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Cinedigm Transfers Select Debt Into Common Stock

28 Dec, 2016 By: Erik Gruenwedel

Seeking to further reduce overhead fiscal costs, Cinedigm Dec. 28 announced it has secured financing transactions with two institutional investors.

The home entertainment distributor and operator of over-the-top video platforms transferred more than $3.4 million in convertible notes due in 2035 to 450,000 shares of Class A common stock, with warrants to purchase an additional 200,000 shares at an exercise price of $1.60 per share.

Separately, Cinedigm reached an agreement with another institutional investor to terminate outstanding warrants to purchase more than 1.7 million common stock for $12.36 per share in exchange for “minimal consideration.”

CEO Chris McGurk said the transactions underscore “significant” progress in achieving the distributor’s financing objectives, which include additional accretive exchanges of convertible and mezzanine debt.

“These accretive financing transactions both serve to further strengthen and simplify our balance sheet, and the termination of convertible debt also reduces our cash interest cost, all consistent with our ongoing strategic financing objectives,” McGurk said in a statement.

Indeed, Cinedigm reported a loss of $557,000 in its most-recent fiscal period, which marked a 98% improvement from a loss of $22.4 million during the previous-year period.

The distributor continues to put significant resources into OTT video, including proprietary subscription services Dove Channel, CONtv and Docurama.

The three channels currently have about 3.1 million app downloads, 570,000 registered users and approximately 76,000 active subscribers.

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