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Stockholders’ Equity (Deficit)
 12 Months Ended
Mar. 31, 2022
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS’ EQUITY (DEFICIT)

6. STOCKHOLDERS’ EQUITY (DEFICIT)

 

COMMON STOCK

 

Authorized Common Stock

 

On October 11, 2021, the Company filed a Certificate of Amendment to the Fifth Amended and Restated Certificate of Incorporation, pursuant to which the number of shares of Common Stock authorized for issuance was increased to 275,000,000 shares.

 

During the year ended March 31, 2022, the Company issued 9,085,016 shares of Common Stock which consist of the sale of shares of our Common Stock, issuance of Common Stock for business combinations, the issuances of Common Stock in payment of preferred stock dividends and in payment of board retainer fees, and the issuance of Common Stock as payment pursuant to a Stock Purchase Agreement (See Note 3).

  

PREFERRED STOCK

 

Cumulative dividends in arrears on preferred stock were $0.1 million and $0.1 million as of March 31, 2022 and March 31, 2021, respectively. In May 2021 and October 2021, we paid preferred stock dividends in arrears in the form of 53,278 and 102,697 shares of Common Stock, respectively.

 

TREASURY STOCK

 

We have treasury stock, at cost, consisting of 1,315,851 and 1,313,836 shares of Common Stock at March 31, 2022 and March 31, 2021, respectively.

 

CINEDIGM’S EQUITY INCENTIVE PLANS

 

Stock Based Compensation Awards

 

Awards issued under our 2000 Equity Incentive Plan (the “2000 Plan”) may be in any of the following forms (or a combination thereof) (i) stock option awards; (ii) stock appreciation rights; (iii) stock or restricted stock or restricted stock units; or (iv) performance awards. The 2000 Plan provides for the granting of incentive stock options (“ISOs”) with exercise prices not less than the fair market value of our Common Stock on the date of grant. ISOs granted to shareholders having more than 10% of the total combined voting power of the Company must have exercise prices of at least 110% of the fair market value of our Common Stock on the date of grant. ISOs and non-statutory stock options granted under the 2000 Plan are subject to vesting provisions, and exercise is subject to the continuous service of the participant. The exercise prices and vesting periods (if any) for non-statutory options are set at the discretion of our compensation committee. On November 1, 2017, upon the consummation of the initial equity investment in Cinedigm by Bison, as a result of which there was a change of control of the Company, all stock options (incentive and non-statutory) and shares of restricted stock were vested immediately and the options became fully exercisable.

 

In connection with the grants of stock options and shares of restricted stock under the 2000 Plan, we and the participants have executed stock option agreements and notices of restricted stock awards setting forth the terms of the grants. The 2000 Plan provided for the issuance of up to 2,380,000 shares of Common Stock to employees, outside directors and consultants.

 

As of March 31, 2022, there were 217,337 stock options outstanding in the 2000 Plan with weighted average exercise price of $14.49 and a weighted average contract life of 1.54 years. As of March 31, 2021, there were 261,587 shares pursuant to stock options outstanding in the Plan with weighted average exercise price of $14.99 and a weighted average contract life of 2.11 years. A total of 44,000 options expired and 250 options forfeited during the year ended March 31, 2022.

 

Options outstanding under the 2000 Plan as of March 31, 2022 is as follows:

 

As of March 31, 2022
Range of Prices   Options Outstanding     Weighted Average Remaining Life in Years     Weighted Average Exercise Price     Aggregate Intrinsic Value
(In thousands)		  
$7.40      5,000       3.25     $  7.40     $            —  
$14.00 - $24.40     212,337       1.50       14.65       —  
 
 
   217,337                     $ —  

 

An analysis of all options exercisable under the 2000 Plan as of March 31, 2022 is presented below:

 

Options Exercisable     Weighted Average
Remaining Life in Years		     Weighted Average
Exercise Price		     Aggregate Intrinsic Value
(In thousands)		  
  217,337       1.54     $ 14.49       —  

 

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 provided for the issuance of up to 2,108,270 shares of Common Stock, in the form of various awards, including stock options, stock appreciation rights, stock, restricted stock, restricted stock units, performance awards and cash awards. The Compensation Committee of the Company’s Board of Directors (the “Board”) is authorized to administer the 2017 Plan and make grants thereunder. The approval of the 2017 Plan did not affect awards already granted under the 2000 Plan. On December 4, 2019, upon shareholder approval, the 2017 Plan was amended to increase the maximum number of shares of Common Stock authorized for issuance thereunder from 2,108,270 shares to 4,098,270.

 

On October 23, 2020, the Company amended its 2017 Plan to increase the number of shares authorized for issuance thereunder from 4,098,270 to 14,098,270.

 

On October 11, 2021, the Company amended its 2017 Plan to increase the number of shares authorized for issuance thereunder from 14,098,270 to 18,098,270.

 

During the year ended March 31, 2022, the Company granted 2,025,250 stock appreciation rights (“SARs”). The SARs were granted under the 2017 Plan, except for 600,000 SARs granted to an officer of the Company as an inducement grant. All SARs issued have an exercise price equal to the fair value of the Company’s Common Stock on the date of grant and a maturity date of 10 years. The SARs were valued on the grant date utilizing an option pricing model, as follows:

 

Grant Date: May 23, 2021 – November 30, 2021

 

Maturity Date: May 23, 2031 – November 30, 2031

 

Exercise price: $1.29 - $2.56

 

Volatility: 94.56% - 114.42%

 

Discount rate: 0.96% - 1.63%

 

Expected term: 6 – 6.5 years

 

Stock appreciation rights outstanding under the 2017 Plan as of March 31, 2022 is as follows:

 

As of March 31, 2022  
Range of Prices     SARs Outstanding     Weighted Average Remaining Life in Years     Weighted Average Exercise Price     Aggregate Intrinsic Value
(In thousands)		  
  $0.54 - $0.74       5,550,000       8.74     $ 0.62     $ 1,208  
  $1.16 - $1.47       2,283,610       7.90       1.37       —  
  $1.71 - $2.10       2,455,738       8.91       1.97       —  
  $2.23 - $2.56       604,250       9.60       2.32       —  
          10,893,598                     $ 1,208  

 

An analysis of all stock appreciation rights exercisable under the 2017 Plan as of March 31, 2022 is presented below:

 

SAR Exercisable     Weighted Average
Remaining Life in Years		     Weighted Average
Exercise Price		     Aggregate Intrinsic Value
(In thousands)		  
  2,521,323       7.01     $ 1.14       158  

 

Total SARs outstanding are as follows:

 

   Year
Ended
March 31,
2022		 
SARs Outstanding March 31, 2021   9,154,933 
Issued   2,025,250 
Forfeited   (286,585)
Total SARs Outstanding March 31, 2022   10,893,598 

 

In addition, in during the year ended March 31, 2022, the Company granted performance stock unit awards under the 2017 Plan to employees of the Company that vest upon certain performance goals being achieved. Upon vesting the award shares are issued to the employee. Following is the activity for performance stock unit awards:

 

    Shares     Weighted Average Grant Date Fair Value  
Unvested balance at April 1, 2021    
-
     $
 
  
Granted     1,317,554     $ 1.25  
Vested     (621,275 )   $ 1.25  
Unvested balance at March 31, 2022     696,280     $ 1.25  

 

During the year ended March 31, 2022, 366,056 shares were issued for vested awards and 255,219 are to be issued as of March 31, 2022.

 

Employee and director stock-based compensation expense related to our stock-based awards was as follows:

 

   Year Ended
March 31,		 
(In thousands)  2022   2021 
Selling, general and administrative  $5,487   $2,892 
   $5,487   $2,892 

 

There was $1 and $5 thousand of stock-based compensation recorded for the year ended March 31, 2022 and 2021, respectively, related to employees’ restricted stock awards.

 

There was $386 thousand and $293 thousand of stock-based compensation for the year ended March 31, 2022 and 2021, respectively, related to board of directors. During the year ended March 31, 2022, the Company issued 280,690 restricted shares to non-employee directors.

 

OPTIONS GRANTED OUTSIDE CINEDIGM’S EQUITY INCENTIVE PLAN

 

In October 2013, we issued options outside of the 2000 Plan to 10 individuals who became employees as a result of a business combination. The employees received options to purchase an aggregate of 62,000 shares of our Common Stock at an exercise price of $17.50 per share. The options were fully vested as of October 2017 and expire 10 years from the date of grant, if unexercised. As of March 31, 2022, 12,500 of such options remained outstanding.

 

WARRANTS

 

The following table presents information about outstanding warrants to purchase shares of our Common Stock as of March 31, 2022. All of the outstanding warrants are fully vested and exercisable.

 

Recipient  Amount
outstanding		   Expiration   Exercise price
per share		 
5-year Warrant issued to Bison Entertainment and Media Group(“ BEMG”) in connection with a term loan agreement   1,400,000    December 2022   $1.80 

 

Warrants for the purchase of 298,519 shares of Common Stock expired unexercised during the year ended March 31, 2022.