10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal period ended: June 30, 2014

oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from --- to ---

Commission File Number: 000-31810

___________________________________

Cinedigm Corp.

(Exact name of registrant as specified in its charter)

___________________________________

Delaware	22-3720962
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
902 Broadway, 9th Floor New York, NY	10010
(Address of principal executive offices)	(Zip Code)

(212) 206-8600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Name of each exchange on which registered
CLASS A COMMON STOCK, PAR VALUE $0.001 PER SHARE	NASDAQ GLOBAL MARKET
Securities registered pursuant to Section 12(g) of the Act:	NONE

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	Accelerated filer  o	Non-accelerated filer  o	Smaller reporting company  x
		(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).				Yes o No x

As of August 11, 2014, 76,774,253 shares of Class A Common Stock, $0.001 par value were outstanding.

CINEDIGM CORP.

TABLE OF CONTENTS

		Page
PART I --	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets at June 30, 2014 (Unaudited) and March 31, 2014	3
	Unaudited Condensed Consolidated Statements of Operations for the Three Months ended June 30, 2014 and 2013	5
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three Months ended June 30, 2014 and 2013	6
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months ended June 30, 2014 and 2013	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 4.	Controls and Procedures	40
PART II --	OTHER INFORMATION	40
Item 1.	Legal Proceedings	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
Signatures		41
Exhibit Index		42

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CINEDIGM CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

	June 30, 2014		March 31, 2014
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	36,742	$	50,215
Accounts receivable, net	37,506		56,863
Inventory	2,870		3,164
Unbilled revenue	5,122		5,144
Prepaid and other current assets	8,392		8,698
Note receivable, current portion	101		112
Assets of discontinued operations, net of current liabilities	—		278
Total current assets	90,733		124,474
Restricted cash	6,751		6,751
Security deposits	269		269
Property and equipment, net	125,642		134,936
Intangible assets, net	35,757		37,639
Goodwill	27,944		25,494
Deferred costs, net	8,618		9,279
Accounts receivable, long-term	1,343		1,397
Note receivable, net of current portion	91		99
Assets of discontinued operations, net of current portion	6,238		5,660
Total assets	$	303,386	$	345,998

See accompanying notes to Condensed Consolidated Financial Statements

3

CINEDIGM CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

(continued)

	June 30, 2014			March 31, 2014
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	(Unaudited)
Current liabilities
Accounts payable and accrued expenses	$	55,537		$	72,604
Current portion of notes payable, non-recourse	33,540			33,825
Current portion of notes payable	15,608			19,219
Current portion of capital leases	609			614
Current portion of deferred revenue	3,025			3,214
Total current liabilities	108,319			129,476
Notes payable, non-recourse, net of current portion	155,388			164,779
Notes payable, net of current portion	22,499			23,525
Capital leases, net of current portion	5,330			5,472
Deferred revenue, net of current portion	11,899			12,519
Total liabilities	303,435			335,771
Commitments and contingencies (see Note 6)
Stockholders’ (Deficit) Equity
Preferred stock, 15,000,000 shares authorized; Series A 10% - $0.001 par value per share; 20 shares authorized; 7 shares issued and outstanding at June 30, 2014 and March 31, 2014, respectively. Liquidation preference of $3,648	3,559			3,559
Class A common stock, $0.001 par value per share; 118,759,000 shares authorized; 76,656,587 and 76,571,972 shares issued and 76,605,147 and 76,520,532 shares outstanding at June 30, 2014 and March 31, 2014, respectively	77			76
Class B common stock, $0.001 par value per share; 1,241,000 shares authorized; 1,241,000 shares issued and 0 shares outstanding, at June 30, 2014 and March 31, 2014, respectively	—			—
Additional paid-in capital	275,938			275,519
Treasury stock, at cost; 51,440 Class A shares	(172		)	(172		)
Accumulated deficit	(279,438		)	(268,686		)
Accumulated other comprehensive loss	(13		)	(69		)
Total stockholders’ (deficit) equity	(49		)	10,227
Total liabilities and stockholders’ (deficit) equity	$	303,386		$	345,998

See accompanying notes to Condensed Consolidated Financial Statements

4

CINEDIGM CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share data)

	For the Three Months Ended June 30,
	2014			2013
Revenues	$	22,857		$	18,537
Costs and expenses:
Direct operating (exclusive of depreciation and amortization shown below)	8,504			3,779
Selling, general and administrative	7,709			6,204
Provision for doubtful accounts	94			62
Transition and acquisition expenses	946			—
Depreciation and amortization of property and equipment	9,376			9,245
Amortization of intangible assets	1,885			418
Total operating expenses	28,514			19,708
Loss from operations	(5,657		)	(1,171		)
Interest expense, net	(5,035		)	(4,924		)
Loss on investment in non-consolidated entity	—			(1,252		)
Other income, net	139			134
Change in fair value of interest rate derivatives	(259		)	829
Loss from continuing operations	(10,812		)	(6,384		)
Income (loss) from discontinued operations	149			(604		)
Net loss	(10,663		)	(6,988		)
Preferred stock dividends	(89		)	(89		)
Net loss attributable to common stockholders	$	(10,752	)	$	(7,077	)
Net loss per Class A and Class B common share attributable to common shareholders - basic and diluted:
Loss from continuing operations	$	(0.14	)	$	(0.13	)
Income (loss) from discontinued operations	—			(0.02		)
	$	(0.14	)	$	(0.15	)
Weighted average number of Class A and Class B common shares outstanding: basic and diluted	76,567,128			48,357,020

See accompanying notes to Condensed Consolidated Financial Statements

5

CINEDIGM CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

	For the Three Months Ended June 30,
	2014			2013
Net loss	$	(10,663	)	$	(6,988	)
Other comprehensive income: foreign exchange translation	56			—
Comprehensive loss	$	(10,607	)	$	(6,988	)

See accompanying notes to Condensed Consolidated Financial Statements

6

CINEDIGM CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Three Months Ended June 30,
	2014			2013
Cash flows from operating activities
Net loss	$	(10,663	)	$	(6,988	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization of property and equipment and      amortization of intangible assets	11,261			9,700
Amortization of capitalized software costs	—			314
Amortization of debt issuance costs	437			288
Provision for doubtful accounts	94			62
Stock-based compensation and expenses	651			737
Change in fair value of interest rate derivatives	259			(829		)
Accretion and PIK interest expense added to note payable	631			472
Loss on investment in non-consolidated entity	—			1,252
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	19,301			(3,496		)
Inventory	294			—
Unbilled revenue	394			3,103
Prepaid expenses and other current assets	228			(1,314		)
Other assets	243			(599		)
Accounts payable and accrued expenses	(19,823		)	7,216
Deferred revenue	(591		)	(604		)
Other liabilities	(292		)	364
Net cash provided by operating activities	2,424			9,678
Cash flows from investing activities:
Purchases of property and equipment	(331		)	(141		)
Purchases of intangible assets	(4		)	—
Additions to capitalized software costs	(483		)	(731		)
Restricted cash	—			(2		)
Net cash used in investing activities	(818		)	(874		)
Cash flows from financing activities:
Repayment of notes payable	(14,862		)	(8,610		)
Principal payments on capital leases	(147		)	(31		)
Costs associated with issuance of Class A common stock	(70		)	—
Net cash used in financing activities	(15,079		)	(8,641		)
Net change in cash and cash equivalents	(13,473		)	163
Cash and cash equivalents at beginning of period	50,215			13,448
Cash and cash equivalents at end of period	$	36,742		$	13,611

See accompanying notes to Condensed Consolidated Financial Statements

7

CINEDIGM CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the fiscal periods ended June 30, 2014 and 2013

($ in thousands, except for share and per share data)

1. NATURE OF OPERATIONS

Cinedigm Corp. (formerly known as Cinedigm Digital Cinema Corp.) was incorporated in Delaware on March 31, 2000 (“Cinedigm”, and collectively with its subsidiaries, the “Company”). Cinedigm is (i) a leading distributor and aggregator of independent movie, television and other short form content managing a library of distribution rights to over 52,000 titles and episodes released across digital, physical, theatrical, home and mobile entertainment platforms as well as (ii) a leading servicer of digital cinema assets in over 12,000 movie screens in both North America and several international countries.

The Company reports its financial results in four primary segments as follows: (1) the first digital cinema deployment (“Phase I Deployment”), (2) the second digital cinema deployment (“Phase II Deployment”), (3) digital cinema services (“Services”) and (4) media content and entertainment (“Content & Entertainment”).  The Phase I Deployment and Phase II Deployment segments are the non-recourse, financing vehicles and administrators for the Company's digital cinema equipment (the “Systems”) installed in movie theatres nationwide.  The Services segment provides services and support to over 12,000 movie screens in the Phase I Deployment and Phase II Deployment segments as well as directly to exhibitors and other third party customers.  Included in these services are Systems management services for a specified fee via service agreements with Phase I Deployment and Phase II Deployment as well as third party exhibitors as buyers of their own digital cinema equipment. These services primarily facilitate the conversion from analog to digital cinema and have positioned the Company at what it believes to be the forefront of a rapidly developing industry relating to the distribution and management of digital cinema and other content to theatres and other remote venues worldwide.  The Content & Entertainment segment provides content marketing and distribution services in both theatrical and ancillary home entertainment markets to independent movie, television and other short form content owners and to theatrical exhibitors. As a leading distributor of independent content, the Company collaborates with producers, major brands and other content owners to market, source, curate and distribute quality content to targeted and profitable audiences through (i) existing and emerging digital home entertainment platforms, including but not limited to, iTunes, Amazon Prime, Netflix, Hulu, Xbox, Playstation, cable video-on-demand ("VOD") and curated over-the-top ("OTT") digital entertainment channels and applications, (ii) physical goods, including DVD and Blu-ray and (iii) theatrical releases.

Gaiam Acquisition

On October 21, 2013, the Company and Cinedigm Entertainment Holdings, LLC ("CHE"), a newly-formed, wholly-owned subsidiary of the Company, acquired from Gaiam Americas, Inc. and Gaiam, Inc. (together, “Gaiam”) their division ("GVE") that maintains exclusive distribution rights agreements with large independent studios/content providers, and distributes entertainment content through home video, digital and television distribution channels (the “GVE Acquisition”). The Company agreed to an aggregate purchase price of $51,500, subject to a working capital adjustment, with (i) $47,500 paid in cash and 666,978 shares of Class A Common Stock valued at $1,000 issued upon the closing of the GVE Acquisition, and (ii) $3,000 to be paid on a deferred basis, of which $1,000 was paid during the fiscal year ended March 31, 2014 and the remainder was settled through the collection of a receivable during the fiscal year ended March 31, 2014. The working capital adjustment related to the purchase price has not yet been finalized between the Company and the sellers of GVE. Pending final resolution, such working capital adjustment, if any, will be recorded as adjustments to purchase considerations during the fiscal year ending March 31, 2015. Upon the closing of the GVE Acquisition, GVE became part of the Company's Content & Entertainment segment.

Upon concluding the purchase price allocation for the GVE Acquisition during the three months ended June 30, 2014, a measurement period adjustment  of $2,450 was made to write off advances on the opening balance sheet of GVE due to conditions that existed at the time of the GVE Acquisition. Such conditions, had they been identified as of March 31, 2014, would have reduced the previously reported prepaid and other current assets to $6,222 and increased goodwill to $27,944 on the consolidated balance sheets as of March 31, 2014, respectively.

The purchase price has been allocated to the identifiable net assets acquired as of the date of acquisition including any measurement period adjustments as follows pending any final working capital adjustment:

8

Accounts receivable	$	15,524
Inventory	2,224
Advances	5,248
Other assets	152
Content library	17,211
Supplier contracts and relationships	11,691
Goodwill	19,402
Total assets acquired	71,452
Total liabilities assumed	(19,952		)
Total net assets acquired	$	51,500

The Company estimates the useful life of the content library and supplier contracts and relationships to be 6 years and 8 years, respectively.

The fair values assigned to intangible assets were determined through the application of various commonly used and accepted valuation procedures and methods, including the multi-period excess earnings method. These valuation methods rely on management judgment, including expected future cash flows resulting from existing customer relationships, customer attrition rates, contributory effects of other assets utilized in the business, peer group cost of capital and royalty rates, and other factors. The valuation of tangible assets was preliminarily determined to approximate book value at the time of the GVE Acquisition. Useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. Goodwill is mainly attributable to the assembled workforce and synergies expected to arise from the GVE Acquisition.

Pro forma Information Related to the Acquisition of GVE

The following unaudited consolidated pro forma summary information for the three months ended June 30, 2014 and 2013 has been prepared by adjusting the historical data as set forth in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2014 and 2013 to give effect to the GVE Acquisition as if it had occurred at April 1, 2013. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the GVE Acquisition, nor does the pro forma reflect additional revenue opportunities following the GVE Acquisition.

	For the Three Months Ended June 30,
	2014			2013
Revenue	$	22,857		$	27,006
Loss from continuing operations	$	(10,812	)	$	(6,606	)
Net loss	$	(10,663	)	$	(7,210	)
Net loss per share (basic and diluted)	$	(0.14	)	$	(0.15	)

Sale of Software

During the fiscal year ended March 31, 2014, the Company made the strategic decision to discontinue, exit its software business and execute a plan of sale for Hollywood Software, Inc. d/b/a Cinedigm Software (“Software”), the Company's direct, wholly-owned subsidiary. Management concluded that it would be in the best interests of shareholders for the Company’s focus to be toward theatrical releasing and aggregation and distribution of independent content, digitally and in the form of DVDs and Blu-Ray discs, and VOD, along with the growth and servicing of the existing digital cinema business. Further, management believed that Software, which was previously included in our Services segment, no longer yielded the same synergies across the Company’s businesses as once existed.

As a consequence, it was determined that Software met the criteria for classification as held for sale/discontinued operations. As such, Software has been adjusted to reflect the fair value of its net assets and the consolidated financial statements and the notes to consolidated financial statements presented herein have been recast solely to reflect, for all periods presented, the adjustments resulting from these changes in classification for discontinued operations.

9

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND CONSOLIDATION

The Company has incurred net losses historically and has an accumulated deficit of $279,438 as of June 30, 2014. The Company also has significant contractual obligations related to its recourse and non-recourse debt for the remainder of the fiscal year ending March 31, 2015 and beyond. The Company may continue to generate net losses for the foreseeable future. Based on the Company’s cash position at June 30, 2014, and expected cash flows from operations, management believes that the Company has the ability to meet its obligations through at least June 30, 2015. Failure to generate additional revenues, raise additional capital or manage discretionary spending could have an adverse effect on the Company’s financial position, results of operations or liquidity.

The Company’s consolidated financial statements include the accounts of Cinedigm, Access Digital Media, Inc. (“AccessDM”), FiberSat Global Services, Inc. d/b/a Cinedigm Satellite and Support Services (“Satellite”), ADM Cinema Corporation (“ADM Cinema”) d/b/a the Pavilion Theatre (certain assets and liabilities of which were sold in May 2011), Christie/AIX, Inc. ("C/AIX") d/b/a Cinedigm Digital Cinema (“Phase 1 DC”), Vistachiara Productions, Inc. f/k/a The Bigger Picture, currently d/b/a Cinedigm Content and Entertainment Group, Cinedigm Entertainment Corp. f/k/a New Video Group, Inc. ("New Video"), CHE, Access Digital Cinema Phase 2 Corp. (“Phase 2 DC”), Cinedigm Digital Cinema Australia Pty Ltd, Access Digital Cinema Phase 2 B/AIX Corp. (“Phase 2 B/AIX”), Cinedigm Digital Funding I, LLC (“CDF I”) and Cinedigm DC Holdings LLC ("DC Holdings LLC"). Cinedigm Content and Entertainment Group, New Video and CHE are together referred to as CEG. Software comprises discontinued operations. All intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated balance sheet as of March 31, 2014, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements were prepared following the interim reporting requirements of the Securities and Exchange Commission ("SEC"). They do not include all disclosures normally made in financial statements contained in the Company’s Annual Report on Form 10-K ("Form 10-K"). In management’s opinion, all adjustments necessary for a fair presentation of financial position, the results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the periods presented have been made. The results of operations for the respective interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended March 31, 2014 filed with the SEC on June 26, 2014.

INVESTMENT IN NON-CONSOLIDATED ENTITY

The Company indirectly owns 100% of the common equity of CDF2 Holdings, LLC ("Holdings"), which is a Variable Interest Entity (“VIE”), as defined in Accounting Standards Codification Topic 810 ("ASC 810"), “Consolidation". Holdings, a subsidiary of Phase 2 DC, which is wholly owned by the Company, and its wholly owned limited liability company, Cinedigm Digital Funding 2, LLC, were created for the purpose of capitalizing on the conversion of the exhibition industry from film to digital technology. Holdings assists customers in procuring the necessary equipment in the conversion of their Systems by providing the necessary financing, equipment, installation and related ongoing services. Holdings is a VIE, as defined in ASC 810, indirectly wholly owned by the Company. 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. To be a primary beneficiary, an entity must have the power to direct the activities of a VIE that most significantly impact the VIE's economic performance, among other factors. Although Holdings is indirectly wholly owned by the Company, a third party, which also has a variable interest in Holdings, along with an independent third party manager and the Company must mutually approve all business activities and transactions that significantly impact Holdings' economic performance. The Company has thus assessed its variable interests in Holdings and determined that it is not the primary beneficiary of Holdings and therefore accounts for its investment in Holdings under the equity method of accounting. In completing our assessment, the Company identified the activities that it considers most significant to the economic performance of Holdings and determined that we do not have the power to direct those activities. As a result, Holdings' financial position and results of operations are not consolidated in the financial position and results of operations of the Company. The Company's net investment in Holdings is reflected as “Investment in non-consolidated entity, net" in the accompanying condensed consolidated balance sheets.

The Holding’s total stockholder’s deficit at June 30, 2014 was $3,512. The Company has no obligation to fund the operating loss or the deficit beyond its initial investment, and accordingly, the Company carried its investment in Holdings at $0.

Accounts receivable due from Holdings for service fees under its master service agreement as of June 30, 2014 and March 31, 2014 were $352 and $346, respectively, are included within accounts receivable, net on the accompanying condensed consolidated balance sheets.

10

During the three months ended June 30, 2014 and 2013, the Company received $294 and $262 in aggregate revenues through digital cinema servicing fees from Holdings, respectively, which are included in revenues on the accompanying condensed consolidated statements of operations.

RECLASSIFICATION

Certain reclassifications, principally for discontinued operations (see Note 3) have been made to the fiscal period ended June 30, 2013 condensed consolidated financial statements to conform to the current fiscal period ended June 30, 2014 presentation.

USE OF ESTIMATES

The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include the adequacy of accounts receivable reserves, return reserves, inventory reserves, recoupment of advances, minimum guarantees, assessment of goodwill and intangible asset impairment and valuation reserve for income taxes, among others. Actual results could differ from these estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of three months or less to be “cash equivalents.” The Company maintains bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation’s insured limits. The Company periodically assesses the financial condition of the institutions and believes that the risk of any loss is minimal.

ACCOUNTS RECEIVABLE

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. Allowance for doubtful accounts amounted to $980 and $898 as of June 30, 2014 and March 31, 2014, respectively.

Within the Content & Entertainment segment, the Company recognizes the accounts receivable net of an estimated allowance for product returns and customer chargebacks at the time we recognize the original sale. We base the amount of the returns allowance and customer chargebacks upon historical experience and future expectations.

Accounts receivable, long-term result from up-front activation fees earned from the Company's Systems deployments with extended payment terms that are discounted to their present value at prevailing market rates.

ADVANCES

Advances, which are recorded within prepaid and other current assets on the condensed consolidated balance sheets, represent amounts prepaid to studios or content producers for which the Company provides content distribution services and such advances, net of any impairment charges, are estimated to be fully recoupable as of the balance sheet dates.

INVENTORY

Inventory consists of finished goods of owned physical DVD titles and is stated at the lower of cost (determined based on weighted average cost) or market. The Company identifies inventory items to be written down for obsolescence based on the item’s sales status and condition. The Company writes down discontinued or slow moving inventories based on an estimate of the markdown to retail price needed to sell through our current stock level of the inventories.

RESTRICTED CASH

In connection with the 2013 Term Loans issued in February 2013 and the 2013 Prospect Loan Agreement issued in February 2013 (collectively, see Note 4), the Company maintains cash restricted for repaying interest on the respective loans as follows:

11

	As of June 30, 2014		As of March 31, 2014
Reserve account related to the 2013 Term Loans (See Note 4)	$	5,751	$	5,751
Reserve account related to the 2013 Prospect Loan Agreement (See Note 4)	1,000		1,000
	$	6,751	$	6,751

DEFERRED COSTS

Deferred costs primarily consist of unamortized debt issuance costs related to the 2013 Term Loans, 2013 Prospect Loan and Cinedigm Credit Agreement (see Note 4) which are amortized under the effective interest rate method over the terms of the respective debt.  All other unamortized debt issuance costs are amortized on a straight-line basis over the term of the respective debt. For such debt, amortization on a straight-line basis is not materially different from the effective interest method.  

PROPERTY AND EQUIPMENT

Property and equipment 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	3 - 5 years
Digital cinema projection systems	10 years
Machinery and equipment	3 - 10 years
Furniture and fixtures	3 - 6 years

Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the leasehold improvements. Maintenance and repair costs are charged to expense as incurred. Major renewals, improvements and additions are capitalized.  Upon the sale or other disposition of any property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and the gain or loss on disposal is included in the condensed consolidated statements of operations.

ACCOUNTING FOR DERIVATIVE ACTIVITIES

Derivative financial instruments are recorded at fair value. The Company had three separate interest rate swap agreements (the “Interest Rate Swaps”) to limit the Company’s exposure to changes in interest rates related to the 2013 Term Loans which matured in June 2013.  Additionally, the Company entered into two separate interest rate cap transactions during the fiscal year ended March 31, 2013, recorded in prepaid and other current assets on the condensed consolidated balance sheets, to limit the Company's exposure to interest rates related to the 2013 Term Loans and 2013 Prospect Loan. Changes in fair value of derivative financial instruments are either recognized in accumulated other comprehensive loss (a component of stockholders' deficit) or in the condensed consolidated statements of operations depending on whether the derivative qualifies for hedge accounting.  The Company has not sought hedge accounting treatment for these instruments and therefore, changes in the value of its Interest Rate Swaps and caps were recorded in the condensed consolidated statements of operations (See Note 4).

FAIR VALUE MEASUREMENTS

The fair value measurement disclosures are grouped into three levels based on valuation factors:

• Level 1 – quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

• Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)

Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities.

The following tables summarize the levels of fair value measurements of the Company’s financial assets and liabilities:

12

	As of June 30, 2014
	Level 1		Level 2		Level 3		Total
Restricted cash	$	6,751	$	—	$	—	$	6,751
Interest rate derivatives	—		519		—		519
	$	6,751	$	519	$	—	$	7,270

	As of March 31, 2014
	Level 1		Level 2		Level 3		Total
Restricted cash	$	6,751	$	—	$	—	$	6,751
Interest rate derivatives	—		787		—		787
	$	6,751	$	787	$	—	$	7,538

The Company’s cash and cash equivalents, accounts receivable, unbilled revenue and accounts payable and accrued expenses are financial instruments and are recorded at cost in the condensed consolidated balance sheets. The estimated fair values of these financial instruments approximate their carrying amounts because of their short-term nature.  The carrying amount of accounts receivable, long-term and notes receivable approximates fair value based on the discounted cash flows of that instrument using current assumptions at the balance sheet date.  The fair value of fixed rate and variable rate debt is estimated by management based upon current interest rates available to the Company at the respective balance sheet date for arrangements with similar terms and conditions.  Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of notes payable and capital lease obligations approximates fair value.

IMPAIRMENT OF LONG-LIVED AND FINITE-LIVED ASSETS

The Company reviews the recoverability of its 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 the Company’s ability to recover the carrying value of its 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 assets the asset is deemed not to be recoverable and possibly impaired.  The Company then estimates the fair value of the asset to determine whether an impairment loss should be recognized.  An impairment loss will be recognized if the difference between the fair value and the carrying value of the asset exceeds its fair value.  Fair value is determined by computing the expected future undiscounted cash flows.  During the three monthsended June 30, 2014 and 2013, no impairment charge from continuing operations for long-lived assets or finite-lived assets was recorded.

GOODWILL

Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. The Company’s process of evaluating goodwill for impairment involves the determination of fair value of its CEG goodwill reporting unit over its carrying value. The Company conducts its annual goodwill impairment analysis during the fourth quarter of each fiscal year, measured as of March 31, unless triggering events occur which require goodwill to be tested at another date.

Information related to the goodwill allocated to the Company's Content & Entertainment segment is as follows:

As of March 31, 2013	$	8,542
Goodwill resulting from the GVE Acquisition	16,952
As of March 31, 2014	25,494
Measurement period adjustment - GVE Acquisition	2,450
As of June 30, 2014	$	27,944

REVENUE RECOGNITION

Phase I Deployment and Phase II Deployment

Virtual print fees (“VPFs”) are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Phase 1 DC and to Phase 2 DC when movies distributed by the studio are displayed on screens

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utilizing the Company’s Systems installed in movie theatres.  VPFs are earned and payable to Phase 1 DC based on a defined fee schedule with a reduced VPF rate year over year until the sixth year at which point the VPF rate remains unchanged through the tenth year.  One VPF is payable for every digital title displayed per System. The amount of VPF revenue is dependent on the number of movie titles released and displayed using the Systems in any given accounting period. VPF revenue is recognized in the period in which the digital title first plays on a System for general audience viewing in a digitally-equipped movie theatre, as Phase 1 DC’s and Phase 2 DC’s performance obligations have been substantially met at that time.

Phase 2 DC’s agreements with distributors require the payment of VPFs, according to a defined fee schedule, for ten years from the date each system is installed; however, Phase 2 DC may no longer collect VPFs once “cost recoupment,” as defined in the agreements, is achieved.  Cost recoupment will occur once the cumulative VPFs and other cash receipts collected by Phase 2 DC have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including the Company’s service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter.  Further, if cost recoupment occurs before the end of the eighth contract year, a one-time “cost recoupment bonus” is payable by the studios to the Company.  Any other cash flows, net of expenses, received by Phase 2 DC following the achievement of cost recoupment are required to be returned to the distributors on a pro-rata basis. At this time, the Company cannot estimate the timing or probability of the achievement of cost recoupment.

Alternative content fees (“ACFs”) are earned pursuant to contracts with movie exhibitors, whereby amounts are payable to Phase 1 DC and to Phase 2 DC, generally either a fixed amount or as a percentage of the applicable box office revenue derived from the exhibitor’s showing of content other than feature movies, such as concerts and sporting events (typically referred to as “alternative content”). ACF revenue is recognized in the period in which the alternative content first opens for audience viewing.

Revenues are deferred for up front exhibitor contributions and are recognized over the cost recoupment period, which is expected to be ten years.

Services

Exhibitors who purchased and own Systems using their own financing in the Phase II Deployment, paid an upfront activation fee that is generally $2 thousand per screen to the Company (the “Exhibitor-Buyer Structure”).  These upfront activation fees are recognized in the period in which these exhibitor owned Systems are ready for content, as the Company has no further obligations to the customer, and are generally paid quarterly from VPF revenues over approximately one year.  Additionally, the Company recognizes activation fee revenue of between $1 thousand and $2 thousand on Phase 2 DC Systems and for Systems installed by Holdings upon installation and such fees are generally collected upfront upon installation. The Company will then manage the billing and collection of VPFs and will remit all VPFs collected to the exhibitors, less an administrative fee that will approximate up to 10% of the VPFs collected.

The administrative fee related to the Phase I Deployment approximates 5% of the VPFs collected and an incentive service fee equal to 2.5% of the VPFs earned by Phase 1 DC. This administrative fee is recognized in the period in which the billing of VPFs occurs, as performance obligations have been substantially met at that time.

Content & Entertainment

CEG earns fees for the distribution of content in the home entertainment markets via several distribution channels, including digital, VOD, and physical goods (e.g. DVD and Blu-ray) is typically based on the gross amounts billed to our customers less the amounts owed to the media studios or content producers under distribution agreements, and gross media sales of owned or licensed content. The fee rate earned by the Company varies depending upon the nature of the agreements with the platform and content providers. Generally, revenues are recognized at the availability date of the content for a subscription digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and VOD services. Reserves for sales returns and other allowances are provided based upon past experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required.  Sales returns and allowances are  reported net in accounts receivable and as a reduction of revenues.

CEG also has contracts for the theatrical distribution of third party feature movies and alternative content. CEG’s distribution fee revenue and CEG's participation in box office receipts is recognized at the time a feature movie and alternative content is viewed. CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date.

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Movie Cost Amortization

Once a movie is released, capitalized acquisition costs are amortized and participations and residual costs are accrued on an individual title basis in the proportion to the revenue recognized during the period for each title ("Period Revenue") bears to the estimated remaining total revenue to be recognized from all sources for each title ("Ultimate Revenue"). The amount of movie and other costs that is amortized each period will depend on the ratio of Period Revenue to Ultimate Revenue for each movie. The Company makes certain estimates and judgments of Ultimate Revenue to be recognized for each title. Ultimate Revenue does not include estimates of revenue that will be earned beyond 5 years of a movie’s initial theatrical release date. Movie cost amortization is a component of direct operating costs within the condensed consolidated statements of operations.

Estimates of Ultimate Revenue and anticipated participation and residual costs are reviewed periodically in the ordinary course of business and are revised if necessary. A change in any given period to the Ultimate Revenue for an individual title will result in an increase or decrease in the percentage of amortization of capitalized movie and other costs and accrued participation and residual costs relative to a previous period. Depending on the performance of a title, significant changes to the future Ultimate Revenue may occur, which could result in significant changes to the amortization of the capitalized acquisition costs.

DIRECT OPERATING COSTS

Direct operating costs consist of operating costs such as cost of goods sold, fulfillment expenses, shipping costs, property taxes and insurance on Systems, royalty expenses, marketing and direct personnel costs.

PARTICIPATIONS PAYABLE

The Company records liabilities within accounts payable and accrued expenses on the condensed consolidated balance sheet, that represent amounts owed to studios or content producers for which the Company provides content distribution services for royalties owed under licensing arrangements. The Company identifies and records as a reduction to the liability any expenses that are to be reimbursed to the Company by such studios or content producers.

STOCK-BASED COMPENSATION

During the three monthsended June 30, 2014 and 2013, the Company recorded stock-based compensation from continuing operations of $618 and $684, respectively.

The weighted-average grant-date fair value of options granted during the three monthsended June 30, 2014 and 2013 was $1.60 and $0.89, respectively. There were 34,443 and 42,640 stock options exercised during the three monthsended June 30, 2014 and 2013, respectively.

The Company estimated the fair value of stock options at the date of each grant using a Black-Scholes option valuation model with the following assumptions:

	For the Three Months Ended June 30,
Assumptions for Option Grants	2014	2013
Range of risk-free interest rates	1.6 - 1.7%	0.7 - 1.2%
Dividend yield	—	—
Expected life (years)	5	5
Range of expected volatilities	71.7 - 72.1%	73.4 - 73.8%

The risk-free interest rate used in the Black-Scholes option pricing model for options granted under the Company’s stock option plan awards is the historical yield on U.S. Treasury securities with equivalent remaining lives. The Company does not currently anticipate paying any cash dividends on common stock in the foreseeable future. Consequently, an expected dividend yield of zero is used in the Black-Scholes option pricing model.  The Company estimates the expected life of options granted under the Company’s stock option plans using both exercise behavior and post-vesting termination behavior, as well as consideration of outstanding options.   The Company estimates expected volatility for options granted under the Company’s stock option plans based on a measure of historical volatility in the trading market for the Company’s common stock.

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Employee and director stock-based compensation expense from continuing operations related to the Company’s stock-based awards was as follows:

	For the Three Months Ended June 30,
	2014		2013
Direct operating	$	3	$	2
Selling, general and administrative	615		682
	$	618	$	684

NET LOSS PER SHARE

Basic and diluted net loss per common share has been calculated as follows:

Basic and diluted net loss per common share =	Net loss + preferred dividends
	Weighted average number of common stock shares  outstanding during the period

Shares issued and any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding.

The Company incurred net losses for each of the three monthsended June 30, 2014 and 2013 and, therefore, the impact of dilutive potential common shares from outstanding stock options and warrants, totaling 28,819,170 shares and 20,485,290shares as of June 30, 2014 and 2013, respectively, were excluded from the computation as it would be anti-dilutive.

COMPREHENSIVE LOSS

As of June 30, 2014, the Company’s other comprehensive loss consisted of net loss and foreign currency translation adjustments.  

RECENT ACCOUNTING PRONOUNCEMENTS

In April 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update which modifies the requirements for disposals to qualify as discontinued operations and expands related disclosure requirements. The update will be effective for the Company during the fiscal year ending March 31, 2015. The adoption of the update may impact whether future disposals qualify as discontinued operations and therefore could impact the Company's financial statement presentation and disclosures.

In May 2014, the FASB issued new accounting guidance on revenue recognition.  The new standard provides for a single five-step model to be applied to all revenue contracts with customers as well as requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts.  Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard.  The guidance will be effective for the Company during the fiscal year ending March 31, 2018. The Company intends to evaluate the impact of the adoption of this accounting standard update on its consolidated financial statements.

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3. DISCONTINUED OPERATIONS

As discussed in Note 1, discontinued operations is principally comprised of the operations of Software. There is no tax provision or benefit related to any of the discontinued operations.

The assets and liabilities of discontinued operations were comprised of the following:

	As of June 30, 2014		As of March 31, 2014
Current assets of discontinued operations:
Accounts receivable, net	$	1,852	$	1,835
Unbilled revenue	215		534
Prepaid and other current assets	7		11
Total current assets of discontinued operations	2,074		2,380
Current liabilities of discontinued operations:
Accounts payable and accrued expenses	422		668
Deferred revenue	1,652		1,434
Total current liabilities of discontinued operations	2,074		2,102
Current assets of discontinued operations, net of current liabilities	$	—	$	278
Property and equipment, net	$	723	$	474
Capitalized software, net	5,346		4,862
Unbilled revenue, net of current portion	169		324
Assets of discontinued operations, net of current portion	$	6,238	$	5,660

The results of Software have been reported as discontinued operations for all periods presented. The income (loss) from discontinued operations was as follows:

	For the Three Months Ended June 30,
	2014			2013
Revenues	$	1,049		$	1,088
Costs and Expenses:
Direct operating (exclusive of depreciation and amortization shown below)	175			703
Selling, general and administrative	532			950
Research and development	9			6
Depreciation of property and equipment	—			30
Amortization of intangible assets	—			7
Total operating expenses	716			1,696
Income (loss) from operations	333			(608		)
Interest income	—			4
Other expense, net	(85		)	—
Income (loss) before provision for income taxes	248			(604		)
Provision for income taxes	99			—
Income (loss) from discontinued operations, net of taxes	$	149		$	(604	)

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4. NOTES PAYABLE

Notes payable consisted of the following:

	As of June 30, 2014				As of March 31, 2014
Notes Payable	Current Portion		Long Term Portion		Current Portion		Long Term Portion
2013 Term Loans, net of debt discount	$	25,500	$	60,884	$	25,688	$	68,590
2013 Prospect Loan Agreement	—		68,714		—		68,454
KBC Facilities	7,858		25,098		7,961		27,009
P2 Vendor Note	110		450		105		466
P2 Exhibitor Notes	72		242		71		260
Total non-recourse notes payable	$	33,540	$	155,388	$	33,825	$	164,779
Cinedigm Term Loans	$	4,000	$	18,923	$	3,750	$	20,015
Cinedigm Revolving Loans	11,608		—		15,469		—
2013 Notes	—		3,576		—		3,510
Total recourse notes payable	$	15,608	$	22,499	$	19,219	$	23,525
Total notes payable	$	49,148	$	177,887	$	53,044	$	188,304

Non-recourse debt is generally defined as debt whereby the lenders’ sole recourse with respect to defaults by the Company is limited to the value of the asset collateralized by the debt. The 2013 Term Loans are not guaranteed by the Company or its other subsidiaries, other than Phase 1 DC. The 2013 Prospect Loan Agreement is not guaranteed by the Company or its other subsidiaries and the service fees of Phase 1 DC and Phase 2 DC were assigned by the Company to DC Holdings LLC. The KBC Facilities, the P2 Vendor Note and the P2 Exhibitor Notes are not guaranteed by the Company or its other subsidiaries, other than Phase 2 DC.

2013 Term Loans

On February 28, 2013, CDF I entered into an amended and restated credit agreement (the “2013 Credit Agreement”) with Société Générale, New York Branch, as administrative agent and collateral agent for the lenders party thereto and certain other secured parties (the “Collateral Agent”), and the lenders party thereto. The 2013 Credit Agreement amended and restated its prior credit agreement. The primary changes effected by the Amended and Restated Credit Agreement were (i) changing the aggregate principal amount of the term loans to $130,000, which included an assignment of $5,000 of the principal balance to an affiliate of CDF I, (ii) changing the interest rate (described further below) and (iii) extending the term of the credit facility to February 2018. The proceeds of the term loans ("2013 Term Loans") under the 2013 Credit Agreement were used by CDF I to refinance its prior credit agreement.

Under the 2013 Credit Agreement, each of the 2013 Term loans bears interest, at the option of CDF I and subject to certain conditions, based on the base rate (generally, the bank prime rate) or the LIBOR rate set at a minimum of 1.00%, plus a margin of 1.75% (in the case of base rate loans) or, 2.75% (in the case of LIBOR rate loans). All collections and revenues of CDF I are deposited into designated accounts, from which amounts are paid out on a monthly basis to pay certain operating expenses and principal, interest, fees, costs and expenses relating to the 2013 Credit Agreement according to certain designated priorities. On a quarterly basis, if funds remain after the payment of all such amounts, they will be applied to prepay the 2013 Term Loans. The 2013 Term Loans mature and must be paid in full by February 28, 2018. In addition, CDF I may prepay the 2013 Term Loans, in whole or in part, subject to paying certain breakage costs, if applicable, and a 1.0% prepayment premium if a prepayment is made during the first year of the 2013 Term Loans. The LIBOR rate at June 30, 2014 was 0.15%.

The 2013 Credit Agreement also requires each of CDF I’s existing and future direct and indirect domestic subsidiaries (the "Guarantors") to guarantee, under an Amended and Restated Guaranty and Security Agreement dated as of February 28, 2013 by and among CDF I, the Guarantors and the Collateral Agent (the “Guaranty and Security Agreement”), the obligations under the 2013 Credit Agreement, and all such obligations to be secured by a first priority perfected security interest in all of the collective assets of CDF I and the Guarantors, including real estate owned or leased, and all capital stock or other equity interests in C/AIX, the direct holder of CDF I’s equity, CDF I and CDF I’s subsidiaries. In connection with the 2013 Credit Agreement, AccessDM, a wholly-owned subsidiary of the Company and the direct parent of C/AIX, entered into an amended and restated pledge agreement dated as of February 28, 2013 (the “AccessDM Pledge Agreement”) in favor of the Collateral Agent pursuant to which AccessDM pledged to the Collateral Agent all of the outstanding shares of common stock of C/AIX, and C/AIX entered into an amended and

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restated pledge agreement dated as of February 28, 2013 (the “C/AIX Pledge Agreement”) in favor of the Collateral Agent pursuant to which C/AIX pledged to the Collateral Agent all of the outstanding membership interests of CDF I. The 2013 Credit Agreement contains customary representations, warranties, affirmative covenants, negative covenants and events of default.

All collections and revenues of CDF I are deposited into designated accounts. These amounts are included in cash and cash equivalents in the condensed consolidated balance sheets and are only available to pay certain operating expenses, principal, interest, fees, costs and expenses relating to the 2013 Credit Agreement, according to certain designated priorities, which totaled $5,919 and $6,493 as of June 30, 2014 and March 31, 2014, respectively. The Company also set up a debt service fund under the 2013 Credit Agreement for future principal and interest payments, classified as restricted cash of $6,751 as of June 30, 2014 and March 31, 2014, respectively.

The balance of the 2013 Term Loans, net of the original issue discount, at June 30, 2014 was as follows:

	As of June 30, 2014			As of March 31, 2014
2013 Term Loans, at issuance, net	$	125,087		$	125,087
Payments to date	(38,456		)	(30,543		)
Discount on 2013 Term Loans	(247		)	(266		)
2013 Term Loans, net	86,384			94,278
Less current portion	(25,500		)	(25,688		)
Total long term portion	$	60,884		$	68,590

2013 Prospect Loan Agreement

On February 28, 2013, DC Holdings LLC, AccessDM and Phase 2 DC entered into a term loan agreement (the “2013 Prospect Loan Agreement”) with Prospect Capital Corporation (“Prospect”), as administrative agent (the “Prospect Administrative Agent”) and collateral agent (the “Prospect Collateral Agent”) for the lenders party thereto, and the other lenders party thereto pursuant to which DC Holdings LLC borrowed $70,000 (the “2013 Prospect Loan”). The 2013 Prospect Loan, as subsequently amended, will bear interest annually in cash at LIBOR plus 9.00% (with a 2.00% LIBOR floor) and at 2.50% to be accrued as an increase in the aggregate principal amount of the 2013 Prospect Loan until the 2013 Credit Agreement is paid off, at which time all interest will be payable in cash.

The 2013 Prospect Loan matures on March 31, 2021. The 2013 Prospect Loan may be accelerated upon a change in control (as defined in the Term Loan Agreement) or other events of default as set forth therein and would be subject to mandatory acceleration upon an insolvency of DC Holdings LLC. The 2013 Prospect Loan is payable on a voluntary basis after the second anniversary of the initial borrowing in whole but not in part, subject to a prepayment penalty equal to 5.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after the second anniversary but prior to the third anniversary of issuance, a prepayment penalty of 4.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after such third anniversary but prior to the fourth anniversary of issuance, a prepayment penalty of 3.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after such fourth anniversary but prior to the fifth anniversary of issuance, a prepayment penalty of 2.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after such fifth anniversary but prior to the sixth anniversary of issuance, a prepayment penalty of 1.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after such sixth anniversary but prior to the seventh anniversary of issuance, and without penalty if the 2013 Prospect Loan is prepaid thereafter, plus cash in an amount equal to the accrued and unpaid interest amount with respect to the principal amount through and including the prepayment date.

In connection with the 2013 Prospect Loan, the Company assigned to DC Holdings LLC its rights to receive servicing fees under the Company’s Phase I and Phase II deployments. Pursuant to a Limited Recourse Pledge Agreement (the “Limited Recourse Pledge”) executed by the Company and a Guaranty, Pledge and Security Agreement (the “Prospect Guaranty and Security Agreement”) among DC Holdings LLC, AccessDM, Phase 2 DC and Prospect, as Prospect Collateral Agent, the Prospect Loan is secured by, among other things, a first priority pledge of the stock of Holdings owned by the Company, the stock of AccessDM owned by DC Holdings LLC and the stock of Phase 2 DC owned by the Company, and guaranteed by AccessDM and Phase 2 DC. The Company provides limited financial support to the 2013 Prospect Loan not to exceed $1,500 per year in the event financial performance does not meet certain defined benchmarks.

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The 2013 Prospect Loan Agreement contains customary representations, warranties, affirmative covenants, negative covenants and events of default. The balance of the 2013 Prospect Loan Agreement at June 30, 2014 and March 31, 2014 was as follows:

	As of June 30, 2014			As of March 31, 2014
2013 Prospect Loan Agreement, at issuance	$	70,000		$	70,000
PIK Interest	2,338			1,906
Payments to date	(3,624		)	(3,452		)
2013 Prospect Loan Agreement, net	68,714			68,454
Less current portion	—			—
Total long term portion	$	68,714		$	68,454

KBC Facilities

In December 2008, Phase 2 B/AIX, a direct wholly-owned subsidiary of Phase 2 DC and an indirect wholly-owned subsidiary of the Company, began entering into multiple credit facilities to fund the purchase of Systems from Barco, Inc. to be installed in movie theatres as part of the Company’s Phase II Deployment. A summary of the credit facilities is as follows:

						Outstanding Principal Balance				Draw as of
Facility1	Credit Facility		Interest Rate2		Maturity Date	As of June 30, 2014		As of March 31, 2014		As of June 30, 2014
1	$	8,900	8.50	%	December 2016	$	—	$	—	$	—
2	2,890		3.75	%	December 2017	212		315		—
3	22,336		3.75	%	September 2018	12,764		13,561		—
4	13,312		3.75	%	September 2018	8,082		8,558		—
5	11,425		3.75	%	March 2019	7,752		8,160		—
6	6,450		3.75	%	December 2018	4,146		4,376		—
	$	65,313				$	32,956	$	34,970	$	—

¹ For each facility, principal is to be repaid in twenty-eight quarterly installments.

² The interest rate for facilities 2 through 6 are the three month LIBOR rate of 0.23% at June 30, 2014, plus the interest rate noted above.

Cinedigm Credit Agreement

On October 17, 2013, the Company entered into a credit agreement (the “Cinedigm Credit Agreement”) with Société Générale, New York Branch, as administrative agent and collateral agent for the lenders party thereto and certain other secured parties (the “Collateral Agent”). Under the Cinedigm Credit Agreement and subject to the terms and conditions thereof, the Company may borrow an aggregate principal amount of up to $55,000, including term loans of $25,000 (the “Cinedigm Term Loans”) and revolving loans of up to $30,000 (the “Cinedigm Revolving Loans”). All of the Cinedigm Term Loans, for which principal will be paid quarterly, and $15,000 of the Cinedigm Revolving Loans were drawn at closing in connection with funding the GVE Acquisition upon the Company’s contribution of such funds. Each of the Cinedigm Term Loans and the Cinedigm Revolving Loans bears interest at the base rate plus 3.0% or the eurodollar rate plus 4.0%. Base rate, per annum, is equal to the highest of (a) the rate quoted by the Wall Street Journal as the “base rate on corporate loans by at least 75% of the nation’s largest banks,” (b) 0.50% plus the federal funds rate, and (c) the eurodollar rate plus 1.0%. All collections and revenues of CEG will be deposited into a special blocked account, from which amounts are paid out on a monthly basis to pay certain operating expenses and principal, interest, fees, costs and expenses relating to the Cinedigm Credit Agreement according to certain designated priorities. On a quarterly basis, if funds remain after the payment of all such amounts, a portion of such funds will be applied to prepay the Cinedigm Term Loans. The Cinedigm Term Loans and Cinedigm Revolving Loans mature and must be paid in full by October 21, 2016. In addition, the Company may prepay the Cinedigm Term Loans and Cinedigm Revolving Loans, in whole or in part, subject to paying certain breakage costs, as applicable.

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The balance of the Cinedigm Term Loans as of June 30, 2014 was as follows:

	As of June 30, 2014			As of March 31, 2014
Cinedigm Term Loans, at issuance, net	$	25,000		$	25,000
Payments to date	(1,750		)	(875		)
Discount on Cinedigm Term Loans	(327		)	(360		)
Cinedigm Term Loans, net	22,923			23,765
Less current portion	(4,000		)	(3,750		)
Total long term portion	$	18,923		$	20,015

At June 30, 2014 and March 31, 2014, the balances of the Cinedigm Revolving Loans was $11,608 and $15,469, respectively.

2013 Notes

On October 17, 2013 and October 21, 2013, the Company entered into securities purchase agreements (the “Securities Purchase Agreements”) with certain investors party thereto (the “Investors”) pursuant to which the Company agreed to sell to the Investors notes in the aggregate principal amount of $5,000 (the “2013 Notes”) and warrants to purchase an aggregate of 1,500,000 shares of Class A Common Stock (the “2013 Warrants”). The sales were consummated on October 21, 2013. The proceeds of the sales of the 2013 Notes and 2013 Warrants were used for working capital and general corporate purposes, including to finance, in part, the GVE Acquisition. The Company allocated a proportional value of $1,598 to the 2013 Warrants using a Black-Scholes option valuation model with the following assumptions:

Risk free interest rate	1.38	%
Dividend yield	—
Expected life (years)	5
Expected volatility	76.25	%

The Company has treated the proportional value of the 2013 Warrants of $1,598 as a debt discount. The debt discount of the 2013 Notes will be amortized through the maturity of the 2013 Notes as interest expense.

The principal amount outstanding under the 2013 Notes is due on October 21, 2018. The 2013 Notes bear interest at 9.0% per annum, payable in quarterly installments over the term of the 2013 Notes. The 2013 Notes entitle the Company to redeem the 2013 Notes any time on or after October 21, 2015, subject to certain premiums.

Letters of Credit

As of June 30, 2014, outstanding letters of credit amounted to $4,000. No amounts were drawn upon during the three months ended June 30, 2014.

At June 30, 2014, the Company was in compliance with all of its debt covenants.

5. STOCKHOLDERS’ (DEFICIT) EQUITY

CAPITAL STOCK

COMMON STOCK

As of June 30, 2014 and March 31, 2014, the Company has 118,759,000 authorized shares of Class A Common Stock and 1,241,000 shares of authorized Class B Common Stock of which none remain available for issuance.

PREFERRED STOCK

Cumulative dividends in arrears on the preferred stock at June 30, 2014 and March 31, 2014 were $89 on each date. In July 2014, the Company paid its preferred stock dividends accrued at June 30, 2014 in the form of 33,531 shares of its Class A Common Stock.

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CINEDIGM’S EQUITY INCENTIVE PLAN

Stock Options

Awards under the Company's equity incentive plan (the "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 Plan provides for the granting of incentive stock options (“ISOs”) with exercise prices not less than the fair market value of the Company’s Class A Common Stock on the date of grant. ISOs granted to shareholders of 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 the Company’s Class A Common Stock on the date of grant. ISOs and non-statutory stock options granted under the 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 the Company’s compensation committee. Upon a change of control of the Company, all stock options (incentive and non-statutory) that have not previously vested will vest immediately and become fully exercisable. In connection with the grants of stock options under the Plan, the Company and the participants have executed stock option agreements setting forth the terms of the grants.

During the three months ended June 30, 2014, the Company granted stock options to purchase 260,000 shares of its Class A Common Stock to its employees at exercise prices ranging from $2.35 to $2.66 per share, which will vest ratably over a four year period. As of June 30, 2014, the weighted average exercise price for outstanding stock options was $1.80 and the weighted average remaining contractual life was 6.03 years.

The following table summarizes the activity of the Plan related to shares issuable pursuant to outstanding options:

	Shares Under Option		Weighted Average Exercise Price Per Share
Balance at March 31, 2014	6,072,986		$	1.74
Granted	260,000		2.65
Exercised	(34,443	)	1.49
Canceled	(265,248	)	1.50
Balance at June 30, 2014	6,033,295		1.80

OPTIONS GRANTED OUTSIDE CINEDIGM’S EQUITY INCENTIVE PLAN

In October 2013, the Company issued options outside of the Equity Incentive Plan to 10 employees who joined the Company following the GVE Acquisition. The employees received options to purchase an aggregate of 620,000 shares of the Company's Class A Common Stock. The options have ten-year terms and an exercise price of $1.75 per share. As of June 30, 2014, there were 545,000 unvested shares outstanding.

WARRANTS

As of June 30, 2014, outstanding warrants consisted of 16,000,000 held by Sageview ("Sageview Warrants"), 525,000 held by a strategic management service provider and the 2013 Warrants.

The Sageview Warrants were exercisable beginning on September 30, 2009 at an exercise price of $1.37, contain a customary cashless exercise provision and anti-dilution adjustments, and expire on August 11, 2016 (subject to extension in limited circumstances). 

The strategic management service provider warrants were issued in connection with a consulting management services agreement entered into with the Company. These warrants for the purchase of 525,000 shares of Class A common stock vested over 18 months commencing in July 2011, are subject to termination with 90 days notice in the event of termination of the consulting management services agreement and expire on July 1, 2021.

The 2013 Warrants will be exercisable through October 21, 2018 at an exercise price per share of $1.85. The 2013 Warrants and 2013 Notes are subject to certain transfer restrictions. As of June 30, 2014, 1,250,625 of the 2013 Warrants were outstanding.

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6. COMMITMENTS AND CONTINGENCIES

The Company is subject to a capital lease obligation where we have no continuing involvement other than being the primary obligor. A sub-lease agreement, through which an unrelated third party purchaser pays the capital lease, was amended during January 2013. The impact of the capital lease amendment to the Company's condensed consolidated financial statements was not material.

LITIGATION

We are subject to certain legal proceedings in the ordinary course of business. We do not expect any such items to have a significant impact on our financial position and results of operations and liquidity.

7. SUPPLEMENTAL CASH FLOW INFORMATION

	For the Three Months Ended June 30,
	2014		2013
Cash interest paid	$	4,475	$	6,064
Accretion of preferred stock discount	$	—	$	27
Accrued dividends on preferred stock	$	89	$	89
Issuance of common stock for payment of preferred stock dividends	$	89	$	—

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8. SEGMENT INFORMATION

The Company is comprised of four reportable segments: Phase I Deployment, Phase II Deployment, Services and Content & Entertainment. The segments were determined based on the products and services provided by each segment and how management reviews and makes decisions regarding segment operations. Performance of the segments is evaluated on the segment’s income (loss) from continuing operations before interest, taxes, depreciation and amortization.  

The Phase I Deployment and Phase II Deployment segments consist of the following:

Operations of:	Products and services provided:
Phase 1 DC	Financing vehicles and administrators for the Company’s 3,724 Systems installed nationwide in Phase 1 DC’s deployment to theatrical exhibitors.  The Company retains ownership of the Systems and the residual cash flows related to the Systems after the repayment of all non-recourse debt at the expiration of exhibitor master license agreements.
Phase 2 DC	Financing vehicles and administrators for the Company’s 8,917 Systems installed in the second digital cinema deployment and international deployments, through Phase 2 DC.  The Company retains no ownership of the residual cash flows and digital cinema equipment after the completion of cost recoupment and at the expiration of the exhibitor master license agreements.

The Services segment provides monitoring, billing, collection, verification and other management services to the Company’s Phase I Deployment, Phase II Deployment, Holdings, as well as to exhibitors who purchase their own equipment. Services also collects and disburses VPFs from motion picture studios and distributors and ACFs from alternative content providers, movie exhibitors and theatrical exhibitors.

The Content & Entertainment segment, or CEG, is a leading distributor of independent content, collaborates with producers and other content owners to market, source, curate and distribute independent content to targeted and profitable audiences in theatres and homes, and via mobile and emerging platforms.

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Information related to the segments of the Company and its subsidiaries is detailed below:

	As of June 30, 2014
	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Total intangible assets, net	$	286	$	—	$	—	$	35,463	$	8	$	35,757
Total goodwill	$	—	$	—	$	—	$	27,944	$	—	$	27,944
Assets from continuing operations	$	101,884	$	69,485	$	3,591	$	95,000	$	27,188	297,148
Net assets from discontinued operations											6,238
Total assets											$	303,386
Notes payable, non-recourse	$	155,098	$	33,830	$	—	$	—	$	—	$	188,928
Notes payable	—		—		—		—		38,107		38,107
Capital leases	—		—		—		82		5,857		5,939
Total debt	$	155,098	$	33,830	$	—	$	82	$	43,964	$	232,974

	As of March 31, 2014
	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Total intangible assets, net	$	298	$	—	$	—	$	37,333	$	8	$	37,639
Total goodwill	$	—	$	—	$	—	$	25,494	$	—	$	25,494
Assets from continuing operations	$	109,538	$	66,957	$	3,848	$	124,226	$	35,491	340,060
Net assets from discontinued operations											5,938
Total assets											$	345,998
Notes payable, non-recourse	$	162,732	$	35,872	$	—	$	—	$	—	$	198,604
Notes payable	—		—		—		—		42,744		42,744
Capital leases	—		—		—		81		6,005		6,086
Total debt	$	162,732	$	35,872	$	—	$	81	$	48,749	$	247,434

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	Statements of Operations
	For the Three Months Ended June 30, 2014
	(Unaudited)
	Phase I		Phase II		Services		Content & Entertainment			Corporate			Consolidated
Revenues from external customers	$	9,484	$	3,171	$	3,060	$	7,142		$	—		$	22,857
Intersegment revenues	—		—		—		—			—			—
Total segment revenues	9,484		3,171		3,060		7,142			—			22,857
Less: Intersegment revenues	—		—		—		—			—			—
Total consolidated revenues	$	9,484	$	3,171	$	3,060	$	7,142		$	—		$	22,857
Direct operating (exclusive of depreciation and amortization shown below)	244		137		51		8,072			—			8,504
Selling, general and administrative	95		39		200		4,494			2,881			7,709
Plus: Allocation of Corporate overhead	—		—		466		1,353			(1,819		)	—
Provision for doubtful accounts	60		21		13		—			—			94
Transition and acquisition expenses, net	—		—		—		842			104			946
Depreciation and amortization of property and equipment	7,137		1,881		53		41			264			9,376
Amortization of intangible assets	11		—		—		1,873			1			1,885
Total operating expenses	7,547		2,078		783		16,675			1,431			28,514
Income (loss) from operations	$	1,937	$	1,093	$	2,277	$	(9,533	)	$	(1,431	)	$	(5,657	)

The following employee and director stock-based compensation expense related to the Company’s stock-based awards is included in the above amounts as follows:

	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Direct operating	$	—	$	—	$	—	$	3	$	—	$	3
Selling, general and administrative	—		—		4		64		547		615
Total stock-based compensation	$	—	$	—	$	4	$	67	$	547	$	618

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	Statements of Operations
	For the Three Months Ended June 30, 2013
	(Unaudited)
	Phase I		Phase II		Services			Content & Entertainment			Corporate			Consolidated
Revenues from external customers	$	8,919	$	2,954	$	3,390		$	3,274		$	—		$	18,537
Intersegment revenues (1)	—		—		6			11			—			17
Total segment revenues	8,919		2,954		3,396			3,285			—			18,554
Less: Intersegment revenues	—		—		(6		)	(11		)	—			(17		)
Total consolidated revenues	$	8,919	$	2,954	$	3,390		$	3,274		$	—		$	18,537
Direct operating (exclusive of depreciation and amortization shown below)	155		142		98			3,384			—			3,779
Selling, general and administrative	63		87		219			2,754			3,081			6,204
Plus: Allocation of Corporate overhead	—		—		500			733			(1,233		)	—
Provision for doubtful accounts	43		14		5			—			—			62
Depreciation and amortization of property and equipment	7,137		1,881		72			3			152			9,245
Amortization of intangible assets	11		2		—			405			—			418
Total operating expenses	7,409		2,126		894			7,279			2,000			19,708
Income (loss) from operations	$	1,510	$	828	$	2,496		$	(4,005	)	$	(2,000	)	$	(1,171	)

(1) Intersegment revenues principally represent personnel expenses.

The following employee and director stock-based compensation expense related to the Company’s stock-based awards is included in the above amounts as follows:

	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Direct operating	$	—	$	—	$	—	$	2	$	—	$	2
Selling, general and administrative	—		—		8		21		653		682
Total stock-based compensation	$	—	$	—	$	8	$	23	$	653	$	684

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9.RESTRUCTURING, TRANSITION AND ACQUISTION EXPENSES

During the fiscal year ended March 31, 2014, the Company completed a strategic assessment of its resource requirements within its Content & Entertainment reporting segment which, based upon the GVE Acquisition, are principally attributed to the integration of the GVE Acquisition and resulted in a transition expenses of $842 during the three months ended June 30, 2014. Transition expenses are a component of transition and acquisition expenses within the condensed consolidated statements of operations.

A summary of activity for the restructuring accrual included within accounts payable and accrued expenses as of June 30, 2014 is as follows:

Balance at March 31, 2014		Total Cost		Amounts Paid/Adjusted			Balance at June 30, 2014
$	1,019	$	—	$	(367	)	$	652

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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 consolidated financial statements and the related notes included elsewhere in this document.

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 the Company’s control that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.  

OVERVIEW

Cinedigm Corp. (formerly known as Cinedigm Digital Cinema Corp.) was incorporated in Delaware on March 31, 2000 (“Cinedigm”, and collectively with its subsidiaries, the “Company”). Cinedigm is (i) a leading distributor of independent movie, television and other short form content managing a library of distribution rights to over 52,000 titles and episodes released across theatrical, digital, physical, home and mobile entertainment platforms as well as (ii) a leading servicer of digital cinema assets on over 12,000 movie screens in both North America and several international countries.

Over the past decade, the Company has played a significant role in the digital distribution revolution that continues to transform the media landscape. In addition to its pioneering role in transitioning over 12,000 movie screens from traditional analog film prints to digital distribution, the Company, through both organic growth and acquisitions, has become a leading distributor of independent content. The Company distributes products for major brands such as the NFL, Discovery Networks, National Geographic and Scholastic as well as leading international and domestic content creators, movie producers, television producers and other short form digital content producers. Cinedigm collaborates with producers, major brands and other content owners to market, source, curate and distribute quality content to targeted and profitable audiences through (i) existing and emerging digital home entertainment platforms, including but not limited to, iTunes, Amazon Prime, Netflix, Hulu, Xbox, Playstation, VOD and curated OTT digital entertainment channels and applications, (ii) physical goods, including DVD and Blu-ray and (iii) theatrical releases.

The Company reports its financial results in four primary segments as follows: (1) Phase I Deployment, (2) Phase II Deployment, (3) Services and (4) Content & Entertainment.  The Phase I Deployment and Phase II Deployment segments are the non-recourse, financing vehicles and administrators for the Company's Systems installed in North American movie theatres.  The Services segment provides services, software and support to the Phase I Deployment and Phase II Deployment segments as well as directly to exhibitors and other third party customers.  Included in these services are asset management services for a specified fee via service agreements with Phase I Deployment and Phase II Deployment as well as third party exhibitors as buyers of their own digital cinema equipment; and software license, maintenance and consulting services to Phase I and Phase II Deployment, various other exhibitors, studios and other content organizations.  These services primarily facilitate the conversion from analog to digital cinema and have positioned the Company at what it believes to be the forefront of a rapidly developing industry relating to the distribution and management of digital cinema and other content to theatres and other remote venues worldwide.  The Content & Entertainment segment is a market leader in three key areas of entertainment content distribution - ancillary market aggregation and distribution, theatrical releasing and branded and curated OTT digital entertainment channels and applications.

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The following organizational chart provides a graphic representation of our business and our four reporting segments:

We have incurred consolidated net losses from continuing operations, including the results of our non-recourse deployment subsidiaries, of $10.8 million and $6.4 million during the three months ended June 30, 2014 and 2013, respectively, and we have an accumulated deficit of $279.4 million as of June 30, 2014. Included within the three months ended June 30, 2014 were $0.9 million of transition and acquisition expenses. We also have significant contractual obligations related to our non-recourse and recourse debt for the fiscal year ended March 31, 2015 and beyond. We may continue generating consolidated net losses for the foreseeable future. Based on our cash position at June 30, 2014, and expected cash flows from operations, we believe that we have the ability to meet our obligations through at least June 30, 2015. Failure to generate additional revenues, raise additional capital or manage discretionary spending could have an adverse effect on our financial position, results of operations or liquidity.

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Results of Continuing Operations for the Three Months Ended June 30, 2014 and 2013

Revenues

	For the Three Months Ended June 30,
($ in thousands)	2014		2013		$ Change			% Change
Phase I Deployment	$	9,484	$	8,919	$	565		6	%
Phase II Deployment	3,171		2,954		217			7	%
Services	3,060		3,390		(330		)	(10	)%
Content & Entertainment	7,142		3,274		3,868			118	%
	$	22,857	$	18,537	$	4,320		23	%

Revenues increased $4.3 million or 23% during the three months ended June 30, 2014, despite being our industry's seasonally slowest quarter. Growth in revenues in Phase 1 and Phase 2 Deployment and additional net revenues of $2.2 million from the GVE Acquisition, which was not part of the prior comparable period's revenues, were partially offset by a decrease in revenues from Services.

Phase 1 and Phase 2 Deployment revenues increased by 7% for the three months ended June 30, 2014 as VPFs increased due to 27 wide release titles being released during the current period as compared to 24 wide release titles in the previous fiscal year period.

In the Services segment, a $0.3 million, or 10%, decrease in revenues was primarily due to the expected reduction of revenues as activation fee revenue recognized in the prior fiscal period of $0.7 million was not present during the current fiscal period. The decrease was partially offset by an increase in servicing fees of $0.3 million due to our international deployment. During the three months ended June 30, 2014, 31 Phase 2 DC Exhibitor-Buyer Structure Systems were installed and a total of 8,917 installed Phase 2 Systems were generating service fees at June 30, 2014 as compared to 8,530 Phase 2 Systems at June 30, 2013. The Company also services an additional 3,724 screens in Phase I. We expect modest growth in Services as we (i) continue with international servicing in Australia and New Zealand during the remaining fiscal year from our 16 international screen backlog; and (ii) secure additional international servicing customers.

The CEG business expanded by $3.9 million, or 118%, year over year, of which $2.2 million is directly attributed to increased net revenues resulting from the GVE Acquisition. The remaining increase is attributed to organic growth from the addition of physical and digital distribution rights of home entertainment titles of our library of over 52,000 movies and television episodes and licensing of original content. This growth was limited due to certain missed sales and from higher than anticipated physical returns resulting from the conversion, as part of the GVE integration, to a new physical goods replication, distribution and fulfillment center partner. In addition, industry wide changes in consumer behavior, declining retail foot traffic and reduced retail shelf space within the industry further impacted physical sales.

Direct Operating Expenses

	For the Three Months Ended June 30,
($ in thousands)	2014		2013		$ Change			% Change
Phase I Deployment	$	244	$	155	$	89		57	%
Phase II Deployment	137		142		(5		)	(4	)%
Services	51		98		(47		)	(48	)%
Content & Entertainment	8,072		3,384		4,688			139	%
	$	8,504	$	3,779	$	4,725		125	%

Direct operating expenses increased by 125% as a result of (i) $2.0 million attributed to the GVE Acquisition during the three months ended June 30, 2014; (ii) increased direct expenses for the expanded CEG home entertainment releasing slate as certain selling, general and administrative expenses were shifted to direct costs due to our outsourced DVD replication and manufacturing partnership with Universal Pictures and movie cost amortization; (iii) approximately $1.0 million in impairment and additional amortization of advances based upon revised ultimates and (iv) higher than anticipated expenses resulting from the conversion, as part of the GVE integration, to a new physical goods replication, distribution and fulfillment center partner. These increases were partially offset by reduced upfront theatrical releasing, marketing and acquisitions costs as CEG released three movies during the current fiscal period versus five releases in the prior fiscal period.

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Selling, General and Administrative Expenses

	For the Three Months Ended June 30,
($ in thousands)	2014		2013		$ Change			% Change
Phase I Deployment	$	95	$	63	$	32		51	%
Phase II Deployment	39		87		(48		)	(55	)%
Services	200		219		(19		)	(9	)%
Content & Entertainment	4,494		2,754		1,740			63	%
Corporate	2,881		3,081		(200		)	(6	)%
	$	7,709	$	6,204	$	1,505		24	%

Selling, general and administrative expenses grew by 24% during the period, consistent with the 23% increase in consolidated revenues.  The Content & Entertainment segment increased 63% as a result of the inclusion of the GVE Acquisition and increased staffing to support the growth in our home entertainment business. Corporate expenses declined modestly year over year as existing capacity was sufficient to support growth.

Transition and Acquisition Expenses

Transition and acquisition expenses were $0.9 million for the three months ended June 30, 2014. Transition expenses of $0.8 million are principally attributed to the continued integration of GVE and ongoing alignment of resources to our content and entertainment business.

Depreciation and Amortization Expense on Property and Equipment

	For the Three Months Ended June 30,
($ in thousands)	2014		2013		$ Change			% Change
Phase I Deployment	$	7,137	$	7,137	$	—		—	%
Phase II Deployment	1,881		1,881		—			—	%
Services	53		72		(19		)	(26	)%
Content & Entertainment	41		3		38			1,267	%
Corporate	264		152		112			74	%
	$	9,376	$	9,245	$	131		1	%

Depreciation and amortization expense remained consistent with the prior fiscal period, increasing by $0.1 million or 1%. 

Amortization of intangible assets

Amortization of intangible assets increased to $1.9 million for the fiscal year ended March 31, 2014 from $0.4 million, which is attributed to the finite-lived intangible assets added from the GVE Acquisition.

Interest expense, net

	For the Three Months Ended June 30,
($ in thousands)	2014		2013		$ Change			% Change
Phase I Deployment	$	3,528	$	4,156	$	(628	)	(15	)%
Phase II Deployment	412		516		(104		)	(20	)%
Corporate	1,095		252		843			335	%
	$	5,035	$	4,924	$	111		2	%

Interest expense, net increased $0.1 million or 2% due to the increase in recourse debt in corporate offset by the continued repayment of non-recourse and recourse term loan and revolver debt as the Company reduced principal outstanding by $14.9 million during the three months ended June 30, 2014.

Corporate interest expense during the fiscal year ended March 31, 2014 includes recourse debt from the Cinedigm Term Loans and Cinedigm Revolving Loans and the 2013 Notes. Each of the Cinedigm Term Loans and the Cinedigm Revolving Loans bear interest at the base rate plus 3.0% or the eurodollar rate plus 4.0%. Base rate, per annum, is equal to the highest of (a) the rate

32

quoted by the Wall Street Journal as the “base rate on corporate loans by at least 75% of the nation’s largest banks,” (b) 0.50% plus the federal funds rate, and (c) the eurodollar rate plus 1.0%. The 2013 Notes bear interest at 9.0%.

The 15% decrease in interest paid and accrued within the non-recourse Phase I Deployment segment is the result of the benefit from the resulting reduced debt balance. The 2013 Term Loans, which are repaid from free cash flow, are at a rate of LIBOR, plus 275 basis points with a 1.0% LIBOR floor, versus the prior credit agreement rate of LIBOR, plus 350 basis points with a 1.75% LIBOR floor. Interest decreased within the Phase II Deployment segment related to the KBC Facilities due to the reduction of outstanding principal.  Phase 2 DC’s non-recourse interest expense is expected to continue to decrease as it did during the fiscal year as we continue to repay the KBC Facilities from free cash flow and the benefit from the resulting reduced debt balance. The decrease in interest paid and accrued within Corporate is related to the recourse note, which was paid off in February 2013.  The 2013 Prospect Loan carries an interest rate of 13.5%, including a cash rate of LIBOR, plus 9.0% with a 2.0% LIBOR floor, and a PIK rate of 2.5%.

Non-cash interest expense was approximately $0.8 million $1.1 million for the three months ended June 30, 2014 and 2013, respectively.

Change in fair value of interest rate derivatives

The change in fair value of the interest rate derivatives was a loss of approximately $0.3 million and a gain of $0.8 million for the three months ended June 30, 2014 and 2013, respectively.  The interest swap associated with the 2013 Term Loans matured in June 2013.

Income (loss) from discontinued operations

Income (loss) from discontinued operations, which represents the results of Software, was $0.1 million and $(0.6) million for the three months ended June 30, 2014 and 2013, respectively.

Adjusted EBITDA

Adjusted EBITDA is defined by the Company for the periods presented to be earnings before interest, taxes, depreciation and amortization, other income, net, stock-based compensation and expenses, merger and acquisition costs, restructuring and transition expenses and certain other items.

The Company reported Adjusted EBITDA (including its Phase 1 DC and Phase 2 DC subsidiaries) of $7.2 million for the three months ended June 30, 2014, a decrease of 26% in comparison to $9.7 million for the three months ended June 30, 2013. Adjusted EBITDA from non-deployment businesses was $(4.9) million during the three months ended ended June 30, 2014, decreasing 196% from $(1.7) million for the three months ended June 30, 2013. As previously discussed, the decline within non-deployment was attributed to missed sales and higher than anticipated physical returns incurred as a result of a transition to a new physical goods replication, distribution and fulfillment center partner. changes in consumer behavior, along with declining retail foot traffic and shelf space for physical product within the industry. Additionally, industry wide changes in consumer behavior, declining retail foot traffic and reduced retail shelf space within the industry further impacted physical sales.

Adjusted EBITDA is not a measurement of financial performance under GAAP and may not be comparable to other similarly titled measures of other companies. The Company uses 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, the Company believes Adjusted EBITDA will also be useful to others, including its stockholders, as a valuable financial metric.

Management presents Adjusted EBITDA because it believes that Adjusted EBITDA is a useful supplement to net loss from continuing operations as an indicator of operating performance. Management also believes that Adjusted EBITDA is a financial measure that is useful both to management and investors when evaluating the Company's performance and comparing our performance with the performance of our competitors. Management also uses Adjusted EBITDA for planning purposes, as well as to evaluate the Company's performance because Adjusted EBITDA excludes certain non-recurring or non-cash items, such as stock-based compensation charges, that management believes are not indicative of the Company's ongoing operating performance.

The Company believes that Adjusted EBITDA is a performance measure and not a liquidity measure, and a reconciliation between net loss from continuing operations and Adjusted EBITDA is provided in the financial results. Adjusted EBITDA should not be considered as an alternative to income from operations or net loss from continuing 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

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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. Management does 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 the Company's consolidated financial statements prepared in accordance with GAAP.

Following is the reconciliation of the Company's consolidated Adjusted EBITDA to consolidated GAAP net loss from continuing operations:

	For the Three Months Ended June 30,
($ in thousands)	2014			2013
Net loss from continuing operations	$	(10,812	)	$	(6,383	)
Add Back:
Depreciation and amortization of property and equipment	9,376			9,245
Amortization of intangible assets	1,885			418
Interest expense, net	5,035			4,924
Loss on investment in non-consolidated entity	—			1,252
Other income, net	(139		)	(134		)
Change in fair value of interest rate derivatives	259			(829		)
Stock-based compensation and expenses	618			687
Transaction and acquisition expenses	946			—
Allocated costs attributable to discontinued operations	—			534
Adjusted EBITDA	$	7,168		$	9,714
Adjustments related to the Phase I and Phase II Deployments:
Depreciation and amortization of property and equipment	$	(9,018	)	$	(9,018	)
Amortization of intangible assets	(11		)	(14		)
Income from operations	(3,030		)	(2,338		)
Intersegment services fees earned	—			6
Adjusted EBITDA from non-deployment businesses	$	(4,891	)	$	(1,650	)

34

Critical Accounting Policies

The following is a discussion of our critical accounting policies.

PROPERTY AND EQUIPMENT

Property and equipment 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	3-5 years
Digital cinema projection systems	10 years
Machinery and equipment	3-10 years
Furniture and fixtures	3-6 years

Leasehold improvements are being amortized over the shorter of the lease term or the estimated useful life of the improvement. Maintenance and repair costs are charged to expense as incurred. Major renewals, improvements and additions are capitalized.

Useful lives are determined based on an estimate of either physical or economic obsolescence, or both.  During the three months ended June 30, 2014 and 2013, the Company has neither made any revisions to estimated useful lives, nor recorded any impairment charges from continuing operations on its property and equipment.

GOODWILL

Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. The Company’s process of evaluating goodwill for impairment involves the determination of fair value of its CEG goodwill reporting unit over its carrying value. The Company conducts its annual goodwill impairment analysis during the fourth quarter of each fiscal year, measured as of March 31, unless triggering events occur which require goodwill to be tested at another date.

DEFINITE-LIVED INTANGIBLE ASSETS

As of June 30, 2014, the Company’s finite-lived intangible assets consisted of customer relationships, supplier agreements, content libraries, theatre relationships, covenants not to compete, a favorable operating lease, trade names and trademarks. During the three months ended June 30, 2014 and 2013, no impairment charge for finite-lived intangible assets was recorded within continuing operations.

REVENUE RECOGNITION

Phase I Deployment and Phase II Deployment

VPFs are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Phase 1 DC, CDF I and to Phase 2 DC when movies distributed by the studio are displayed on screens utilizing the Company’s Systems installed in movie theatres.  VPFs are earned and payable to Phase 1 DC and CDF I based on a defined fee schedule with a reduced VPF rate year over year until the sixth year (calendar 2011) at which point the VPF rate remains unchanged through the tenth year.  One VPF is payable for every digital title displayed per System. The amount of VPF revenue is dependent on the number of movie titles released and displayed using the Systems in any given accounting period. VPF revenue is recognized in the period in which the digital title first plays on a System for general audience viewing in a digitally-equipped movie theatre, as Phase 1 DC’s, CDF I’s and Phase 2 DC’s performance obligations have been substantially met at that time.

Phase 2 DC’s agreements with distributors require the payment of VPFs, according to a defined fee schedule, for ten years from the date each system is installed; however, Phase 2 DC may no longer collect VPFs once “cost recoupment,” as defined in the contracts with movie studios and distributors, is achieved.  Cost recoupment will occur once the cumulative VPFs and other cash receipts collected by Phase 2 DC have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including the Company’s service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter.  Further, if cost recoupment occurs before the end of the eighth contract year, a one-time “cost recoupment bonus” is payable by the studios to the Company.  Any other cash flows, net of expenses, received by Phase 2 DC following the achievement of cost recoupment are required to be returned to the distributors on a pro-rata basis. At this time, the Company cannot estimate the timing or probability of the achievement of cost recoupment.

35

Alternative content fees (“ACFs”) are earned pursuant to contracts with movie exhibitors, whereby amounts are payable to Phase 1 DC, CDF I and to Phase 2 DC, generally either a fixed amount or as a percentage of the applicable box office revenue derived from the exhibitor’s showing of content other than feature movies, such as concerts and sporting events (typically referred to as “alternative content”). ACF revenue is recognized in the period in which the alternative content first opens for audience viewing.

Revenues are deferred for up front exhibitor contributions and are recognized over the cost recoupment period, which is expected to be ten years.

Services

Exhibitors who purchased and own Systems using their own financing in the Phase II Deployment, paid an upfront activation fee that is generally $2 thousand per screen to the Company (the “Exhibitor-Buyer Structure”).  These upfront activation fees are recognized in the period in which these exhibitor owned Systems are ready for content, as the Company has no further obligations to the customer, and are generally paid quarterly from VPF revenues over approximately one year.  Additionally, the Company recognizes activation fee revenue of between $1 thousand and $2 thousand on Phase 2 DC Systems and for Systems installed by Holdings upon installation and such fees are generally collected upfront upon installation. The Company will then manage the billing and collection of VPFs and will remit all VPFs collected to the exhibitors, less an administrative fee that will approximate up to 10% of the VPFs collected.

The administrative fee related to the Phase I Deployment approximates 5% of the VPFs collected and an incentive service fee equal to 2.5% of the VPFs earned by Phase 1 DC. This administrative fee is recognized in the period in which the billing of VPFs occurs, as performance obligations have been substantially met at that time.

Content & Entertainment

CEG earns fees for the distribution of content in the home entertainment markets via several distribution channels, including digital, video-on-demand, and physical goods (e.g. DVD and Blu-ray). The fee rate earned by the Company varies depending upon the nature of the agreements with the platform and content providers. Generally, revenues are recognized at the availability date of the content for a subscription digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and video-on-demand services. Reserves for sales returns and other allowances are provided based upon past experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required.  Sales returns and allowances are  reported net in accounts receivable and as a reduction of revenues.

CEG also has contracts for the theatrical distribution of third party feature movies and alternative content. CEG’s distribution fee revenue and CEG's participation in box office receipts is recognized at the time a feature movie and alternative content is viewed. CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date.

Revenue is deferred in cases where a portion or the entire contract amount cannot be recognized as revenue due to non-delivery of services. Such amounts are classified as deferred revenue and are recognized as earned revenue in accordance with the Company’s revenue recognition policies described above.

In connection with revenue recognition for CEG, the following are also considered critical accounting policies:

Advances

Advances, which are recorded within prepaid and other current assets on the consolidated balance sheets, represent amounts prepaid to studios or content producers for which the Company provides content distribution services and such advances are estimated to be fully recoupable as of the consolidated balance sheet date.

Participations payable

The Company records liabilities within accounts payable and accrued expenses on the consolidated balance sheet, that represent amounts owed to studios or content producers for which the Company provides content distribution services for royalties owed under licensing arrangements. The Company identifies and records as a reduction to the liability any expenses that are to be reimbursed to the Company by such studios or content producers.

36

Movie Cost Amortization

Once a movie is released, capitalized acquisition costs are amortized and participations and residual costs are accrued on an individual title basis in the proportion to the revenue recognized during the period for each title ("Period Revenue") bears to the estimated remaining total revenue to be recognized from all sources for each title ("Ultimate Revenue"). The amount of movie and other costs that is amortized each period will depend on the ratio of Period Revenue to Ultimate Revenue for each movie. The Company makes certain estimates and judgments of Ultimate Revenue to be recognized for each title. Ultimate Revenue does not include estimates of revenue that will be earned beyond 5 years of a movie’s initial theatrical release date. Movie cost amortization is a component of direct operating costs within the consolidated statements of operations.

Estimates of Ultimate Revenue and anticipated participation and residual costs are reviewed periodically in the ordinary course of business and are revised if necessary. A change in any given period to the Ultimate Revenue for an individual title will result in an increase or decrease in the percentage of amortization of capitalized movie and other costs and accrued participation and residual costs relative to a previous period. Depending on the performance of a title, significant changes to the future Ultimate Revenue may occur, which could result in significant changes to the amortization of the capitalized acquisition costs.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update which modifies the requirements for disposals to qualify as discontinued operations and expands related disclosure requirements. The update will be effective for the Company during the fiscal year ending March 31, 2015. The adoption of the update may impact whether future disposals qualify as discontinued operations and therefore could impact the Company's financial statement presentation and disclosures.

In May 2014, the FASB issued new accounting guidance on revenue recognition.  The new standard provides for a single five-step model to be applied to all revenue contracts with customers as well as requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts.  Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard.  The guidance will be effective for the Company during the fiscal year ending March 31, 2018. The Company intends to evaluate the impact of the adoption of this accounting standard update on its financial statements.

Liquidity and Capital Resources

We have incurred net losses each year since we commenced our operations. Since our inception, we have financed our operations substantially through the private placement of shares of our common and preferred stock, the issuance of promissory notes, our initial public offering and subsequent private and public offerings, notes payable and common stock used to fund various acquisitions.

Our business is primarily driven by the growth in global demand for entertainment content in all forms, and in particular, the shifting consumer demand for content in digital forms within home and mobile devices as well as the maturing digital cinema marketplace. Primary revenue drivers will be the increasing number of digitally equipped devices/screens and the demand for entertainment content in theatrical, home and mobile ancillary markets. According to the Motion Picture Association of America, during 2013 there were approximately 43,000 domestic (United States and Canada) movie theatre screens and approximately 135,000 screens worldwide, of which approximately 40,000 of the domestic screens were equipped with digital cinema technology, and 12,641 of those screens contained our Systems. Historically, the number of digitally-equipped screens in the marketplace has been a significant determinant of our potential revenue streams. Going forward, the expansion of our content business into the ancillary distribution markets as well into the acquisition and distribution of new movie releases expands our market opportunities and will be the primary driver of our revenue streams as the rapidly evolving digital and entertainment landscape creates significant new growth potential for the Company.

Beginning in May 2010, Phase 2 B/AIX, an indirect wholly-owned subsidiary of the Company, entered into additional credit facilities, the KBC Facilities, to fund the purchase of Systems from Barco, to be installed in movie theatres as part of the Company’s Phase II Deployment.  As of June 30, 2014, the outstanding principal balance of the KBC Facilities was $33.0 million.

In February 2013, the Company refinanced its existing non-recourse senior 2010 Term Loan and recourse 2010 Note with a $125.0 million senior non-recourse credit facility led by Société Générale, New York Branch and a $70.0 million non-recourse credit facility provided by Prospect Capital Corporation. These two new non-recourse credit facilities will be supported by the cash flows

37

of the Phase 1 deployment and the Company’s digital cinema servicing business. As of June 30, 2014, the outstanding principal balance of these non-recourse credit facilities was $155.1 million.

In October 2013, the Company entered the Cinedigm Credit Agreement pursuant to which the Company borrowed term loans of $25.0 million and revolving loans of up to $30.0 million, of which all of the term loans and $15.0 million of the revolving loans were drawn upon in connection with the GVE Acquisition. The Cinedigm Credit Agreement, which further enhances the Company's working capital needs and ability to further invest in entertainment content, will be supported by the cash flows of the Company's media library, acquired in connection with the GVE Acquisition. Additionally, the Company entered into an agreement providing $5.0 million of financing. As of June 30, 2014, the outstanding principal balance of these recourse credit facilities was $39.5 million.

As of June 30, 2014, we had negative working capital, defined as current assets less current liabilities, of $17.6 million and cash and cash equivalents and restricted cash totaling $43.5 million.

Operating activities provided net cash of $2.4 million and $9.7 million for the three months ended June 30, 2014 and 2013, respectively. Cash flows from VPFs are expected to remain consistent with the current fiscal year and support non-recourse debt paydown. Generally, changes in accounts receivable from our studio customers and others are a large component of operating cash flow and will vary based on the seasonality of movie release schedules by the major studios. The CEG business differs from our deployment business as we build receivables, the amount of cash flows and timing which will depend upon the success of the theatrical and home entertainment releases. The Company has put in place an up to $30.0 million revolver to support these working capital fluctuations. In addition, the Company makes advances towards theatrical releases and expects to recover the initial expenditures within nine to twelve months and advances to certain home entertainment distribution clients which it expects to recover within the same period. CEG also generates additional operating cash flows during the Company's fiscal third and fourth quarter resulting from holiday revenues and distributes royalties from such revenues in the subsequent one to two fiscal quarters.

Investing activities used net cash of $0.8 million and $0.9 million for the three months ended June 30, 2014 and 2013, respectively principally for capital expenditures.

Financing activities used net cash of $15.1 million and $8.6 million for the three months ended June 30, 2014 and 2013, respectively.  The increase reflects the Cinedigm Credit Facility which was not present during the prior year period in addition to normal principal reduction of other notes payables during the three months ended June 30, 2014 as well as the seasonally expected reduction in outstanding revolver balance. Financing activities are expected to continue using the net cash generated from the Phase 1 and Phase 2 DC operations as well as a portion of the cash generated from CEG, primarily for principal repayments on the 2013 Term Loans, 2013 Prospect Loan, the Cinedigm Credit Facility and other existing debt facilities. 

We have contractual obligations that include long-term debt consisting of notes payable, credit facilities, non-cancelable long-term capital lease obligations for the Pavilion Theatre, capital leases for information technology equipment and other various computer related equipment, non-cancelable operating leases consisting of real estate leases, and minimum guaranteed obligations under theatre advertising agreements with exhibitors for displaying cinema advertising. The capital lease obligation of the Pavilion Theatre is paid by an unrelated third party, although Cinedigm remains the primary lessee and would be obligated to pay if the unrelated third party were to default on its rental payment obligations.

38

The following table summarizes our significant contractual obligations as of June 30, 2014:

	Payments Due
Contractual Obligations ($ in thousands)	Total		2015		2016 & 2017		2018 & 2019		Thereafter
Long-term recourse debt (1)	$	39,858	$	15,608	$	19,250	$	5,000	$	—
Long-term non-recourse debt (2)	201,996		33,538		59,754		27,170		81,534
Capital lease obligations (3)	5,923		616		1,386		1,199		2,722
Debt-related obligations, principal	$	247,777	$	49,762	$	80,390	$	33,369	$	84,256
Interest on recourse debt (1)	$	4,441	$	1,724	$	2,128	$	589	$	—
Interest on non-recourse debt (2)	65,637		11,859		20,607		17,592		15,579
Interest on capital leases (3)	4,365		842		1,498		1,181		844
Total interest	$	74,443	$	14,425	$	24,233	$	19,362	$	16,423
Total debt-related obligations	$	322,220	$	64,187	$	104,623	$	52,731	$	100,679
Total non-recourse debt including interest	$	267,633	$	45,397	$	80,361	$	44,762	$	97,113
Operating lease obligations (4)	$	10,611	$	1,976	$	2,932	$	2,509	$	3,194

(1) Recourse debt includes the Cinedigm Credit Agreement and the 2013 Notes.

(2) Non-recourse debt is generally defined as debt whereby the lenders’ sole recourse with respect to defaults by the Company is limited to the value of the asset, which is collateral for the debt.  The 2013 Term Loans are not guaranteed by the Company or its other subsidiaries, other than Phase 1 DC and CDF I, the 2013 Prospect Loan is not guaranteed by the Company or its other subsidiaries, other than Phase 1 DC and DC Holdings LLC and the KBC Facilities are not guaranteed by the Company or its other subsidiaries, other than Phase 2 DC.

(3) Represents the capital lease and capital lease interest for the Pavilion Theatre and capital leases on information technology equipment. The Company has remained the primary obligor on the Pavilion capital lease, and therefore, the capital lease obligation and related assets under the capital lease remain on the Company's consolidated financial statements as of June 30, 2014. The Company has, however, entered into a sub-lease agreement with the unrelated third party purchaser which pays the capital lease and as such, has no continuing involvement in the operation of the Pavilion Theatre. This capital lease was previously included in discontinued operations.

(4) Includes the remaining operating lease agreement for one IDC lease now operated and paid for by FiberMedia, consisting of unrelated third parties.  FiberMedia currently pays the lease directly to the landlord and the Company will attempt to obtain landlord consent to assign the facility lease to FiberMedia.  Until such landlord consent is obtained, the Company will remain as the lessee.

We may continue to generate net losses for the foreseeable future primarily due to depreciation and amortization, interest on the 2013 Term Loans, 2013 Prospect Loan and Cinedigm Credit Agreement, marketing and promotional activities, content acquisition and marketing costs and the development of our digital OTT channels. Certain of these costs, including costs of content acquisition, marketing and promotional activities and digital channels, could be reduced if necessary. The restrictions imposed by the 2013 Term Loans and 2013 Prospect Loan may limit our ability to obtain financing, make it more difficult to satisfy our debt obligations or require us to dedicate a substantial portion of our cash flow to payments on our existing debt obligations. The 2013 Prospect Loan requires certain screen turn performance from Phase 1 DC and Phase 2 DC. While such restrictions may reduce the availability of our cash flow to fund working capital, capital expenditures and other corporate requirements, we do not have similar restrictions imposed upon our CEG business. We may seek to raise additional capital for strategic acquisitions or working capital as necessary. Failure to generate additional revenues, raise additional capital or manage discretionary spending could have an adverse effect on our financial position, results of operations or liquidity.

Seasonality

Revenues from our Phase I Deployment and Phase II Deployment segments derived from the collection of VPFs from motion picture studios are seasonal, coinciding with the timing of releases of movies by the motion picture studios. Generally, motion picture studios release the most marketable movies during the summer and the winter holiday season. The unexpected emergence of a hit movie during other periods can alter the traditional trend. The timing of movie releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter or any other quarter. While CEG benefits from the winter holiday season, we believe the seasonality of motion picture exhibition, however, is becoming less pronounced as the motion picture studios are releasing movies somewhat more evenly throughout the year.

39

Off-balance sheet arrangements

We are not a party to any off-balance sheet arrangements, other than operating leases in the ordinary course of business, which are disclosed above in the table of our significant contractual obligations, and Holdings. In addition, as discussed further in Note 2 to the Consolidated Financial Statements, the Company holds a 100% equity interest in Holdings, which is an unconsolidated variable interest entity (“VIE”), which wholly owns Cinedigm Digital Funding 2, LLC; however, the Company is not the primary beneficiary of the VIE.

Impact of Inflation

The impact of inflation on our operations has not been significant to date.  However, there can be no assurance that a high rate of inflation in the future would not have an adverse impact on our operating results.

Item 4. CONTROLS AND PROCEDURES

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.

Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There have been no changes in the Company’s internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

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

None.

ITEM 6. EXHIBITS

The exhibits are listed in the Exhibit Index on page 40 herein.

40

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.

CINEDIGM CORP.

Date:	August 13, 2014	By:	/s/ Christopher J. McGurk
			Christopher J. McGurk Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)
Date:	August 13, 2014	By:	/s/ Jeffrey S. Edell
			Jeffrey S. Edell Chief Financial Officer (Principal Financial Officer)

41

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	‑‑	XBRL Instance Document.*
101.SCH	‑‑	XBRL Taxonomy Extension Schema.*
101.CAL	‑‑	XBRL Taxonomy Extension Calculation.*
101.DEF	‑‑	XBRL Taxonomy Extension Definition.*
101.LAB	‑‑	XBRL Taxonomy Extension Label.*
101.PRE	‑‑	XBRL Taxonomy Extension Presentation.*

42

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Christopher J. McGurk, certify that:

1. I have reviewed this Form 10-Q of Cinedigm Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 13, 2014	By:	/s/ Christopher J. McGurk
			Christopher J. McGurk Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Jeffrey S. Edell, certify that:

1. I have reviewed this Form 10-Q of Cinedigm Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 13, 2014	By:	/s/ Jeffrey S. Edell
			Jeffrey S. Edell Chief Financial Officer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with Form 10-Q of Cinedigm Corp. (the “Company”) for the period ended June 30, 2014 as filed with the SEC (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date:	August 13, 2014	By:	/s/ Christopher J. McGurk
			Christopher J. McGurk Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with Form 10-Q of Cinedigm Corp. (the “Company”) for the period ended June 30, 2014 as filed with the SEC (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date:	August 13, 2014	By:	/s/ Jeffrey S. Edell
			Jeffrey S. Edell Chief Financial Officer (Principal Financial Officer)

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NOTES PAYABLE - NARRATIVE (Details) (USD $) In Thousands, except Share data, unless otherwise specified								0 Months Ended	6 Months Ended				0 Months Ended							3 Months Ended		3 Months Ended		3 Months Ended		3 Months Ended		3 Months Ended		3 Months Ended		0 Months Ended	3 Months Ended	0 Months Ended			0 Months Ended											0 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Jun. 30, 2014 2013 Term Loans	Mar. 31, 2014 2013 Term Loans	Dec. 31, 2013 2013 Term Loans	Feb. 28, 2013 2013 Term Loans	Feb. 28, 2013 2013 Prospect Term Loan Agreement	Sep. 30, 2013 2013 Prospect Term Loan Agreement	Jun. 30, 2014 2013 Prospect Term Loan Agreement	Mar. 31, 2014 2013 Prospect Term Loan Agreement	Oct. 17, 2013 Cinedigm Credit Agreement [Member]	Oct. 17, 2013 Base Rate Loans [Member]	Oct. 17, 2013 Term Loans [Member] Cinedigm Term Loan [Member]	Jun. 30, 2014 Term Loans [Member] CEH Credit Agreement [Member]	Mar. 31, 2014 Term Loans [Member] CEH Credit Agreement [Member]	Jun. 30, 2014 Credit Facility [Member] installments	Mar. 31, 2014 Credit Facility [Member]	Oct. 17, 2013 Credit Facility [Member] Cinedigm Revolving loans [Member]	Jun. 30, 2014 Credit Facility [Member] KBC Credit Facility 1 [Member]	Mar. 31, 2014 Credit Facility [Member] KBC Credit Facility 1 [Member]	Jun. 30, 2014 Credit Facility [Member] KBC Credit Facility 2 [Member]	Mar. 31, 2014 Credit Facility [Member] KBC Credit Facility 2 [Member]	Jun. 30, 2014 Credit Facility [Member] KBC Credit Facility 3 [Member]	Mar. 31, 2014 Credit Facility [Member] KBC Credit Facility 3 [Member]	Jun. 30, 2014 Credit Facility [Member] KBC Credit Facility 4 [Member]	Mar. 31, 2014 Credit Facility [Member] KBC Credit Facility 4 [Member]	Jun. 30, 2014 Credit Facility [Member] KBC Credit Facility 5 [Member]	Mar. 31, 2014 Credit Facility [Member] KBC Credit Facility 5 [Member]	Jun. 30, 2014 Credit Facility [Member] KBC Credit Facility 6 [Member]	Mar. 31, 2014 Credit Facility [Member] KBC Credit Facility 6 [Member]	Feb. 28, 2013 Base Rate [Member] 2013 Term Loans	Jun. 30, 2014 LIBOR	Feb. 28, 2013 LIBOR 2013 Term Loans	Jun. 30, 2014 LIBOR 2013 Term Loans	Feb. 28, 2013 LIBOR 2013 Prospect Term Loan Agreement	Oct. 17, 2013 Eurodollar [Member] Base Rate Loans [Member]	Feb. 28, 2013 Debt Instrument, Prepayment Period - Between Second And Third Anniversary 2013 Prospect Term Loan Agreement	Feb. 28, 2013 Debt Instrument, Prepayment Period - Between Third and Fourth Anniversary 2013 Prospect Term Loan Agreement	Feb. 28, 2013 Debt Instrument, Prepayment Period - Between Fourth and Fifth Anniversary 2013 Prospect Term Loan Agreement	Feb. 28, 2013 Debt Instrument, Prepayment Period - Between Fifth and Sixth Anniversary 2013 Prospect Term Loan Agreement	Feb. 28, 2013 Debt Instrument, Prepayment Period - Between Sixth and Seventh Anniversary 2013 Prospect Term Loan Agreement	Jun. 30, 2014 Debt Service Payment for 2013 and 2010 Credit Agreements	Dec. 31, 2013 Debt Service Payment for 2013 and 2010 Credit Agreements	Jun. 30, 2014 Loans Payable [Member] Cinedigm Term Loan [Member]	Mar. 31, 2014 Loans Payable [Member] Cinedigm Term Loan [Member]	Oct. 17, 2013 Loans Payable [Member] Cinedigm Revolving loans [Member]	Oct. 17, 2013 Loans Payable [Member] Base Rate [Member] Cinedigm Revolving loans [Member]	Oct. 17, 2013 Loans Payable [Member] Eurodollar [Member] Cinedigm Revolving loans [Member]	Oct. 17, 2013 Senior Notes [Member] Notes 2013 Due 2018 [Member]	Oct. 23, 2013 Warrant [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity												$ 55,000		$ 25,000			$ 65,313		$ 30,000	$ 8,900		$ 2,890		$ 22,336		$ 13,312		$ 11,425		$ 6,450
Fair Value Assumptions, Risk Free Interest Rate																																																			1.38%
Line of Credit Facility, Amount Outstanding															11,608	15,469	32,956	34,970		0		212	315	12,764	13,561	8,082	8,558	7,752	8,160	4,146	4,376																15,000
Debt Conversion, Original Debt, Amount																																																		5,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights																																																		1,500,000
Debt amount, at issuance				125,087	125,087		130,000	70,000		70,000	70,000																																		25,000	25,000
Debt Instrument, Basis Spread on Variable Rate								9.00%												8.50%		3.75%		3.75%		3.75%		3.75%		3.75%		1.75%	0.23%	2.75%			1.00%											3.00%	4.00%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum													0.50%
Debt Instrument, Variable Rate Basis, Floor																																		1.00%		2.00%
Debt principal balance assigned to affiliate							5,000
Restricted Funds dedicated to 2010 Term Loans Credit Agreement																																											6,493	5,919
Restricted cash	6,751	6,751
Senior Secured Note Annual Interest Rate								2.50%																																										9.00%
Debt Instrument, Prepayment Premium						1.00%																																5.00%	4.00%	3.00%	2.00%	1.00%
Debt Instrument, Variable Rate Basis, Percent																																			0.15%
Annual threshold of financial support guaranteed by Company towards the 2013 Prospect Loan									1,500
Line of Credit Facility, Principal Payment, Number of Quarterly Installments																	28
Debt Instrument, Unamortized Discount				247	266																																								327	360				1,598
Letters of Credit Outstanding, Amount			$ 4,000
Fair Value Assumptions, Expected Dividend Rate																																																			0.00%
Fair Value Assumptions, Expected Term																																																			5 years
Fair Value Assumptions, Expected Volatility Rate																																																			76.25%

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SEGMENT INFORMATION - RECONCILIATION OF OPERATING PROFIT (LOSS) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Proceeds from Customers	$ 22,857	$ 18,537
Intersegment revenues	0	17
Total segment revenues	22,857	18,554
Less: Intersegment revenues	0	17
Total consolidated revenues	22,857	18,537
Direct operating (exclusive of depreciation and amortization shown below)	8,504	3,779
Selling, general and administrative	7,709	6,204
Plus: Allocation of Corporate overhead	0	0
Provision for doubtful accounts	94	62
Transition and acquisition expenses	946	0
Depreciation and amortization of property and equipment	9,376	9,245
Amortization of intangible assets	1,885	418
Total operating expenses	28,514	19,708
Loss from operations	(5,657)	(1,171)
Phase I
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Proceeds from Customers	9,484	8,919
Intersegment revenues	0	0
Total segment revenues	9,484	8,919
Less: Intersegment revenues	0	0
Total consolidated revenues	9,484	8,919
Direct operating (exclusive of depreciation and amortization shown below)	244	155
Selling, general and administrative	95	63
Plus: Allocation of Corporate overhead	0	0
Provision for doubtful accounts	60	43
Transition and acquisition expenses	0
Depreciation and amortization of property and equipment	7,137	7,137
Amortization of intangible assets	11	11
Total operating expenses	7,547	7,409
Loss from operations	1,937	1,510
Phase II
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Proceeds from Customers	3,171	2,954
Intersegment revenues	0	0
Total segment revenues	3,171	2,954
Less: Intersegment revenues	0	0
Total consolidated revenues	3,171	2,954
Direct operating (exclusive of depreciation and amortization shown below)	137	142
Selling, general and administrative	39	87
Plus: Allocation of Corporate overhead	0	0
Provision for doubtful accounts	21	14
Transition and acquisition expenses	0
Depreciation and amortization of property and equipment	1,881	1,881
Amortization of intangible assets	0	2
Total operating expenses	2,078	2,126
Loss from operations	1,093	828
Services
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Proceeds from Customers	3,060	3,390
Intersegment revenues	0	6
Total segment revenues	3,060	3,396
Less: Intersegment revenues	0	6
Total consolidated revenues	3,060	3,390
Direct operating (exclusive of depreciation and amortization shown below)	51	98
Selling, general and administrative	200	219
Plus: Allocation of Corporate overhead	466	500
Provision for doubtful accounts	13	5
Transition and acquisition expenses	0
Depreciation and amortization of property and equipment	53	72
Amortization of intangible assets	0	0
Total operating expenses	783	894
Loss from operations	2,277	2,496
Content & Entertainment
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Proceeds from Customers	7,142	3,274
Intersegment revenues	0	11
Total segment revenues	7,142	3,285
Less: Intersegment revenues	0	11
Total consolidated revenues	7,142	3,274
Direct operating (exclusive of depreciation and amortization shown below)	8,072	3,384
Selling, general and administrative	4,494	2,754
Plus: Allocation of Corporate overhead	1,353	733
Provision for doubtful accounts	0	0
Transition and acquisition expenses	842
Depreciation and amortization of property and equipment	41	3
Amortization of intangible assets	1,873	405
Total operating expenses	16,675	7,279
Loss from operations	(9,533)	(4,005)
Corporate
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Proceeds from Customers	0	0
Intersegment revenues	0	0
Total segment revenues	0	0
Less: Intersegment revenues	0	0
Total consolidated revenues	0	0
Direct operating (exclusive of depreciation and amortization shown below)	0	0
Selling, general and administrative	2,881	3,081
Plus: Allocation of Corporate overhead	(1,819)	(1,233)
Provision for doubtful accounts	0	0
Transition and acquisition expenses	104
Depreciation and amortization of property and equipment	264	152
Amortization of intangible assets	1	0
Total operating expenses	1,431	2,000
Loss from operations	$ (1,431)	$ (2,000)

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SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Supplemental Cash Flow Elements [Abstract]
Cash interest paid	$ 4,475	$ 6,064
Accretion of preferred stock discount	0	27
Accrued dividends on preferred stock	89	89
Issuance of common stock for payment of preferred stock dividends	$ 89	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - GOODWILL ALLOCATED TO THE COMPANY (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								3 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Phase I	Mar. 31, 2014 Phase I	Jun. 30, 2014 Phase II	Mar. 31, 2014 Phase II	Jun. 30, 2014 Services	Mar. 31, 2014 Services	Jun. 30, 2014 Content & Entertainment	Mar. 31, 2014 Content & Entertainment
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 25,494		$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 25,494	$ 8,542
Goodwill, Acquired During Period									2,450	16,952
Goodwill, ending balance	27,944		0	0	0	0	0	0	27,944	25,494
Amortization of capitalized software costs	$ 0	$ (314)

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NATURE OF OPERATIONS - NARRATIVE (Details)	3 Months Ended
	Jun. 30, 2014 segments titles theatre
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of Titles and Episodes	52,000
Number Of Movie Theatres	12,000
Number of Reportable Segments	4

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RESTRUCTURING, TRANSITION AND ACQUISTION EXPENSES - Narrative (Details) (Content & Entertainment, Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014
Content & Entertainment | Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and transition expenses	$ 842

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STOCKHOLDERS' EQUITY - COMMON STOCK (Details)	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Class B common stock
Class of Stock [Line Items]
Common stock, shares authorized	1,241,000	1,241,000	1,241,000
Class A common stock
Class of Stock [Line Items]
Common stock, shares authorized	118,759,000	118,759,000	118,759,000

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DISCONTINUED OPERATIONS (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Loss from discontinued operations:
Revenues	$ 1,049	$ 1,088
Costs and Expenses:
Direct operating (exclusive of depreciation and amortization shown below)	175	703
Selling, general and administrative	532	950
Research and development	9	6
Depreciation of property and equipment	0	30
Amortization of intangible assets	0	7
Total operating expenses	716	1,696
Income (loss) from operations	333	(608)
Interest income	0	4
Other expense, net	(85)	0
Income (loss) before provision for income taxes	248	(604)
Provision for income taxes	99	0
Income (loss) from discontinued operations, net of taxes	$ 149	$ (604)

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SEGMENT INFORMATION - ASSETS and DEBT (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014	Mar. 31, 2013
Segment Reporting, Asset Reconciling Item [Line Items]
Total intangible assets, net	$ 35,757	$ 37,639
Total goodwill	27,944	25,494
Assets from continuing operations	303,386	345,998
Notes payable, non-recourse	188,928	198,604
Current portion of notes payable	38,107	42,744
Capital leases	5,939	6,086
Total debt	232,974	247,434
Segment, Continuing Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Assets from continuing operations	297,148	340,060
Segment, Discontinued Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Net assets from discontinued operations	6,238	5,938
Phase I
Segment Reporting, Asset Reconciling Item [Line Items]
Total intangible assets, net	286	298
Total goodwill	0	0
Notes payable, non-recourse	155,098	162,732
Current portion of notes payable	0	0
Capital leases	0	0
Total debt	155,098	162,732
Phase I | Segment, Continuing Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Assets from continuing operations	101,884	109,538
Phase II
Segment Reporting, Asset Reconciling Item [Line Items]
Total intangible assets, net	0	0
Total goodwill	0	0
Notes payable, non-recourse	33,830	35,872
Current portion of notes payable	0	0
Capital leases	0	0
Total debt	33,830	35,872
Phase II | Segment, Continuing Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Assets from continuing operations	69,485	66,957
Services
Segment Reporting, Asset Reconciling Item [Line Items]
Total intangible assets, net	0	0
Total goodwill	0	0
Notes payable, non-recourse	0	0
Current portion of notes payable	0	0
Capital leases	0	0
Total debt	0	0
Services | Segment, Continuing Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Assets from continuing operations	3,591	3,848
Content & Entertainment
Segment Reporting, Asset Reconciling Item [Line Items]
Total intangible assets, net	35,463	37,333
Total goodwill	27,944	25,494	8,542
Notes payable, non-recourse	0	0
Current portion of notes payable	0	0
Capital leases	82	81
Total debt	82	81
Content & Entertainment | Segment, Continuing Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Assets from continuing operations	95,000	124,226
Corporate
Segment Reporting, Asset Reconciling Item [Line Items]
Total intangible assets, net	8	8
Total goodwill	0	0
Notes payable, non-recourse	0	0
Current portion of notes payable	38,107	42,744
Capital leases	5,857	6,005
Total debt	43,964	48,749
Corporate | Segment, Continuing Operations [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Assets from continuing operations	$ 27,188	$ 35,491

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DISCONTINUED OPERATIONS

3 Months Ended

Jun. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

As discussed in Note 1, discontinued operations is principally comprised of the operations of Software. There is no tax provision or benefit related to any of the discontinued operations.

The assets and liabilities of discontinued operations were comprised of the following:

	As of June 30, 2014		As of March 31, 2014
Current assets of discontinued operations:
Accounts receivable, net	$	1,852	$	1,835
Unbilled revenue	215		534
Prepaid and other current assets	7		11
Total current assets of discontinued operations	2,074		2,380
Current liabilities of discontinued operations:
Accounts payable and accrued expenses	422		668
Deferred revenue	1,652		1,434
Total current liabilities of discontinued operations	2,074		2,102
Current assets of discontinued operations, net of current liabilities	$	—	$	278
Property and equipment, net	$	723	$	474
Capitalized software, net	5,346		4,862
Unbilled revenue, net of current portion	169		324
Assets of discontinued operations, net of current portion	$	6,238	$	5,660

The results of Software have been reported as discontinued operations for all periods presented. The income (loss) from discontinued operations was as follows:

	For the Three Months Ended June 30,
	2014			2013
Revenues	$	1,049		$	1,088
Costs and Expenses:
Direct operating (exclusive of depreciation and amortization shown below)	175			703
Selling, general and administrative	532			950
Research and development	9			6
Depreciation of property and equipment	—			30
Amortization of intangible assets	—			7
Total operating expenses	716			1,696
Income (loss) from operations	333			(608		)
Interest income	—			4
Other expense, net	(85		)	—
Income (loss) before provision for income taxes	248			(604		)
Provision for income taxes	99			—
Income (loss) from discontinued operations, net of taxes	$	149		$	(604	)

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STOCKHOLDERS' EQUITY - PREFERRED STOCK (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended			12 Months Ended	1 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Class A common stock	Mar. 31, 2014 Class A common stock	Jul. 31, 2014 Subsequent Event [Member] Class A common stock
Class of Stock [Line Items]
Dividends, Preferred Stock	$ 89	$ 89	$ 89	$ 89
Preferred stock dividends (shares)					33,531

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NARRATIVE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		12 Months Ended			3 Months Ended			3 Months Ended				3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Mar. 31, 2014	Dec. 31, 2013	Dec. 31, 2013 Up-front Payment Arrangement [Member]	Jun. 30, 2014 Services	Jun. 30, 2013 Services	Mar. 31, 2014 Services	Jun. 30, 2014 Content & Entertainment	Jun. 30, 2013 Content & Entertainment	Mar. 31, 2014 Content & Entertainment	Mar. 31, 2013 Content & Entertainment	Jun. 30, 2014 Holdings [Member] Variable Interest Entity, Not Primary Beneficiary [Member]	Jun. 30, 2013 Holdings [Member] Variable Interest Entity, Not Primary Beneficiary [Member]
Deferred Revenue Arrangement [Line Items]
Accumulated deficit	$ (279,438)		$ (268,686)
Ownership percentage of CDF2 Holdings, LLC	100.00%
Equity method investment, Stockholders deficit													(3,512)
Investment in Investment in non-consolidated entity													0
Accounts Receivable Service Equity Investment	352		346
Management fees revenue													294	262
Allowance for Doubtful Accounts	898			980
Deferred revenue for period exhibitor contributions	10 years
Activation Fee Revenue, Per Screen	2
Activation fee revenue, lower range	1
Activation fee revenue, upper range	2
Administrative Fee VPFs					10.00%
Administrative Fees VPF Phase 1 Deployment				5.00%
Incentive Fees, Percentage of VPF Phase I				2.50%
Total stock-based compensation	618	684				4	8		67	23
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 1.60	$ 0.89
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	28,819,170		20,485,290
Goodwill	$ 27,944		$ 25,494			$ 0		$ 0	$ 27,944		$ 25,494	$ 8,542

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NATURE OF OPERATIONS - PRO FORMA INFORMATION (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Business Acquisition [Line Items]
Loss from continuing operations	$ (10,812)
Net loss per share (basic and diluted) (in dollars per share)	$ (0.14)	$ (0.13)
Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member]
Business Acquisition [Line Items]
Revenue	22,857	27,006
Loss from continuing operations		(6,606)
Net loss	$ (10,663)	$ (7,210)
Net loss per share (basic and diluted) (in dollars per share)	$ (0.14)	$ (0.15)

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STOCKHOLDERS' EQUITY - STOCK OPTIONS (Details) (USD $)	3 Months Ended	12 Months Ended	3 Months Ended				1 Months Ended
	Jun. 30, 2014 Maximum [Member]	Mar. 31, 2014 Maximum [Member]	Jun. 30, 2014 Cinedigm Equity Incentive Plan [Member]	Jun. 30, 2013 Cinedigm Equity Incentive Plan [Member]	Jun. 30, 2014 Cinedigm Equity Incentive Plan [Member] Minimum [Member]	Jun. 30, 2014 Cinedigm Equity Incentive Plan [Member] Maximum [Member]	Oct. 31, 2013 Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member] employee	Oct. 31, 2013 Employee Stock Option [Member] Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term			6 years 10 days
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Exercise Price					$ 2.35	$ 2.66
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Shares Under Option
Shares under option, beginning of period			6,072,986
Shares under option, granted			260,000				620,000
Shares under option, exercised			(34,443)	(42,640)
Shares under option, cancelled			(265,248)
Shares under option, end of period			6,033,295
Weighted Average Exercise Price Per Share
Weighted average exercise price per share, beginning of period			$ 1.74
Weighted average exercise price per share, granted			$ 2.65					$ 1.75
Weighted average exercise price per share, exercised			$ 1.49
Weighted average exercise price per share, cancelled			$ 1.50
Weighted average exercise price per share, end of period			$ 1.80
Number of Employees Joining Company Following Acquisition							10
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	5 years	5 years						10 years

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - RESTRICTED CASH (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014
Restricted Cash and Investments [Abstract]
Reserve account related to the Term Loans	$ 6,751	$ 6,751
2013 Term Loans
Restricted Cash and Investments [Abstract]
Reserve account related to the Term Loans	5,751	5,751
2013 Prospect Term Loan Agreement
Restricted Cash and Investments [Abstract]
Reserve account related to the Term Loans	$ 1,000	$ 1,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY AND EQUIPMENT (Details)	3 Months Ended
	Jun. 30, 2014
Computer Equipment and Software [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful lives	3 years
Computer Equipment and Software [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful lives	5 years
Digital Cinema Projection Systems [Member]
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful lives	10 years
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful lives	3 years
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful lives	10 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful lives	3 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment estimated useful lives	6 years

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND CONSOLIDATION

The Company has incurred net losses historically and has an accumulated deficit of $279,438 as of June 30, 2014. The Company also has significant contractual obligations related to its recourse and non-recourse debt for the remainder of the fiscal year ending March 31, 2015 and beyond. The Company may continue to generate net losses for the foreseeable future. Based on the Company’s cash position at June 30, 2014, and expected cash flows from operations, management believes that the Company has the ability to meet its obligations through at least June 30, 2015. Failure to generate additional revenues, raise additional capital or manage discretionary spending could have an adverse effect on the Company’s financial position, results of operations or liquidity.

The Company’s consolidated financial statements include the accounts of Cinedigm, Access Digital Media, Inc. (“AccessDM”), FiberSat Global Services, Inc. d/b/a Cinedigm Satellite and Support Services (“Satellite”), ADM Cinema Corporation (“ADM Cinema”) d/b/a the Pavilion Theatre (certain assets and liabilities of which were sold in May 2011), Christie/AIX, Inc. ("C/AIX") d/b/a Cinedigm Digital Cinema (“Phase 1 DC”), Vistachiara Productions, Inc. f/k/a The Bigger Picture, currently d/b/a Cinedigm Content and Entertainment Group, Cinedigm Entertainment Corp. f/k/a New Video Group, Inc. ("New Video"), CHE, Access Digital Cinema Phase 2 Corp. (“Phase 2 DC”), Cinedigm Digital Cinema Australia Pty Ltd, Access Digital Cinema Phase 2 B/AIX Corp. (“Phase 2 B/AIX”), Cinedigm Digital Funding I, LLC (“CDF I”) and Cinedigm DC Holdings LLC ("DC Holdings LLC"). Cinedigm Content and Entertainment Group, New Video and CHE are together referred to as CEG. Software comprises discontinued operations. All intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated balance sheet as of March 31, 2014, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements were prepared following the interim reporting requirements of the Securities and Exchange Commission ("SEC"). They do not include all disclosures normally made in financial statements contained in the Company’s Annual Report on Form 10-K ("Form 10-K"). In management’s opinion, all adjustments necessary for a fair presentation of financial position, the results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the periods presented have been made. The results of operations for the respective interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended March 31, 2014 filed with the SEC on June 26, 2014.

INVESTMENT IN NON-CONSOLIDATED ENTITY

The Company indirectly owns 100% of the common equity of CDF2 Holdings, LLC ("Holdings"), which is a Variable Interest Entity (“VIE”), as defined in Accounting Standards Codification Topic 810 ("ASC 810"), “Consolidation". Holdings, a subsidiary of Phase 2 DC, which is wholly owned by the Company, and its wholly owned limited liability company, Cinedigm Digital Funding 2, LLC, were created for the purpose of capitalizing on the conversion of the exhibition industry from film to digital technology. Holdings assists customers in procuring the necessary equipment in the conversion of their Systems by providing the necessary financing, equipment, installation and related ongoing services. Holdings is a VIE, as defined in ASC 810, indirectly wholly owned by the Company. 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. To be a primary beneficiary, an entity must have the power to direct the activities of a VIE that most significantly impact the VIE's economic performance, among other factors. Although Holdings is indirectly wholly owned by the Company, a third party, which also has a variable interest in Holdings, along with an independent third party manager and the Company must mutually approve all business activities and transactions that significantly impact Holdings' economic performance. The Company has thus assessed its variable interests in Holdings and determined that it is not the primary beneficiary of Holdings and therefore accounts for its investment in Holdings under the equity method of accounting. In completing our assessment, the Company identified the activities that it considers most significant to the economic performance of Holdings and determined that we do not have the power to direct those activities. As a result, Holdings' financial position and results of operations are not consolidated in the financial position and results of operations of the Company. The Company's net investment in Holdings is reflected as “Investment in non-consolidated entity, net" in the accompanying condensed consolidated balance sheets.

The Holding’s total stockholder’s deficit at June 30, 2014 was $3,512. The Company has no obligation to fund the operating loss or the deficit beyond its initial investment, and accordingly, the Company carried its investment in Holdings at $0.

Accounts receivable due from Holdings for service fees under its master service agreement as of June 30, 2014 and March 31, 2014 were $352 and $346, respectively, are included within accounts receivable, net on the accompanying condensed consolidated balance sheets.

During the three months ended June 30, 2014 and 2013, the Company received $294 and $262 in aggregate revenues through digital cinema servicing fees from Holdings, respectively, which are included in revenues on the accompanying condensed consolidated statements of operations.

RECLASSIFICATION

Certain reclassifications, principally for discontinued operations (see Note 3) have been made to the fiscal period ended June 30, 2013 condensed consolidated financial statements to conform to the current fiscal period ended June 30, 2014 presentation.

USE OF ESTIMATES

The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include the adequacy of accounts receivable reserves, return reserves, inventory reserves, recoupment of advances, minimum guarantees, assessment of goodwill and intangible asset impairment and valuation reserve for income taxes, among others. Actual results could differ from these estimates.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of three months or less to be “cash equivalents.” The Company maintains bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation’s insured limits. The Company periodically assesses the financial condition of the institutions and believes that the risk of any loss is minimal.

ACCOUNTS RECEIVABLE

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. Allowance for doubtful accounts amounted to $980 and $898 as of June 30, 2014 and March 31, 2014, respectively.

Within the Content & Entertainment segment, the Company recognizes the accounts receivable net of an estimated allowance for product returns and customer chargebacks at the time we recognize the original sale. We base the amount of the returns allowance and customer chargebacks upon historical experience and future expectations.

Accounts receivable, long-term result from up-front activation fees earned from the Company's Systems deployments with extended payment terms that are discounted to their present value at prevailing market rates.

ADVANCES

Advances, which are recorded within prepaid and other current assets on the condensed consolidated balance sheets, represent amounts prepaid to studios or content producers for which the Company provides content distribution services and such advances, net of any impairment charges, are estimated to be fully recoupable as of the balance sheet dates.

INVENTORY

Inventory consists of finished goods of owned physical DVD titles and is stated at the lower of cost (determined based on weighted average cost) or market. The Company identifies inventory items to be written down for obsolescence based on the item’s sales status and condition. The Company writes down discontinued or slow moving inventories based on an estimate of the markdown to retail price needed to sell through our current stock level of the inventories.

RESTRICTED CASH

In connection with the 2013 Term Loans issued in February 2013 and the 2013 Prospect Loan Agreement issued in February 2013 (collectively, see Note 4), the Company maintains cash restricted for repaying interest on the respective loans as follows:

	As of June 30, 2014		As of March 31, 2014
Reserve account related to the 2013 Term Loans (See Note 4)	$	5,751	$	5,751
Reserve account related to the 2013 Prospect Loan Agreement (See Note 4)	1,000		1,000
	$	6,751	$	6,751

DEFERRED COSTS

Deferred costs primarily consist of unamortized debt issuance costs related to the 2013 Term Loans, 2013 Prospect Loan and Cinedigm Credit Agreement (see Note 4) which are amortized under the effective interest rate method over the terms of the respective debt.  All other unamortized debt issuance costs are amortized on a straight-line basis over the term of the respective debt. For such debt, amortization on a straight-line basis is not materially different from the effective interest method.  

PROPERTY AND EQUIPMENT

Property and equipment 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	3 - 5 years
Digital cinema projection systems	10 years
Machinery and equipment	3 - 10 years
Furniture and fixtures	3 - 6 years

Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the leasehold improvements. Maintenance and repair costs are charged to expense as incurred. Major renewals, improvements and additions are capitalized.  Upon the sale or other disposition of any property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and the gain or loss on disposal is included in the condensed consolidated statements of operations.

ACCOUNTING FOR DERIVATIVE ACTIVITIES

Derivative financial instruments are recorded at fair value. The Company had three separate interest rate swap agreements (the “Interest Rate Swaps”) to limit the Company’s exposure to changes in interest rates related to the 2013 Term Loans which matured in June 2013.  Additionally, the Company entered into two separate interest rate cap transactions during the fiscal year ended March 31, 2013, recorded in prepaid and other current assets on the condensed consolidated balance sheets, to limit the Company's exposure to interest rates related to the 2013 Term Loans and 2013 Prospect Loan. Changes in fair value of derivative financial instruments are either recognized in accumulated other comprehensive loss (a component of stockholders' deficit) or in the condensed consolidated statements of operations depending on whether the derivative qualifies for hedge accounting.  The Company has not sought hedge accounting treatment for these instruments and therefore, changes in the value of its Interest Rate Swaps and caps were recorded in the condensed consolidated statements of operations (See Note 4).

FAIR VALUE MEASUREMENTS

The fair value measurement disclosures are grouped into three levels based on valuation factors:

• Level 1 – quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

• Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)

Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities.

The following tables summarize the levels of fair value measurements of the Company’s financial assets and liabilities:

	As of June 30, 2014
	Level 1		Level 2		Level 3		Total
Restricted cash	$	6,751	$	—	$	—	$	6,751
Interest rate derivatives	—		519		—		519
	$	6,751	$	519	$	—	$	7,270

	As of March 31, 2014
	Level 1		Level 2		Level 3		Total
Restricted cash	$	6,751	$	—	$	—	$	6,751
Interest rate derivatives	—		787		—		787
	$	6,751	$	787	$	—	$	7,538

The Company’s cash and cash equivalents, accounts receivable, unbilled revenue and accounts payable and accrued expenses are financial instruments and are recorded at cost in the condensed consolidated balance sheets. The estimated fair values of these financial instruments approximate their carrying amounts because of their short-term nature.  The carrying amount of accounts receivable, long-term and notes receivable approximates fair value based on the discounted cash flows of that instrument using current assumptions at the balance sheet date.  The fair value of fixed rate and variable rate debt is estimated by management based upon current interest rates available to the Company at the respective balance sheet date for arrangements with similar terms and conditions.  Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of notes payable and capital lease obligations approximates fair value.

IMPAIRMENT OF LONG-LIVED AND FINITE-LIVED ASSETS

The Company reviews the recoverability of its 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 the Company’s ability to recover the carrying value of its 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 assets the asset is deemed not to be recoverable and possibly impaired.  The Company then estimates the fair value of the asset to determine whether an impairment loss should be recognized.  An impairment loss will be recognized if the difference between the fair value and the carrying value of the asset exceeds its fair value.  Fair value is determined by computing the expected future undiscounted cash flows.  During the three monthsended June 30, 2014 and 2013, no impairment charge from continuing operations for long-lived assets or finite-lived assets was recorded.

GOODWILL

Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. The Company’s process of evaluating goodwill for impairment involves the determination of fair value of its CEG goodwill reporting unit over its carrying value. The Company conducts its annual goodwill impairment analysis during the fourth quarter of each fiscal year, measured as of March 31, unless triggering events occur which require goodwill to be tested at another date.

Information related to the goodwill allocated to the Company's Content & Entertainment segment is as follows:

As of March 31, 2013	$	8,542
Goodwill resulting from the GVE Acquisition	16,952
As of March 31, 2014	25,494
Measurement period adjustment - GVE Acquisition	2,450
As of June 30, 2014	$	27,944

REVENUE RECOGNITION

Phase I Deployment and Phase II Deployment

Virtual print fees (“VPFs”) are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Phase 1 DC and to Phase 2 DC when movies distributed by the studio are displayed on screens utilizing the Company’s Systems installed in movie theatres.  VPFs are earned and payable to Phase 1 DC based on a defined fee schedule with a reduced VPF rate year over year until the sixth year at which point the VPF rate remains unchanged through the tenth year.  One VPF is payable for every digital title displayed per System. The amount of VPF revenue is dependent on the number of movie titles released and displayed using the Systems in any given accounting period. VPF revenue is recognized in the period in which the digital title first plays on a System for general audience viewing in a digitally-equipped movie theatre, as Phase 1 DC’s and Phase 2 DC’s performance obligations have been substantially met at that time.

Phase 2 DC’s agreements with distributors require the payment of VPFs, according to a defined fee schedule, for ten years from the date each system is installed; however, Phase 2 DC may no longer collect VPFs once “cost recoupment,” as defined in the agreements, is achieved.  Cost recoupment will occur once the cumulative VPFs and other cash receipts collected by Phase 2 DC have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including the Company’s service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter.  Further, if cost recoupment occurs before the end of the eighth contract year, a one-time “cost recoupment bonus” is payable by the studios to the Company.  Any other cash flows, net of expenses, received by Phase 2 DC following the achievement of cost recoupment are required to be returned to the distributors on a pro-rata basis. At this time, the Company cannot estimate the timing or probability of the achievement of cost recoupment.

Alternative content fees (“ACFs”) are earned pursuant to contracts with movie exhibitors, whereby amounts are payable to Phase 1 DC and to Phase 2 DC, generally either a fixed amount or as a percentage of the applicable box office revenue derived from the exhibitor’s showing of content other than feature movies, such as concerts and sporting events (typically referred to as “alternative content”). ACF revenue is recognized in the period in which the alternative content first opens for audience viewing.

Revenues are deferred for up front exhibitor contributions and are recognized over the cost recoupment period, which is expected to be ten years.

Services

Exhibitors who purchased and own Systems using their own financing in the Phase II Deployment, paid an upfront activation fee that is generally $2 thousand per screen to the Company (the “Exhibitor-Buyer Structure”).  These upfront activation fees are recognized in the period in which these exhibitor owned Systems are ready for content, as the Company has no further obligations to the customer, and are generally paid quarterly from VPF revenues over approximately one year.  Additionally, the Company recognizes activation fee revenue of between $1 thousand and $2 thousand on Phase 2 DC Systems and for Systems installed by Holdings upon installation and such fees are generally collected upfront upon installation. The Company will then manage the billing and collection of VPFs and will remit all VPFs collected to the exhibitors, less an administrative fee that will approximate up to 10% of the VPFs collected.

The administrative fee related to the Phase I Deployment approximates 5% of the VPFs collected and an incentive service fee equal to 2.5% of the VPFs earned by Phase 1 DC. This administrative fee is recognized in the period in which the billing of VPFs occurs, as performance obligations have been substantially met at that time.

Content & Entertainment

CEG earns fees for the distribution of content in the home entertainment markets via several distribution channels, including digital, VOD, and physical goods (e.g. DVD and Blu-ray) is typically based on the gross amounts billed to our customers less the amounts owed to the media studios or content producers under distribution agreements, and gross media sales of owned or licensed content. The fee rate earned by the Company varies depending upon the nature of the agreements with the platform and content providers. Generally, revenues are recognized at the availability date of the content for a subscription digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and VOD services. Reserves for sales returns and other allowances are provided based upon past experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required.  Sales returns and allowances are  reported net in accounts receivable and as a reduction of revenues.

CEG also has contracts for the theatrical distribution of third party feature movies and alternative content. CEG’s distribution fee revenue and CEG's participation in box office receipts is recognized at the time a feature movie and alternative content is viewed. CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date.

Movie Cost Amortization

Once a movie is released, capitalized acquisition costs are amortized and participations and residual costs are accrued on an individual title basis in the proportion to the revenue recognized during the period for each title ("Period Revenue") bears to the estimated remaining total revenue to be recognized from all sources for each title ("Ultimate Revenue"). The amount of movie and other costs that is amortized each period will depend on the ratio of Period Revenue to Ultimate Revenue for each movie. The Company makes certain estimates and judgments of Ultimate Revenue to be recognized for each title. Ultimate Revenue does not include estimates of revenue that will be earned beyond 5 years of a movie’s initial theatrical release date. Movie cost amortization is a component of direct operating costs within the condensed consolidated statements of operations.

Estimates of Ultimate Revenue and anticipated participation and residual costs are reviewed periodically in the ordinary course of business and are revised if necessary. A change in any given period to the Ultimate Revenue for an individual title will result in an increase or decrease in the percentage of amortization of capitalized movie and other costs and accrued participation and residual costs relative to a previous period. Depending on the performance of a title, significant changes to the future Ultimate Revenue may occur, which could result in significant changes to the amortization of the capitalized acquisition costs.

DIRECT OPERATING COSTS

Direct operating costs consist of operating costs such as cost of goods sold, fulfillment expenses, shipping costs, property taxes and insurance on Systems, royalty expenses, marketing and direct personnel costs.

PARTICIPATIONS PAYABLE

The Company records liabilities within accounts payable and accrued expenses on the condensed consolidated balance sheet, that represent amounts owed to studios or content producers for which the Company provides content distribution services for royalties owed under licensing arrangements. The Company identifies and records as a reduction to the liability any expenses that are to be reimbursed to the Company by such studios or content producers.

STOCK-BASED COMPENSATION

During the three monthsended June 30, 2014 and 2013, the Company recorded stock-based compensation from continuing operations of $618 and $684, respectively.

The weighted-average grant-date fair value of options granted during the three monthsended June 30, 2014 and 2013 was $1.60 and $0.89, respectively. There were 34,443 and 42,640 stock options exercised during the three monthsended June 30, 2014 and 2013, respectively.

The Company estimated the fair value of stock options at the date of each grant using a Black-Scholes option valuation model with the following assumptions:

	For the Three Months Ended June 30,
Assumptions for Option Grants	2014	2013
Range of risk-free interest rates	1.6 - 1.7%	0.7 - 1.2%
Dividend yield	—	—
Expected life (years)	5	5
Range of expected volatilities	71.7 - 72.1%	73.4 - 73.8%

The risk-free interest rate used in the Black-Scholes option pricing model for options granted under the Company’s stock option plan awards is the historical yield on U.S. Treasury securities with equivalent remaining lives. The Company does not currently anticipate paying any cash dividends on common stock in the foreseeable future. Consequently, an expected dividend yield of zero is used in the Black-Scholes option pricing model.  The Company estimates the expected life of options granted under the Company’s stock option plans using both exercise behavior and post-vesting termination behavior, as well as consideration of outstanding options.   The Company estimates expected volatility for options granted under the Company’s stock option plans based on a measure of historical volatility in the trading market for the Company’s common stock.

Employee and director stock-based compensation expense from continuing operations related to the Company’s stock-based awards was as follows:

	For the Three Months Ended June 30,
	2014		2013
Direct operating	$	3	$	2
Selling, general and administrative	615		682
	$	618	$	684

NET LOSS PER SHARE

Basic and diluted net loss per common share has been calculated as follows:

Basic and diluted net loss per common share =	Net loss + preferred dividends
	Weighted average number of common stock shares  outstanding during the period

Shares issued and any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding.

The Company incurred net losses for each of the three monthsended June 30, 2014 and 2013 and, therefore, the impact of dilutive potential common shares from outstanding stock options and warrants, totaling 28,819,170 shares and 20,485,290shares as of June 30, 2014 and 2013, respectively, were excluded from the computation as it would be anti-dilutive.

COMPREHENSIVE LOSS

As of June 30, 2014, the Company’s other comprehensive loss consisted of net loss and foreign currency translation adjustments.  

RECENT ACCOUNTING PRONOUNCEMENTS

In April 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update which modifies the requirements for disposals to qualify as discontinued operations and expands related disclosure requirements. The update will be effective for the Company during the fiscal year ending March 31, 2015. The adoption of the update may impact whether future disposals qualify as discontinued operations and therefore could impact the Company's financial statement presentation and disclosures.

In May 2014, the FASB issued new accounting guidance on revenue recognition.  The new standard provides for a single five-step model to be applied to all revenue contracts with customers as well as requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts.  Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard.  The guidance will be effective for the Company during the fiscal year ending March 31, 2018. The Company intends to evaluate the impact of the adoption of this accounting standard update on its consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - FAIR VALUE MEASUREMENTS (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014
Levels of fair value measurements of financial assets:
Restricted cash	$ 6,751	$ 6,751
Fair Value, Measurements, Recurring [Member]
Levels of fair value measurements of financial assets:
Restricted cash	6,751	6,751
Interest rate derivatives	519	787
Financial assets	7,270	7,538
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1
Levels of fair value measurements of financial assets:
Restricted cash	6,751	6,751
Interest rate derivatives	0	0
Financial assets	6,751	6,751
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2
Levels of fair value measurements of financial assets:
Restricted cash	0	0
Interest rate derivatives	519	787
Financial assets	519	787
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3
Levels of fair value measurements of financial assets:
Restricted cash	0	0
Interest rate derivatives	0	0
Financial assets	$ 0	$ 0

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NOTES PAYABLE - NET OF ORIGINAL ISSUE DISCOUNT (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014	Feb. 28, 2013
2013 Term Loans, net of discount
Debt Instrument [Line Items]
Debt amount, at issuance	$ 125,087	$ 125,087	$ 130,000
Debt Instrument, Payments to Date	(38,456)	(30,543)
Discount on debt instrument	(247)	(266)
Notes payable, net	86,384	94,278
Less current portion	(25,500)	(25,688)
Long Term Portion	60,884	68,590
2013 Prospect Term Loan Agreement
Debt Instrument [Line Items]
Debt amount, at issuance	70,000	70,000	70,000
PIK Interest Accrued	2,338	1,906
Debt Instrument, Payments to Date	(3,624)	(3,452)
Notes payable, net	68,714	68,454
Long Term Portion	$ 68,714	$ 68,454

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014
Current assets
Cash and cash equivalents	$ 36,742	$ 50,215
Accounts receivable, net	37,506	56,863
Inventory	2,870	3,164
Unbilled revenue	5,122	5,144
Prepaid and other current assets	8,392	8,698
Note receivable, current portion	101	112
Assets of discontinued operations, net of current liabilities	0	278
Total current assets	90,733	124,474
Restricted cash	6,751	6,751
Security deposits	269	269
Property and equipment, net	125,642	134,936
Intangible assets, net	35,757	37,639
Goodwill	27,944	25,494
Deferred costs, net	8,618	9,279
Accounts receivable, long-term	1,343	1,397
Note receivable, net of current portion	91	99
Assets of discontinued operations, net of current portion	6,238	5,660
Total assets	303,386	345,998
Current liabilities
Accounts payable and accrued expenses	55,537	72,604
Current portion of notes payable, non-recourse	33,540	33,825
Current portion of notes payable	15,608	19,219
Current portion of capital leases	609	614
Current portion of deferred revenue	3,025	3,214
Total current liabilities	108,319	129,476
Notes payable, non-recourse, net of current portion	155,388	164,779
Notes payable, net of current portion	22,499	23,525
Capital leases, net of current portion	5,330	5,472
Deferred revenue, net of current portion	11,899	12,519
Total liabilities	303,435	335,771
Stockholders’ Deficit
Preferred stock, 15,000,000 shares authorized; Series A 10% - $0.001 par value per share; 20 shares authorized; 7 shares issued and outstanding at June 30, 2014 and March 31, 2014, respectively. Liquidation preference of $3,648	3,559	3,559
Additional paid-in capital	275,938	275,519
Treasury stock, at cost; 51,440 Class A shares	(172)	(172)
Accumulated deficit	(279,438)	(268,686)
Accumulated other comprehensive loss	(13)	(69)
Total stockholders’ (deficit) equity	(49)	10,227
Total liabilities and stockholders’ (deficit) equity	303,386	345,998
Class A common stock
Stockholders’ Deficit
Common stock	77	76
Class B common stock
Stockholders’ Deficit
Common stock	$ 0	$ 0

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STOCKHOLDERS' EQUITY - WARRANTS (Details)	12 Months Ended
	Mar. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
Sageview Warrants
Class of Warrant or Right [Line Items]
Outstanding warrants			16,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		1.37
Strategic Management Service Provider Warrants
Class of Warrant or Right [Line Items]
Outstanding warrants			525,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		1,850.00
Outstanding warrants, vesting period	18 months
Class of Warrant or Right, Termination Notice	90 days
Securities Purchase Agreement [Member]
Class of Warrant or Right [Line Items]
Outstanding warrants		1,250,625

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities
Net loss	$ (10,663)	$ (6,988)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization of property and equipment and amortization of intangible assets	11,261	9,700
Amortization of capitalized software costs	0	314
Amortization of debt issuance costs	437	288
Provision for doubtful accounts	94	62
Stock-based compensation and expenses	651	737
Change in fair value of interest rate derivatives	259	(829)
Accretion and PIK interest expense added to note payable	631	472
Loss on investment in non-consolidated entity	0	1,252
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	19,301	(3,496)
Inventory	294	0
Unbilled revenue	394	3,103
Prepaid expenses and other current assets	228	(1,314)
Other assets	243	(599)
Accounts payable and accrued expenses	(19,823)	7,216
Deferred revenue	(591)	(604)
Other liabilities	(292)	364
Net cash provided by operating activities	2,424	9,678
Cash flows from investing activities:
Purchases of property and equipment	(331)	(141)
Purchases of intangible assets	(4)	0
Additions to capitalized software costs	(483)	(731)
Restricted cash	0	(2)
Net cash used in investing activities	(818)	(874)
Cash flows from financing activities
Repayment of notes payable	(14,862)	(8,610)
Principal payments on capital leases	(147)	(31)
Payments of Stock Issuance Costs	(70)	0
Net cash used in financing activities	(15,079)	(8,641)
Net change in cash and cash equivalents	(13,473)	163
Cash and cash equivalents at beginning of period	50,215	13,448
Cash and cash equivalents at end of period	$ 36,742	$ 13,611

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - EMPLOYEE STOCK-BASED COMPENSATION EXPENSE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Mar. 31, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	28,819,170		20,485,290
Total stock-based compensation	$ 618	$ 684
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 1.60	$ 0.89
Direct operating
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	3	2
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	615	682
Segment, Continuing Operations [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	618		684
Segment, Continuing Operations [Member] | Direct operating
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	3		2
Segment, Continuing Operations [Member] | Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 615		$ 682
Cinedigm Equity Incentive Plan [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Issuance of common stock in connection with the exercise of warrants and stock options (shares)	34,443	42,640

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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

3 Months Ended

Jun. 30, 2014

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flows

	For the Three Months Ended June 30,
	2014		2013
Cash interest paid	$	4,475	$	6,064
Accretion of preferred stock discount	$	—	$	27
Accrued dividends on preferred stock	$	89	$	89
Issuance of common stock for payment of preferred stock dividends	$	89	$	—

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DISCONTINUED OPERATIONS (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014
Discontinued Operations and Disposal Groups [Abstract]
Accounts receivable, net	$ 1,852	$ 1,835
Unbilled revenue	215	534
Prepaid and other current assets	7	11
Total current assets of discontinued operations	2,074	2,380
Accounts payable and accrued expenses	422	668
Deferred revenue	1,652	1,434
Total current liabilities of discontinued operations	2,074	2,102
Current assets of discontinued operations, net of current liabilities	0	278
Property and equipment, net	723	474
Capitalized software, net	5,346	4,862
Unbilled revenue, net of current portion	169	324
Assets of discontinued operations, net of current portion	$ 6,238	$ 5,660

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RESTRUCTURING, TRANSITION AND ACQUISTION EXPENSES (Tables)

3 Months Ended

Jun. 30, 2014

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Activities

A summary of activity for the restructuring accrual included within accounts payable and accrued expenses as of June 30, 2014 is as follows:

Balance at March 31, 2014		Total Cost		Amounts Paid/Adjusted			Balance at June 30, 2014
$	1,019	$	—	$	(367	)	$	652

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NATURE OF OPERATIONS

3 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF OPERATIONS

NATURE OF OPERATIONS

Cinedigm Corp. (formerly known as Cinedigm Digital Cinema Corp.) was incorporated in Delaware on March 31, 2000 (“Cinedigm”, and collectively with its subsidiaries, the “Company”). Cinedigm is (i) a leading distributor and aggregator of independent movie, television and other short form content managing a library of distribution rights to over 52,000 titles and episodes released across digital, physical, theatrical, home and mobile entertainment platforms as well as (ii) a leading servicer of digital cinema assets in over 12,000 movie screens in both North America and several international countries.

The Company reports its financial results in four primary segments as follows: (1) the first digital cinema deployment (“Phase I Deployment”), (2) the second digital cinema deployment (“Phase II Deployment”), (3) digital cinema services (“Services”) and (4) media content and entertainment (“Content & Entertainment”).  The Phase I Deployment and Phase II Deployment segments are the non-recourse, financing vehicles and administrators for the Company's digital cinema equipment (the “Systems”) installed in movie theatres nationwide.  The Services segment provides services and support to over 12,000 movie screens in the Phase I Deployment and Phase II Deployment segments as well as directly to exhibitors and other third party customers.  Included in these services are Systems management services for a specified fee via service agreements with Phase I Deployment and Phase II Deployment as well as third party exhibitors as buyers of their own digital cinema equipment. These services primarily facilitate the conversion from analog to digital cinema and have positioned the Company at what it believes to be the forefront of a rapidly developing industry relating to the distribution and management of digital cinema and other content to theatres and other remote venues worldwide.  The Content & Entertainment segment provides content marketing and distribution services in both theatrical and ancillary home entertainment markets to independent movie, television and other short form content owners and to theatrical exhibitors. As a leading distributor of independent content, the Company collaborates with producers, major brands and other content owners to market, source, curate and distribute quality content to targeted and profitable audiences through (i) existing and emerging digital home entertainment platforms, including but not limited to, iTunes, Amazon Prime, Netflix, Hulu, Xbox, Playstation, cable video-on-demand ("VOD") and curated over-the-top ("OTT") digital entertainment channels and applications, (ii) physical goods, including DVD and Blu-ray and (iii) theatrical releases.

Gaiam Acquisition

On October 21, 2013, the Company and Cinedigm Entertainment Holdings, LLC ("CHE"), a newly-formed, wholly-owned subsidiary of the Company, acquired from Gaiam Americas, Inc. and Gaiam, Inc. (together, “Gaiam”) their division ("GVE") that maintains exclusive distribution rights agreements with large independent studios/content providers, and distributes entertainment content through home video, digital and television distribution channels (the “GVE Acquisition”). The Company agreed to an aggregate purchase price of $51,500, subject to a working capital adjustment, with (i) $47,500 paid in cash and 666,978 shares of Class A Common Stock valued at $1,000 issued upon the closing of the GVE Acquisition, and (ii) $3,000 to be paid on a deferred basis, of which $1,000 was paid during the fiscal year ended March 31, 2014 and the remainder was settled through the collection of a receivable during the fiscal year ended March 31, 2014. The working capital adjustment related to the purchase price has not yet been finalized between the Company and the sellers of GVE. Pending final resolution, such working capital adjustment, if any, will be recorded as adjustments to purchase considerations during the fiscal year ending March 31, 2015. Upon the closing of the GVE Acquisition, GVE became part of the Company's Content & Entertainment segment.

Upon concluding the purchase price allocation for the GVE Acquisition during the three months ended June 30, 2014, a measurement period adjustment  of $2,450 was made to write off advances on the opening balance sheet of GVE due to conditions that existed at the time of the GVE Acquisition. Such conditions, had they been identified as of March 31, 2014, would have reduced the previously reported prepaid and other current assets to $6,222 and increased goodwill to $27,944 on the consolidated balance sheets as of March 31, 2014, respectively.

The purchase price has been allocated to the identifiable net assets acquired as of the date of acquisition including any measurement period adjustments as follows pending any final working capital adjustment:

Accounts receivable	$	15,524
Inventory	2,224
Advances	5,248
Other assets	152
Content library	17,211
Supplier contracts and relationships	11,691
Goodwill	19,402
Total assets acquired	71,452
Total liabilities assumed	(19,952		)
Total net assets acquired	$	51,500

The Company estimates the useful life of the content library and supplier contracts and relationships to be 6 years and 8 years, respectively.

The fair values assigned to intangible assets were determined through the application of various commonly used and accepted valuation procedures and methods, including the multi-period excess earnings method. These valuation methods rely on management judgment, including expected future cash flows resulting from existing customer relationships, customer attrition rates, contributory effects of other assets utilized in the business, peer group cost of capital and royalty rates, and other factors. The valuation of tangible assets was preliminarily determined to approximate book value at the time of the GVE Acquisition. Useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. Goodwill is mainly attributable to the assembled workforce and synergies expected to arise from the GVE Acquisition.

Pro forma Information Related to the Acquisition of GVE

The following unaudited consolidated pro forma summary information for the three months ended June 30, 2014 and 2013 has been prepared by adjusting the historical data as set forth in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2014 and 2013 to give effect to the GVE Acquisition as if it had occurred at April 1, 2013. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the GVE Acquisition, nor does the pro forma reflect additional revenue opportunities following the GVE Acquisition.

	For the Three Months Ended June 30,
	2014			2013
Revenue	$	22,857		$	27,006
Loss from continuing operations	$	(10,812	)	$	(6,606	)
Net loss	$	(10,663	)	$	(7,210	)
Net loss per share (basic and diluted)	$	(0.14	)	$	(0.15	)

Sale of Software

During the fiscal year ended March 31, 2014, the Company made the strategic decision to discontinue, exit its software business and execute a plan of sale for Hollywood Software, Inc. d/b/a Cinedigm Software (“Software”), the Company's direct, wholly-owned subsidiary. Management concluded that it would be in the best interests of shareholders for the Company’s focus to be toward theatrical releasing and aggregation and distribution of independent content, digitally and in the form of DVDs and Blu-Ray discs, and VOD, along with the growth and servicing of the existing digital cinema business. Further, management believed that Software, which was previously included in our Services segment, no longer yielded the same synergies across the Company’s businesses as once existed.

As a consequence, it was determined that Software met the criteria for classification as held for sale/discontinued operations. As such, Software has been adjusted to reflect the fair value of its net assets and the consolidated financial statements and the notes to consolidated financial statements presented herein have been recast solely to reflect, for all periods presented, the adjustments resulting from these changes in classification for discontinued operations.

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Consolidated Balance Sheets (Parenthetical) (USD $)			3 Months Ended	12 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2014 Series A preferred stock	Mar. 31, 2014 Series A preferred stock	Jun. 30, 2014 Class A common stock	Mar. 31, 2014 Class A common stock	Jun. 30, 2014 Class B common stock	Mar. 31, 2014 Class B common stock
Preferred stock, shares authorized (shares)	15,000,000	15,000,000	20	20
Preferred stock, dividend rate (percentage)			10.00%	10.00%
Preferred stock, par value (in dollars per share)			$ 0.001	$ 0.001
Preferred stock, shares issued (shares)			7	7
Preferred stock, shares outstanding (shares)			7	7
Preferred stock, liquidation preference			$ 3,648	$ 3,648
Common stock, par value (in dollars per share)					$ 0.001	$ 0.001	$ 0.001	$ 0.001
Common stock, shares authorized (shares)					118,759,000	118,759,000	1,241,000	1,241,000
Common stock, shares issued (shares)					76,656,587	76,571,972	1,241,000	1,241,000
Common stock, shares outstanding (shares)					76,605,147	76,520,532	0	0
Treasury stock, Class A shares (shares)					51,440	51,440

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NATURE OF OPERATIONS (Tables)

3 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of purchase price allocation

The purchase price has been allocated to the identifiable net assets acquired as of the date of acquisition including any measurement period adjustments as follows pending any final working capital adjustment:

Accounts receivable	$	15,524
Inventory	2,224
Advances	5,248
Other assets	152
Content library	17,211
Supplier contracts and relationships	11,691
Goodwill	19,402
Total assets acquired	71,452
Total liabilities assumed	(19,952		)
Total net assets acquired	$	51,500

Schedule of pro forma consolidated summary operating data

The following unaudited consolidated pro forma summary information for the three months ended June 30, 2014 and 2013 has been prepared by adjusting the historical data as set forth in the accompanying condensed consolidated statements of operations for the three months ended June 30, 2014 and 2013 to give effect to the GVE Acquisition as if it had occurred at April 1, 2013. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the GVE Acquisition, nor does the pro forma reflect additional revenue opportunities following the GVE Acquisition.

	For the Three Months Ended June 30,
	2014			2013
Revenue	$	22,857		$	27,006
Loss from continuing operations	$	(10,812	)	$	(6,606	)
Net loss	$	(10,663	)	$	(7,210	)
Net loss per share (basic and diluted)	$	(0.14	)	$	(0.15	)

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Document and Entity Information	3 Months Ended
	Jun. 30, 2014	Aug. 11, 2014
Document and Entity Information [Abstract]
Entity Central Index Key	0001173204
Entity Registrant Name	CINEDIGM CORP.
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Current Fiscal Year End Date	--03-31
Amendment Flag	false
Entity Common Stock, Shares Outstanding		76,774,253
Entity Filer Category	Smaller Reporting Company
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Cash restricted for repaying interest on the term loans

	As of June 30, 2014		As of March 31, 2014
Reserve account related to the 2013 Term Loans (See Note 4)	$	5,751	$	5,751
Reserve account related to the 2013 Prospect Loan Agreement (See Note 4)	1,000		1,000
	$	6,751	$	6,751

Estimated useful lives of Property and equipment

Depreciation expense is recorded using the straight-line method over the estimated useful lives of the respective assets as follows:

Computer equipment and software	3 - 5 years
Digital cinema projection systems	10 years
Machinery and equipment	3 - 10 years
Furniture and fixtures	3 - 6 years

Fair Value Measurements of financial assets

The following tables summarize the levels of fair value measurements of the Company’s financial assets and liabilities:

	As of June 30, 2014
	Level 1		Level 2		Level 3		Total
Restricted cash	$	6,751	$	—	$	—	$	6,751
Interest rate derivatives	—		519		—		519
	$	6,751	$	519	$	—	$	7,270

	As of March 31, 2014
	Level 1		Level 2		Level 3		Total
Restricted cash	$	6,751	$	—	$	—	$	6,751
Interest rate derivatives	—		787		—		787
	$	6,751	$	787	$	—	$	7,538

Assumptions used in Black-Scholes option valuation model for estimating fair value of options

The Company estimated the fair value of stock options at the date of each grant using a Black-Scholes option valuation model with the following assumptions:

	For the Three Months Ended June 30,
Assumptions for Option Grants	2014	2013
Range of risk-free interest rates	1.6 - 1.7%	0.7 - 1.2%
Dividend yield	—	—
Expected life (years)	5	5
Range of expected volatilities	71.7 - 72.1%	73.4 - 73.8%

Employee stock-based compensation expense related to stock-based awards

Employee and director stock-based compensation expense from continuing operations related to the Company’s stock-based awards was as follows:

	For the Three Months Ended June 30,
	2014		2013
Direct operating	$	3	$	2
Selling, general and administrative	615		682
	$	618	$	684

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Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
Revenues	$ 22,857	$ 18,537
Costs and expenses:
Direct operating (exclusive of depreciation and amortization shown below)	8,504	3,779
Selling, general and administrative	7,709	6,204
Provision for doubtful accounts	94	62
Transition and acquisition expenses	946	0
Depreciation and amortization of property and equipment	9,376	9,245
Amortization of intangible assets	1,885	418
Total operating expenses	28,514	19,708
Loss from operations	(5,657)	(1,171)
Interest expense, net	(5,035)	(4,924)
Loss on investment in non-consolidated entity	0	(1,252)
Other income, net	139	134
Change in fair value of interest rate derivatives	(259)	829
Loss from continuing operations	(10,812)	(6,384)
Income (loss) from discontinued operations	149	(604)
Net loss	(10,663)	(6,988)
Preferred stock dividends	(89)	(89)
Net loss attributable to common stockholders	$ (10,752)	$ (7,077)
Net loss per Class A and Class B common share attributable to common shareholders - basic and diluted:
Loss from continuing operations (in dollars per share)	$ (0.14)	$ (0.13)
Income (loss from discontinued operations (in dollars per share)	$ 0.00	$ (0.02)
Net loss per Class A and Class B common share attributable to common shareholders - basic and diluted:	$ (0.14)	$ (0.15)
Weighted average number of Class A and Class B common shares outstanding: basic and diluted (shares)	76,567,128	48,357,020

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

The Company is subject to a capital lease obligation where we have no continuing involvement other than being the primary obligor. A sub-lease agreement, through which an unrelated third party purchaser pays the capital lease, was amended during January 2013. The impact of the capital lease amendment to the Company's condensed consolidated financial statements was not material.

LITIGATION

We are subject to certain legal proceedings in the ordinary course of business. We do not expect any such items to have a significant impact on our financial position and results of operations and liquidity.

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STOCKHOLDERS' EQUITY

3 Months Ended

Jun. 30, 2014

Equity [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ (DEFICIT) EQUITY

CAPITAL STOCK

COMMON STOCK

As of June 30, 2014 and March 31, 2014, the Company has 118,759,000 authorized shares of Class A Common Stock and 1,241,000 shares of authorized Class B Common Stock of which none remain available for issuance.

PREFERRED STOCK

Cumulative dividends in arrears on the preferred stock at June 30, 2014 and March 31, 2014 were $89 on each date. In July 2014, the Company paid its preferred stock dividends accrued at June 30, 2014 in the form of 33,531 shares of its Class A Common Stock.

CINEDIGM’S EQUITY INCENTIVE PLAN

Stock Options

Awards under the Company's equity incentive plan (the "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 Plan provides for the granting of incentive stock options (“ISOs”) with exercise prices not less than the fair market value of the Company’s Class A Common Stock on the date of grant. ISOs granted to shareholders of 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 the Company’s Class A Common Stock on the date of grant. ISOs and non-statutory stock options granted under the 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 the Company’s compensation committee. Upon a change of control of the Company, all stock options (incentive and non-statutory) that have not previously vested will vest immediately and become fully exercisable. In connection with the grants of stock options under the Plan, the Company and the participants have executed stock option agreements setting forth the terms of the grants.

During the three months ended June 30, 2014, the Company granted stock options to purchase 260,000 shares of its Class A Common Stock to its employees at exercise prices ranging from $2.35 to $2.66 per share, which will vest ratably over a four year period. As of June 30, 2014, the weighted average exercise price for outstanding stock options was $1.80 and the weighted average remaining contractual life was 6.03 years.

The following table summarizes the activity of the Plan related to shares issuable pursuant to outstanding options:

	Shares Under Option		Weighted Average Exercise Price Per Share
Balance at March 31, 2014	6,072,986		$	1.74
Granted	260,000		2.65
Exercised	(34,443	)	1.49
Canceled	(265,248	)	1.50
Balance at June 30, 2014	6,033,295		1.80

OPTIONS GRANTED OUTSIDE CINEDIGM’S EQUITY INCENTIVE PLAN

In October 2013, the Company issued options outside of the Equity Incentive Plan to 10 employees who joined the Company following the GVE Acquisition. The employees received options to purchase an aggregate of 620,000 shares of the Company's Class A Common Stock. The options have ten-year terms and an exercise price of $1.75 per share. As of June 30, 2014, there were 545,000 unvested shares outstanding.

WARRANTS

As of June 30, 2014, outstanding warrants consisted of 16,000,000 held by Sageview ("Sageview Warrants"), 525,000 held by a strategic management service provider and the 2013 Warrants.

The Sageview Warrants were exercisable beginning on September 30, 2009 at an exercise price of $1.37, contain a customary cashless exercise provision and anti-dilution adjustments, and expire on August 11, 2016 (subject to extension in limited circumstances). 

The strategic management service provider warrants were issued in connection with a consulting management services agreement entered into with the Company. These warrants for the purchase of 525,000 shares of Class A common stock vested over 18 months commencing in July 2011, are subject to termination with 90 days notice in the event of termination of the consulting management services agreement and expire on July 1, 2021.

The 2013 Warrants will be exercisable through October 21, 2018 at an exercise price per share of $1.85. The 2013 Warrants and 2013 Notes are subject to certain transfer restrictions. As of June 30, 2014, 1,250,625 of the 2013 Warrants were outstanding.

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SEGMENT INFORMATION (Tables)

3 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Schedule of Segment Reporting, Assets and Debt

Information related to the segments of the Company and its subsidiaries is detailed below:

	As of June 30, 2014
	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Total intangible assets, net	$	286	$	—	$	—	$	35,463	$	8	$	35,757
Total goodwill	$	—	$	—	$	—	$	27,944	$	—	$	27,944
Assets from continuing operations	$	101,884	$	69,485	$	3,591	$	95,000	$	27,188	297,148
Net assets from discontinued operations											6,238
Total assets											$	303,386
Notes payable, non-recourse	$	155,098	$	33,830	$	—	$	—	$	—	$	188,928
Notes payable	—		—		—		—		38,107		38,107
Capital leases	—		—		—		82		5,857		5,939
Total debt	$	155,098	$	33,830	$	—	$	82	$	43,964	$	232,974

	As of March 31, 2014
	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Total intangible assets, net	$	298	$	—	$	—	$	37,333	$	8	$	37,639
Total goodwill	$	—	$	—	$	—	$	25,494	$	—	$	25,494
Assets from continuing operations	$	109,538	$	66,957	$	3,848	$	124,226	$	35,491	340,060
Net assets from discontinued operations											5,938
Total assets											$	345,998
Notes payable, non-recourse	$	162,732	$	35,872	$	—	$	—	$	—	$	198,604
Notes payable	—		—		—		—		42,744		42,744
Capital leases	—		—		—		81		6,005		6,086
Total debt	$	162,732	$	35,872	$	—	$	81	$	48,749	$	247,434

Schedule of Segment Reporting, Statement of Operations

	Statements of Operations
	For the Three Months Ended June 30, 2014
	(Unaudited)
	Phase I		Phase II		Services		Content & Entertainment			Corporate			Consolidated
Revenues from external customers	$	9,484	$	3,171	$	3,060	$	7,142		$	—		$	22,857
Intersegment revenues	—		—		—		—			—			—
Total segment revenues	9,484		3,171		3,060		7,142			—			22,857
Less: Intersegment revenues	—		—		—		—			—			—
Total consolidated revenues	$	9,484	$	3,171	$	3,060	$	7,142		$	—		$	22,857
Direct operating (exclusive of depreciation and amortization shown below)	244		137		51		8,072			—			8,504
Selling, general and administrative	95		39		200		4,494			2,881			7,709
Plus: Allocation of Corporate overhead	—		—		466		1,353			(1,819		)	—
Provision for doubtful accounts	60		21		13		—			—			94
Transition and acquisition expenses, net	—		—		—		842			104			946
Depreciation and amortization of property and equipment	7,137		1,881		53		41			264			9,376
Amortization of intangible assets	11		—		—		1,873			1			1,885
Total operating expenses	7,547		2,078		783		16,675			1,431			28,514
Income (loss) from operations	$	1,937	$	1,093	$	2,277	$	(9,533	)	$	(1,431	)	$	(5,657	)

	Statements of Operations
	For the Three Months Ended June 30, 2013
	(Unaudited)
	Phase I		Phase II		Services			Content & Entertainment			Corporate			Consolidated
Revenues from external customers	$	8,919	$	2,954	$	3,390		$	3,274		$	—		$	18,537
Intersegment revenues (1)	—		—		6			11			—			17
Total segment revenues	8,919		2,954		3,396			3,285			—			18,554
Less: Intersegment revenues	—		—		(6		)	(11		)	—			(17		)
Total consolidated revenues	$	8,919	$	2,954	$	3,390		$	3,274		$	—		$	18,537
Direct operating (exclusive of depreciation and amortization shown below)	155		142		98			3,384			—			3,779
Selling, general and administrative	63		87		219			2,754			3,081			6,204
Plus: Allocation of Corporate overhead	—		—		500			733			(1,233		)	—
Provision for doubtful accounts	43		14		5			—			—			62
Depreciation and amortization of property and equipment	7,137		1,881		72			3			152			9,245
Amortization of intangible assets	11		2		—			405			—			418
Total operating expenses	7,409		2,126		894			7,279			2,000			19,708
Income (loss) from operations	$	1,510	$	828	$	2,496		$	(4,005	)	$	(2,000	)	$	(1,171	)

(1) Intersegment revenues principally represent personnel expenses.

Schedule of Segement Reporting, Employee Stock-based Compensation Expense

The following employee and director stock-based compensation expense related to the Company’s stock-based awards is included in the above amounts as follows:

	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Direct operating	$	—	$	—	$	—	$	2	$	—	$	2
Selling, general and administrative	—		—		8		21		653		682
Total stock-based compensation	$	—	$	—	$	8	$	23	$	653	$	684

The following employee and director stock-based compensation expense related to the Company’s stock-based awards is included in the above amounts as follows:

	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Direct operating	$	—	$	—	$	—	$	3	$	—	$	3
Selling, general and administrative	—		—		4		64		547		615
Total stock-based compensation	$	—	$	—	$	4	$	67	$	547	$	618

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DISCONTINUED OPERATIONS (Tables)

3 Months Ended

Jun. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Assets and Liabilities Held for Sale

The assets and liabilities of discontinued operations were comprised of the following:

	As of June 30, 2014		As of March 31, 2014
Current assets of discontinued operations:
Accounts receivable, net	$	1,852	$	1,835
Unbilled revenue	215		534
Prepaid and other current assets	7		11
Total current assets of discontinued operations	2,074		2,380
Current liabilities of discontinued operations:
Accounts payable and accrued expenses	422		668
Deferred revenue	1,652		1,434
Total current liabilities of discontinued operations	2,074		2,102
Current assets of discontinued operations, net of current liabilities	$	—	$	278
Property and equipment, net	$	723	$	474
Capitalized software, net	5,346		4,862
Unbilled revenue, net of current portion	169		324
Assets of discontinued operations, net of current portion	$	6,238	$	5,660

Schedule of Income/Loss From Discontinued Operations

The results of Software have been reported as discontinued operations for all periods presented. The income (loss) from discontinued operations was as follows:

	For the Three Months Ended June 30,
	2014			2013
Revenues	$	1,049		$	1,088
Costs and Expenses:
Direct operating (exclusive of depreciation and amortization shown below)	175			703
Selling, general and administrative	532			950
Research and development	9			6
Depreciation of property and equipment	—			30
Amortization of intangible assets	—			7
Total operating expenses	716			1,696
Income (loss) from operations	333			(608		)
Interest income	—			4
Other expense, net	(85		)	—
Income (loss) before provision for income taxes	248			(604		)
Provision for income taxes	99			—
Income (loss) from discontinued operations, net of taxes	$	149		$	(604	)

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RESTRUCTURING, TRANSITION AND ACQUISTION EXPENSES

3 Months Ended

Jun. 30, 2014

Restructuring and Related Activities [Abstract]

RESTRUCTURING, TRANSITION AND ACQUISTION EXPENSES

RESTRUCTURING, TRANSITION AND ACQUISTION EXPENSES

During the fiscal year ended March 31, 2014, the Company completed a strategic assessment of its resource requirements within its Content & Entertainment reporting segment which, based upon the GVE Acquisition, are principally attributed to the integration of the GVE Acquisition and resulted in a transition expenses of $842 during the three months ended June 30, 2014. Transition expenses are a component of transition and acquisition expenses within the condensed consolidated statements of operations.

A summary of activity for the restructuring accrual included within accounts payable and accrued expenses as of June 30, 2014 is as follows:

Balance at March 31, 2014		Total Cost		Amounts Paid/Adjusted			Balance at June 30, 2014
$	1,019	$	—	$	(367	)	$	652

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SUPPLEMENTAL CASH FLOW INFORMATION

3 Months Ended

Jun. 30, 2014

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW DISCLOSURE

SUPPLEMENTAL CASH FLOW INFORMATION

	For the Three Months Ended June 30,
	2014		2013
Cash interest paid	$	4,475	$	6,064
Accretion of preferred stock discount	$	—	$	27
Accrued dividends on preferred stock	$	89	$	89
Issuance of common stock for payment of preferred stock dividends	$	89	$	—

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SEGMENT INFORMATION

3 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company is comprised of four reportable segments: Phase I Deployment, Phase II Deployment, Services and Content & Entertainment. The segments were determined based on the products and services provided by each segment and how management reviews and makes decisions regarding segment operations. Performance of the segments is evaluated on the segment’s income (loss) from continuing operations before interest, taxes, depreciation and amortization.  

The Phase I Deployment and Phase II Deployment segments consist of the following:

Operations of:	Products and services provided:
Phase 1 DC	Financing vehicles and administrators for the Company’s 3,724 Systems installed nationwide in Phase 1 DC’s deployment to theatrical exhibitors.  The Company retains ownership of the Systems and the residual cash flows related to the Systems after the repayment of all non-recourse debt at the expiration of exhibitor master license agreements.
Phase 2 DC	Financing vehicles and administrators for the Company’s 8,917 Systems installed in the second digital cinema deployment and international deployments, through Phase 2 DC.  The Company retains no ownership of the residual cash flows and digital cinema equipment after the completion of cost recoupment and at the expiration of the exhibitor master license agreements.

The Services segment provides monitoring, billing, collection, verification and other management services to the Company’s Phase I Deployment, Phase II Deployment, Holdings, as well as to exhibitors who purchase their own equipment. Services also collects and disburses VPFs from motion picture studios and distributors and ACFs from alternative content providers, movie exhibitors and theatrical exhibitors.

The Content & Entertainment segment, or CEG, is a leading distributor of independent content, collaborates with producers and other content owners to market, source, curate and distribute independent content to targeted and profitable audiences in theatres and homes, and via mobile and emerging platforms.

Information related to the segments of the Company and its subsidiaries is detailed below:

	As of June 30, 2014
	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Total intangible assets, net	$	286	$	—	$	—	$	35,463	$	8	$	35,757
Total goodwill	$	—	$	—	$	—	$	27,944	$	—	$	27,944
Assets from continuing operations	$	101,884	$	69,485	$	3,591	$	95,000	$	27,188	297,148
Net assets from discontinued operations											6,238
Total assets											$	303,386
Notes payable, non-recourse	$	155,098	$	33,830	$	—	$	—	$	—	$	188,928
Notes payable	—		—		—		—		38,107		38,107
Capital leases	—		—		—		82		5,857		5,939
Total debt	$	155,098	$	33,830	$	—	$	82	$	43,964	$	232,974

	As of March 31, 2014
	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Total intangible assets, net	$	298	$	—	$	—	$	37,333	$	8	$	37,639
Total goodwill	$	—	$	—	$	—	$	25,494	$	—	$	25,494
Assets from continuing operations	$	109,538	$	66,957	$	3,848	$	124,226	$	35,491	340,060
Net assets from discontinued operations											5,938
Total assets											$	345,998
Notes payable, non-recourse	$	162,732	$	35,872	$	—	$	—	$	—	$	198,604
Notes payable	—		—		—		—		42,744		42,744
Capital leases	—		—		—		81		6,005		6,086
Total debt	$	162,732	$	35,872	$	—	$	81	$	48,749	$	247,434

	Statements of Operations
	For the Three Months Ended June 30, 2014
	(Unaudited)
	Phase I		Phase II		Services		Content & Entertainment			Corporate			Consolidated
Revenues from external customers	$	9,484	$	3,171	$	3,060	$	7,142		$	—		$	22,857
Intersegment revenues	—		—		—		—			—			—
Total segment revenues	9,484		3,171		3,060		7,142			—			22,857
Less: Intersegment revenues	—		—		—		—			—			—
Total consolidated revenues	$	9,484	$	3,171	$	3,060	$	7,142		$	—		$	22,857
Direct operating (exclusive of depreciation and amortization shown below)	244		137		51		8,072			—			8,504
Selling, general and administrative	95		39		200		4,494			2,881			7,709
Plus: Allocation of Corporate overhead	—		—		466		1,353			(1,819		)	—
Provision for doubtful accounts	60		21		13		—			—			94
Transition and acquisition expenses, net	—		—		—		842			104			946
Depreciation and amortization of property and equipment	7,137		1,881		53		41			264			9,376
Amortization of intangible assets	11		—		—		1,873			1			1,885
Total operating expenses	7,547		2,078		783		16,675			1,431			28,514
Income (loss) from operations	$	1,937	$	1,093	$	2,277	$	(9,533	)	$	(1,431	)	$	(5,657	)

The following employee and director stock-based compensation expense related to the Company’s stock-based awards is included in the above amounts as follows:

	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Direct operating	$	—	$	—	$	—	$	3	$	—	$	3
Selling, general and administrative	—		—		4		64		547		615
Total stock-based compensation	$	—	$	—	$	4	$	67	$	547	$	618

	Statements of Operations
	For the Three Months Ended June 30, 2013
	(Unaudited)
	Phase I		Phase II		Services			Content & Entertainment			Corporate			Consolidated
Revenues from external customers	$	8,919	$	2,954	$	3,390		$	3,274		$	—		$	18,537
Intersegment revenues (1)	—		—		6			11			—			17
Total segment revenues	8,919		2,954		3,396			3,285			—			18,554
Less: Intersegment revenues	—		—		(6		)	(11		)	—			(17		)
Total consolidated revenues	$	8,919	$	2,954	$	3,390		$	3,274		$	—		$	18,537
Direct operating (exclusive of depreciation and amortization shown below)	155		142		98			3,384			—			3,779
Selling, general and administrative	63		87		219			2,754			3,081			6,204
Plus: Allocation of Corporate overhead	—		—		500			733			(1,233		)	—
Provision for doubtful accounts	43		14		5			—			—			62
Depreciation and amortization of property and equipment	7,137		1,881		72			3			152			9,245
Amortization of intangible assets	11		2		—			405			—			418
Total operating expenses	7,409		2,126		894			7,279			2,000			19,708
Income (loss) from operations	$	1,510	$	828	$	2,496		$	(4,005	)	$	(2,000	)	$	(1,171	)

(1) Intersegment revenues principally represent personnel expenses.

The following employee and director stock-based compensation expense related to the Company’s stock-based awards is included in the above amounts as follows:

	Phase I		Phase II		Services		Content & Entertainment		Corporate		Consolidated
Direct operating	$	—	$	—	$	—	$	2	$	—	$	2
Selling, general and administrative	—		—		8		21		653		682
Total stock-based compensation	$	—	$	—	$	8	$	23	$	653	$	684

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND CONSOLIDATION

BASIS OF PRESENTATION AND CONSOLIDATION

The Company has incurred net losses historically and has an accumulated deficit of $279,438 as of June 30, 2014. The Company also has significant contractual obligations related to its recourse and non-recourse debt for the remainder of the fiscal year ending March 31, 2015 and beyond. The Company may continue to generate net losses for the foreseeable future. Based on the Company’s cash position at June 30, 2014, and expected cash flows from operations, management believes that the Company has the ability to meet its obligations through at least June 30, 2015. Failure to generate additional revenues, raise additional capital or manage discretionary spending could have an adverse effect on the Company’s financial position, results of operations or liquidity.

The Company’s consolidated financial statements include the accounts of Cinedigm, Access Digital Media, Inc. (“AccessDM”), FiberSat Global Services, Inc. d/b/a Cinedigm Satellite and Support Services (“Satellite”), ADM Cinema Corporation (“ADM Cinema”) d/b/a the Pavilion Theatre (certain assets and liabilities of which were sold in May 2011), Christie/AIX, Inc. ("C/AIX") d/b/a Cinedigm Digital Cinema (“Phase 1 DC”), Vistachiara Productions, Inc. f/k/a The Bigger Picture, currently d/b/a Cinedigm Content and Entertainment Group, Cinedigm Entertainment Corp. f/k/a New Video Group, Inc. ("New Video"), CHE, Access Digital Cinema Phase 2 Corp. (“Phase 2 DC”), Cinedigm Digital Cinema Australia Pty Ltd, Access Digital Cinema Phase 2 B/AIX Corp. (“Phase 2 B/AIX”), Cinedigm Digital Funding I, LLC (“CDF I”) and Cinedigm DC Holdings LLC ("DC Holdings LLC"). Cinedigm Content and Entertainment Group, New Video and CHE are together referred to as CEG. Software comprises discontinued operations. All intercompany transactions and balances have been eliminated in consolidation.

The condensed consolidated balance sheet as of March 31, 2014, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements were prepared following the interim reporting requirements of the Securities and Exchange Commission ("SEC"). They do not include all disclosures normally made in financial statements contained in the Company’s Annual Report on Form 10-K ("Form 10-K"). In management’s opinion, all adjustments necessary for a fair presentation of financial position, the results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for the periods presented have been made. The results of operations for the respective interim periods are not necessarily indicative of the results to be expected for the full year. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended March 31, 2014 filed with the SEC on June 26, 2014.

INVESTMENT IN NON-CONSOLIDATED ENTITY

INVESTMENT IN NON-CONSOLIDATED ENTITY

The Company indirectly owns 100% of the common equity of CDF2 Holdings, LLC ("Holdings"), which is a Variable Interest Entity (“VIE”), as defined in Accounting Standards Codification Topic 810 ("ASC 810"), “Consolidation".

RECLASSIFICATION

RECLASSIFICATION

Certain reclassifications, principally for discontinued operations (see Note 3) have been made to the fiscal period ended June 30, 2013 condensed consolidated financial statements to conform to the current fiscal period ended June 30, 2014 presentation.

USE OF ESTIMATES

USE OF ESTIMATES

The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include the adequacy of accounts receivable reserves, return reserves, inventory reserves, recoupment of advances, minimum guarantees, assessment of goodwill and intangible asset impairment and valuation reserve for income taxes, among others. Actual results could differ from these estimates.

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of three months or less to be “cash equivalents.” The Company maintains bank accounts with major banks, which from time to time may exceed the Federal Deposit Insurance Corporation’s insured limits. The Company periodically assesses the financial condition of the institutions and believes that the risk of any loss is minimal.

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. Allowance for doubtful accounts amounted to $980 and $898 as of June 30, 2014 and March 31, 2014, respectively.

Within the Content & Entertainment segment, the Company recognizes the accounts receivable net of an estimated allowance for product returns and customer chargebacks at the time we recognize the original sale. We base the amount of the returns allowance and customer chargebacks upon historical experience and future expectations.

Accounts receivable, long-term result from up-front activation fees earned from the Company's Systems deployments with extended payment terms that are discounted to their present value at prevailing market rates.

INVENTORY

INVENTORY

Inventory consists of finished goods of owned physical DVD titles and is stated at the lower of cost (determined based on weighted average cost) or market. The Company identifies inventory items to be written down for obsolescence based on the item’s sales status and condition. The Company writes down discontinued or slow moving inventories based on an estimate of the markdown to retail price needed to sell through our current stock level of the inventories.

RESTRICTED CASH

RESTRICTED CASH

In connection with the 2013 Term Loans issued in February 2013 and the 2013 Prospect Loan Agreement issued in February 2013 (collectively, see Note 4), the Company maintains cash restricted for repaying interest on the respective loans as follows:

	As of June 30, 2014		As of March 31, 2014
Reserve account related to the 2013 Term Loans (See Note 4)	$	5,751	$	5,751
Reserve account related to the 2013 Prospect Loan Agreement (See Note 4)	1,000		1,000
	$	6,751	$	6,751

DEFERRED COSTS

DEFERRED COSTS

Deferred costs primarily consist of unamortized debt issuance costs related to the 2013 Term Loans, 2013 Prospect Loan and Cinedigm Credit Agreement (see Note 4) which are amortized under the effective interest rate method over the terms of the respective debt.  All other unamortized debt issuance costs are amortized on a straight-line basis over the term of the respective debt. For such debt, amortization on a straight-line basis is not materially different from the effective interest method.  

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

Property and equipment 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	3 - 5 years
Digital cinema projection systems	10 years
Machinery and equipment	3 - 10 years
Furniture and fixtures	3 - 6 years

Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the leasehold improvements. Maintenance and repair costs are charged to expense as incurred. Major renewals, improvements and additions are capitalized.  Upon the sale or other disposition of any property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and the gain or loss on disposal is included in the condensed consolidated statements of operations.

ACCOUNTING FOR DERIVATIVE ACTIVITIES

ACCOUNTING FOR DERIVATIVE ACTIVITIES

Derivative financial instruments are recorded at fair value. The Company had three separate interest rate swap agreements (the “Interest Rate Swaps”) to limit the Company’s exposure to changes in interest rates related to the 2013 Term Loans which matured in June 2013.  Additionally, the Company entered into two separate interest rate cap transactions during the fiscal year ended March 31, 2013, recorded in prepaid and other current assets on the condensed consolidated balance sheets, to limit the Company's exposure to interest rates related to the 2013 Term Loans and 2013 Prospect Loan. Changes in fair value of derivative financial instruments are either recognized in accumulated other comprehensive loss (a component of stockholders' deficit) or in the condensed consolidated statements of operations depending on whether the derivative qualifies for hedge accounting.  The Company has not sought hedge accounting treatment for these instruments and therefore, changes in the value of its Interest Rate Swaps and caps were recorded in the condensed consolidated statements of operations (See Note 4).

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The fair value measurement disclosures are grouped into three levels based on valuation factors:

• Level 1 – quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs)

• Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)

Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities.

The following tables summarize the levels of fair value measurements of the Company’s financial assets and liabilities:

	As of June 30, 2014
	Level 1		Level 2		Level 3		Total
Restricted cash	$	6,751	$	—	$	—	$	6,751
Interest rate derivatives	—		519		—		519
	$	6,751	$	519	$	—	$	7,270

	As of March 31, 2014
	Level 1		Level 2		Level 3		Total
Restricted cash	$	6,751	$	—	$	—	$	6,751
Interest rate derivatives	—		787		—		787
	$	6,751	$	787	$	—	$	7,538

The Company’s cash and cash equivalents, accounts receivable, unbilled revenue and accounts payable and accrued expenses are financial instruments and are recorded at cost in the condensed consolidated balance sheets. The estimated fair values of these financial instruments approximate their carrying amounts because of their short-term nature.  The carrying amount of accounts receivable, long-term and notes receivable approximates fair value based on the discounted cash flows of that instrument using current assumptions at the balance sheet date.  The fair value of fixed rate and variable rate debt is estimated by management based upon current interest rates available to the Company at the respective balance sheet date for arrangements with similar terms and conditions.  Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of notes payable and capital lease obligations approximates fair value.

IMPAIRMENT OF LONG-LIVED AND FINITE-LIVED ASSETS

IMPAIRMENT OF LONG-LIVED AND FINITE-LIVED ASSETS

The Company reviews the recoverability of its 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 the Company’s ability to recover the carrying value of its 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 assets the asset is deemed not to be recoverable and possibly impaired.  The Company then estimates the fair value of the asset to determine whether an impairment loss should be recognized.  An impairment loss will be recognized if the difference between the fair value and the carrying value of the asset exceeds its fair value.  Fair value is determined by computing the expected future undiscounted cash flows.  During the three monthsended June 30, 2014 and 2013, no impairment charge from continuing operations for long-lived assets or finite-lived assets was recorded.

GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS

GOODWILL

Goodwill is the excess of the purchase price paid over the fair value of the net assets of an acquired business. The Company’s process of evaluating goodwill for impairment involves the determination of fair value of its CEG goodwill reporting unit over its carrying value. The Company conducts its annual goodwill impairment analysis during the fourth quarter of each fiscal year, measured as of March 31, unless triggering events occur which require goodwill to be tested at another date.

REVENUE RECOGNITION

REVENUE RECOGNITION

Phase I Deployment and Phase II Deployment

Virtual print fees (“VPFs”) are earned, net of administrative fees, pursuant to contracts with movie studios and distributors, whereby amounts are payable by a studio to Phase 1 DC and to Phase 2 DC when movies distributed by the studio are displayed on screens utilizing the Company’s Systems installed in movie theatres.  VPFs are earned and payable to Phase 1 DC based on a defined fee schedule with a reduced VPF rate year over year until the sixth year at which point the VPF rate remains unchanged through the tenth year.  One VPF is payable for every digital title displayed per System. The amount of VPF revenue is dependent on the number of movie titles released and displayed using the Systems in any given accounting period. VPF revenue is recognized in the period in which the digital title first plays on a System for general audience viewing in a digitally-equipped movie theatre, as Phase 1 DC’s and Phase 2 DC’s performance obligations have been substantially met at that time.

Phase 2 DC’s agreements with distributors require the payment of VPFs, according to a defined fee schedule, for ten years from the date each system is installed; however, Phase 2 DC may no longer collect VPFs once “cost recoupment,” as defined in the agreements, is achieved.  Cost recoupment will occur once the cumulative VPFs and other cash receipts collected by Phase 2 DC have equaled the total of all cash outflows, including the purchase price of all Systems, all financing costs, all “overhead and ongoing costs”, as defined, and including the Company’s service fees, subject to maximum agreed upon amounts during the three-year rollout period and thereafter.  Further, if cost recoupment occurs before the end of the eighth contract year, a one-time “cost recoupment bonus” is payable by the studios to the Company.  Any other cash flows, net of expenses, received by Phase 2 DC following the achievement of cost recoupment are required to be returned to the distributors on a pro-rata basis. At this time, the Company cannot estimate the timing or probability of the achievement of cost recoupment.

Alternative content fees (“ACFs”) are earned pursuant to contracts with movie exhibitors, whereby amounts are payable to Phase 1 DC and to Phase 2 DC, generally either a fixed amount or as a percentage of the applicable box office revenue derived from the exhibitor’s showing of content other than feature movies, such as concerts and sporting events (typically referred to as “alternative content”). ACF revenue is recognized in the period in which the alternative content first opens for audience viewing.

Revenues are deferred for up front exhibitor contributions and are recognized over the cost recoupment period, which is expected to be ten years.

Services

Exhibitors who purchased and own Systems using their own financing in the Phase II Deployment, paid an upfront activation fee that is generally $2 thousand per screen to the Company (the “Exhibitor-Buyer Structure”).  These upfront activation fees are recognized in the period in which these exhibitor owned Systems are ready for content, as the Company has no further obligations to the customer, and are generally paid quarterly from VPF revenues over approximately one year.  Additionally, the Company recognizes activation fee revenue of between $1 thousand and $2 thousand on Phase 2 DC Systems and for Systems installed by Holdings upon installation and such fees are generally collected upfront upon installation. The Company will then manage the billing and collection of VPFs and will remit all VPFs collected to the exhibitors, less an administrative fee that will approximate up to 10% of the VPFs collected.

The administrative fee related to the Phase I Deployment approximates 5% of the VPFs collected and an incentive service fee equal to 2.5% of the VPFs earned by Phase 1 DC. This administrative fee is recognized in the period in which the billing of VPFs occurs, as performance obligations have been substantially met at that time.

Content & Entertainment

CEG earns fees for the distribution of content in the home entertainment markets via several distribution channels, including digital, VOD, and physical goods (e.g. DVD and Blu-ray) is typically based on the gross amounts billed to our customers less the amounts owed to the media studios or content producers under distribution agreements, and gross media sales of owned or licensed content. The fee rate earned by the Company varies depending upon the nature of the agreements with the platform and content providers. Generally, revenues are recognized at the availability date of the content for a subscription digital platform, at the time of shipment for physical goods, or point-of-sale for transactional and VOD services. Reserves for sales returns and other allowances are provided based upon past experience. If actual future returns and allowances differ from past experience, adjustments to our allowances may be required.  Sales returns and allowances are  reported net in accounts receivable and as a reduction of revenues.

CEG also has contracts for the theatrical distribution of third party feature movies and alternative content. CEG’s distribution fee revenue and CEG's participation in box office receipts is recognized at the time a feature movie and alternative content is viewed. CEG has the right to receive or bill a portion of the theatrical distribution fee in advance of the exhibition date, and therefore such amount is recorded as a receivable at the time of execution, and all related distribution revenue is deferred until the third party feature movies’ or alternative content’s theatrical release date.

Movie Cost Amortization

Once a movie is released, capitalized acquisition costs are amortized and participations and residual costs are accrued on an individual title basis in the proportion to the revenue recognized during the period for each title ("Period Revenue") bears to the estimated remaining total revenue to be recognized from all sources for each title ("Ultimate Revenue"). The amount of movie and other costs that is amortized each period will depend on the ratio of Period Revenue to Ultimate Revenue for each movie. The Company makes certain estimates and judgments of Ultimate Revenue to be recognized for each title. Ultimate Revenue does not include estimates of revenue that will be earned beyond 5 years of a movie’s initial theatrical release date. Movie cost amortization is a component of direct operating costs within the condensed consolidated statements of operations.

Estimates of Ultimate Revenue and anticipated participation and residual costs are reviewed periodically in the ordinary course of business and are revised if necessary. A change in any given period to the Ultimate Revenue for an individual title will result in an increase or decrease in the percentage of amortization of capitalized movie and other costs and accrued participation and residual costs relative to a previous period. Depending on the performance of a title, significant changes to the future Ultimate Revenue may occur, which could result in significant changes to the amortization of the capitalized acquisition costs.

DIRECT OPERATING COSTS

DIRECT OPERATING COSTS

Direct operating costs consist of operating costs such as cost of goods sold, fulfillment expenses, shipping costs, property taxes and insurance on Systems, royalty expenses, marketing and direct personnel costs.

PARTICIPATIONS PAYABLE

PARTICIPATIONS PAYABLE

The Company records liabilities within accounts payable and accrued expenses on the condensed consolidated balance sheet, that represent amounts owed to studios or content producers for which the Company provides content distribution services for royalties owed under licensing arrangements. The Company identifies and records as a reduction to the liability any expenses that are to be reimbursed to the Company by such studios or content producers.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

During the three monthsended June 30, 2014 and 2013, the Company recorded stock-based compensation from continuing operations of $618 and $684, respectively.

The weighted-average grant-date fair value of options granted during the three monthsended June 30, 2014 and 2013 was $1.60 and $0.89, respectively. There were 34,443 and 42,640 stock options exercised during the three monthsended June 30, 2014 and 2013, respectively.

The Company estimated the fair value of stock options at the date of each grant using a Black-Scholes option valuation model with the following assumptions:

	For the Three Months Ended June 30,
Assumptions for Option Grants	2014	2013
Range of risk-free interest rates	1.6 - 1.7%	0.7 - 1.2%
Dividend yield	—	—
Expected life (years)	5	5
Range of expected volatilities	71.7 - 72.1%	73.4 - 73.8%

The risk-free interest rate used in the Black-Scholes option pricing model for options granted under the Company’s stock option plan awards is the historical yield on U.S. Treasury securities with equivalent remaining lives. The Company does not currently anticipate paying any cash dividends on common stock in the foreseeable future. Consequently, an expected dividend yield of zero is used in the Black-Scholes option pricing model.  The Company estimates the expected life of options granted under the Company’s stock option plans using both exercise behavior and post-vesting termination behavior, as well as consideration of outstanding options.   The Company estimates expected volatility for options granted under the Company’s stock option plans based on a measure of historical volatility in the trading market for the Company’s common stock.

NET LOSS PER SHARE

NET LOSS PER SHARE

Basic and diluted net loss per common share has been calculated as follows:

Basic and diluted net loss per common share =	Net loss + preferred dividends
	Weighted average number of common stock shares  outstanding during the period

Shares issued and any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding.

COMPREHENSIVE LOSS

COMPREHENSIVE LOSS

As of June 30, 2014, the Company’s other comprehensive loss consisted of net loss and foreign currency translation adjustments.  

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

In April 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update which modifies the requirements for disposals to qualify as discontinued operations and expands related disclosure requirements. The update will be effective for the Company during the fiscal year ending March 31, 2015. The adoption of the update may impact whether future disposals qualify as discontinued operations and therefore could impact the Company's financial statement presentation and disclosures.

In May 2014, the FASB issued new accounting guidance on revenue recognition.  The new standard provides for a single five-step model to be applied to all revenue contracts with customers as well as requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts.  Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard.  The guidance will be effective for the Company during the fiscal year ending March 31, 2018. The Company intends to evaluate the impact of the adoption of this accounting standard update on its consolidated financial statements.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - FAIR VALUE ASSUMPTIONS USED FOR STOCK OPTIONS (Details)	3 Months Ended			12 Months Ended	3 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Minimum [Member]	Mar. 31, 2014 Minimum [Member]	Jun. 30, 2014 Maximum [Member]	Mar. 31, 2014 Maximum [Member]
Assumptions for Option Grants:
Range of risk free rates			1.60%	0.70%	1.70%	1.20%
Dividend yield	0.00%	0.00%
Expected life (years)					5 years	5 years
Range of expected volatilities			71.70%	73.40%	72.10%	73.80%

XML

RESTRUCTURING, TRANSITION AND ACQUISTION EXPENSES (Details) (Content & Entertainment, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve, balance at beginning of period	$ 1,019
Total cost	0
Restructuring payments	367
Restructuring reserve, balance at end of period	652
Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member]
Restructuring Cost and Reserve [Line Items]
Total cost	$ 842

XML

STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Jun. 30, 2014

Equity [Abstract]

Schedule of Outstanding Stock Options

The following table summarizes the activity of the Plan related to shares issuable pursuant to outstanding options:

	Shares Under Option		Weighted Average Exercise Price Per Share
Balance at March 31, 2014	6,072,986		$	1.74
Granted	260,000		2.65
Exercised	(34,443	)	1.49
Canceled	(265,248	)	1.50
Balance at June 30, 2014	6,033,295		1.80

XML

NATURE OF OPERATIONS - BUSINESS ACQUISITION (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended
	Oct. 17, 2013	Jun. 30, 2014	Mar. 31, 2014	Oct. 21, 2013
Business Acquisition [Line Items]
Goodwill		$ 27,944	$ 25,494
Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred	51,500
Payments to Acquire Businesses, Gross	47,500	1,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	666,978
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned	1,000
Business Combination, Consideration Transferred, Liabilities Incurred	3,000
Business Combination, Adjustment to Assets Acquired		2,450
Business Combination, Prepaid and Other Current Assets			6,222
Goodwill			$ 27,944	$ 16,952

XML

SEGMENT INFORMATION - EMPLOYEE STOCK-BASED COMPENSATION EXPENSE (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	$ 618	$ 684
Direct operating
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	3	2
Selling, general and administrative
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	615	682
Phase I
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	0	0
Phase I | Direct operating
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	0	0
Phase I | Selling, general and administrative
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	0	0
Phase II
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	0	0
Phase II | Direct operating
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	0	0
Phase II | Selling, general and administrative
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	0	0
Services
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	4	8
Services | Direct operating
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	0	0
Services | Selling, general and administrative
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	4	8
Content & Entertainment
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	67	23
Content & Entertainment | Direct operating
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	3	2
Content & Entertainment | Selling, general and administrative
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	64	21
Corporate
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	547	653
Corporate | Direct operating
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	0	0
Corporate | Selling, general and administrative
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total stock-based compensation	$ 547	$ 653

XML

NOTES PAYABLE - SUMMARY OF CREDIT FACILITIES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Mar. 31, 2014
LIBOR
Line of Credit Facility [Line Items]
Line of Credit Facility, Interest Rate	0.23%
Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 65,313
Line of Credit Facility, Outstanding Principal Balance	32,956	34,970
Line of Credit Facility, Draw as of March 31, 2013	0
Credit Facility 1 [Member] | Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	8,900
Line of Credit Facility, Interest Rate	8.50%
Line of Credit Facility, Outstanding Principal Balance	0
Line of Credit Facility, Draw as of March 31, 2013	0
Credit Facility 2 [Member] | Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	2,890
Line of Credit Facility, Interest Rate	3.75%
Line of Credit Facility, Outstanding Principal Balance	212	315
Line of Credit Facility, Draw as of March 31, 2013	0
Credit Facility 3 [Member] | Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	22,336
Line of Credit Facility, Interest Rate	3.75%
Line of Credit Facility, Outstanding Principal Balance	12,764	13,561
Line of Credit Facility, Draw as of March 31, 2013	0
Credit Facility 4 [Member] | Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	13,312
Line of Credit Facility, Interest Rate	3.75%
Line of Credit Facility, Outstanding Principal Balance	8,082	8,558
Line of Credit Facility, Draw as of March 31, 2013	0
Credit Facility 5 [Member] | Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	11,425
Line of Credit Facility, Interest Rate	3.75%
Line of Credit Facility, Outstanding Principal Balance	7,752	8,160
Line of Credit Facility, Draw as of March 31, 2013	0
Credit Facility 6 [Member] | Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	6,450
Line of Credit Facility, Interest Rate	3.75%
Line of Credit Facility, Outstanding Principal Balance	4,146	4,376
Line of Credit Facility, Draw as of March 31, 2013	0
Loans Payable [Member] | Cinedigm Term Loan [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Face Amount	25,000	25,000
Debt Instrument, Payments to Date	(1,750)	(875)
Debt Instrument, Unamortized Discount	(327)	(360)
Notes payable, net	22,923	23,765
Debt, Current	(4,000)	(3,750)
Long-term Debt, Excluding Current Maturities	$ 18,923	$ 20,015

XML

Consolidated Statements of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Statement of Comprehensive Income [Abstract]
Net loss	$ (10,663)	$ (6,988)
Other comprehensive income: foreign exchange translation	56	0
Comprehensive loss	$ (10,607)	$ (6,988)

XML

NOTES PAYABLE

3 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTES PAYABLE

Notes payable consisted of the following:

	As of June 30, 2014				As of March 31, 2014
Notes Payable	Current Portion		Long Term Portion		Current Portion		Long Term Portion
2013 Term Loans, net of debt discount	$	25,500	$	60,884	$	25,688	$	68,590
2013 Prospect Loan Agreement	—		68,714		—		68,454
KBC Facilities	7,858		25,098		7,961		27,009
P2 Vendor Note	110		450		105		466
P2 Exhibitor Notes	72		242		71		260
Total non-recourse notes payable	$	33,540	$	155,388	$	33,825	$	164,779
Cinedigm Term Loans	$	4,000	$	18,923	$	3,750	$	20,015
Cinedigm Revolving Loans	11,608		—		15,469		—
2013 Notes	—		3,576		—		3,510
Total recourse notes payable	$	15,608	$	22,499	$	19,219	$	23,525
Total notes payable	$	49,148	$	177,887	$	53,044	$	188,304

Non-recourse debt is generally defined as debt whereby the lenders’ sole recourse with respect to defaults by the Company is limited to the value of the asset collateralized by the debt. The 2013 Term Loans are not guaranteed by the Company or its other subsidiaries, other than Phase 1 DC. The 2013 Prospect Loan Agreement is not guaranteed by the Company or its other subsidiaries and the service fees of Phase 1 DC and Phase 2 DC were assigned by the Company to DC Holdings LLC. The KBC Facilities, the P2 Vendor Note and the P2 Exhibitor Notes are not guaranteed by the Company or its other subsidiaries, other than Phase 2 DC.

2013 Term Loans

On February 28, 2013, CDF I entered into an amended and restated credit agreement (the “2013 Credit Agreement”) with Société Générale, New York Branch, as administrative agent and collateral agent for the lenders party thereto and certain other secured parties (the “Collateral Agent”), and the lenders party thereto. The 2013 Credit Agreement amended and restated its prior credit agreement. The primary changes effected by the Amended and Restated Credit Agreement were (i) changing the aggregate principal amount of the term loans to $130,000, which included an assignment of $5,000 of the principal balance to an affiliate of CDF I, (ii) changing the interest rate (described further below) and (iii) extending the term of the credit facility to February 2018. The proceeds of the term loans ("2013 Term Loans") under the 2013 Credit Agreement were used by CDF I to refinance its prior credit agreement.

Under the 2013 Credit Agreement, each of the 2013 Term loans bears interest, at the option of CDF I and subject to certain conditions, based on the base rate (generally, the bank prime rate) or the LIBOR rate set at a minimum of 1.00%, plus a margin of 1.75% (in the case of base rate loans) or, 2.75% (in the case of LIBOR rate loans). All collections and revenues of CDF I are deposited into designated accounts, from which amounts are paid out on a monthly basis to pay certain operating expenses and principal, interest, fees, costs and expenses relating to the 2013 Credit Agreement according to certain designated priorities. On a quarterly basis, if funds remain after the payment of all such amounts, they will be applied to prepay the 2013 Term Loans. The 2013 Term Loans mature and must be paid in full by February 28, 2018. In addition, CDF I may prepay the 2013 Term Loans, in whole or in part, subject to paying certain breakage costs, if applicable, and a 1.0% prepayment premium if a prepayment is made during the first year of the 2013 Term Loans. The LIBOR rate at June 30, 2014 was 0.15%.

The 2013 Credit Agreement also requires each of CDF I’s existing and future direct and indirect domestic subsidiaries (the "Guarantors") to guarantee, under an Amended and Restated Guaranty and Security Agreement dated as of February 28, 2013 by and among CDF I, the Guarantors and the Collateral Agent (the “Guaranty and Security Agreement”), the obligations under the 2013 Credit Agreement, and all such obligations to be secured by a first priority perfected security interest in all of the collective assets of CDF I and the Guarantors, including real estate owned or leased, and all capital stock or other equity interests in C/AIX, the direct holder of CDF I’s equity, CDF I and CDF I’s subsidiaries. In connection with the 2013 Credit Agreement, AccessDM, a wholly-owned subsidiary of the Company and the direct parent of C/AIX, entered into an amended and restated pledge agreement dated as of February 28, 2013 (the “AccessDM Pledge Agreement”) in favor of the Collateral Agent pursuant to which AccessDM pledged to the Collateral Agent all of the outstanding shares of common stock of C/AIX, and C/AIX entered into an amended and restated pledge agreement dated as of February 28, 2013 (the “C/AIX Pledge Agreement”) in favor of the Collateral Agent pursuant to which C/AIX pledged to the Collateral Agent all of the outstanding membership interests of CDF I. The 2013 Credit Agreement contains customary representations, warranties, affirmative covenants, negative covenants and events of default.

All collections and revenues of CDF I are deposited into designated accounts. These amounts are included in cash and cash equivalents in the condensed consolidated balance sheets and are only available to pay certain operating expenses, principal, interest, fees, costs and expenses relating to the 2013 Credit Agreement, according to certain designated priorities, which totaled $5,919 and $6,493 as of June 30, 2014 and March 31, 2014, respectively. The Company also set up a debt service fund under the 2013 Credit Agreement for future principal and interest payments, classified as restricted cash of $6,751 as of June 30, 2014 and March 31, 2014, respectively.

The balance of the 2013 Term Loans, net of the original issue discount, at June 30, 2014 was as follows:

	As of June 30, 2014			As of March 31, 2014
2013 Term Loans, at issuance, net	$	125,087		$	125,087
Payments to date	(38,456		)	(30,543		)
Discount on 2013 Term Loans	(247		)	(266		)
2013 Term Loans, net	86,384			94,278
Less current portion	(25,500		)	(25,688		)
Total long term portion	$	60,884		$	68,590

2013 Prospect Loan Agreement

On February 28, 2013, DC Holdings LLC, AccessDM and Phase 2 DC entered into a term loan agreement (the “2013 Prospect Loan Agreement”) with Prospect Capital Corporation (“Prospect”), as administrative agent (the “Prospect Administrative Agent”) and collateral agent (the “Prospect Collateral Agent”) for the lenders party thereto, and the other lenders party thereto pursuant to which DC Holdings LLC borrowed $70,000 (the “2013 Prospect Loan”). The 2013 Prospect Loan, as subsequently amended, will bear interest annually in cash at LIBOR plus 9.00% (with a 2.00% LIBOR floor) and at 2.50% to be accrued as an increase in the aggregate principal amount of the 2013 Prospect Loan until the 2013 Credit Agreement is paid off, at which time all interest will be payable in cash.

The 2013 Prospect Loan matures on March 31, 2021. The 2013 Prospect Loan may be accelerated upon a change in control (as defined in the Term Loan Agreement) or other events of default as set forth therein and would be subject to mandatory acceleration upon an insolvency of DC Holdings LLC. The 2013 Prospect Loan is payable on a voluntary basis after the second anniversary of the initial borrowing in whole but not in part, subject to a prepayment penalty equal to 5.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after the second anniversary but prior to the third anniversary of issuance, a prepayment penalty of 4.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after such third anniversary but prior to the fourth anniversary of issuance, a prepayment penalty of 3.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after such fourth anniversary but prior to the fifth anniversary of issuance, a prepayment penalty of 2.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after such fifth anniversary but prior to the sixth anniversary of issuance, a prepayment penalty of 1.00% of the principal amount prepaid if the 2013 Prospect Loan is prepaid after such sixth anniversary but prior to the seventh anniversary of issuance, and without penalty if the 2013 Prospect Loan is prepaid thereafter, plus cash in an amount equal to the accrued and unpaid interest amount with respect to the principal amount through and including the prepayment date.

In connection with the 2013 Prospect Loan, the Company assigned to DC Holdings LLC its rights to receive servicing fees under the Company’s Phase I and Phase II deployments. Pursuant to a Limited Recourse Pledge Agreement (the “Limited Recourse Pledge”) executed by the Company and a Guaranty, Pledge and Security Agreement (the “Prospect Guaranty and Security Agreement”) among DC Holdings LLC, AccessDM, Phase 2 DC and Prospect, as Prospect Collateral Agent, the Prospect Loan is secured by, among other things, a first priority pledge of the stock of Holdings owned by the Company, the stock of AccessDM owned by DC Holdings LLC and the stock of Phase 2 DC owned by the Company, and guaranteed by AccessDM and Phase 2 DC. The Company provides limited financial support to the 2013 Prospect Loan not to exceed $1,500 per year in the event financial performance does not meet certain defined benchmarks.

The 2013 Prospect Loan Agreement contains customary representations, warranties, affirmative covenants, negative covenants and events of default. The balance of the 2013 Prospect Loan Agreement at June 30, 2014 and March 31, 2014 was as follows:

	As of June 30, 2014			As of March 31, 2014
2013 Prospect Loan Agreement, at issuance	$	70,000		$	70,000
PIK Interest	2,338			1,906
Payments to date	(3,624		)	(3,452		)
2013 Prospect Loan Agreement, net	68,714			68,454
Less current portion	—			—
Total long term portion	$	68,714		$	68,454

KBC Facilities

In December 2008, Phase 2 B/AIX, a direct wholly-owned subsidiary of Phase 2 DC and an indirect wholly-owned subsidiary of the Company, began entering into multiple credit facilities to fund the purchase of Systems from Barco, Inc. to be installed in movie theatres as part of the Company’s Phase II Deployment. A summary of the credit facilities is as follows:

						Outstanding Principal Balance				Draw as of
Facility1	Credit Facility		Interest Rate2		Maturity Date	As of June 30, 2014		As of March 31, 2014		As of June 30, 2014
1	$	8,900	8.50	%	December 2016	$	—	$	—	$	—
2	2,890		3.75	%	December 2017	212		315		—
3	22,336		3.75	%	September 2018	12,764		13,561		—
4	13,312		3.75	%	September 2018	8,082		8,558		—
5	11,425		3.75	%	March 2019	7,752		8,160		—
6	6,450		3.75	%	December 2018	4,146		4,376		—
	$	65,313				$	32,956	$	34,970	$	—

¹ For each facility, principal is to be repaid in twenty-eight quarterly installments.

² The interest rate for facilities 2 through 6 are the three month LIBOR rate of 0.23% at June 30, 2014, plus the interest rate noted above.

Cinedigm Credit Agreement

On October 17, 2013, the Company entered into a credit agreement (the “Cinedigm Credit Agreement”) with Société Générale, New York Branch, as administrative agent and collateral agent for the lenders party thereto and certain other secured parties (the “Collateral Agent”). Under the Cinedigm Credit Agreement and subject to the terms and conditions thereof, the Company may borrow an aggregate principal amount of up to $55,000, including term loans of $25,000 (the “Cinedigm Term Loans”) and revolving loans of up to $30,000 (the “Cinedigm Revolving Loans”). All of the Cinedigm Term Loans, for which principal will be paid quarterly, and $15,000 of the Cinedigm Revolving Loans were drawn at closing in connection with funding the GVE Acquisition upon the Company’s contribution of such funds. Each of the Cinedigm Term Loans and the Cinedigm Revolving Loans bears interest at the base rate plus 3.0% or the eurodollar rate plus 4.0%. Base rate, per annum, is equal to the highest of (a) the rate quoted by the Wall Street Journal as the “base rate on corporate loans by at least 75% of the nation’s largest banks,” (b) 0.50% plus the federal funds rate, and (c) the eurodollar rate plus 1.0%. All collections and revenues of CEG will be deposited into a special blocked account, from which amounts are paid out on a monthly basis to pay certain operating expenses and principal, interest, fees, costs and expenses relating to the Cinedigm Credit Agreement according to certain designated priorities. On a quarterly basis, if funds remain after the payment of all such amounts, a portion of such funds will be applied to prepay the Cinedigm Term Loans. The Cinedigm Term Loans and Cinedigm Revolving Loans mature and must be paid in full by October 21, 2016. In addition, the Company may prepay the Cinedigm Term Loans and Cinedigm Revolving Loans, in whole or in part, subject to paying certain breakage costs, as applicable.

The balance of the Cinedigm Term Loans as of June 30, 2014 was as follows:

	As of June 30, 2014			As of March 31, 2014
Cinedigm Term Loans, at issuance, net	$	25,000		$	25,000
Payments to date	(1,750		)	(875		)
Discount on Cinedigm Term Loans	(327		)	(360		)
Cinedigm Term Loans, net	22,923			23,765
Less current portion	(4,000		)	(3,750		)
Total long term portion	$	18,923		$	20,015

At June 30, 2014 and March 31, 2014, the balances of the Cinedigm Revolving Loans was $11,608 and $15,469, respectively.

2013 Notes

On October 17, 2013 and October 21, 2013, the Company entered into securities purchase agreements (the “Securities Purchase Agreements”) with certain investors party thereto (the “Investors”) pursuant to which the Company agreed to sell to the Investors notes in the aggregate principal amount of $5,000 (the “2013 Notes”) and warrants to purchase an aggregate of 1,500,000 shares of Class A Common Stock (the “2013 Warrants”). The sales were consummated on October 21, 2013. The proceeds of the sales of the 2013 Notes and 2013 Warrants were used for working capital and general corporate purposes, including to finance, in part, the GVE Acquisition. The Company allocated a proportional value of $1,598 to the 2013 Warrants using a Black-Scholes option valuation model with the following assumptions:

Risk free interest rate	1.38	%
Dividend yield	—
Expected life (years)	5
Expected volatility	76.25	%

The Company has treated the proportional value of the 2013 Warrants of $1,598 as a debt discount. The debt discount of the 2013 Notes will be amortized through the maturity of the 2013 Notes as interest expense.

The principal amount outstanding under the 2013 Notes is due on October 21, 2018. The 2013 Notes bear interest at 9.0% per annum, payable in quarterly installments over the term of the 2013 Notes. The 2013 Notes entitle the Company to redeem the 2013 Notes any time on or after October 21, 2015, subject to certain premiums.

Letters of Credit

As of June 30, 2014, outstanding letters of credit amounted to $4,000. No amounts were drawn upon during the three months ended June 30, 2014.

At June 30, 2014, the Company was in compliance with all of its debt covenants.

XML

NATURE OF OPERATIONS - PURCHASE PRICE ALLOCATION (Details) (USD $) In Thousands, unless otherwise specified					3 Months Ended		3 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Mar. 31, 2014 Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member]	Oct. 21, 2013 Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member]	Jun. 30, 2014 Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member] Content library	Oct. 21, 2013 Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member] Content library	Jun. 30, 2014 Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member] Supplier contracts and relationships	Oct. 21, 2013 Gaiam Americas, Inc. and Gaiam, Inc. (GVE) [Member] Supplier contracts and relationships
Business Acquisition [Line Items]
Accounts receivable				$ 15,524
Inventory				2,224
Advances				7,698
Other assets				152
Intangible assets subject to amortization						17,211		11,691
Goodwill	27,944	25,494	27,944	16,952
Total assets acquired				71,452
Total liabilities assumed				(19,952)
Total net assets acquired				$ 51,500
Intangible asset useful life					6 years		8 years

XML

NOTES PAYABLE OUTSTANDING (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014	Feb. 28, 2013
2013 Term Loans
Notes Payable:
Debt Instrument, Face Amount	$ 125,087	$ 125,087	$ 130,000
Debt Instrument, Payments to Date	38,456	30,543
Debt Instrument, Unamortized Discount	247	266
Long-term Debt	86,384	94,278
Long Term Portion	60,884	68,590
2013 Prospect Term Loan Agreement
Notes Payable:
Debt Instrument, Face Amount	70,000	70,000	70,000
PIK Interest Accrued	2,338	1,906
Debt Instrument, Payments to Date	3,624	3,452
Long-term Debt	68,714	68,454
Current Portion	0	0
Long Term Portion	68,714	68,454
Notes Payable
Notes Payable:
Current Portion	49,148	53,044
Long Term Portion	177,887	188,304
Non-recourse Notes Payable [Member]
Notes Payable:
Current Portion	33,540	33,825
Long Term Portion	155,388	164,779
Non-recourse Notes Payable [Member] | 2013 Term Loans
Notes Payable:
Current Portion	25,500	25,688
Long Term Portion	60,884	68,590
Non-recourse Notes Payable [Member] | 2013 Prospect Term Loan Agreement
Notes Payable:
Current Portion	0	0
Long Term Portion	68,714	68,454
Non-recourse Notes Payable [Member] | KBC Facilities
Notes Payable:
Current Portion	7,858	7,961
Long Term Portion	25,098	27,009
Non-recourse Notes Payable [Member] | P2 Vendor Notes
Notes Payable:
Current Portion	110	105
Long Term Portion	450	466
Non-recourse Notes Payable [Member] | P2 Exhibitor Notes
Notes Payable:
Current Portion	72	71
Long Term Portion	242	260
Recourse Notes Payable [Member]
Notes Payable:
Current Portion	15,608	19,219
Long Term Portion	22,499	23,525
Recourse Notes Payable [Member] | 2010 Note, net of discount
Notes Payable:
Current Portion	4,000	3,750
Long Term Portion	18,923	20,015
Recourse Notes Payable [Member] | Cinedigm Term Loans [Member]
Notes Payable:
Current Portion	11,608	15,469
Long Term Portion	0	0
Recourse Notes Payable [Member] | Notes 2013 Due 2018 [Member]
Notes Payable:
Current Portion	0	0
Long Term Portion	$ 3,576	$ 3,510

XML

NOTES PAYABLE (Tables)

3 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Schedule of Notes Payable

Notes payable consisted of the following:

	As of June 30, 2014				As of March 31, 2014
Notes Payable	Current Portion		Long Term Portion		Current Portion		Long Term Portion
2013 Term Loans, net of debt discount	$	25,500	$	60,884	$	25,688	$	68,590
2013 Prospect Loan Agreement	—		68,714		—		68,454
KBC Facilities	7,858		25,098		7,961		27,009
P2 Vendor Note	110		450		105		466
P2 Exhibitor Notes	72		242		71		260
Total non-recourse notes payable	$	33,540	$	155,388	$	33,825	$	164,779
Cinedigm Term Loans	$	4,000	$	18,923	$	3,750	$	20,015
Cinedigm Revolving Loans	11,608		—		15,469		—
2013 Notes	—		3,576		—		3,510
Total recourse notes payable	$	15,608	$	22,499	$	19,219	$	23,525
Total notes payable	$	49,148	$	177,887	$	53,044	$	188,304

Debt Instrument [Line Items]

Schedule of Debt Outstanding

The balance of the Cinedigm Term Loans as of June 30, 2014 was as follows:

	As of June 30, 2014			As of March 31, 2014
Cinedigm Term Loans, at issuance, net	$	25,000		$	25,000
Payments to date	(1,750		)	(875		)
Discount on Cinedigm Term Loans	(327		)	(360		)
Cinedigm Term Loans, net	22,923			23,765
Less current portion	(4,000		)	(3,750		)
Total long term portion	$	18,923		$	20,015

Schedule of Credit Facilities

A summary of the credit facilities is as follows:

						Outstanding Principal Balance				Draw as of
Facility1	Credit Facility		Interest Rate2		Maturity Date	As of June 30, 2014		As of March 31, 2014		As of June 30, 2014
1	$	8,900	8.50	%	December 2016	$	—	$	—	$	—
2	2,890		3.75	%	December 2017	212		315		—
3	22,336		3.75	%	September 2018	12,764		13,561		—
4	13,312		3.75	%	September 2018	8,082		8,558		—
5	11,425		3.75	%	March 2019	7,752		8,160		—
6	6,450		3.75	%	December 2018	4,146		4,376		—
	$	65,313				$	32,956	$	34,970	$	—

¹ For each facility, principal is to be repaid in twenty-eight quarterly installments.

² The interest rate for facilities 2 through 6 are the three month LIBOR rate of 0.23% at June 30, 2014, plus the interest rate noted above.

Schedule of Assumptions for Fair Value of Warrant LIabilities

The Company allocated a proportional value of $1,598 to the 2013 Warrants using a Black-Scholes option valuation model with the following assumptions:

Risk free interest rate	1.38	%
Dividend yield	—
Expected life (years)	5
Expected volatility	76.25	%

2013 Term Loans

Debt Instrument [Line Items]

Schedule of Debt Outstanding

The balance of the 2013 Term Loans, net of the original issue discount, at June 30, 2014 was as follows:

	As of June 30, 2014			As of March 31, 2014
2013 Term Loans, at issuance, net	$	125,087		$	125,087
Payments to date	(38,456		)	(30,543		)
Discount on 2013 Term Loans	(247		)	(266		)
2013 Term Loans, net	86,384			94,278
Less current portion	(25,500		)	(25,688		)
Total long term portion	$	60,884		$	68,590

2013 Prospect Term Loan Agreement

Debt Instrument [Line Items]

Schedule of Debt Outstanding

The 2013 Prospect Loan Agreement contains customary representations, warranties, affirmative covenants, negative covenants and events of default. The balance of the 2013 Prospect Loan Agreement at June 30, 2014 and March 31, 2014 was as follows:

	As of June 30, 2014			As of March 31, 2014
2013 Prospect Loan Agreement, at issuance	$	70,000		$	70,000
PIK Interest	2,338			1,906
Payments to date	(3,624		)	(3,452		)
2013 Prospect Loan Agreement, net	68,714			68,454
Less current portion	—			—
Total long term portion	$	68,714		$	68,454