Cineverse Corp 10-K for FY2020

Cineverse Corp. (CNVS)

10-K 2020-07-06 For: 2020-03-31

Added on April 10, 2026

About this 10-K

Cineverse Corp filed this 10-K on July 6, 2020, covering the fiscal year ended March 31, 2020 (FY2020).

Headline figures

Fiscal year ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $39.29M; down 26.6% from $53.53M a year earlier
Net loss: $14.73M; compared with a net loss of $16.23M a year earlier

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Delaware		22-3720962
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

237 West 35th Street, Suite 605, New York, NY		10001
(Address of principal executive offices)		(Zip Code)



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

Title of each class	Trading Symbol	Name of each exchange on which registered
CLASS A COMMON STOCK, PAR VALUE $0.001 PER SHARE	CIDM	NASDAQ GLOBAL MARKET

Securities registered pursuant to Section 12(g) of the Act:		NONE



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.	Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.	Yes o No x

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.	Yes x No o

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).	Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an 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	o



Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller reporting company x		Emerging growth company o

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. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).				Yes o No x



		Page
FORWARD-LOOKING STATEMENTS		1

PART I

ITEM 1.	Business	1
ITEM 1A.	Risk Factors	9
ITEM 1B.	Unresolved Staff Comments	20
ITEM 2.	Properties	20
ITEM 3.	Legal Proceedings	20
ITEM 4.	Mine Safety Disclosures	20

PART II

ITEM 5.	Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	21
ITEM 6.	Selected Financial Data	22
ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
ITEM 8.	Financial Statements and Supplementary Data	38
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	39
ITEM 9A.	Controls and Procedures	39
ITEM 9B.	Other Information	39

PART III

ITEM 10.	Directors, Executive Officers and Corporate Governance	40
ITEM 11.	Executive Compensation	44
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	57
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	60
ITEM 14.	Principal Accountant Fees and Services	61

PART IV

ITEM 15.	Exhibits and Financial Statement Schedules	63

SIGNATURES		70


•	successful execution of our business strategy, particularly for new endeavors;


•	changes in business relationships with our major customers;


•	the content we distribute through our in-theatre, on-line and mobile services may expose us to liability;


•	the effect of our indebtedness on our financial condition and financial flexibility, including, but not limited to, the ability to obtain necessary financing for our business;


•	disruptions to our business due to the COVID-19 pandemic, including workforce inability to perform in the ordinary


•	the other risks and uncertainties that are set forth in Item 1, “Business”, Item 1A "Risk Factors" and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.


•	More than 12 years of experience as a primary distributor of content to scale 3rd party OTT platforms such as Netflix, Hulu, Amazon Prime, Apple iTunes and more, and nearly six years of history operating OTT channels with millions of downloads, hundreds of thousands of registered users, and hundreds of millions of discrete data points on our customer’s behavior and preferences,


•	The depth and breadth of our almost 50,000 title film and television episode library,


•	Our digital assets and deep, long-standing relationships as launch partners that cover the major digital platforms and devices,


•	Our flexible releasing strategies, which differ from larger entertainment companies that need to protect their legacy businesses, and


•	the performance of our targeted markets;


•	competitive product and pricing pressures;


•	successful integration of acquired businesses;


•	general economic and market conditions;



Operations of:	Products and services provided:

Cinema Equipment Business	Financing vehicles and administrators for 3,344 Systems installed nationwide in our first deployment phase (“Phase I Deployment”) to theatrical exhibitors and for 3,761 Systems installed domestically and internationally in our second deployment phase (“Phase II Deployment”). We retain ownership of our digital cinema equipment (the “Systems”) and the residual cash flows related to the Systems in Phase I Deployment after the For certain Phase II Deployment Systems, we do not retain ownership of the residual cash flows and digital cinema equipment in Phase II Deployment after the completion of cost recoupment and at the expiration of the exhibitor master license agreements. The Cinema Equipment Business also provides monitoring, collection, verification and management services to this segment, as well as to exhibitors who purchase their own equipment, and also collects and disburses VPFs from motion picture studios, and distributors and ACFs from alternative content providers, movie exhibitors and theatrical exhibitors (collectively, “Services”).


•	requiring a substantial portion of our cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;


•	limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;


•	limiting our ability to pursue our growth strategy or, including restricting us from making strategic acquisitions or causing us to make nonstrategic divestitures;


•	placing us at a disadvantage compared to our competitors who are less leveraged and may be better able to use their cash flow to fund competitive responses to changing industry, market or economic conditions; and


•	making us more vulnerable in the event of a downturn in our business, our industry or the economy in general.


•	lack of sufficient customers or loss of significant customers;


•	the downward trend in sales of physical DVD and Blu-ray discs;


•	rapidly-changing technology for some of the products and services we offer; and


•	limiting our ability to obtain necessary financing in the future; and


•	requiring us to dedicate a substantial portion of our cash flow to payments on our debt obligations,


•	thereby reducing the availability of our cash flow to fund working capital, capital expenditures


•	and other corporate requirements or expansion of our business.


•	restricting us from incurring liens on the digital cinema projection systems financed and from


•	subleasing, assigning or modifying the digital cinema projection systems financed; and


•	requiring them to dedicate a substantial portion of their cash flow to payments on their debt obligations, thereby reducing the availability of their cash flow for other uses.


•	acquire, consolidate with, or merge with or into other companies; and


•	restructuring or refinancing our remaining indebtedness; and


•	the Chinese government exerts substantial influence over the manner in which we must conduct our business activities;


•	restrictions on currency exchange may limit our ability to receive and use our cash effectively;