Entry into a Definitive Material Agreement.
On March 14, 2019, Cinedigm Corp. (the “Company”)
and C&F Merger Sub, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”), entered into an Agreement and
Plan of Merger (the “Agreement”) with Future Today Inc (“Future Today”), Alok Ranjan and Vikrant Mathur
(individually and as Stockholder Representative) and the Company Stockholders identified therein, pursuant to which Future Today
will merge with Merger Sub and, as a result, become wholly-owned by the Company (the “Acquisition”). Future Today,
founded in 2006, operates an over-the-top (OTT) Advertising Video on Demand (AVOD) platform with extensive distribution connections.
The Company has agreed to pay an aggregate purchase price of
$60,000,000, subject to a post-closing adjustment, consisting of (i) $45,000,000 in cash and (ii) 10,000,000 shares of Class A
Common Stock, par value $0.001 per share, of the Company (the “Common Stock”) valued at $15,000,000, or $1.50 per share,
subject to certain transfer restrictions, in each case upon the closing of the Acquisition. In addition, the Agreement provides
for an earnout of up to $20,940,000 if certain performance targets are achieved during the first three years following the closing
of the Acquisition (the “Earnout”). Up to half of the Earnout may be paid in shares of Common Stock (valued at a floor
of $1.50 per share), provided that if any year the Earnout target is exceeded by 30%, the Earnout for that year must all be paid
The Agreement contains certain conditions to closing, including
that (x) the Company completes financial due diligence about Future Today to its satisfaction, (y) the Company obtains financing
for the cash portion of the purchase price on terms satisfactory to it, and (z) the Company obtains required consents from certain
of its lenders. The Agreement also provides for termination of the Agreement under certain circumstances, including by either party
if the Acquisition has not closed by June 30, 2019.
The Company has obtained the approval of the Acquisition by
the Company’s majority stockholder and will mail a copy of an information statement relating thereto (the “Information
Statement”) to its stockholders. In order to comply with SEC rules and regulations, the Agreement provides that, under certain
circumstances, only approximately 7,1000,000 million shares of Common Stock will be issued at closing, with the balance being issued
approximately 20 days after the Information Statement is first mailed to the Company’s stockholders.
The Agreement contains representations and warranties and covenants
as are customary for transactions of this type. The Company expects to close the Acquisition in the second calendar quarter of
The parties have agreed to make a voluntary filing for approval
by the Committee on Foreign Investment in the US (“CFIUS”), but obtaining CFIUS approval is not a condition to closing.
The foregoing description of the Agreement does not purport
to be complete and is qualified in its entirety by reference to and incorporates herein by reference the full text of the Agreement,
which will be filed in accordance with SEC regulations.
On March 15, 2019, the Company issued a press release announcing the Agreement, a copy of which is attached
hereto as Exhibit 99.1.