Executive Officer and Chairman of the Board of Directors, and Mark Lindsey, Chief Financial Officer, on August 14, 2024[82](index=82&type=chunk)

Revenue Performance - Total revenue for Q1 FY 2025 was $9.1 million, a decrease from $13.0 million in the prior year, primarily due to a $2.4 million reduction in Streaming and Digital revenue[3] - Revenues for Q2 2024 were $9,127,000, a decrease of 29% from $12,980,000 in Q2 2023[19] Operating Expenses - Selling, General, and Administrative (SG&A) expenses decreased by $1.3 million, or 17%, driven by reduced legal, consulting, and compensation costs[4] - Total operating expenses for Q2 2024 were $11,905,000, down 24% from $15,697,000 in Q2 2023[19] - Direct operating expenses decreased by 36% to $4,479,000 in Q2 2024 from $6,987,000 in Q2 2023[19] - Selling, general and administrative expenses decreased by 17% to $6,563,000 in Q2 2024 from $7,888,000 in Q2 2023[19] Profitability and Loss - Net loss attributable to common stockholders was $3.2 million, or $(0.20) earnings per share, an improvement from a net loss of $3.6 million, or $(0.37) earnings per share in the prior year[4] - Net loss for Q2 2024 was $3,050,000, compared to a net loss of $3,536,000 in Q2 2023, representing a 14% improvement[19] - Basic and diluted net loss per share attributable to common stockholders was $(0.20) for Q2 2024, compared to $(0.37) in Q2 2023[19] - Adjusted EBITDA for Q2 2024 was $(1,435,000), slightly improved from $(1,500,000) in Q2 2023[25] Viewership and Content Growth - Total monthly viewership across the channel portfolio increased by 73% year-over-year, supported by successful new channel launches and podcast growth[5][9] - The company experienced a 143% increase in podcast revenue, attributed to the popularity of its Bloody Disgusting podcast content[4] Cash and Financial Position - Cash and cash equivalents stood at $4.0 million as of June 30, 2024, with a line of credit facility extended to September 15, 2025[4][10] Strategic Initiatives - The company has signed its first long-term Matchpoint SaaS deals worth over $250,000 in annual revenue and has a pipeline of more than 20 potential deals[7][11] - The anticipated release of "Terrifier 3" on October 11, 2024, is expected to maximize profits across various distribution channels[9][12] Shareholder Information - Weighted average shares of common stock outstanding increased to 15,702,000 in Q2 2024 from 9,879,000 in Q2 2023[19] Interest and Investment - Interest expense increased to $431,000 in Q2 2024 from $295,000 in Q2 2023[19] - The company reported a loss from investment in Metaverse of $3,000 in Q2 2024, with no prior year comparison available[19] Direct Operating Margin - Direct operating margin improved to 51%, up from 46% in the previous year, exceeding the target range of 45% to 50%[1]

LOS ANGELES, Aug. 7, 2024 /PRNewswire/ -- Cineverse Corp. (NASDAQ: CNVS), an innovative streaming technology and entertainment company, today announced it will release its financial results for the first quarter fiscal year 2025 ended June 30, 2024, after market close on Wednesday, August 14, 2024. Cineverse will host a conference call discussing these results at 4:30 p.m. ET/1:30 p.m. PT that same day. To participate in the live conference call, please use the following dial-in numbers: United States (Loca ...

The Film DEVON Explores Every Parent's Worst Nightmare LOS ANGELES, Aug. 1, 2024 /PRNewswire/ -- No good deed goes unpunished in DEVON, the latest acquisition from distributor and streaming innovator Cineverse (NASDAQ: CNVS). When a group of friends try to uncover the truth behind an unsolved disappearance, they unwittingly find themselves at the center of a terrifying mystery. The film which will premiere exclusively on the Company's streaming service SCREAMBOX is the highly anticipated first feature of Je ...

Group 1 - Cineverse Corp. has announced the distribution of video content on Spotify, marking its first foray into this platform, which includes programming from its channel partners and a library of over 70,000 films and television shows [3][4] - The content available on Spotify includes popular titles such as "Dog Whisperer with Cesar Millan," "Land of the Lost," and various comedy specials, expanding the reach of Cineverse's offerings [1][4] - Cineverse's proprietary technology, Matchpoint™ Dispatch, facilitated the rapid deployment of this content on Spotify [5][6] Group 2 - The partnership with Spotify is seen as a strategic move, leveraging Spotify's extensive user base of over 170 million who have engaged with video content, including more than 250,000 video podcasts [2][4] - Cineverse's distribution capabilities reach over 150 million unique viewers monthly, positioning the company as a significant player in the streaming technology and entertainment sector [6]

The Channel Has Seen Tremendous Growth Across Consumption and Engagement Since Its January Launch LOS ANGELES, July 2, 2024 /PRNewswire/ -- Cineverse Corp. (NASDAQ: CNVS), an innovative streaming technology and entertainment company, today announced its inaugural Bark Week on the Dog Whisperer With Cesar Millan free ad-supported streaming television (FAST) channel for the week of July 7 to July 14, 2024. The company also announced that the channel will be available on Pluto TV on July 8 – just in time for B ...

Cineverse Corp. (NASDAQ:CNVS) Q4 2024 Earnings Conference Call July 1, 2024 4:30 PM ET Company Participants Gary Loffredo - Chief Legal Officer, Secretary & Senior Advisor Chris McGurk - Chairman and Chie Executive Officer Mark Lindsey - Chief Financial Officer Erick Opeka - President and Chief Strategy Officer Conference Call Participants Dan Kurnos - The Benchmark Company Operator Good day, everyone. Welcome to Cineverse’s Fourth Quarter Fiscal Year 2024 Financial Results Conference Call. My name is Camer ...

Financial Performance - As of March 31, 2024, Cineverse reported a positive working capital of $1.5 million and cash and cash equivalents of $5.2 million[76]. - The company incurred $10.6 million of net cash flows used in operating activities[76]. - Cineverse recognized $14 million of impairment in the current fiscal year[90]. - The company has a total equity of $32.2 million as of March 31, 2024[76]. - The company has incurred a goodwill impairment of $14.0 million during the twelve months ended March 31, 2024, due to a sustained decline in share price from $8.40 to $1.39[116]. - The company has incurred long-term net losses and cash outflows, which may increase as business operations expand and additional marketing and content acquisition activities are undertaken[99]. - Changes in economic conditions could materially impact the company's financial position and results of operations[104]. Stock Information - Cineverse's common stock is listed on the Nasdaq under the symbol "CNVS" and underwent a 1-for-20 reverse stock split on June 9, 2023[59]. - Approximately 20.8% of the company's outstanding Common Stock is beneficially owned by directors, executive officers, and principal stockholders, which may significantly influence business affairs[100]. - The company has never paid cash dividends on its Common Stock and has no current plans to do so, with certain credit facilities restricting dividend payments[117]. - The liquidity of the company's Common Stock is uncertain, with limited trading volume potentially depressing stock prices[108]. - The company's stock price has been volatile, which may affect the price at which Common Stock can be sold in the future[110]. Business Strategy - The company aims to acquire premium content and streaming channels while leveraging its proprietary MatchpointTM technology[56]. - Cineverse's strategy includes licensing film and TV content to key players in the OTT streaming ecosystem, including Amazon, Apple, Netflix, and Google[58]. - The company operates in various specialty sectors, including faith and family, anime, action, horror, and sports, to capture underserved market opportunities[54]. Risks and Challenges - The company faces substantial risks in the media content industry, where commercial success is unpredictable and heavily influenced by audience reactions and competitive releases[102]. - The company is subject to cybersecurity risks and global health threats that may adversely affect its business[106]. - The company has not established significant "key person" life insurance policies for key employees, which may adversely affect operations if key personnel are lost[101].

Exhibit 99.1 Cineverse Reports Fourth Quarter and Fiscal Year 2024 Results Total Revenue of $49.1 Million Total Direct Operating Margin Increased to 61% from 47% Selling, General, and Administrative Expenses Decreased By $8.9 Million, or 24% Adjusted EBITDA of $4.4 Million, an Increase of $4.3 Million from Prior Year Positive Working Capital of $1.5 Million as of Year End LOS ANGELES, July 1, 2024 – Cineverse Corp. ("Cineverse" or the "Company") (NASDAQ: CNVS), a global streaming technology and entertainmen ...

Selling, General, and Administrative Expenses Decreased By $8.9 Million, or 24% LOS ANGELES, July 1, 2024 /PRNewswire/ -- Cineverse Corp. ("Cineverse" or the "Company") (NASDAQ: CNVS), a global streaming technology and entertainment company, today announced its financial results for the quarter and fiscal year ended March 31, 2024 ("FY 2024"). During the fourth quarter, the Company recorded a $14.0 million non-cash, non-recurring impairment to Goodwill. The Goodwill impairment was required by US GAAP as a r ...