CNVS

MKT CAP $37.3MP/E —DIV YIELD —FCF YIELD —REV TTM $85.2M +6.3%NET INCOME −$10.8M −428.2%NET DEBT $193.8M52W 1.56 – 3.20SEC XBRL · TTM TO Invalid Date

How CNVS rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

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New in FY2026

For the year ended March 31, 2026, we have net loss attributable to common stockholders of $(9.2) million.
As of March 31, 2026, we had an accumulated deficit of $510.1 million and net cash used in operations for the fiscal year ended March 31, 2026 was $26.5 million.
We have negative working capital of $(12.2) million as of March 31, 2026, we may continue to generate net losses for the foreseeable future.
The Company is party to a Loan, Guaranty, and Security Agreement, as amended on April 8, 2025 , with East West Bank (the "Line of Credit Facility") currently provides for borrowings of up to $ 12.5 million guaranteed by substantially all of our material subsidiaries and secured by substantially all of our and our subsidiaries’ assets.
The facility includes provisions that allow for an increase in total borrowing capacity up to $ 15.0 million, subject to lender approval.
As of March 31, 2026, $9.4 million was outstanding on the Line of Credit Facility.
Please see Note 5 - Debt for further information regarding the Company's Line of Credit Facility.
On February 17, 2026, the Company sold in a public offering an aggregate of 1,725,000 shares of Common Stock (the “Offered Shares”) at a price of $2.00 per share, for aggregate gross proceeds of approximately $3.45 million, before deducting underwriting commissions and expenses payable by the Company The Offered Shares were sold pursuant to an Underwriting Agreement with The Benchmark Company, LLC and pursuant a prospectus and prospectus supplement which are part of the Company’s shelf registration statement on Form S-3 (File No. 333-273098) filed with the SEC.
On February 12, 2026, the Company issued and sold convertible notes in the aggregate principal amount of $13,000,000 (each, a “Note”) to certain lenders (individually, an “Investor” and collectively, the “Investors”) pursuant to those certain note purchase agreements (each, a “Purchase Agreement”), dated February 12, 2026, between the Company and each Investor.
The Notes mature on the earlier to occur of (i) the four-year anniversary of issuance and (ii) an event of default (such date, the “Maturity Date”).
The Notes bear interest at a rate of 9 % per annum payable in cash or, as to a portion, in shares of Common Stock in the holder’s discretion.
At any time after issuance of the Notes, the Investors may convert their Notes, in whole or in part, into shares of Common Stock, in accordance with the terms of the Notes at a conversion price per share of $ 2.00 (the “Conversion Price”), subject to customary adjustments upon any stock split, stock dividend, stock combination, recapitalization or similar events.
The Company can require conversion in tranches of up to approximately 15 % of the original principal amount of the Notes during each of the six-month periods beginning July 1, 2026 and ending December 31, 2028, with any unconverted tranches available on a cumulative basis in future tranches.
The Notes may be prepaid by paying 100 % of the outstanding principal amount, interest on the outstanding principal amount through the earlier of the Maturity Date or the date that is 24 months from the date of prepayment, and warrants (the “Warrants”) to purchase the number of shares of Common Stock into which the principal amount then outstanding would be convertible at the Conversion Price, with such warrants having an exercise price equal to such Conversion Price and a term that ends on the Maturity Date.
The Notes rank junior to secured debt of the Company, including the Line of Credit Facility.
On May 3, 2024, the Company entered into an at-the-market, or ATM, Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners and The Benchmark Company, LLC (collectively, the “Sales Agents”), pursuant to which the Company may offer and sell, from time to time, through the Sales Agents, shares of its Class A common stock, par value $0.001 per share (the “Common Stock”).
The Company is not obligated to sell any shares under the Sales Agreement.
During the year ended March 31, 2026, the Company sold 397 thousand shares for net proceeds of $1.0 million, after deduction of commissions and fees.
The T3 Loan Agreement provides for a term loan with a principal amount not to exceed $3,666,000 (the “T3 Loan”), and a maturity date of April 1, 2025.
The T3 Loan incurred no interest until the maturity date other than an interest advance equal to $576,000 at the closing of the T3 Loan on April 5, 2024.
The interest advance was recorded as a discount on the T3 Loan at inception and was amortized to interest expense and increase the loan amount over its term.
The T3 Loan, including interest of $576 thousand, was repaid in advance during the year ended March 31, 2025.
After the principal of the T3 Loan was paid in full, the T3 Lender was entitled to receive 15% of all royalties earned by the Company on the Film under its distribution agreements for the Film until the T3 Lender received 1.75 times the full commitment amount of $3,666,000, consisting of the principal amount plus interest and fees advanced to T3 Borrower ("Participation Interest"), plus any extension interest.
The T3 Loan was secured by a first priority interest in all of T3 Borrower’s rights and interest in the Film and the distribution agreements, including the proceeds to the T3 Borrower from the distribution of the Film.
During the fiscal year ended March 31, 2026, the Company paid the T3 Lender $700,000 in Participation Interest During the year ended March 31, 2026, the Company negotiated a reduction to the accrued Participation Interest of $375 thousand and made a final payment of $944 thousand to the T3 Lender.
The $ 375 thousand reduction to Participation Interest was recorded as a reduction to interest expense in our Consolidated Statement of Operations for the year ended March 31, 2026.
As of March 31, 2026 and 2025, short term content advances were $7.5 million and $6.7 million, respectively, and content advances, net of current portion were, $8.2 million and $4.1 million, respectively.
Management's plans with respect to the Company's recurring net losses and net operating cash outflows also include but are not limited to our effort in increasing revenue from existing services as well as offering new services, which may result in additional income from operations.
Should management be unsuccessful in executing these plans, additional capital resources will be necessary.
There can be no assurance that resources under our Line of Credit Facility or from additional debt or equity resources will be available on acceptable terms, if at all.
We believe our cash and cash equivalents and availability under our Line of Credit Facility as of March 31, 2026 will be sufficient to support our operations for at least twelve months from the filing of this report.
In the years ended March 31, 2026 and 2025, no impairment charges were recorded to intangible assets.
Business Combinations We record tangible and intangible assets acquired and liabilities assumed in business combinations under the purchase method of accounting.
Amounts paid for each acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition.
We then allocate the purchase price in excess of net tangible assets acquired to identifiable intangible assets based on detailed valuations that use information and assumptions provided by management.
We allocate any excess purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed to goodwill.
If the fair value of the assets acquired exceeds the purchase price, the excess is recognized as a gain.
Significant management judgments and assumptions are required in determining the fair value of acquired assets and liabilities, particularly acquired intangible assets.
The valuation of purchased intangible assets is based upon estimates of the future performance and cash flows from the acquired business.
Each asset is measured at fair value from the perspective of a market participant.

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Gone since FY2025

For the year ended March 31, 2025, we have net income attributable to common stockholders of $3.2 million.
As of March 31, 2025, we had an accumulated deficit of $500.9 million and net cash provided by operations for the fiscal year ended March 31, 2025 was $17.4 million.
Although we have positive working capital of $3.6 million as of March 31, 2025, we may continue to generate net losses for the foreseeable future.
The Company is party to a Loan, Guaranty, and Security Agreement, as amended on April 8, 2025 , with East West Bank ("EWB") providing for a $ 12.5 million Line of Credit Facility and expandable to $ 15.0 million, guaranteed by substantially all of our material subsidiaries and secured by substantially all of our and our subsidiaries’ assets.
The Line of Credit Facility bears interest at a rate equal to 1.25 % above the prime rate , equal to 8.75 % as of March 31, 2025.
The Line of Credit Facility matures on April 8, 2028 .
As of March 31, 2025, $0 was outstanding on the Line of Credit Facility.
Please see Note 7 - Debt for further information regarding the Company's Line of Credit Facility.
The T3 Loan Agreement provides for a term loan with a principal amount not to exceed $3,666,000 (the “T3 Loan”), and a maturity date of April 1, 2025, unless extended for 120 days under certain conditions.
The T3 Loan bears no interest until the maturity date other than an interest advance equal to $576,000 at the closing of the T3 Loan on April 5, 2024.
The interest advance was recorded as a discount on the T3 Loan at inception and will be amortized to interest expense and increase the loan amount over its term.
If the T3 Loan is extended as noted above, the T3 Loan will bear interest at a rate of 1.44 % per month.
The T3 Borrower may prepay the obligations under the T3 Loan, in full or in part, without penalty or premium.
The T3 Loan Agreement contains customary covenants, representation and warranties and events of default.
The T3 Loan, including interest of $576 thousand, was repaid in advance during the quarter ended December 31, 2024.
After the principal of the T3 Loan is paid in full, the T3 Lender will be entitled to receive 15% of all royalties earned by the Company on the Film under its distribution agreements for the Film until the T3 Lender has received 1.75 times the full commitment amount of $3,666,000, consisting of the principal amount plus interest and fees advanced to T3 Borrower ("Participation Interest"), plus any extension interest, if applicable.
The T3 Loan is secured by a first priority interest in all of T3 Borrower’s rights and interest in the Film and the distribution agreements, including the proceeds to the T3 Borrower from the distribution of the Film.
In April 2025, the Company paid the T3 Lender $700,000 in Participation Interest.
On May 3, 2024, the Company entered into a Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners and The Benchmark Company, LLC (collectively, the “Sales Agents”), pursuant to which the Company may offer and sell, from time to time, through the Sales Agents, shares of its Class A common stock, par value $0.001 per share (the “Common Stock”).
The Company is not obligated to sell any shares under the Sales Agreement and has not sold any shares through the date of this report.
In June, 2023, the Company issued and sold 2,150,000 shares of Common Stock, 516,667 prefunded warrants, and warrants to purchase up to 2,666,667 shares of Common Stock at a combined public offering price of $3.00 per share and accompanying warrant for aggregate gross proceeds of approximately $7.4 million, after deducting placement agent fees and other offering expenses in the amount of $0.6 million.
The warrants have an exercise price of $3.00 per share, were exercisable immediately and will expire five years from issuance.
The Company received $2.999 per share for the pre-funded warrants, with the remaining $0.001 due at the time of exercise.
All 516,667 pre-funded warrants were subsequently exercised in July 2023 for total proceeds of $0.5 thousand.
All common warrants were issued as immediately exercisable and 2,654 thousand common warrants remain outstanding as of March 31, 2025.
In July 2020, we entered into an At-the-Market sales agreement (the “ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“A.G.P.”) and B.
Riley” and, together with A.G.P., the “Sales Agents”), pursuant to which the Company may offer and sell, from time to time, through the Sales Agents, shares of Common Stock at the market prices prevailing on Nasdaq at the time of the sale of such shares.
For the year ended March 31, 2024, the Company sold 176,751 shares for $1.1 million in net proceeds, after deduction of commissions and fees.
The ATM Sales Agreement terminated on January 6, 2024 .
As of March 31, 2025 and 2024, short term content advances were $6.7 million and $9.3 million, respectively, and content advances, net of current portion were, $4.1 million and $2.6 million, respectively.
We believe our cash and cash equivalents and availability under our Line of Credit Facility as of March 31, 2025 will be sufficient to support our operations for at least twelve months from the filing of this report.
In the years ended March 31, 2025 and 2024, no impairment charges were recorded to intangible assets.
We recognize revenue in the amount that reflects the consideration we expect to receive in exchange for the services provided, sales of physical products (DVD’s and Blu-ray Discs) or when the content is available for subscription on the digital platform or available on the point-of-sale for transactional and video on demand services which is when the control of the promised products and services is transferred to our customers and our performance obligations under the contract have been satisfied.
The Company’s performance obligations include the delivery of content for transactional, subscription and ad supported/free ad-supported streaming TV (“FAST”) on the digital platforms, and shipment of DVDs and Blu-ray Discs.
Shipping and Handling Shipping and handling costs are incurred to move physical goods (e.g., DVDs and Blu-ray Discs) to customers.
Deferred revenue includes payments related to the sale of DVDs with future release dates or subscription dues paid in advance.
Deferred revenue that is short term in nature, carried a balance as of March 31, 2025 and 2024 of $0.2 million and $0.4 million, respectively.
For the years ended March 31, 2025 and 2024, the additions to our deferred revenue balance were primarily due to cash payments received or due in advance of satisfying performance obligations, while the reductions to our deferred revenue balance were primarily due to the recognition of revenue upon fulfillment of our performance obligations, both of which were in the ordinary course of business.
Results of Operations for the Fiscal Years Ended March 31, 2025 and 2024 (in thousands, except where noted below) Revenues For the Fiscal Year Ended March 31, As a % of Revenue 2025 2024 $ Change % Change 2025 2024 Streaming and digital $ 44,408 $ 37,312 $ 7,096 % % % Base distribution 28,614 5,259 23,355 % % % Podcast and other 4,893 2,718 2,175 % % % Other non-recurring 3,842 (3,576 ) (93 )% — % % Total Revenue $ 78,181 $ 49,131 $ 29,050 % % % For the year ended March 31, 2025, the Company's revenue increased by $29.1 million.
Streaming and digital revenue improved by $7.1 million, primarily due to: (i) $3.3 million license fee revenue recorded during the period related to the licensing of the Dog Whisperer and Terrifier 3 contents, and (ii) net favorable impact of other content releases' timing relative to the same period in the prior year.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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