Stockholders' Equity

6 Months Ended

Sep. 30, 2021

Stockholders' Equity Note [Abstract]

STOCKHOLDERS’ EQUITY

6. STOCKHOLDERS’ EQUITY

COMMON STOCK

During the six months ended September 30, 2021, we issued 2,883,907 shares of Common Stock which consists of the issuance of Common Stock for business combination, the issuances of Common Stock in payment of preferred stock dividends and in payment of board retainer fees.

PREFERRED STOCK

Cumulative dividends in arrears on preferred stock were $0.2 million and $0.1 million as of September 30, 2021 and March 31, 2021. In May 2021, we paid the preferred stock dividends in arrears in the form of 53,278 shares of Class A common stock.

TREASURY STOCK

We have treasury stock, at cost, consisting of 1,315,851 and 1,313,836 shares of Class A common stock at September 30, 2021 and March 31, 2021, respectively.

CINEDIGM’S EQUITY INCENTIVE PLANS

Stock Based Compensation Awards

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

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

As of September 30, 2021, there were 218,837 stock options outstanding in the 2000 Plan with weighted average exercise price of $14.48 and a weighted average contract life of 1.67 years. As of March 31, 2021, there were 261,587 shares pursuant to stock options outstanding in the Plan with weighted average exercise price of $14.99 and a weighted average contract life of 2.11 years. A total of 42,500 options expired and 250 options forfeited during the three and six months ended September 30, 2021.

Options outstanding under the 2000 Plan as of September 30, 2021 is as follows:

As of September 30, 2021
Range of Prices	Options Outstanding		Weighted Average Remaining Life in Years		Weighted Average Exercise Price		Aggregate Intrinsic Value (In thousands)
$7.40 - $13.69		5,000		3.75	$	7.40	$	—
$13.70 - $24.40		213,837		1.62		14.65		—
		218,837					$	—

An analysis of all options exercisable under the 2000 Plan as of September 30, 2021 is presented below:

Options Exercisable		Weighted Average Remaining Life in Years		Weighted Average Exercise Price		Aggregate Intrinsic Value (In thousands)
	218,837		1.67	$	14.48		—

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

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

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

During the six months ended September 30, 2021, the Company granted 1,409,000 stock appreciation rights (“SARs”). The SARs were granted under the Company’s 2017 Equity Incentive Plan (the “2017 Plan), except for 600,000 SARs granted an officer of the Company as an inducement grant. All SARs issued have an exercise price equal to the fair value of the Company’s Class A common stock on the date of grant and a maturity date of 10 years. The SARs were valued on the grant date utilizing an option pricing model, as follows:

Grant Date: May 23, 2021 – September 13, 2021

Maturity Date: May 23, 2031 – March 31, 2034

Exercise price: $1.29 - $2.10

Volatility: 110.32% - 114.42%

Discount rate: 0.96% - 1.08%

Expected term: 6 – 6.5 years

Stock appreciation rights outstanding under the 2017 Plan as of September 30, 2021 is as follows:

As of September 30, 2021
Range of Prices		SAR´s Outstanding		Weighted Average Remaining Life in Years		Weighted Average Exercise Price		Aggregate Intrinsic Value (In thousands)
	$0.54 - $0.74		5,550,000		9.23	$	0.66	$	10,624
	$1.16 - $1.47		2,046,610		8.05		1.35		2,304
	$1.71 - $2.10		2,682,114		9.40		1.97		1,429
			10,278,724					$	14,357

An analysis of all stock appreciation rights exercisable under the 2017 Plan as of September 30, 2021 is presented below:

Options Exercisable		Weighted Average Remaining Life in Years		Weighted Average Exercise Price		Aggregate Intrinsic Value (In thousands)
	2,576,740		7.51	$	1.16		3,952

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

	Three Months Ended September 30,				Six Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Selling, general and administrative	$	946	$	1,035	$	1,929	$	1,212
	$	946	$	1,035	$	1,929	$	1,212

Total SARs outstanding are as follows:

	Six Months Ended September 30, 2021
SARs Outstanding March 31, 2021		9,154,933
Issued		1,409,000
Forfeited		(285,209	)
Total SARs Outstanding September 30, 2021		10,278,724

There was $1 thousand and $1 thousand of stock-based compensation recorded for the six months ended September 30, 2021 and 2020, respectively, related to employees’ restricted stock awards. There was $0 thousand and $1 thousand of stock-based compensation recorded for the three months ended September 30, 2021 and 2020, respectively, related to employees’ restricted stock awards.

There was $193  thousand and $131 thousand of stock-based compensation for the six months ended September 30, 2021 and 2020, respectively, related to board of directors. There was $71 thousand and $65 thousand of stock-based compensation for the three months ended September 30, 2021 and 2020, respectively, related to board of directors. During the six months ended September 30, 2021, the Company issued 35,714 shares to the board of directors.

OPTIONS GRANTED OUTSIDE CINEDIGM’S EQUITY INCENTIVE PLAN

In October 2013, we issued options outside of the 2000 Plan to 10 individuals who became employees as a result of a business combination. The employees received options to purchase an aggregate of 62,000 shares of our Class A Common Stock at an exercise price of $17.50 per share. The options were fully vested as of October 2017 and expire 10 years from the date of grant, if unexercised. As of September 30, 2021, 12,500 of such options remained outstanding.

WARRANTS

The following table presents information about outstanding warrants to purchase shares of our Class A common stock as of September 30, 2021. All of the outstanding warrants are fully vested and exercisable.

Recipient	Amount outstanding		Expiration	Exercise price per share
Warrants issued in connection with Convertible Notes exchange transaction		246,019	December 2021	$	1.30
5-year Warrant issued to BEMG in connection with a term loan agreement		1,400,000	December 2022	$	1.80

Warrants for the purchase of 52,500 shares of Common Stock expired unexercised during the three months ended September 30, 2021.