New acquisitions on the roadmap as Cinedigm closes direct offering | Media investment | Business | New

After a slew of content additions and corporate acquisitions, movie subscription companies Fandor and The Film Detective, growing streaming service Cinedigm consummated the sale of 5.6 million common shares class A.

The stake has a purchase price of $1.25 per share in a registered direct offering to a single institutional investor and the company plans to use the sale proceeds to withdraw the remaining approximately $3. $2 million in second lien debt and for other content and streaming channels. acquisitions, in addition to other general corporate uses. Following the repayment of the remaining second lien debt, the Company’s only recourse debt will be its revolving credit facility with East West Bank, an asset-backed loan which currently has a balance below $3 million and an interest rate interest rate of 3.75%.

The loan reduction plan is the latest step in Cinedigm’s initiative to reduce its debt and interest charges. The company noted that since December 31, 2019, it had reduced its overall debt by $35.0 million, or 68% and had converted $15 million into notes convertible into shares at $1.50 per share, reduced second lien loans from $8.1 million to zero, reduced our revolving credit asset base by $13.5 million, or 85%, to $2.7 million, and reduced commercial debt by movie equipment inherited without recourse of $523,000 to reach the current balance of $12 million.

Proceeds from this offering will also be used to accelerate Cinedigm’s streaming acquisition strategy, which the company plans to pursue based on the new funding. The intent is to acquire additional enthusiast-backed streaming channels that Cinedigm believes can immediately benefit from its scale, content library, distribution footprint, infrastructure and technical prowess.

“Following this registered direct offering and the scheduled repayment of all remaining junior debt, our balance sheet will be stronger than ever,” said Cinedigm President and COO Gary Loffredo. “We will be virtually debt-free now with a small revolving credit facility at a very favorable interest rate. Equally important, we will have the cash and balance sheet firepower to continue the rapid execution of our deployment strategy in streaming, with more impactful, accretive and cash-positive acquisition targets like The Film Detective and Fandor (pictured) that will immediately benefit from streaming technology, distribution reach, infrastructure and Cinedigm’s digital content library.