Cineverse (NASDAQ: CNVS) swings to loss and funds IndiCue deal with new debt and equity
Rhea-AI Filing Summary
Cineverse Corp. reported a sharp downturn in results for the quarter ended December 31, 2025, moving from prior-year profit to a net loss. Revenue fell to $16.3 million from $40.7 million, mainly because last year benefited from the hit film Terrifier 3, which drove both theatrical and digital sales. Operating expenses dropped but not enough to offset the revenue decline, leading to a net loss attributable to common stockholders of $1.0 million, or $0.05 per share, and a nine‑month loss of $10.3 million. Cash flow from operations was negative $23.3 million, cutting cash on hand to $2.5 million, while $8.3 million was drawn on the company’s credit facility, for which a covenant waiver was obtained. After quarter-end, Cineverse agreed to acquire CTV ad-tech platform IndiCue for $22 million and raised capital through $13 million of convertible notes and a public equity offering.
Positive
- None.
Negative
- None.
Insights
Cineverse posted weaker results, significant cash burn and layered on new debt to fund growth.
Cineverse’s quarterly revenue dropped to $16.3M from $40.7M as prior-year figures were boosted by Terrifier 3 theatrical and digital releases. The business swung to a quarterly net loss attributable to common stockholders of $(1.0)M and a nine‑month loss of $(10.3)M, reflecting both lower sales and ongoing operating costs.
Liquidity is a central issue. Operating activities used $23.3M of cash over nine months, reducing cash to $2.5M while content advances increased. The company had $8.3M outstanding under its East West Bank credit facility and was out of compliance with a covenant as of December 31, 2025, though it secured a waiver through April 30, 2026.
Subsequent events materially reshape the balance sheet and strategy. Cineverse agreed to buy IndiCue for $22M (cash plus stock), issued $13M of 9% convertible notes at a $2.00 conversion price, and completed an underwritten equity sale yielding about $3.2M in net proceeds. Future filings will clarify how the IndiCue acquisition and added leverage affect growth, margins, and compliance with lending arrangements.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the fiscal period ended:
For the transition period from _____ to _____
Commission File Number:
(Exact name of registrant as specified in its charter)
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ |
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Accelerated filer ☐ |
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Smaller reporting company |
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Emerging Growth Company |
☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
As of February 13, 2026,
Cineverse Corp.
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION |
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Item 1. |
Condensed Consolidated Financial Statements (Unaudited) |
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Condensed Consolidated Balance Sheets as of December 31, (Unaudited) and March 31, 2025 |
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Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months ended December 31, 2025 and 2024 |
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Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months ended December 31, 2025 and 2024 |
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Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months ended December 31, 2025 and 2024 |
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Unaudited Condensed Consolidated Statements of Equity for the Three and Nine Months ended December 31, 2025 and 2024 |
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Notes to the Condensed Consolidated Financial Statements (Unaudited) |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 4. |
Controls and Procedures |
31 |
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PART II - OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
32 |
Item 1A. |
Risk Factors |
32 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
32 |
Item 3. |
Defaults Upon Senior Securities |
32 |
Item 4. |
Mine Safety Disclosures |
32 |
Item 5. |
Other Information |
32 |
Item 6. |
Exhibits |
33 |
Exhibit Index |
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Signatures |
34 |
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Cineverse Corp.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
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As of |
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December 31, |
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March 31, |
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(Unaudited) |
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ASSETS |
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Current Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net allowance of credit losses of $ |
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Content advances, net allowance of $ |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Content advances, net of current portion |
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Other long-term assets |
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Total Assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities |
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Accounts payable and accrued expenses |
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$ |
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$ |
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Line of credit |
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— |
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Current portion of deferred consideration on purchase of business |
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— |
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Current portion of operating lease liabilities |
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Other current liabilities |
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Total current liabilities |
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Operating lease liabilities, net of current portion |
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Other long-term liabilities |
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Total Liabilities |
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$ |
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$ |
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(see Note 8) |
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Stockholders’ Equity |
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Preferred stock, |
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Common Stock, $ |
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Additional paid-in capital |
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Treasury stock, at cost; |
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Accumulated deficit |
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( |
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Accumulated other comprehensive loss |
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Total stockholders’ equity of Cineverse Corp. |
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Deficit attributable to noncontrolling interest |
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Total equity |
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Total Liabilities and Equity |
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$ |
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$ |
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See accompanying Notes to Condensed Consolidated Financial Statements
1
Cineverse Corp.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
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Three Months Ended December 31, |
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Nine Months Ended |
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2025 |
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2024 |
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2025 |
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2024 |
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Revenues |
$ |
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$ |
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$ |
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$ |
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Costs and expenses |
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Direct operating |
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Selling, general and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Operating (loss) income |
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Interest expense |
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( |
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Other (expense) income, net |
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( |
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Net (loss) income before income taxes |
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Income tax expense |
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Net (loss) income |
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Net income attributable to noncontrolling interest |
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Net (loss) income attributable to controlling interests |
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Preferred stock dividends |
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Net (loss) income attributable to common stock holders |
$ |
( |
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$ |
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$ |
( |
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$ |
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Net (loss) income per share attributable to common stock holders: |
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Basic |
$ |
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$ |
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$ |
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$ |
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Diluted |
$ |
( |
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$ |
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$ |
( |
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$ |
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Weighted average shares of Common Stock outstanding: |
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Basic |
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Diluted |
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See accompanying Notes to Condensed Consolidated Financial Statements
2
Cineverse Corp.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)
(In thousands)
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Three Months Ended December 31, |
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Nine Months Ended |
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2025 |
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2024 |
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2025 |
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2024 |
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Net (loss) income |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Other comprehensive loss: |
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Foreign exchange translation |
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( |
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Net income attributable to noncontrolling interest |
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( |
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( |
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( |
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( |
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Comprehensive (loss) income |
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$ |
( |
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$ |
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$ |
( |
) |
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$ |
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See accompanying Notes to Condensed Consolidated Financial Statements
3
Cineverse Corp.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
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Nine Months Ended |
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2025 |
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2024 |
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Cash flows from operating activities: |
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Net (loss) income |
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$ |
( |
) |
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$ |
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Adjustments to reconcile net loss to net cash provided by operating activities: |
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Depreciation and amortization |
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Allowance for content advances |
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( |
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( |
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Amortization of debt issuance costs |
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Stock-based compensation |
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Non-cash interest (income) expense |
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( |
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Barter transactions |
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( |
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Capitalized content |
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( |
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( |
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Other |
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( |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
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( |
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Content advances |
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( |
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Other current and long-term assets |
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Accounts payable, accrued expenses, and other liabilities |
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( |
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Deferred revenue |
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( |
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( |
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Net cash (used in) provided by operating activities |
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$ |
( |
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$ |
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Cash flows from investing activities: |
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Expenditures for long-lived assets |
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( |
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( |
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Internally developed software capitalization |
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( |
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( |
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Sale of equity investment securities |
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Net cash used in investing activities |
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$ |
( |
) |
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$ |
( |
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Cash flows from financing activities: |
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Proceeds from line of credit |
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Payments on line of credit |
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( |
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( |
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Proceeds from common stock warrant exercises |
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Withholding taxes paid on restricted stock units |
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( |
) |
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Payment of deferred consideration |
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( |
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( |
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Proceeds from Issuance of Common Stock from ATM, net of fees |
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Payment of earnout consideration |
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( |
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Proceeds from the issuance of a term loan, net of debt issuance costs |
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Repayment of term loan |
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( |
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Cost to acquire treasury shares |
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( |
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Financing fees for line of credit |
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( |
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At-the-market issuance fees |
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( |
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Net cash provided by (used in) financing activities |
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$ |
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$ |
( |
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Net change in cash and cash equivalents |
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( |
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Effect of exchange rate changes on cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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See accompanying Notes to Condensed Consolidated Financial Statements
4
Cineverse Corp.
SUPPLEMENTAL CASH FLOW INFORMATION AND DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITY
(Unaudited)
(In thousands)
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Nine Months Ended |
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2025 |
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2024 |
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Cash interest paid |
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$ |
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$ |
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Income taxes paid |
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$ |
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$ |
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Noncash investing and financing activities: |
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Earnout liability settled in stock |
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$ |
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$ |
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Bonus liability settled in stock |
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$ |
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$ |
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Issuance of Common Stock for settlement of deferred consideration |
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$ |
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$ |
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Accrued dividends on preferred stock |
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$ |
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$ |
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Issuance of Common Stock for payment of accrued preferred stock dividends |
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$ |
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$ |
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See accompanying Notes to Condensed Consolidated Financial Statements
5
Cineverse Corp.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In thousands)
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Preferred Stock |
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Common Stock |
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Treasury |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Non |
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Shares |
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Amount |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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Loss |
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Equity |
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Interest |
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Total |
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Balances as of March 31, 2025 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
( |
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$ |
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Foreign exchange translation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of Common Stock for deferred consideration |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of Common Stock in connection with employee equity awards |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Treasury shares withheld for employee taxes |
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— |
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— |
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( |
) |
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— |
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( |
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— |
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— |
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— |
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( |
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— |
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( |
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Preferred stock dividends paid in Common Stock |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Preferred stock dividends accrued |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balances as of June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
Foreign exchange translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Proceeds from common stock warrant exercises |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||||
Preferred stock dividends paid in Common Stock |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Preferred stock dividends accrued |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Issuance of Common Stock for ATM, net of fees |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balances as of September 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
Foreign exchange translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Preferred stock dividends paid in Common Stock |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Preferred stock dividends accrued |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Issuance of Common Stock for ATM, net of fees |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Issuance of common stock for Board of Directors compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balances as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
See accompanying Notes to Condensed Consolidated Financial Statements
6
Cineverse Corp.
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In thousands)
|
|
Preferred Stock |
|
|
Common Stock |
|
|
Treasury |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|
Non |
|
|
|
|
|||||||||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|
Equity |
|
|
Interest |
|
|
Total |
|
||||||||||||
Balances as of March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
Foreign exchange translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Treasury stock acquired |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Fees incurred in connection with ATM offering |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Issuance of common stock for acquiree consideration |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Preferred stock dividends paid in stock |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Preferred stock dividends accrued |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net loss (income) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balances as of June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
Foreign exchange translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of Class A common stock for earnout commitment |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Treasury stock acquired |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Preferred stock dividends paid in stock |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Preferred stock dividends accrued |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net loss (income) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balances as of September 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
Foreign exchange translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of common stock for Board of Directors compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Preferred stock dividends paid in stock |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Preferred stock dividends accrued |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Exercise of common stock warrant |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Balances as of December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
7
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. NATURE OF OPERATIONS AND LIQUIDITY
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.
The Company has a long legacy in using technology to transform the entertainment industry and played a pioneering role in transitioning movie screens from traditional analog film prints to digital distribution. Over the past several years, Cineverse has transformed itself from being a digital cinema equipment and physical content distributor to a leading independent streaming company.
Cineverse is a streaming technology and entertainment company with its core business operating as (i) a portfolio of owned and operated streaming channels with enthusiast fan bases; (ii) a large-scale global aggregator and full-service distributor of feature films and television programs; and (iii) a proprietary technology software-as-a-service platform for over-the-top (“OTT”) app development and content distribution through subscription video on demand ("SVOD"), dedicated ad-supported video on demand ("AVOD"), ad-supported streaming linear ("FAST") channels, social video streaming services, and audio podcasts. Our streaming channels reach audiences in several distinct ways: direct-to-consumer, through these major application platforms, and through third-party distributors of content on platforms.
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.
We distribute products for major brands such as Hallmark, ITV, Nelvana, ZDF, Konami, NFL and Highlander, as well as international and domestic content creators, movie producers, television producers and other short-form digital content producers. We collaborate with producers, major brands and other content owners to market, source, curate and distribute quality content to targeted audiences through (i) existing and emerging digital home entertainment platforms, including but not limited to Apple iTunes, Amazon Prime, Netflix, Hulu, Xbox, Pluto, and Tubi, as well as (ii) physical goods, including DVD and Blu-ray Discs.
Our Class A common stock, par value $
Financial Condition and Liquidity
We have a history of net losses, and for the three and nine months ended December 31, 2025 the Company had a net loss attributable to Common Stockholders of $(
The Company is party to a Loan, Guaranty, and Security Agreement, as amended on
As of December 31, 2025, $
On May 3, 2024, the Company entered into a sales agreement (the “2024 Sales Agreement”) with A.G.P./Alliance Global Partners and The Benchmark Company, LLC (collectively, the “Sales Agents”), pursuant to which the Company may offer and sell, from time to time, through the Sales Agents, shares of Common Stock. Shares of Common Stock may be offered and sold for an aggregate offering price of up to $
8
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Exchange Commission (the “SEC”) on June 30, 2023 and declared effective by the SEC on January 25, 2024, and other customary closing conditions. The Company will pay the Sales Agents a commission of
The Company will continue to invest in content development and acquisitions, from which it believes it will obtain an appropriate return on its investment. As of December 31, 2025 and March 31, 2025, short-term content advances were $
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. Management's plans with respect to the Company's recurring net losses and net operating cash outflows also include but are not limited to our effort in increasing revenue from existing services as well as offering new services, which may result in additional income from operations. Should management be unsuccessful in executing these plans, additional capital resources will be necessary. There can be no assurance that resources under our Line of Credit Facility or from additional debt or equity resources will be available on acceptable terms, if at all.
2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying interim Condensed Consolidated Financial Statements of Cineverse Corp. have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended March 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on July 1, 2025. These Condensed Consolidated Financial Statements are unaudited and have been prepared by the Company following the rules and regulations of the SEC.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations; however, the Company believes the disclosures are adequate to make the information presented not misleading. Certain columns and rows may not foot due to the use of rounded numbers.
The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2025. Interim results are not necessarily indicative of the results for a full year.
We own an
Use of Estimates
The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Significant items subject to such estimates and assumptions include revenue recognition, allowance for credit losses, content advances, returns and recovery reserves, goodwill and intangible asset impairments, share-based compensation expense, valuation allowance for deferred income taxes and amortization of intangible assets. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates these judgments and estimates. Actual results may differ from
9
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Accounting Policies
There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended March 31, 2025.
Reclassifications
Certain amounts have been reclassified to conform to the current presentation.
Cash and Cash Equivalents
We consider all highly liquid investments with an original maturity of three months or less to be “cash equivalents.” We maintain bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation’s insured limits. We periodically assess the financial condition of the institutions and believe that the risk of any loss is minimal.
Property and Equipment, Net
Property and equipment, net are stated at cost, less accumulated depreciation and amortization. Depreciation expense is recorded using the straight-line method over the estimated useful lives of the respective assets as follows:
Computer equipment and software |
|
|
Internal use software |
|
|
Machinery and equipment |
|
|
Furniture and fixtures |
|
We capitalize costs associated with software developed or obtained for internal use when the preliminary project stage is completed, and it is determined that the software will provide significantly enhanced capabilities and modifications. These capitalized costs are included in property and equipment, net and include external direct cost of services procured in developing or obtaining internal-use software and personnel and related expenses for employees who are directly associated with, and who devote time to internal-use software projects. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended use. Once the software is ready for its intended use, the costs are amortized over the useful life of the software. Post-configuration training and maintenance costs are expensed as incurred. We amortize internal-use software over its estimated useful life on a straight-line basis.
Intangible Assets, Net
Intangible assets are stated at cost less accumulated amortization. For intangible assets that have finite lives, the assets are amortized using the straight-line method over the estimated useful lives of the related assets. For intangible assets with indefinite lives, the assets are tested annually for impairment or sooner if a triggering event occurs.
Amortization lives of intangible assets are as follows:
Content library |
|
|
Tradenames, trademarks and patents |
|
|
Customer relationships |
|
|
Advertiser relationships and channel |
|
|
Software |
|
|
Capitalized content |
|
|
Supplier agreements |
|
10
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company’s intangible assets included the following (in thousands):
|
|
As of December 31, 2025 |
|
|||||||||
|
|
Cost Basis |
|
|
Accumulated |
|
|
Net |
|
|||
Content library |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Advertiser relationships and channel |
|
|
|
|
|
( |
) |
|
|
|
||
Customer relationships |
|
|
|
|
|
( |
) |
|
|
|
||
Software |
|
|
|
|
|
( |
) |
|
|
|
||
Tradenames, trademarks and patents |
|
|
|
|
|
( |
) |
|
|
|
||
Capitalized content |
|
|
|
|
|
( |
) |
|
|
|
||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
As of March 31, 2025 |
|
|||||||||
|
|
Cost Basis |
|
|
Accumulated |
|
|
Net |
|
|||
Content library |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Advertiser relationships and channel |
|
|
|
|
|
( |
) |
|
|
|
||
Customer relationships |
|
|
|
|
|
( |
) |
|
|
|
||
Software |
|
|
|
|
|
( |
) |
|
|
|
||
Tradenames, trademarks and patents |
|
|
|
|
|
( |
) |
|
|
|
||
Capitalized content |
|
|
|
|
|
( |
) |
|
|
|
||
Total intangible assets |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
The Company had amortization expense of $
As of December 31, 2025, amortization expense is expected to be (in thousands):
|
|
Total |
|
|
In-process intangible assets |
|
$ |
|
|
Remainder of fiscal year 2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
Capitalized Content
The Company capitalizes direct costs incurred in the production of content from which it expects to generate a return over the anticipated useful life and the Company’s predominant monetization strategy informs the method of amortizing these deferred costs. The determination of the predominant monetization strategy is made at commencement of the production or license period and the classification of the monetization strategy as individual or group only changes if there is a significant change to the title’s monetization strategy relative to its initial assessment. The costs are capitalized to the Capitalized Content costs within Intangible Assets and are amortized as a group within Depreciation and Amortization within the Condensed Consolidated Statements of Operations.
Impairment of Long-lived and Finite-lived Intangible Assets
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. 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 asset, the asset is deemed not to be recoverable and possibly impaired. We then estimate the fair value of the asset to determine whether an impairment loss should
11
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
be recognized. An impairment loss will be recognized if the asset’s fair value is determined to be less than its carrying value. Fair value is determined by computing the expected future discounted cash flows. There were
Goodwill
Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. Goodwill is tested for impairment on an annual basis or more often if warranted by events or changes in circumstances indicating that the carrying value may exceed fair value, also known as impairment indicators.
Inherent in the fair value determination for each reporting unit are certain judgments and estimates relating to future cash flows, including management’s interpretation of current economic indicators and market conditions, and assumptions about our strategic plans with regard to its operations. To the extent additional information arises, market conditions change, or our strategies change, it is possible that the conclusion regarding whether our remaining goodwill is impaired could change and result in future goodwill impairment charges that will have a material effect on our consolidated financial position or results of operations.
The Company has the option to assess goodwill for possible impairment by performing a qualitative analysis to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount or to perform the quantitative impairment test. The Company annually assesses goodwill for potential impairment during its fiscal fourth quarter, or sooner if events occur or circumstances indicate it would be more likely than not that fair value would be reduced below its carrying amount.
Fair Value Measurements
The fair value measurement disclosures are grouped into three levels based on valuation factors:
There were no assets and liabilities carried at fair value as of December 31, 2025.
Content Advances
Content advances represent amounts prepaid to studios or content producers for which we provide content distribution services. We evaluate advances regularly for recoverability and record a provision for amounts that we expect may not be recoverable. Amounts which are expected to be recovered in more than 12 months are classified as long term and presented within content advances, net of current portion, which were $
12
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following (in thousands):
|
|
As of |
|
|||||
|
|
December 31, |
|
|
March 31, |
|
||
Amounts due to producers |
|
$ |
|
|
$ |
|
||
Accounts payable |
|
|
|
|
|
|
||
Accrued compensation and benefits |
|
|
|
|
|
|
||
Accrued other expenses |
|
|
|
|
|
|
||
Total Accounts Payable and Accrued Expenses |
|
$ |
|
|
$ |
|
||
Deferred Consideration
The Company has recognized a liability related to a deferred consideration arrangement related to the acquisitions of FoundationTV ("FTV") and Digital Media Rights ("DMR"). These payments are fixed in nature and are due to the seller of the respective company. The Company initially recognized the liability at fair value at the time of acquisition and has since recognized interest expense related to accretion in advance of the ultimate settlement.
The deferred consideration related to the acquisition of DMR was payable in either shares of Common Stock or cash, at the Company's discretion and subject to certain conditions. The final deferred consideration payment of $
The final deferred consideration payment of $
Revenue Recognition
Payment terms and conditions vary by customer and typically provide net 30-to-90 day terms. We do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to our customer and payment for that product or service will be one year or less.
The following tables present the Company’s disaggregated revenue by source (in thousands):
|
Three Months Ended December 31, |
|
|
Nine Months Ended |
|
||||||||||
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Streaming and digital |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Base distribution |
|
|
|
|
|
|
|
|
|
|
|
||||
Podcast and other |
|
|
|
|
|
|
|
|
|
|
|
||||
Other non-recurring |
|
|
|
|
|
|
|
|
|
|
|
||||
Total Revenue |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company's Streaming and digital revenue pertains to its OTT business, including the licensing, service, advertising, and subscription revenue related to the Company's streaming business and partnerships. Base distribution revenue relates to non-streaming revenue, including Theatrical revenue, license fees and the sale of DVDs and Blu-ray Discs. Podcast and other revenue primarily relate to the Company's Bloody Disgusting Podcast Network. As the Company satisfies its performance obligations from these revenue sources, whether relating to the delivery of digital content, physical goods, or licensing, revenue is generally measured at a point in time.
The Company follows the five-step model established by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 606, Revenue from contracts with customers ("ASC 606") when preparing its assessment of revenue recognition.
13
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Principal Agent Considerations
Revenue earned from the delivery of digital content and physical goods may be recognized gross or net depending on the terms of the arrangement. We determine whether revenue should be reported on a gross or net basis based on each revenue stream. Key indicators that we use in evaluating gross versus net treatment include, but are not limited to, the following:
Shipping and Handling
Shipping and handling costs are incurred to move physical goods (e.g., DVDs and Blu-ray Discs) to customers. We recognize all shipping and handling costs as an expense in direct operating expenses because we are responsible for delivery of the product to our customers prior to transfer of control to the customer.
Credit Losses
We maintain reserves for expected credit losses on accounts receivable primarily on a specific identification basis. We review the composition of accounts receivable and analyze historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.
We recognize accounts receivable, net of an estimated allowance for product returns and customer chargebacks, at the time that we recognize revenue from a sale. Reserves for product returns and other allowances are variable consideration as part of the transaction price. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required.
A summary of the movements of our allowances for credit losses as of December 31, 2025 (in thousands):
Allowance for credit losses as of March 31, 2025 |
|
$ |
|
|
Increase in estimated provision |
|
|
|
|
Allowance for credit losses as of June 30, 2025 |
|
|
|
|
Increase in estimated provision |
|
|
|
|
Allowance for credit losses as of September 30, 2025 |
|
|
|
|
Increase in estimated provision |
|
|
|
|
Allowance for credit losses as of December 31, 2025 |
|
$ |
|
Contract Liabilities
We generally record a receivable related to revenue when we have an unconditional right to invoice and receive payment, and we record deferred revenue (contract liability) when cash payments are received or due in advance of our performance, such as the sale of DVDs with future release dates, even if amounts are refundable. Amounts recorded as contract liabilities are generally not long-term in nature.
The ending deferred revenue balance, including current and non-current balances as of December 31, 2025 and March 31, 2025, was $
14
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Participations and Royalties Payable
When we use third-parties to distribute Company-owned content, we record participations payable, which represent amounts owed to the distributor under revenue-sharing arrangements. When we provide content distribution services, we record accounts payable and accrued expenses to studios or content producers for royalties owed under licensing arrangements. 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.
Concentrations
For the three and nine months ended December 31, 2025, a customer represented
Direct Operating Expenses
Direct operating expenses consist of cost of revenue, fulfillment expenses, shipping costs, property taxes and insurance on systems, royalty expenses, reserves against advances and marketing and direct personnel costs.
Stock-based Compensation
The Company issues stock-based awards to employees and non-employees, generally in the form of restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights ("SARs") and performance stock units ("PSUs"). The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments, including grants of stock options and restricted stock units and modifications to existing stock options, to be recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss based on their fair values. The Company measures the compensation expense of employee and non-employee services received in exchange for an award of equity instruments based on the fair value of the award on the grant date. That cost is recognized on a straight-line basis over the period during which the employee or non-employee is required to provide service in exchange for the award. The fair values of options and SARs are calculated as of the date of grant using the Black-Scholes option pricing model based on key assumptions such as stock price, expected volatility, risk-free rate and expected term. The Company’s estimates of these assumptions are primarily based on the trading price of the Company’s stock, historical data, peer company data and judgment regarding future trends and factors. Forfeitures are recognized as they occur.
Income Taxes
The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to operating loss and tax credit carryforwards and for differences between the carrying amounts of existing assets and liabilities and their respective tax basis.
Valuation allowances are established when management is unable to conclude that it is more likely than not that some portion, or all, of the deferred tax asset will ultimately be realized. The Company is primarily subject to income taxes in the United States and India.
The Company accounts for uncertain tax positions in accordance with an amendment to FASB ASC Topic 740-10, Income Taxes (Accounting for Uncertainty in Income Taxes), which clarified the accounting for uncertainty in tax positions. This amendment provides that the tax effects from an uncertain tax position can be recognized in the financial statements only if the position is “more-likely-than-not” to be sustained were it to be challenged by a taxing authority. The assessment of the tax position is based solely on the technical merits of the position, without regard to the likelihood that the tax position may be challenged. If an uncertain tax position meets the “more-likely-than-not” threshold, the largest amount of tax benefit that is more than 50% likely to be recognized upon ultimate settlement with the taxing authority is recorded. The Company had no uncertain tax positions as of December 31, 2025 and March 31, 2025.
15
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Recently Issued Accounting Pronouncements
The Company evaluates all Accounting Standard Updates ("ASUs") issued but not yet effective by FASB for consideration of their applicability. ASU's not included in the Company's disclosures were assessed and determined to be not applicable and material to the Company's consolidated financial statements or disclosures.
In December 2023, the FASB issued ASU 2023-09, "Income Taxes - Improvements to Income Tax Disclosures. (Topic 740)" On an annual basis, this update requires the disclosure of specific tax categories in the rate reconciliation and provides additional information for reconciling items that meet a quantitative threshold. The Company is adopting this update for our fiscal year end disclosure.
In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income- Expense Disaggregation Disclosures (Topic 220)", requiring all public business entities to provide additional disclosure of the nature of expenses included in the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027, on a prospective basis, with early adoption permitted. The Company is currently evaluating the impact on our financial statement disclosures.
In July 2025, the FASB issued ASU 2025-05, “Measurement of Credit Losses for Accounts Receivable and Contract Assets (Topic 326)" aiming to simplify the estimation of credit losses on accounts receivable and contract assets arising from transactions accounted for under ASC 606, “Revenue from Contracts with Customers,” by providing companies an option to assume that the conditions as of the balance sheet date will remain unchanged for the remaining life of these assets while estimating expected credit losses. The standard is effective for all entities for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this pronouncement on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06 "Intangibles: Goodwill and Other Internal-Use Software - Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40)" to modernize the accounting for software costs under, Intangible: Goodwill and Other Internal-Use Software (referred to as “internal-use software”). Upon adoption, we will be required to account for internal-use software under the updated capitalization criteria. The standard is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing adoption timing and the method of adoption.
16
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. SEGMENT INFORMATION
The Company operates as a reportable segment. The Company’s Chief Operating Decision Maker ("CODM"), its , reviews financial information on a consolidated basis to make operating decisions, assess financial performance, and allocate resources.
T
|
Three Months Ended December 31, |
|
|
Nine Months Ended |
|
||||||||||
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenues |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Less: |
|
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|
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|
|
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|
||||
Royalty expense |
|
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|
||||
License, participation and technology costs |
|
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|
||||
Other direct operating costs |
|
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|
||||
Compensation and related |
|
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|
||||
Professional services |
|
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||||
Advertising and marketing |
|
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|
||||
Other general and administrative |
|
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|
|
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|
||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
Operating (loss) income |
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Interest expense |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other (expense) income, net |
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net (loss) income before income taxes |
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Income tax expense |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net (loss) income |
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
4. OTHER INTERESTS
Investment in CDF2 Holdings
We indirectly own
CDF2 Holdings is a Variable Interest Entity (“VIE”), as defined in FASB ASC Topic 810, Consolidation (“ASC 810”). ASC 810 requires the consolidation of VIEs by an entity that has a controlling financial interest in the VIE which entity is thereby defined as the primary beneficiary of the VIE.
As of December 31, 2025 and March 31, 2025, our maximum exposure to loss, as it relates to the non-consolidated CDF2 Holdings entity, represents accounts receivable for service fees under a master service agreement with CDF2 Holdings. Such accounts receivable was $
The accompanying Condensed Consolidated Statements of Operations includes digital cinema servicing revenue from CDF2 Holdings in the amount of $
17
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Total Stockholders’ Deficit of CDF2 Holdings as of December 31, 2025 and March 31, 2025 was $
CONtv
We own an
Roundtable
On March 15, 2022, the Company entered into a stock purchase agreement with Roundtable Entertainment Holdings, Inc. (“Roundtable”) pursuant to which the Company purchased
5. STOCKHOLDERS’ EQUITY
Common Stock
As of December 31, 2025 and March 31, 2025, the number of shares of Common Stock authorized for issuance was
During the three months ended December 31, 2025, the Company issued
This was comprised of
During the nine months ended December 31, 2025, the Company issued
During the three months ended December 31, 2024, the Company issued
This was comprised of
During the nine months ended December 31, 2024, in addition to the activities cited above, the Company also
purchased
issuance of
Common Stock Warrants
As of December 31, 2025 and March 31, 2025, the number of warrants exercisable for shares of Common Stock was
18
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Preferred Stock
Cumulative dividends in arrears on Series A Preferred Stock were $
Treasury Stock
We have treasury stock of
Equity Incentive Plans
Stock Based Compensation Awards
The Company has issued awards under the 2017 Equity Incentive Plan (the “2017 Plan").
In August 2017, the Company adopted the 2017 Equity Incentive Plan (the “2017 Plan). The 2017 Plan replaced the 2000 Plan, and applies to employees and directors of, and consultants to, the Company. The 2017 Plan provides for the issuance of up to
During the nine months ended December 31, 2025,
During the nine months ended December 31, 2025, the Company issued
During the nine months ended December 31, 2025, approximately
For the three and nine months ended December 31, 2025, the Company incurred stock-based compensation expense
of $
For the three and nine months ended December 31, 2024, the Company incurred stock-based compensation expense
of $
19
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
6. Earnings per Share
Basic net income (loss) per share is computed by dividing the net income (loss) attributable to Common Stock holders, adjusted for by the deemed earnings attributable to participating common warrant holders, by the weighted average number of shares of Common Stock outstanding during the period.
Diluted net income (loss) per share is computed by dividing the net income (loss) available to Common Stock holders by the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include restricted stock units, stock options and warrants outstanding during the period, and are calculated using the treasury stock method. Potentially dilutive common shares are excluded from the computations of diluted income (loss) per share if their effect would be anti-dilutive. A net loss available to Common Stock holders causes all potentially dilutive securities to be anti-dilutive and are not included.
The following table sets forth the computation of basic and diluted earnings per share and a reconciliation of the
weighted average number of common and common equivalent shares outstanding:
|
|
Three Months Ended December 31, |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands, except share and per share data) |
|
|||||||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to common stock holders |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Less: earnings attributable to participating common warrant holders |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income (loss) attributable to common stock holders - basic and diluted |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares of common stock - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive common stock equivalents |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Weighted average shares of common stock - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings (loss) per share |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Effect of dilutive common stock equivalents |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Diluted earnings (loss) per share |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
The following common equivalent shares outstanding at period-end have been excluded from the computation of earnings per share, as their inclusion would have been anti-dilutive:
|
|
Three and Nine Months Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Options to purchase common stock |
|
|
— |
|
|
|
|
|
Stock appreciation rights |
|
|
|
|
|
|
||
Restricted stock units and awards |
|
|
|
|
|
|
||
Warrants to purchase common stock |
|
|
|
|
|
|
||
20
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
7. DEBT
Line of Credit Facility
The Company is party to a Loan, Guaranty, and Security Agreement, as amended on
As of December 31, 2025, $
During the three and nine months ended December 31, 2025, the Company had interest expense, including cash interest and amortization, of $
Term Loan
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 guarantor (the "T3 Loan Agreement").
The T3 Loan Agreement provides for a term loan with a principal amount not to exceed $
After the principal of the T3 Loan is paid in full, the T3 Lender will be entitled to receive
During the nine months ended December 31, 2025, the Company negotiated a reduction to the accrued Participation Interest of $
21
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8. COMMITMENTS AND CONTINGENCIES
Leases
Cineverse operates in a remote environment without domestic operating leases. The Company previously maintained
The Company did not have any sublease arrangements during the three and nine months ended December 31, 2025, and accordingly did
The table below presents the lease-related assets and liabilities recorded on our Condensed Consolidated Balance Sheets (in thousands):
|
|
|
|
As of |
|
|||||
|
|
Classification on the Balance Sheet |
|
December 31, |
|
|
March 31, |
|
||
Assets |
|
|
|
|
|
|
|
|
||
Noncurrent |
|
Other long-term assets |
|
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
|
|
|
||
Current |
|
Operating leases liabilities |
|
|
|
|
|
|
||
Noncurrent |
|
Operating leases liabilities, net of current |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||||
The table below presents the annual gross undiscounted cash flows related to the Company's operating lease commitments (in thousands):
Fiscal year ending March 31, |
Operating Lease Commitments |
|
|
2026 (remainder of the fiscal year) |
$ |
|
|
2027 |
|
|
|
2028 |
|
|
|
Thereafter |
|
— |
|
Total lease payments |
$ |
|
|
Less imputed interest |
|
( |
) |
Total |
$ |
|
|
For leases which have a term of twelve months or less and do not contain an option to extend which the Company is reasonably certain to extend the term, the Company has elected to not apply the recognition provisions of FASB ASC Topic 842, Leases ("ASC 842") and recognizes these expenses on a straight-line basis over the term of the agreement.
22
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
9. INCOME TAXES
We calculate income tax expense based upon an annual effective tax rate forecast, which includes estimates and assumptions. We recognized income tax expense of $
We have recorded income tax expense of $
Our effective tax rate for the three and nine months ended December 31, 2025 was (
On July 4, 2025, the President signed the One Big Beautiful Bill Act (“OBBBA”; Pub. L. 119-21) into law. The Act introduces significant changes to the Internal Revenue Code. The company evaluated the Act and concluded it will not have a material impact on its condensed consolidated financial statements.
OBBBA retains the
10. Subsequent Events
The Company evaluated subsequent events through the date these condensed consolidated financial statements were issued.
Asset Acquisition
On January 7, 2026, the Company entered into an asset purchase agreement with Giant Worldwide, a global media services provider serving the world's leading Hollywood studios and streaming platforms, as previously disclosed in the Company's Current Report on Form 8-K filed with the SEC on January 7, 2026.
IndiCue Acquisition
On February 13, 2026 (the “Closing Date”), Cineverse Corp. purchased all of the issued and outstanding equity securities (the “Acquisition”) of IndiCue, Inc., a Delaware corporation (“IndiCue”), a next-generation CTV monetization and engagement platform, built for media owners, publishers, and streaming platforms that want full control over their Connected TV advertising (the “IndiCue Business”), pursuant to that certain Stock Purchase Agreement (the “Purchase Agreement”), dated February 12, 2026, by and among the Company and IndiCue and its shareholders (collectively, the “Sellers”).
The purchase price for the Acquisition was $
Concurrently with the closing of the Acquisition, the Company entered into a registration rights agreement (the “IndiCue Registration Rights Agreement”) with the Sellers, pursuant to which the Company agreed to file a registration statement for the resale of the Registrable Securities (as defined in the IndiCue Registration Rights Agreement) with the SEC.
23
Cineverse Corp.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Convertible Notes Issuance
On February 12, 2026, the Company issued and sold convertible notes in the aggregate principal amount of $
The Notes may be prepaid by paying
to such Conversion Price and a term that ends on the Maturity Date.
The Notes rank junior to secured debt of the Company, including the Second Amended and Restated Loan, Guaranty, and Security Agreement, dated as of April 8, 2025, by and among East West Bank (the “Existing Lender”), the Company and the Guarantors party thereto.
Equity Offering
On February 12, 2026, Company agreed to sell in a public offering an aggregate of
aggregate gross proceeds of approximately $
The closing of the sale of the Shares occurred on February 17, 2026. The net proceeds to the Company from the sale of the Shares, after deducting the fees of the underwriter but before paying the Company’s estimated Offering expenses, is approximately $
24
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our historical Condensed Consolidated Financial Statements and the related notes included elsewhere in this report.
This report contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which are indicated by words or phrases such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “will,” “estimates,” and similar words. Forward-looking statements represent, as of the date of this report, our judgment relating to, among other things, future results of operations, growth plans, sales, capital requirements and general industry and business conditions applicable to us. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond our control that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
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.
The Company has a long legacy in using technology to transform the entertainment industry and played a pioneering role in transitioning movie screens from traditional analog film prints to digital distribution. Over the past several years, Cineverse has transformed itself from being a digital cinema equipment and physical content distributor to a leading independent streaming company.
Cineverse is a streaming technology and entertainment company with its core business operating as (i) a portfolio of owned and operated streaming channels with enthusiast fan bases; (ii) a large-scale global aggregator and full-service distributor of feature films and television programs; and (iii) a proprietary technology software-as-a-service platform for over-the-top (“OTT”) app development and content distribution through subscription video on demand ("SVOD"), dedicated ad-supported video on demand ("AVOD"), ad-supported streaming linear ("FAST") channels, social video streaming services, and audio podcasts. Our streaming channels reach audiences in several distinct ways: direct-to-consumer, through these major application platforms, and through third-party distributors of content on platforms.
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.
We distribute products for major brands such as Hallmark, ITV, Nelvana, ZDF, Konami, NFL and Highlander, as well as international and domestic content creators, movie producers, television producers and other short-form digital content producers. We collaborate with producers, major brands and other content owners to market, source, curate and distribute quality content to targeted audiences through (i) existing and emerging digital home entertainment platforms, including but not limited to Apple iTunes, Amazon Prime, Netflix, Hulu, Xbox, Pluto, and Tubi, as well as (ii) physical goods, including DVD and Blu-ray Discs.
Financial Condition and Liquidity
As of December 31, 2025, the Company has an accumulated deficit of $(511.2) million and negative working capital of $(1.4) million. For the three and nine months ended December 31, 2025, the Company had a net loss attributable to the Company's common stock holders of $(1.0) million and $(10.3) million, respectively. Net cash used in operating activities for the nine months ended December 31, 2025 was $23.3 million, which included $7.9 million of incremental investment in our content portfolio via advances or minimum guarantee payouts. We may continue to generate net losses for the foreseeable future. During the nine months ended December 31, 2025, 1.9 million warrants were exercised for net proceeds of $5.8 million.
The Company is party to a Loan, Guaranty, and Security Agreement, as amended on April 8, 2025, with East West Bank (the "Line of Credit Facility") providing for borrowings of up to $12.5 million guaranteed by substantially all of our material subsidiaries and secured by substantially all of our and our subsidiaries’ assets. The facility includes provisions that allow for an increase in total borrowing capacity up to $15.0 million, subject to lender approval. As of December 31, 2025, $8.3 million was outstanding on the Line of Credit Facility.
25
The Company will continue to invest in content development and acquisitions, from which it believes it will obtain an appropriate return on its investment. As of December 31, 2025 and March 31, 2025, short-term content advances were $7.9 million and $6.7 million, respectively, and long-term content advances, net of current portion, were $9.2 million and $4.1 million, respectively.
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. We believe our cash and cash equivalents, availability under our Line of Credit Facility and ability to use our ATM as of December 31, 2025 will be sufficient to support our operations for at least twelve months from the filing of this report.
Critical Accounting Estimates
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our Condensed Consolidated Financial Statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.
Our significant accounting policies are discussed in Note 2 – Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to the Condensed Consolidated Financial Statements, included in Item 1, Condensed Consolidated Financial Statements (Unaudited), of this Quarterly Report on Form 10-Q. Management believes that these policies are the most critical to aid in fully understanding and evaluating our reported financial results, and they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. Management has reviewed these critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.
Results of Operations for the three months ended December 31, 2025 and 2024 (unaudited) (in thousands):
Revenue
|
|
For the Three Months Ended December 31, |
|
|
As a % of Revenue |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
||||||
Streaming and digital |
|
$ |
11,488 |
|
|
$ |
14,128 |
|
|
|
(2,640 |
) |
|
|
(19 |
)% |
|
|
70 |
% |
|
|
35 |
% |
Base distribution |
|
|
3,516 |
|
|
|
24,481 |
|
|
|
(20,965 |
) |
|
|
(86 |
)% |
|
|
22 |
% |
|
|
60 |
% |
Podcast and other |
|
|
1,282 |
|
|
|
2,058 |
|
|
|
(776 |
) |
|
|
(38 |
)% |
|
|
8 |
% |
|
|
5 |
% |
Other and non-recurring |
|
|
— |
|
|
|
73 |
|
|
|
(73 |
) |
|
|
(100 |
)% |
|
|
— |
|
|
|
— |
|
Total Revenue |
|
$ |
16,286 |
|
|
$ |
40,740 |
|
|
$ |
(24,454 |
) |
|
|
(60 |
)% |
|
|
100 |
% |
|
|
100 |
% |
Streaming and digital revenue for the three months ended December 31, 2025 decreased by $2.6 million, primarily due to strong digital release revenue of $2.8 million from Terrifier 3 in the prior period. This is partially offset by revenue growth of $1.5 million in our top channels. Programmatic revenue decreased by $1.2 million due to reduced advertiser demand.
Base distribution revenue decreased by $21.0 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, primarily attributable to the strong theatrical release revenue of $22.8 million from Terrifier 3 in the prior period. This is partially offset by theatrical release revenue of $1.2 million in the current period.
Podcast and other revenue decreased by $0.8 million during the three months ended December 31, 2025, compared to same period in 2024 due to lower podcast direct advertising.
26
Direct Operating Expenses
|
|
For the Three Months Ended December 31, |
|
|
As a % of Revenue |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
||||||
Direct operating expenses |
|
$ |
5,049 |
|
|
$ |
20,997 |
|
|
$ |
(15,948 |
) |
|
|
(76 |
)% |
|
|
31 |
% |
|
|
52 |
% |
The $15.9 million decrease in Direct operating expenses for the three months ended December 31, 2025 was primarily driven by lower variable costs compared to the prior year quarter, which included royalty expenses for Terrifier 3, platform fees, freight, and fulfillment charges, offset by an increase in manufacturing costs related to Toxic Avenger.
Selling, General and Administrative Expenses
|
|
For the Three Months Ended December 31, |
|
|
As a % of Revenue |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
||||||
Compensation expense |
|
$ |
4,778 |
|
|
$ |
6,574 |
|
|
$ |
(1,796 |
) |
|
|
(27 |
)% |
|
|
29 |
% |
|
|
16 |
% |
Corporate expenses |
|
|
1,588 |
|
|
|
832 |
|
|
|
756 |
|
|
|
91 |
% |
|
|
10 |
% |
|
|
2 |
% |
Share-based compensation |
|
|
1,027 |
|
|
|
498 |
|
|
|
529 |
|
|
|
106 |
% |
|
|
6 |
% |
|
|
1 |
% |
Marketing expenses |
|
|
2,043 |
|
|
|
72 |
|
|
|
1,971 |
|
|
|
2738 |
% |
|
|
13 |
% |
|
|
— |
|
Other operating expenses |
|
|
1,254 |
|
|
|
1,385 |
|
|
|
(131 |
) |
|
|
(9 |
)% |
|
|
8 |
% |
|
|
3 |
% |
Selling, General and Administrative |
|
$ |
10,690 |
|
|
$ |
9,361 |
|
|
$ |
1,329 |
|
|
|
14 |
% |
|
|
66 |
% |
|
|
22 |
% |
For the three months ended December 31, 2025 compared to three months ended December 31, 2024, compensation expense decreased by $1.8 million primarily due to a lower bonus accrual. Corporate expenses increased by $0.8 million reflecting higher professional services and legal expenses associated with strategic business and content acquisitions. Marketing expenses increased by $2.0 million primarily due to Toxic Avenger. For the three months ended December 31, 2024, $0.6 million Marketing expenses were included in Direct operating expenses.
Depreciation and Amortization Expense
|
|
For the Three Months Ended December 31, |
|
|
As a % of Revenue |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
||||||
Amortization of intangible assets |
|
$ |
1,118 |
|
|
$ |
806 |
|
|
$ |
312 |
|
|
|
39 |
% |
|
|
7 |
% |
|
|
2 |
% |
Depreciation of property and equipment |
|
|
85 |
|
|
|
140 |
|
|
|
(55 |
) |
|
|
(39 |
)% |
|
|
1 |
% |
|
|
— |
|
Depreciation and Amortization |
|
$ |
1,203 |
|
|
$ |
946 |
|
|
$ |
257 |
|
|
|
27 |
% |
|
|
8 |
% |
|
|
2 |
% |
Amortization expense increased by $0.3 million during the three months ended December 31, 2025 compared to the prior year quarter primarily due to increased capitalized content costs.
Interest Expense, Net
For the three months ended December 31, 2025, compared with the same period in 2024, interest expense decreased by $2.1 million to $0.2 million primarily due to higher interest participation in the prior year related to the T3 Loan, which was obtained and repaid during the prior fiscal year, lower borrowings under our line of credit, and lower interest rates.
27
Results of Operations for the nine months ended December 31, 2025 and 2024 (unaudited) (in thousands):
Revenues
|
|
For the Nine Months Ended December 31, |
|
|
As a % of Revenue |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
||||||
Streaming and digital |
|
$ |
30,151 |
|
|
$ |
31,920 |
|
|
$ |
(1,769 |
) |
|
|
(6 |
)% |
|
|
76 |
% |
|
|
51 |
% |
Base distribution |
|
|
6,377 |
|
|
|
26,153 |
|
|
|
(19,776 |
) |
|
|
(76 |
)% |
|
|
16 |
% |
|
|
42 |
% |
Podcast and other |
|
|
3,216 |
|
|
|
4,374 |
|
|
|
(1,158 |
) |
|
|
(26 |
)% |
|
|
8 |
% |
|
|
7 |
% |
Other and non-recurring |
|
|
18 |
|
|
|
159 |
|
|
|
(141 |
) |
|
|
(89 |
)% |
|
|
— |
|
|
|
— |
|
Total Revenue |
|
$ |
39,762 |
|
|
$ |
62,606 |
|
|
$ |
(22,844 |
) |
|
|
(36 |
)% |
|
|
100 |
% |
|
|
100 |
% |
Streaming and digital revenue for the nine months ended December 31, 2025 decreased by $1.8 million compared to the same period in 2024, primarily driven by primarily due to strong digital release revenue of $2.8 million for Terrifier 3 in the prior period. This is partially offset by growth of $1.4 million in our top channels.
Base distribution revenue decreased by $19.8 million for the nine months ended December 31, 2025, compared to the same period in 2024, primarily due to the strong theatrical release revenue of $22.8 million in the prior period. This is partially offset by the theatrical and physical releases bringing in $2.0 million in the current period.
Podcast and other revenue declined by $1.2 million during the nine months ended December 31, 2025 compared to same period in 2024, due to lower podcast direct advertising.
Direct Operating Expenses
|
|
For the Nine Months Ended December 31, |
|
|
As a % of Revenue |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
||||||
Direct operating expenses |
|
$ |
15,070 |
|
|
$ |
31,738 |
|
|
$ |
(16,668 |
) |
|
|
(53 |
)% |
|
|
38 |
% |
|
|
51 |
% |
The decrease of $16.7 million in Direct operating Expenses for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024 was primarily driven by lower variable costs, including royalty expenses and platform fees. The reduction also reflects higher recoupements on our content advances resulting in lower provision for royalty advance allowance. These decreases were partially offset by increased theatrical distribution fees related to Toxic Avenger and licensor costs.
Selling, General and Administrative Expenses
|
|
For the Nine Months Ended December 31, |
|
|
As a % of Revenue |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
||||||
Compensation expense |
|
$ |
15,468 |
|
|
$ |
14,713 |
|
|
$ |
755 |
|
|
|
5 |
% |
|
|
39 |
% |
|
|
24 |
% |
Corporate expenses |
|
|
4,270 |
|
|
|
2,576 |
|
|
|
1,694 |
|
|
|
66 |
% |
|
|
11 |
% |
|
|
4 |
% |
Share-based compensation |
|
|
1,939 |
|
|
|
1,471 |
|
|
|
468 |
|
|
|
32 |
% |
|
|
5 |
% |
|
|
2 |
% |
Marketing expenses |
|
|
5,355 |
|
|
|
116 |
|
|
|
5,239 |
|
|
|
4516 |
% |
|
|
13 |
% |
|
|
— |
|
Other operating expenses |
|
|
4,017 |
|
|
|
3,412 |
|
|
|
605 |
|
|
|
18 |
% |
|
|
10 |
% |
|
|
6 |
% |
Selling, General and Administrative |
|
$ |
31,049 |
|
|
$ |
22,288 |
|
|
$ |
8,761 |
|
|
|
39 |
% |
|
|
78 |
% |
|
|
36 |
% |
For the nine months ended December 31, 2025 compared to nine months ended December 31, 2024, Compensation expenses increased by $0.8 million due to increased employee headcount. Corporate expenses increased by $1.7 million reflecting higher professional services and legal expenses associated with strategic business and content acquisitions. Marketing expenses increased primarily due to costs associated with Toxic Avenger. For the nine months ended December 31, 2024, $0.8 million of marketing expenses were included in Direct operating expenses. Other operating expenses increased by $0.6 million primarily due to increased administrative costs.
28
Depreciation and Amortization Expense
|
|
For the Nine Months Ended December 31, |
|
|
As a % of Revenue |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
$ Change |
|
|
% Change |
|
|
2025 |
|
|
2024 |
|
||||||
Amortization of intangible assets |
|
$ |
3,115 |
|
|
$ |
2,330 |
|
|
$ |
785 |
|
|
|
34 |
% |
|
|
8 |
% |
|
|
4 |
% |
Depreciation of property and equipment |
|
|
296 |
|
|
|
453 |
|
|
|
(157 |
) |
|
|
(35 |
)% |
|
|
1 |
% |
|
|
1 |
% |
Depreciation and Amortization |
|
$ |
3,411 |
|
|
$ |
2,783 |
|
|
$ |
628 |
|
|
|
23 |
% |
|
|
9 |
% |
|
|
5 |
% |
Amortization expense increased by $0.8 million during the nine months ended December 31, 2025, compared to 2024, primarily due to increased capitalized content costs.
Interest Expense, Net
For the nine months ended December 31, 2025, compared with the same period in 2024, interest expense decreased by $3.0 million, primarily due to higher interest participation in the prior year related to the T3 Loan, which was obtained and repaid during prior fiscal year, lower borrowings under our line of credit, and lower interest rates. In addition, during the nine months ended December 31, 2025, we recognized a $0.4 million discount on accrued interest provided by the T3 lender in exchange for the final payment made during the period.
Adjusted EBITDA
We define Adjusted EBITDA to be earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, merger and acquisition costs, restructuring, transition and acquisitions expense, net, goodwill impairment and certain other items.
Adjusted EBITDA is not a measurement of financial performance under GAAP and may not be comparable to other similarly titled measures of other companies. We use Adjusted EBITDA as a financial metric to measure the financial performance of the business because management believes it provides additional information with respect to the performance of its fundamental business activities. For this reason, we believe Adjusted EBITDA will also be useful to others, including our stockholders, as a valuable financial metric.
We present Adjusted EBITDA because we believe that Adjusted EBITDA is a useful supplement to net income (loss) from continuing operations as an indicator of operating performance. We also believe that Adjusted EBITDA is a financial measure that is useful both to management and investors when evaluating our performance and comparing our performance with that of our competitors. We also use Adjusted EBITDA for planning purposes and to evaluate our financial performance because Adjusted EBITDA excludes certain incremental expenses or non-cash items, such as stock-based compensation charges, that we believe are not indicative of our ongoing operating performance.
We believe that Adjusted EBITDA is a performance measure and not a liquidity measure, and therefore a reconciliation between net income (loss) from continuing operations and Adjusted EBITDA has been provided in the financial results. Adjusted EBITDA should not be considered as an alternative to net income (loss) from operations as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of cash flows, in each case as determined in accordance with GAAP, or as a measure of liquidity. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. We do not intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP. These non-GAAP measures should be read only in conjunction with our Condensed Consolidated Financial Statements prepared in accordance with GAAP.
29
Following is the reconciliation of our consolidated net (loss) income to Adjusted EBITDA (in thousands):
|
|
For the Three Months Ended December 31, |
|
|
For the Nine Months Ended December 31, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net (loss) income |
|
$ |
(875 |
) |
|
$ |
7,161 |
|
|
$ |
(9,936 |
) |
|
$ |
2,906 |
|
Add Back: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense |
|
|
19 |
|
|
|
6 |
|
|
|
53 |
|
|
|
19 |
|
Depreciation and amortization ⁽¹⁾ |
|
|
1,332 |
|
|
|
1,031 |
|
|
|
3,755 |
|
|
|
3,039 |
|
Interest expense |
|
|
195 |
|
|
|
2,342 |
|
|
|
64 |
|
|
|
3,110 |
|
Stock-based compensation |
|
|
1,027 |
|
|
|
490 |
|
|
|
1,939 |
|
|
|
1,463 |
|
Other expense (income), net |
|
|
5 |
|
|
|
(73 |
) |
|
|
51 |
|
|
|
(238 |
) |
Net income attributable to noncontrolling interest |
|
|
(49 |
) |
|
|
(48 |
) |
|
|
(137 |
) |
|
|
(155 |
) |
Acquisition-related costs |
|
|
603 |
|
|
|
— |
|
|
|
603 |
|
|
|
— |
|
Employee severance costs |
|
|
97 |
|
|
|
— |
|
|
|
144 |
|
|
|
27 |
|
Adjusted EBITDA |
|
$ |
2,354 |
|
|
$ |
10,909 |
|
|
$ |
(3,464 |
) |
|
$ |
10,171 |
|
(1) - Includes $129 thousand and $344 thousand of amortization included in direct operating expenses on our Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2025, respectively, and $85 thousand and $256 thousand for the three and nine months ended December 31, 2024, respectively.
Cash Flow
Changes in our cash flows were as follows (in thousands):
|
|
For the Nine Months Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Net cash (used in) provided by operating activities |
|
$ |
(23,308 |
) |
|
$ |
4,945 |
|
Net cash used in investing activities |
|
|
(1,434 |
) |
|
|
(655 |
) |
Net cash provided by (used in) financing activities |
|
|
13,236 |
|
|
|
(3,413 |
) |
Net Change in Cash and Cash Equivalents |
|
$ |
(11,506 |
) |
|
$ |
877 |
|
For the nine months ended December 31, 2025, net cash used in operating activities was primarily driven by loss from operations, excluding non-cash expenses such as depreciation, amortization and stock-based compensation, and other changes in working capital. Specifically, the adjustments are primarily driven by net cash outflows related to content advances made to partners for which initial expenditures are generally recovered within six to twelve months and operating prepayments and a decrease in accounts payable and accrued expenses.
Cash used in investing activities is primarily related to expenditures towards long-lived intangible and fixed assets, along with strategic acquisitions.
Cash flows from financing were primarily attributable to proceeds under the Line of Credit Facility, net of payments, and proceeds from common stock warrant exercises.
For the three and nine months ended December 31, 2024, net cash used in operating activities was primarily driven by loss from operations, excluding non-cash expenses such as depreciation, amortization, reserve for credit losses and stock-based compensation, including capitalized content spend and other changes in working capital.
Off-balance sheet arrangements
We are not a party to any off-balance sheet arrangements other than as discussed in Note 2 – Basis of Presentation and Summary of Significant Accounting Policies, Basis of Presentation and Consolidation and Note 3 - Other Interests to the Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q, we hold a 100% equity interest in CDF2 Holdings, which is an unconsolidated variable interest entity (“VIE”), which wholly owns Cinedigm Digital Funding 2, LLC; however, we are not the primary beneficiary of the VIE.
30
ITEM 4. CONTROLS AND PROCEDURES
Definition and Limitations of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.
Evaluation of Disclosure Controls and Procedures
The management of the Company, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in the Exchange Act), as of December 31, 2025. Based on such evaluation, our principal executive officer and principal financial and accounting officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, on a timely basis, and (ii) accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures as of December 31, 2025.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the three months ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
31
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
There have been no material changes to the Risk Factors disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
The exhibits are listed in the Exhibit Index beginning on the following page herein.
32
EXHIBIT INDEX
Exhibit Number |
|
Description of Document |
31.1 |
|
Officer’s Certificate Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 |
|
Officer’s Certificate Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 |
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 |
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS |
|
Inline XBRL Instance Document. |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document. |
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
33
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
CINEVERSE CORP. |
|
|
|
|
Date: February 17, 2026 |
By: |
/s/ Christopher J. McGurk |
|
|
Christopher J. McGurk |
|
|
|
Date: February 17, 2026 |
By: |
/s/ Mark Lindsey |
|
|
Mark Lindsey |
34