STOCKHOLDERS’ DEFICIT

COMMON STOCK

On October 31, 2017, the Company filed a Fifth Amended and Restated Certificate of Incorporation, pursuant to which (i) the number of shares of Class A common stock authorized for issuance was increased to 60,000,000 shares, (ii) share transfer restrictions under Article Fourth were eliminated and (iii) two inactive classes of capital stock, the Class B common stock and the Series B Junior Participating preferred stock, were eliminated.

On November 1, 2017, in connection with the Stock Purchase Agreement with Bison, we sold 19,666,667 shares of our Class A common stock to Bison, and as a result Bison became a majority shareholder of the outstanding Class A common stock.

On November 1, 2017, Christopher J. McGurk entered into a Stock Purchase Agreement with the Company (the “McGurk SPA”) pursuant to which, in connection with the transactions under the Bison Agreement, Mr. McGurk purchased 333,333 shares of Common Stock at a price of $1.50 per share, which was paid by the cancellation of $500,000 principal amount under the Loan Agreement.

During the year ended March 31, 2018, we issued 4,780,998 shares of Class A common stock in exchange for Convertible Notes and Second Lien Loans, as compensation to the board of directors, as payment of preferred stock dividends, as settlement of an obligation to a content provider, and as awards to employees. See Note - 8 Supplemental Cash Flow

Disclosure.

PREFERRED STOCK

Cumulative dividends in arrears on the preferred stock at March 31, 2018 and 2017 were $0.1 million. In April 2018, we paid preferred stock dividends accrued at March 31, 2018 in the form of 64,194 shares of our Class A common stock.

TREASURY STOCK

In November 2017, the Company consummated the transactions contemplated by the Stock Purchase Agreement which accelerated the vesting of all its outstanding unvested equity awards. As a result, 134,698 shares of vested restricted stock were surrendered to the Company by employees in payment for withholding taxes, and were placed in treasury and are no longer outstanding.

In connection with the sale of the Convertible Notes in April 2015, the Company and a financial institution (the "Forward Counterparty") which is one of the lenders under our credit agreement, entered into a privately negotiated forward stock purchase transaction, pursuant to which we paid $11.4 million to purchase 1,179,138 shares of our Class A common stock for

settlement at any time prior to the fifth year anniversary of the issuance date of the notes. These shares were settled in full during the year ended March 31, 2018 and moved these share amounts from additional paid in capital to treasury shares.

These shares are no longer outstanding.

CINEDIGM’S EQUITY INCENTIVE PLAN

Stock Based Compensation Awards

Awards issued under our Second Amended and Restated 2000 Equity Incentive Plan, as amended (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 Class A 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 Class A 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 transactions pursuant to the Stock Purchase Agreement, as a result of which there was a change of control of the Company, all outstanding unvested stock options (incentive and non-statutory) and shares of restricted stock 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 Class A Common Stock to employees, outside directors and consultants.

At the August 31, 2017 Annual Meeting, the stockholders of the Company approved the 2017 Equity Incentive Plan (the "2017 Plan”), the Company’s new equity incentive plan. The 2017 Plan replaced the 2000 Plan, and applies to employees and directors of, and consultants to, the Company. The 2017 Plan provides for the issuance of up to 2,098,270 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 does not affect awards already granted under the 2000 Plan. No awards were granted under the 2017 Plan during the year ended March 31, 2018.

The following table summarizes the activity of the 2000 Plan related to shares issuable pursuant to outstanding options:



	Shares Under Option		Weighted Average Exercise Price Per Share
Balance at March 31, 2016	362,272		$	16.50
Canceled	(16,657	)	22.08
Balance at March 31, 2017	345,615		16.50
Forfeited	(750	)	15.03
Canceled	(6,550	)	42.49
Balance at March 31, 2018	338,315		15.57

An analysis of all options outstanding under the 2000 Plan as of March 31, 2018 is as follows:



Range of Prices	Options Outstanding	Weighted Average Remaining Life in Years	Weighted Average Exercise Price	Aggregate Intrinsic Value (In thousands)
$6.00 - $13.70	34,499	4.70	10.64	—
$14.00 - $24.40	271,316	5.13	14.78	—
$24.60 - $50.00	32,500	5.55	27.38	—
	338,315			$	—

An analysis of all options exercisable under the 2000 Plan as of March 31, 2018 is presented below:



Options Exercisable	Weighted Average Remaining Life in Years	Weighted Average Exercise Price		Aggregate Intrinsic Value (In thousands)
1,221,377	5.13	$	15.58	$	—

Restricted Stock Awards

There were no restricted shares granted for the year end March 31, 2018. During the year ended March 31, 2017, we granted 1,055,465 shares of restricted Class A common stock to employees at a weighted average market price per share of $1.81, all of which were fully vested as of March 31, 2018.

STOCK OPTIONS ISSUED OUTSIDE CINEDIGM’S EQUITY INCENTIVE PLAN

In October 2013, we issued options outside of the 2000 Plan to 10 individuals that 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. As of March 31, 2018, 40,500 of such options remained outstanding, were fully vested and will expire in October 2023.

In December 2010, we issued options to purchase 450,000 shares of Class A common stock outside of the 2000 Plan as part of our Chief Executive Officer's initial employment agreement with the Company. Such options have exercise prices per share between $15.00 and $50.00, all of which were vested as of December 2013 and will expire in December 2020. As of March 31, 2018, all such options remained outstanding.

WARRANTS

The following table presents information on outstanding warrants to purchase shares of our Class A common stock as of March 31, 2018. All of the outstanding warrants are fully vested and exercisable.



Recipient	Amount outstanding	Expiration	Exercise price per share
Strategic management service provider	52,500	July 2021	$17.20 - $30.00
Warrants issued to creditors in connection with the 2013 Notes (the "2013 Warrants")	125,063	October 2018	$18.50
Warrants issued to Ronald L. Chez in connection with the Second Secured Lien Notes	206,768	July 2023	$1.34 - $1.57
Warrants issued in connection with Convertible Notes exchange transaction	207,679	December 2021	$1.54
5-year Warrant issued to Bison in connection with a term loan agreement	1,400,000	December 2022	$1.80

Outstanding warrants held by the strategic management service provider were issued in connection with a consulting management services agreement ("MSA"). The warrants may be terminated with 90 days' notice in the event of termination of the MSA.

The 2013 Warrants and related 2013 Notes are subject to certain transfer restrictions.

The warrants issued in connection with the Second Secured Lien Notes (See Note 5) to Ronald L. Chez, at the time a member of our Board of Directors, contain a cashless exercise provision and customary anti-dilution rights.

Warrants to purchase Class A common stock issued in connection with the Convertible Notes exchange transaction were issued on December 22, 2016, became exercisable six months after issuance and contain customary anti-dilution provisions. The value of the warrants issued in connection with the Exchange Agreement was $0.2 million, determined by using the Black-Scholes Option Pricing Model, assuming a 5-year life, a risk free rate interest of 2.0% and an expected volatility of 76.4%.

The Warrants issued to Bison have a 5-year term and are immediately exercisable at $1.80 per share. The Warrants contain certain anti-dilution adjustments. The Company valued the Warrants at $1.1 million, on a relative fair value basis, using Black-Scholes Option Pricing Model assuming a 5-year life, a risk-free rate of interest of 2.2% and an expected volatility of 74.3%. These Warrants were recorded as debt issuance costs.