LOS
ANGELES, June 21, 2023 /PRNewswire/ -- Cineverse
Corp. ("Cineverse" or the "Company") (NASDAQ: CNVS), a global
streaming technology and entertainment company with one of the
world's largest portfolios of streaming channels and content
libraries, today provided the following comments from the Company's
Chairman and CEO Chris McGurk
regarding Cineverse's recent developments and long-term growth
strategy.
On June 16, 2023, the Company
closed a public offering that raised aggregate gross proceeds of
approximately $8 million, before
deducting placement agent fees and other offering expenses.
"I want to outline the reasoning behind our recent equity
financing in the context of our growth strategy, particularly in
light of the stock repurchase program we announced a few months
back and that remains in place through the end of February 2024," said Mr. McGurk.
"Over the last three years, we have anchored our position in the
streaming market by building up our streaming channel and content
portfolio, predominantly through M&A and strategic
partnerships. This has proved fruitful, with our library reaching
more than 70,000 titles. The net result of this has been the rapid
growth of our namesake channel, Cineverse, which has already
reached the top ten of all streamers in terms of title depth and
breadth. Our reputation in the industry as a company that can
successfully monetize channels and IP has grown alongside our
library, with more than 650 partners ranging from Hallmark and
Konami to American Public Media and All3Media.
"That perception rose to a whole new level over the last two
quarters on the back of our wildly successful theatrical horror hit
Terrifier 2. Earning more than $15
million at the box office on a $250
thousand dollar budget, we were proud to usher in an iconic
new horror character, Art the Clown, who many are already calling
this generation's Jason or Freddy
Krueger. I have been involved with the release of hundreds
of films, both studio-level and independent, and I have never seen
a movie that has had such a high ROI and enormous box
office-to-marketing-dollar ratio.
"How did we do it? We leveraged the 80 million visitors and
billions of ad impressions across our portfolio of streaming
properties to drive massive awareness for the title and generated
millions of dollars in earned media value on hard-to-get venues
like Good Morning America, The Howard Stern Show and Saturday Night
Live through the effective viral and social marketing efforts of
our Bloody Disgusting horror group. This has resulted in
substantial ancillary sales and a more-than-tripling of paid
subscribers on our Screambox horror channel. Most importantly, all
of this created an industry-wide perception of major momentum for
the Company and underscored that Cineverse has become a key new
destination to bring important IP.
"Based on our track record, culminating with the break-out
success of Terrifier 2, we have had a flood of new partnership and
M&A opportunities for high value IP emerge over the last 90
days. Some of these brands and IP have already been announced,
including the highly anticipated franchise sequel to Terrifier 2,
and the beloved Sid & Marty
Krofft library. We are also in the final stages of closing
deals for one of the most loved, successful and profitable
nonfiction television brands of all time, a highly valuable and
recognizable children's library of IP, and a seminal brand &
library in the horror space. For these five deals alone, we beat
out competing offers from at least three major studios and a major
cable conglomerate.
"The late Andy Grove of Intel
fame once said: 'Most companies don't die because they are wrong;
they die because they don't commit themselves. They fritter away
their momentum and their valuable resources while attempting to
make a decision. The greatest danger is standing still.' Based on
my over 30 years of experience in this industry, I can emphatically
say that Grove's adage is even more true for the entertainment
industry… and Cineverse.
"This new plethora of high-impact, immediately available
high-ROI opportunities led us to make an important choice—between
waiting and likely losing these properties to our studio
competitors or moving decisively forward now. We did not take this
decision lightly, and though we steadfastly believe our equity is
undervalued, we needed to balance that against the Company-changing
opportunities that we would immediately lose if we did not act now.
That logic prudently required us to preserve our cash for
acquisitions as opposed to enacting a buyback in this quarter.
"The accretive aspect and inherent return potential of the
compelling properties I just described, combined with the highly
competitive situations involved, necessitated that we act quickly
to review, finance, and consummate these transactions and add
additional cash for the targets yet to be acquired. That is why we
made the decision to raise $8 million
via an equity offering at this time, despite our disappointment
about our undervalued stock price. We needed the funds to invest in
our future immediately and maintain the Company's momentum.
"Again, our stock repurchase program remains in effect through
early 2024. We still retain the option to consider repurchasing
shares if the share pricing does not improve significantly and
market conditions warrant. We recognize the frustration our
shareholders are feeling at this time, particularly when we have an
internal sum of the parts valuation that has our library value
alone, which was valued by a third-party appraiser, at a premium to
our current market cap, even before adding our content streaming
and technology businesses to the valuation. We will evaluate all
opportunities to address this issue."
Mr. McGurk concluded, "Finally, on behalf of the management team
and Board of Directors of Cineverse, I would like to reiterate that
decisions regarding the management of our capital structure in
pursuit of long-term growth are made thoughtfully and in the
interest of generating long-term shareholder value. We will be
sharing more detailed information on our long-term growth
initiatives, financing strategy and competitive positioning during
the earnings call on June
29th."
About Cineverse
Cineverse is a global streaming
technology and entertainment company with one of the world's
largest portfolios of streaming channels and content libraries, all
powered by its advanced, proprietary technology platform. Cineverse
currently features enthusiast brands for subscription video on
demand (SVOD), advertising-based video on demand (AVOD) and free,
ad-supported streaming television (FAST) channels. Cineverse
entertains consumers around the globe by providing premium feature
film and television series, enthusiast streaming channels and
technology services to some of the world's largest media, retail
and technology companies. For more information, please visit
www.cineverse.com.
Safe Harbor Statement
Investors and readers are
cautioned that certain statements contained in this document, as
well as some statements in periodic press releases and some oral
statements of Cineverse officials during presentations about
Cineverse, along with Cineverse's filings with the Securities and
Exchange Commission, including Cineverse's registration statements,
quarterly reports on Form 10-Q and annual report on Form 10-K, are
"forward-looking'' statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act'').
Forward-looking statements include statements that are predictive
in nature, which depend upon or refer to future events or
conditions, which include words such as "expects," "anticipates,''
"intends,'' "plans,'' "could," "might," "believes,'' "seeks,"
"estimates'' or similar expressions. In addition, any statements
concerning future financial performance (including future revenues,
earnings, or growth rates), ongoing business strategies or
prospects, and possible future actions, including those relating to
the timing and completion of the proposed offering, which may be
provided by Cineverse's management, are also forward-looking
statements as defined by the Act. Forward-looking statements are
based on current expectations and projections about future events
and are subject to various risks, uncertainties, and assumptions
about Cineverse, its technology, economic and market factors, and
the industries in which Cineverse does business, among other
things. These statements are not guarantees of future performance,
and Cineverse undertakes no specific obligation or intention to
update these statements after the date of this release.
For additional information, please contact:
At Cineverse
Julie
Milstead
424-281-5411
investorrelations@cineverse.com
The Equity Group Inc.
Carolyne
Sohn
408-538-4577
csohn@equityny.com
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SOURCE Cineverse Corp.
