Cinedigm Updates Progre in Operations, Financings and Real Estate Expense Reductions

January 9, 2017

Cinedigm Updates Progress in Operations, Financings and Real Estate Expense Reductions Deployment Debt Reduced by $53 Million in Last 12 Months

LOS ANGELES--(BUSINESS WIRE)-- Cinedigm Corp. (NASDAQ: CIDM) today announced significant progress in operations, financing and real estate expense reductions.

We are now a leader in the rapidly growing digital streaming channel business, where we already have three successful channels and a fourth on its way. Also, we continue to grow as an important provider of independent content and digital services to key players in the third party SVOD business, soon to be a $20 billion market, said Chris McGurk, Cinedigms Chairman and CEO. Our recent operational results, combined with our progress on key financings, real estate transactions, reduction of debt and more than $10 million in annual operating cost savings, position the Company for more success.

OPERATIONS:

Cinedigms three digital streaming channels have increased gross subscriber additions more than 88% since October, 2016, with November being the best month ever for Cinedigms OTT subscriber additions. Combined, the channels provide more than 5,500 hours of content to viewers across 3.2 million app downloads. In addition, following the successful launch in November, 2016 of Dove NOW, a 24/7 preprogrammed viewing option, Dove Channel launched on the Apple TV platform, making the service available to millions of additional users.

Cinedigm also continues to explore additional partnership opportunities for channels and content with leading global company LeEco, both domestically and overseas, after adding two more streaming channels to LeEcos North American product line launch. In addition to the two streaming channels currently available on LeEcos mobile phones and TVs -- Dove Channel and ConTV -- Docurama, Cinedigms already successful documentary OTT channel, and a yet-to-be named channel currently in development, will launch on LeEcos platforms in early 2017.

Cinedigms OTT channels are also available to Amazon Prime members as part of Amazons Streaming Partners Program. Launched a year ago, this program has delivered significant additional channel subscribers to Cinedigm with no incremental costs. Cinedigms channels are also available across a wide and growing variety of connected devices including most Android and iOS mobile phones and tablets, Roku streaming media players, Samsung Smart TVs, Apple TV and the Web.

Given the progress of the existing OTT offerings across a wide variety of platforms, we expect meaningful financial impacts from these partnerships in the next 12 months, continued McGurk.

In the entertainment distribution business, Cinedigm also continues to see strong progress, where recent competitive developments have solidified the Companys position as the leading independent studio in North America. In digital distribution, Cinedigm continues to expand relationships with key accounts such as Hulu and Netflix, closing significant new licensing deals with both companies. In addition, our recent film releases, particularly in the Western/Action genre, have been performing strongly in television VOD and DVD sales.

FINANCING:

In a continuing initiative to strengthen and simplify its balance sheet, the Company recently consummated an accretive exchange agreement with an institutional holder of $3,429,000 of the Companys Convertible Notes. This transaction exchanged the holders debt into 450,000 shares of its Class A Common Stock and warrants to purchase 200,000 shares of stock exercisable six months after issuance, with a 5-year term, an exercise price of $1.60 per share and customary anti-dilution provisions. This transaction saves the Company nearly $190,000 per year in interest expense.

In December, 2016, the Company also completed an accretive exchange agreement with another institutional holder, where the holder agreed to terminate its outstanding warrants to purchase 1,773,412 shares of Common Stock at an exercise price of $12.36 per share in exchange for minimal consideration.

In Digital Cinema, the outstanding balance of the Societe Generale Phase 1 term loan facility was fully prepaid in November, 2016. The total payoff amount was $9,081,110. This loan related to the 3,724 Digital Cinema projection systems that were installed in theaters as part of the Phase 1 Deployment. This move continues the aggressive reduction of non-recourse debt related to the Digital Cinema business. In calendar year 2016, Cinedigms Digital Cinema-related debt was reduced by over $53,000,000.

The Company continues to make progress on the convertible and mezzanine debt exchange that began with the aforementioned retirement of $3,429,000 in Convertible Notes. The Company believes this exchange will reduce interest costs, and, combined with our efforts to further enhance liquidity, such as our significant cost reduction initiative, provide more flexibility in ongoing negotiations for a new revolving asset based loan.

REAL ESTATE:

As part of the initiative to finalize more than $10 million in annual operating cost savings, most of that already achieved last calendar year, Cinedigm entered into an agreement to terminate its lease for its corporate space in Century City California and entered into a lease for office space in Sherman Oaks, California. This change will provide Cinedigm with savings of over $700,000 on an annualized basis. The new space is also better situated to support Cinedigms expanding streaming digital channel and content services businesses.

ABOUT CINEDIGM

Cinedigm is a leading independent content distributor in the United States, with direct relationships with thousands of physical retail storefronts and digital platforms, including Wal-Mart, Target, iTunes, Netflix, and Amazon, as well as the national Video on Demand platform on cable

LINK:	http://investor.cinedigm.com/releasedetail.cfm?ReleaseID=1007020...
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