Business
Cinedigm Closes $7.0 Million Registered Direct Offering and Plans to Use a Portion of the Proceeds to Retire All Remaining Second Lien Debt
Offering Proceeds Will Also be used for Content and Streaming Channel AcquisitionsLOS ANGELES, CA / ACCESSWIRE / February 5, 2021 / Cinedigm Corp.
About this update from Cineverse Corp.
[{"type":"text","content":"Offering Proceeds Will Also be used for Content and Streaming Channel AcquisitionsLOS ANGELES, CA / ACCESSWIRE / February 5, 2021 / Cinedigm Corp. (NASDAQ:CIDM) (\"Cinedigm\" or the \"Company\"), announced today that it has consummated the sale of 5,600,000 shares of its Class A common stock at a purchase price of $1.25 per share in a registered direct offering to a single institutional investor.The Company plans to use the proceeds from the sale to retire the remainder of approximately $3.2 million in second lien debt and for content and streaming channel acquisitions, in addition to other general corporate uses. Following the retirement of the remaining second lien debt, the Company's only recourse debt will be its revolving credit facility with East West Bank, an asset-backed loan that currently has a balance of less than $3 million and an interest rate of 3.75 percent.This reduction in second lien loans is the latest step in Cinedigm's initiative to dramatically reduce its debt and interest expense. Since December 31, 2019, the Company has reduced overall debt by $35.0 million, or 68%. Over this period, the Company converted $15 million in convertible notes to equity at $1.50 per share, reduced second lien loans from $8.1 million to zero, reduced our asset-based revolving loan by $13.5 million, or 85%, to $2.7 million, and reduced non-recourse legacy cinema equipment business debt by $523 thousand to the current balance of $12 million.The proceeds of this offering will also be used to accelerate Cinedigm's streaming acquisition roll up strategy. This follows closely on the heels of Cinedigm's recent acquisitions of Fandor, the leading global independent film subscription streaming service with the largest collection of independent films, documentaries, and international features in the market and called \"The Netflix for Indie Film\" by The Wall Street Journal. At the end of December 2020, the Company also acquired The Film Detective, a leading content distributor and streaming channel focused on classic film and television programming. The Company plans to continue to execute this roll-up strategy utilizing this new funding, acquiring additional enthusiast-supported streaming channels that can immediately benefit from Cinedigm's scale, content library, distribution footprint, infrastructure and technical prowess.\"Following...