[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) LiveOne's Q1 Fiscal 2026 saw a significant revenue decline, increased losses, and negative Adjusted EBITDA, alongside strategic staff reductions and new B2B partnerships [Q1 Fiscal 2026 Financial Summary](index=1&type=section&id=Q1%20Fiscal%202026%20Financial%20Summary) LiveOne's Q1 Fiscal 2026 revenue decreased to **$19.2 million** from **$33.1 million** year-over-year, leading to an operating loss of **$4.0 million** and a net loss of **$3.9 million**, with Adjusted EBITDA turning negative at **($1.8) million** Q1 Fiscal 2026 Financial Summary (In thousands, except per share data) | | Three Months Ended June 30, | | | :--- | :--- | :--- | | | **2025** | **2024** | | **Revenue** | $19,207 | $33,078 | | **Operating loss** | $(4,034) | $(784) | | **Net loss** | $(3,864) | $(1,557) | | **Adjusted EBITDA*** | $(1,812) | $2,903 | | **Net loss per share** | $(0.04) | $(0.02) | [Key Business Highlights](index=1&type=section&id=Key%20Business%20Highlights) The company executed a **31% staff reduction**, secured major B2B partnerships including a **$16.5 million** Amazon deal, and raised **$10.2 million** in equity for Bitcoin and Web3 initiatives - Executed a **31% staff reduction**, decreasing employee count from 138 to 95[4](index=4&type=chunk) - Secured major B2B partnerships, including a 3-year, **$16.5 million** deal with Amazon via PodcastOne and a partnership with a Fortune 250 company projected to generate over **$26 million** in revenue[4](index=4&type=chunk) - Completed a **$10.2 million** equity raise to fund a Bitcoin yield strategy and other Web3 initiatives[4](index=4&type=chunk) - Subsidiary PodcastOne (PODC) reported a record **$15 million** in revenue for Q1 2026[4](index=4&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) This section details the drivers behind the Q1 Fiscal 2026 revenue decline and its impact on operating loss and Adjusted EBITDA [Detailed Quarterly Results Discussion](index=2&type=section&id=Detailed%20Quarterly%20Results%20Discussion) Q1 Fiscal 2026 revenue declined to **$19.2 million** due to Slacker revenue reductions, resulting in an operating loss of **$4.0 million** and a **$4.7 million** decrease in Adjusted EBITDA to **($1.8) million** - Q1 Fiscal 2026 revenue was **$19.2 million**, a decrease from **$33.1 million** in the prior year, primarily due to reductions in Slacker revenues[5](index=5&type=chunk) - Operating loss for the quarter was **($4.0) million**, compared to a **($0.8) million** loss in Q1 Fiscal 2025, largely resulting from the decrease in Slacker revenue[5](index=5&type=chunk) - Adjusted EBITDA was **($1.8) million**, a decrease of **$4.7 million** from **$2.9 million** in the prior-year quarter, with the Audio Division also impacted by the decline in Slacker revenues[6](index=6&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents LiveOne's consolidated statements of operations and balance sheets, along with reconciliations of non-GAAP financial measures [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) LiveOne reported Q1 Fiscal 2026 revenue of **$19.2 million**, total operating expenses of **$23.2 million**, and a loss from operations of **$4.0 million**, with a net loss attributable to LiveOne of **$3.6 million** or **($0.04)** per share Consolidated Statements of Operations (In thousands, except per share) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Revenue** | $19,207 | $33,078 | | **Total operating expenses** | $23,241 | $33,862 | | **Loss from operations** | $(4,034) | $(784) | | **Net loss** | $(3,864) | $(1,557) | | **Net loss attributed to LiveOne** | $(3,593) | $(1,945) | | **Net loss per share** | $(0.04) | $(0.02) | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$48.9 million**, total liabilities **$61.0 million**, and total stockholders' deficit **$12.1 million**, with cash and cash equivalents significantly increasing to **$11.9 million** Consolidated Balance Sheets (In thousands) | | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $11,891 | $4,119 | | **Total Current Assets** | $22,946 | $15,246 | | **Total Assets** | $48,940 | $40,517 | | **Total Current Liabilities** | $33,956 | $36,384 | | **Total Liabilities** | $61,032 | $48,929 | | **Total equity (deficit)** | $(12,092) | $(8,412) | [Reconciliation of Non-GAAP Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section reconciles non-GAAP metrics, showing Q1 FY2026 Adjusted EBITDA at **($1.8) million** (down from **$2.9 million**) and Contribution Margin at **$3.4 million** (down from **$8.3 million**) [Adjusted EBITDA Reconciliation](index=7&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA for Q1 FY2026 was **($1,812) thousand**, a significant decrease from **$2,903 thousand** in the prior year, largely due to a swing in Slacker operations Adjusted EBITDA Reconciliation (In thousands) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net Loss** | $(3,864) | $(1,557) | | **Total Adjusted EBITDA*** | **$(1,812)** | **$2,903** | | *By Segment:* | | | | Operations – PodcastOne | $580 | $(316) | | Operations – Slacker | $(191) | $5,425 | | Operations – Other | $(715) | $(628) | | Corporate | $(1,486) | $(1,578) | [Contribution Margin Reconciliation](index=8&type=section&id=Contribution%20Margin%20Reconciliation) Q1 FY2026 Contribution Margin was **$3,425 thousand**, a substantial decrease from **$8,343 thousand** year-over-year, reflecting a lower Gross Profit Contribution Margin Reconciliation (In thousands) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Revenue** | $19,207 | $33,078 | | **Gross Profit** | $2,170 | $7,216 | | **Contribution Margin*** | **$3,425** | **$8,343** | [Supplementary Information](index=2&type=section&id=Supplementary%20Information) This section provides details on the conference call, explanations of non-GAAP measures, forward-looking statements, and a company overview [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) LiveOne scheduled a conference call and webcast for August 13, 2025, at 10:00 AM ET to discuss Q1 Fiscal 2026 financial results, with dial-in and webcast details provided Conference Call Information | | Details | | :--- | :--- | | **Date** | Wednesday, August 13, 2025 | | **Time** | 10:00 AM Eastern Time (7:00 AM Pacific Time) | | **Webcast Link** | Provided in the report | | **Dial-in** | (800) 715-9871 | | **Conference Code** | 2892444 | [About Non-GAAP Financial Measures](index=4&type=section&id=About%20Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Contribution Margin and Adjusted EBITDA to assess segment performance, acknowledging their limitations as supplements to GAAP results - The company uses non-GAAP measures, Contribution Margin and Adjusted EBITDA, to evaluate the performance of its operating segments[11](index=11&type=chunk)[12](index=12&type=chunk) - Adjusted EBITDA is defined as earnings excluding interest, taxes, depreciation, amortization, and other specific non-recurring or non-cash items like stock-based compensation and acquisition-related costs[13](index=13&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section includes forward-looking statements subject to risks and uncertainties, cautioning that actual results may differ materially from expectations, with further details in SEC filings - The press release contains "forward-looking statements" that involve risks and uncertainties, which may cause actual results to differ materially from expectations[9](index=9&type=chunk) - Key risks include reliance on its largest OEM customer, ability to consummate proposed transactions, ability to continue as a going concern, and risks related to digital assets[9](index=9&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) LiveOne is a Los Angeles-based creator-first music, entertainment, and technology platform operating through subsidiaries like Slacker and PodcastOne, delivering content via memberships and events - LiveOne is a creator-first music, entertainment, and technology platform based in Los Angeles[8](index=8&type=chunk) - Its key subsidiaries include Slacker, PodcastOne (Nasdaq: PODC), PPVOne, and others[8](index=8&type=chunk)

Core Insights - LiveOne reported a significant decline in revenue for Q1 Fiscal 2026, totaling $19.2 million compared to $33.1 million in Q1 Fiscal 2025, primarily due to reductions in Slacker revenues [2][3] - The company experienced an operating loss of $4.0 million in Q1 Fiscal 2026, worsening from a loss of $0.8 million in the same quarter the previous year [3] - Adjusted EBITDA for Q1 Fiscal 2026 was reported at ($1.8) million, a decrease of $4.7 million from $2.9 million in Q1 Fiscal 2025 [4] Financial Performance - Revenue for Q1 Fiscal 2026 was $19,207,000, down from $33,078,000 in Q1 Fiscal 2025 [20] - Operating loss increased to ($4,034,000) from ($784,000) year-over-year [20] - Net loss for Q1 Fiscal 2026 was ($3,864,000), compared to ($1,557,000) in the prior year [20] Operational Highlights - The company underwent a 31% staff reduction, decreasing from 138 to 95 employees [6] - LiveOne expanded its B2B partnerships, including a $16.5 million deal with Amazon via PodcastOne and a revenue partnership with a Fortune 250 Streaming Network [6] - The company launched a significant live event, a reality Olympics series, building on the success of Social Gloves, which generated $27 million in revenue [6] Strategic Initiatives - LiveOne completed a $10.2 million equity raise aimed at Bitcoin yield strategy and Web3 initiatives [6] - The company added key personnel to its Web3 team to monetize over 10,000 hours of video content through digital assets [6] - LiveOne continues to explore merger and acquisition opportunities, including the potential sale of a subsidiary [6]

Core Viewpoint - LiveOne plans to announce its operating and financial results for Q1 Fiscal 2026 on August 13, 2025, and will host an investor webcast to discuss these results [1] Group 1: Company Overview - LiveOne is headquartered in Los Angeles, CA, and is recognized as a creator-first music, entertainment, and technology platform [2] - The company focuses on delivering premium experiences and content globally through memberships and live and virtual events [2] - LiveOne's subsidiaries include Slacker, PodcastOne, PPVOne, Custom Personalization Solutions, LiveXLive, DayOne Music Publishing, Drumify, and Splitmind [2] Group 2: Upcoming Financial Announcement - The earnings conference call for Q1 Fiscal Year 2026 is scheduled for August 13, 2025, at 10:00 AM Eastern Time [1] - The call can be accessed via a webcast link and a dial-in number provided in the announcement [1]

Core Insights - LiveOne has appointed Andy Vick to its Web3/Crypto Advisory Board to enhance revenue through tokenization and blockchain opportunities [1] - The company has generated $3 million in profits from NFTs related to Social Gloves, indicating a successful venture into the NFT space [1][4] - LiveOne operates a creator-first platform that includes over 200 podcasters and more than 10,000 hours of video content [1] Company Overview - LiveOne is headquartered in Los Angeles, CA, and is publicly traded on NASDAQ under the ticker LVO [2] - The company focuses on delivering premium music, entertainment, and technology experiences through memberships and live/virtual events [2] - LiveOne's subsidiaries include Slacker, PodcastOne, PPVOne, and others, providing a diverse range of services [2] Leadership and Expertise - Andy Vick brings over 15 years of leadership experience in media, technology, AI, VR/AR, and blockchain, having co-founded multiple NFT and Web3 projects that generated over $100 million in primary sales [4] - Vick's previous achievements include designing NFTs for Social Gloves and founding a top 5 blockchain-enabled video game [4]

Russ has 12M+ Monthly Listeners on Spotify, 10M+ Social Media Followers LOS ANGELES, July 22, 2025 (GLOBE NEWSWIRE) -- LiveOne (NASDAQ: LVO), an award-winning, creator-first, music, entertainment, and technology platform, announced today that its executive producer Kiri Gerbs has played a pivotal role in the remarkable success of Russ's latest album, which has debuted at #1 on the Billboard Indie Chart and climbed to #10 on the Billboard 200. With first-week sales soaring, the album signifies a major milest ...

Core Insights - LiveOne has announced a strategic partnership with Arca to co-manage its expanding cryptocurrency treasury portfolio, indicating a focus on enhancing its financial strategy through cryptocurrency investments [1][2]. Company Overview - LiveOne is a creator-first music, entertainment, and technology platform headquartered in Los Angeles, CA, offering premium experiences and content through memberships and live and virtual events [3]. - The company operates several subsidiaries, including Slacker, PodcastOne, and LiveXLive, and provides services across various platforms such as iOS, Android, Roku, and more [3]. Strategic Focus - The partnership with Arca aims to execute a multi-coin strategy that is expected to generate high yield returns, showcasing the company's commitment to leveraging cryptocurrency for financial growth [2].

Core Viewpoint - LiveOne is expanding its crypto asset treasury strategy with an initial investment of $10 million dedicated to a Bitcoin yield strategy, supported by a board-approved authorization of up to $500 million to enhance shareholder value and innovation in the digital asset space [1][2]. Group 1: Financial Offering - The company has priced its public offering of 11,833,334 shares of common stock at $0.75 per share, expected to generate gross proceeds of approximately $8.9 million before expenses [1]. - The offering is set to close on or about July 17, 2025, subject to customary closing conditions, and includes a 45-day option for the underwriter to purchase an additional 1,775,000 shares [3]. Group 2: Strategic Intent - The initial $10 million investment in the Bitcoin yield strategy reflects the company's confidence in the long-term potential of crypto assets to drive innovation and enhance shareholder value [2]. - The board's approval for a treasury authorization of up to $500 million indicates a significant commitment to integrating digital assets into the company's business model [2]. Group 3: Company Overview - LiveOne is a creator-first music, entertainment, and technology platform headquartered in Los Angeles, with a focus on delivering premium experiences through memberships and live events [6]. - The company's subsidiaries include Slacker, PodcastOne, and others, indicating a diverse portfolio aimed at enhancing its market presence [6].

Core Insights - LiveOne announced that certain investors have converted their preferred stock into common stock at a price of $1.50 per share, indicating strong investor confidence in the company's future [1][2] - CEO Robert Ellin expressed gratitude towards Harvest Funds and No Street Capital for their decision, highlighting that this move strengthens the company's capital structure and aligns interests with shareholders [2] Company Overview - LiveOne is a creator-first music, entertainment, and technology platform headquartered in Los Angeles, CA, focusing on delivering premium experiences and content globally through memberships and live and virtual events [3] - The company's subsidiaries include Slacker, PodcastOne, PPVOne, CPS, LiveXLive, DayOne Music Publishing, Drumify, and Splitmind, and it is accessible on various platforms including iOS, Android, Roku, and more [3]

Company Overview - LiveOne is a creator-first music, entertainment, and technology platform headquartered in Los Angeles, CA, focused on delivering premium experiences and content worldwide through memberships and live and virtual events [5] - The company's subsidiaries include Slacker, PodcastOne, PPVOne, Custom Personalization Solutions, LiveXLive, DayOne Music Publishing, Drumify, and Splitmind [5] Public Offering Announcement - LiveOne announced the commencement of an underwritten public offering of shares of its common stock, subject to market conditions [1] - Lucid Capital Markets is acting as the sole book-running manager for the offering, which is made pursuant to a shelf registration statement filed with the SEC [2] Regulatory Filings - A preliminary prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC and will be available on the SEC's website [3]

PART I [Business Overview](index=5&type=section&id=Item%201.%20Business) LiveOne, Inc. is an award-winning music, entertainment, and technology platform offering premium experiences globally through memberships and live/virtual events - LiveOne operates as a creator-first music, entertainment, and technology platform, focusing on premium experiences and content delivery worldwide through memberships and live/virtual events[19](index=19&type=chunk) - The company's core integrated services include LiveOne (live music streaming), Slacker (streaming music), PodcastOne (podcasting), and Custom Personalization Solutions (personalized merchandise)[19](index=19&type=chunk) - Revenue streams are diversified, including membership-based services, advertising, licensing of live music and podcast content, pay-per-view offerings, and retail sales of merchandise and gifts[20](index=20&type=chunk) - PodcastOne, acquired in July 2020, boasts a distribution network reaching over **1 billion listeners monthly** and produces over **300 episodes per week** from over **200 exclusive shows**, generating over **204 million downloads in FY2025**[24](index=24&type=chunk)[26](index=26&type=chunk) - The company holds **46 registered or pending patents** related to streaming Internet radio services, covering aspects like digital media playback, personalized content, and content scoring[42](index=42&type=chunk) Market and Industry Data (2024-2030) | Metric | 2024 | 2025 (Projected) | 2030 (Projected) | | :-------------------------------- | :--------- | :----------------- | :----------------- | | Global Recorded Music Revenue (in billions) | $29.6 | - | $80 | | Paid Digital Music Streaming Users | - | - | >1.2 billion | | Podcast Listeners (Monthly, in millions) | 135 | 158 | - | | Podcast Advertising Spend (in billions) | $2.43 | $4.6 | - | [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) LiveOne faces significant risks including heavy reliance on its largest OEM customer (Tesla) for a substantial portion of revenue, a history of operating losses and substantial doubt about its ability to continue as a going concern - The company's business is highly dependent on its relationship with Tesla, its largest OEM customer, which accounted for **45% of consolidated revenue in FY2025** and **51% in FY2024**; the loss or significant reduction of business from this customer would materially adversely affect operations[116](index=116&type=chunk) - LiveOne has a history of significant operating and net losses, including **$20.4 million in FY2025** and **$13.3 million in FY2024**, and has an accumulated deficit of **$265.1 million as of March 31, 2025**, raising substantial doubt about its ability to continue as a going concern[123](index=123&type=chunk)[129](index=129&type=chunk) - The company faces intense competition from various entertainment providers, including broadcast radio, interactive on-demand audio, podcast platforms, and large merchandise retailers, which could hinder revenue growth[157](index=157&type=chunk)[162](index=162&type=chunk)[369](index=369&type=chunk) - Advancements in AI technology pose risks by potentially enabling synthetic music that competes with licensed content and by competitors surpassing LiveOne's AI capabilities in personalization and content recommendation[214](index=214&type=chunk)[215](index=215&type=chunk) - The company's disclosure controls and internal control over financial reporting were not effective for FY2024 due to material weaknesses, though no material weaknesses were identified for FY2025[225](index=225&type=chunk)[226](index=226&type=chunk) [Risks Related to Our Business and Industry](index=21&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) This section details risks inherent to LiveOne's business model and the broader industry, including heavy reliance on a single OEM customer, the need for additional capital, and the challenges of securing and funding music streaming rights Revenue Concentration from Largest OEM Customer | Fiscal Year Ended March 31 | Percentage of Consolidated Revenue | | :------------------------- | :------------------------------- | | 2025 | 45% | | 2024 | 51% | - The company's ability to attract and retain users is highly sensitive to rapidly changing public tastes in music and technology, requiring continuous platform, content, and technology attractiveness[143](index=143&type=chunk) - Significant upfront and/or minimum guaranteed payments for live music streaming rights may limit operating flexibility and adversely impact margins if user forecasts or advertising sales do not meet expectations[140](index=140&type=chunk) - The company relies on third-party platforms (e.g., Google Cloud Platform, Amazon Web Services) for operations and data storage; disruptions or interference with these services could materially harm the business[169](index=169&type=chunk) - Cybersecurity risks, including unauthorized access to data and software bugs, could damage reputation, drive away users, and lead to significant liabilities and costs[189](index=189&type=chunk)[190](index=190&type=chunk) [Risks Related to Our Acquisition Strategy](index=22&type=section&id=Risks%20Related%20to%20Our%20Acquisition%20Strategy) LiveOne's growth strategy heavily relies on strategic acquisitions, but there's no assurance of successfully completing future deals or integrating acquired businesses - The company's growth strategy depends on strategic acquisitions, but there is no assurance of consummating future acquisitions or integrating them successfully[277](index=277&type=chunk)[279](index=279&type=chunk) - Integration challenges for acquired businesses include coordinating geographically dispersed organizations, combining different corporate cultures, and integrating individual websites and databases[279](index=279&type=chunk)[281](index=281&type=chunk) - Due diligence may not uncover all material issues, such as fraud or accounting irregularities, in acquired businesses, potentially leading to unexpected liabilities or write-offs[286](index=286&type=chunk) [Risks Related to Technology and Intellectual Property](index=22&type=section&id=Risks%20Related%20to%20Technology%20and%20Intellectual%20Property) LiveOne's operations are heavily reliant on its proprietary and third-party technology, including the Slacker Radio app, LiveOne App, PodcastOne App, and Content Management System (CMS) - The business heavily relies on its Slacker Radio app, LiveOne App, PodcastOne App, and CMS technology; any failure or improper operation could impair user attraction and retention[287](index=287&type=chunk) - Inability to detect unauthorized use or sufficiently protect intellectual property rights (trademarks, patents, copyrights) could lead to legal action, erosion of brand names, or loss of rights[288](index=288&type=chunk)[289](index=289&type=chunk) - The company faces risks of claims alleging infringement of third-party intellectual property rights, which could result in costly litigation, damages, or injunctions preventing the use of affected intellectual property[292](index=292&type=chunk)[295](index=295&type=chunk) - Use of open-source software in its streaming network carries risks, including potential requirements to publicly disclose proprietary source code or face costly licensing/re-engineering efforts[299](index=299&type=chunk) [Risks Related to Our PodcastOne Business](index=22&type=section&id=Risks%20Related%20to%20Our%20PodcastOne%20Business) PodcastOne's business is highly dependent on podcast and advertising sales, facing intense competition for listeners and advertising budgets from various audio content providers - PodcastOne's revenue is substantially generated from podcasting and advertising sales; failure to maintain or grow these revenues, or collect receivables, could adversely affect financial results[318](index=318&type=chunk) - Competition for listeners and advertising spend is intense, with rivals including internet radio, terrestrial radio, satellite radio, and major digital media companies like Apple, Amazon, and Spotify[319](index=319&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk)[323](index=323&type=chunk) - The business is dependent on the performance and talent of its podcasts; loss of popular hosts or increased compensation costs could negatively impact revenue and expenses[325](index=325&type=chunk)[332](index=332&type=chunk) - Reliance on third-party advertising platforms (e.g., Apple, Spotify) for content integration and ad placement means disruptions or changes in their policies could materially impact PodcastOne's ability to reach listeners and monetize content[343](index=343&type=chunk) [Risks Related to Our E-commerce Merchandising Business](index=23&type=section&id=Risks%20Related%20to%20Our%20E-commerce%20Merchandising%20Business) The e-commerce merchandising business (CPS) faces risks from seasonality, with higher sales typically in the third fiscal quarter, leading to potential fluctuations in operating results - CPS's merchandising business is seasonal, with higher sales in the **third fiscal quarter** (ending December 31), leading to potential fluctuations in operating results[358](index=358&type=chunk) - Failure to accurately forecast consumer demand can lead to excess inventories (resulting in write-downs and discounted sales) or inventory shortages (delaying shipments and harming customer relationships)[359](index=359&type=chunk) - The e-commerce merchandise market is intensely competitive, with minimal barriers to entry, and competition from large retailers like Amazon, AliExpress, eBay, Temu, and Rakuten[369](index=369&type=chunk) - Reliance on third-party carriers (FedEx, UPS, DHL, USPS) for product delivery exposes CPS to shipping delays, damage risks, and potential customer dissatisfaction[370](index=370&type=chunk) [Risks Related to the Ownership of Our Common Stock](index=23&type=section&id=Risks%20Related%20to%20the%20Ownership%20of%20Our%20Common%20Stock) Ownership of LiveOne's common stock carries risks including potential dilution from future equity issuances (e.g., for capital, acquisitions, or incentive plans) and conversion of Series A Preferred Stock and Debentures - Future sales and issuances of common stock or rights to purchase common stock, including under equity incentive plans or for acquisitions, could result in substantial dilution for existing stockholders[377](index=377&type=chunk) - Conversion of Series A Preferred Stock (approx. **6.8 million shares**) and Debentures (approx. **7.86 million shares**) into common stock will dilute existing stockholders' ownership interests and could depress the stock price[379](index=379&type=chunk) - The market price of the common stock may be highly volatile, influenced by fluctuations in revenue, analyst estimates, new product announcements, and overall market conditions[381](index=381&type=chunk) - The Chairman and CEO, Mr. Robert Ellin, and his affiliates beneficially owned approximately **21% of outstanding common stock** as of May 31, 2025, allowing them to exert significant control over matters requiring stockholder approval[384](index=384&type=chunk) [Unresolved Staff Comments](index=90&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report - The company has no unresolved staff comments[398](index=398&type=chunk) [Cybersecurity](index=90&type=section&id=Item%201C.%20Cybersecurity) LiveOne conducts annual formal risk assessments to identify and manage cybersecurity threats, utilizing policies, processes, internal controls, and third-party assessments - LiveOne performs annual formal risk assessments to consider potential cybersecurity threats, including interruptions, outages, and breaches to operational and financial systems[399](index=399&type=chunk) - The company employs a combination of cybersecurity awareness training, manual processes, specialized software, automated tools, and third-party assessments for its cybersecurity program[399](index=399&type=chunk) - The Audit Committee of the board of directors provides oversight for the internal control program, including cybersecurity, with management providing quarterly updates on risks and trends[401](index=401&type=chunk) - As of the report date, LiveOne is not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition[403](index=403&type=chunk) [Properties](index=91&type=section&id=Item%202.%20Properties) LiveOne's principal executive offices are in Beverly Hills, California, and its subsidiaries also lease facilities in Los Angeles and Illinois, with no owned real property - LiveOne's principal executive offices are located at 269 S. Beverly Drive, Suite 1450, Beverly Hills, CA 90212[404](index=404&type=chunk) - PodcastOne leases premises in Beverly Hills, CA, on a month-to-month basis[404](index=404&type=chunk) - CPS leases facilities in Addison, Illinois (expiring September 2026) and Palatine, Illinois (expiring October 2027)[404](index=404&type=chunk) - The company does not own any real property[404](index=404&type=chunk) [Legal Proceedings](index=91&type=section&id=Item%203.%20Legal%20Proceedings) LiveOne is periodically involved in legal proceedings arising from its business activities, which management does not expect to have a material adverse effect, despite potential costs and resource diversion - LiveOne is involved in various legal proceedings arising from its business, which are discussed in Note 13 to the consolidated financial statements[405](index=405&type=chunk) - Management believes that routine claims and lawsuits are not significant and are not expected to have a material adverse effect on the business, financial condition, results of operations, or liquidity[405](index=405&type=chunk)[709](index=709&type=chunk) - Litigation, regardless of outcome, can negatively impact the company due to defense and settlement costs and diversion of management resources[405](index=405&type=chunk) [Mine Safety Disclosures](index=91&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to LiveOne, Inc - This item is not applicable[406](index=406&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=92&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) LiveOne's common stock trades on The NASDAQ Capital Market under the symbol 'LVO' since October 6, 2021, with 397 stockholders of record as of July 1, 2025, and no cash dividends paid to date - LiveOne's common stock has been trading on The NASDAQ Capital Market under the symbol 'LVO' since October 6, 2021[409](index=409&type=chunk) - As of July 1, 2025, there were **397 stockholders of record** for the common stock[410](index=410&type=chunk) - The company has not paid any cash dividends on its common stock to date and does not anticipate doing so in the foreseeable future, intending to retain earnings for business development[411](index=411&type=chunk)[392](index=392&type=chunk) Common Stock Issued to Consultants, Employees, and Vendors | Fiscal Year Ended March 31 | Shares Issued | | :------------------------- | :------------ | | 2025 | 3,114,085 | | 2024 | 2,855,298 | | 2023 | 2,676,611 | Stock Repurchases by Issuer | Period (Fiscal Year Ended March 31) | Total Number of Shares Purchased | Amount (in thousands) | | :---------------------------------- | :------------------------------- | :-------------------- | | 2025 | 558,247 | $1,000 | | 2024 | 1,639,125 | $2,620 | [Item 6. [Reserved]](index=93&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis](index=94&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of LiveOne's financial performance, condition, and operational results for the fiscal year ended March 31, 2025, compared to 2024, highlighting decreased total revenue, increased advertising revenue, ongoing net losses, and a working capital deficiency - LiveOne is a pioneer in the acquisition, distribution, and monetization of live music, Internet radio, podcasting, and music-related streaming and video content, with principal operations in North America[426](index=426&type=chunk) - For FY2025, **50% of revenue** came from paid memberships and **46% from advertising**, with the remainder from merchandising[433](index=433&type=chunk) - In January 2025, total paid and monthly active ad-supported users exceeded **860k**, with direct-billed premium subscribers increasing by **78%** and overall direct-billed subscribers by **130%** since October 2024, following a new conversion program with Tesla[428](index=428&type=chunk) - PodcastOne entered a three-year Enterprise Service and Advertising Agreement with ART19 LLC (an Amazon subsidiary) in January 2025, expected to drive additional monetization opportunities with a minimum guarantee of **$15.0 million**[430](index=430&type=chunk)[700](index=700&type=chunk) - The company incurred a net loss of **$20.4 million in FY2025** and had a working capital deficiency of **$21.3 million**, indicating substantial doubt about its ability to continue as a going concern[512](index=512&type=chunk) [Consolidated Results of Operations](index=97&type=section&id=Consolidated%20Results%20of%20Operations) LiveOne reported a **3% decrease in total revenue** to **$114.4 million in FY2025** from **$118.4 million in FY2024**, primarily due to a **14% decrease in membership services revenue** and a **37% decrease in merchandising revenue**, partially offset by a **20% increase in advertising revenue** Consolidated Statement of Operations (in thousands) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | % Change | | :------------------------- | :------------------------ | :------------------------ | :------- | | Revenue | $114,405 | $118,440 | -3% | | Total Operating Expenses | $132,462 | $123,108 | 8% | | Loss from Operations | $(18,057) | $(4,668) | 287% | | Total Other Expense, Net | $(2,498) | $(8,525) | -71% | | Net Loss | $(20,370) | $(13,311) | 53% | Revenue Breakdown (in thousands) | Revenue Stream | Year Ended March 31, 2025 | Year Ended March 31, 2024 | % Change | | :---------------------- | :------------------------ | :------------------------ | :------- | | Membership services | $56,939 | $66,182 | -14% | | Advertising | $52,285 | $43,729 | 20% | | Merchandising | $5,181 | $8,271 | -37% | | Sponsorship and licensing | $- | $126 | -100% | | Ticket/Event | $- | $132 | -100% | | Total Revenue | $114,405 | $118,440 | -3% | - Impairment of fixed assets, intangible assets, and goodwill increased significantly to **$11.6 million in FY2025** from **$0.1 million in FY2024**, contributing to the increased operating loss[442](index=442&type=chunk)[460](index=460&type=chunk) Cost of Sales Breakdown (in thousands) | Cost of Sales Stream | Year Ended March 31, 2025 | Year Ended March 31, 2024 | % Change | | :------------------- | :------------------------ | :------------------------ | :------- | | Membership services | $32,089 | $42,121 | -24% | | Advertising | $48,300 | $38,065 | 27% | | Production | $322 | $(288) | 212% | | Merchandising | $4,530 | $6,493 | -30% | | Total Cost of Sales | $85,241 | $86,391 | -1% | [Business Segment Results](index=101&type=section&id=Business%20Segment%20Results) LiveOne manages its business through three operating segments: PodcastOne, Slacker, and Media Group, with PodcastOne seeing a **20% revenue increase** but a **46% wider operating loss**, Slacker's revenue decreasing by **14%** and operating income dropping by **59%**, and the Media Group experiencing a **40% revenue decrease** and a **12% increase in operating loss** PodcastOne Operations (in thousands) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | % Change | | :------------------------- | :------------------------ | :------------------------ | :------- | | Revenue | $52,119 | $43,302 | 20% | | Cost of Sales | $47,394 | $37,326 | 27% | | Operating Income (Loss) | $(6,434) | $(4,421) | 46% | | Adjusted EBITDA* | $(501) | $501 | -200% | Slacker Operations (in thousands) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | % Change | | :------------------------- | :------------------------ | :------------------------ | :------- | | Revenue | $56,787 | $65,959 | -14% | | Cost of Sales | $32,997 | $42,867 | -23% | | Operating Income (Loss) | $5,876 | $14,341 | -59% | | Adjusted EBITDA* | $18,679 | $20,553 | -9% | Media Group Operations (in thousands) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | % Change | | :------------------------- | :------------------------ | :------------------------ | :------- | | Revenue | $5,499 | $9,179 | -40% | | Cost of Sales | $4,850 | $6,197 | -22% | | Operating Income (Loss) | $(7,050) | $(6,268) | 12% | | Adjusted EBITDA* | $(3,085) | $(3,888) | -21% | Corporate Expenses (in thousands) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | % Change | | :------------------------- | :------------------------ | :------------------------ | :------- | | Sales & Marketing, Product Development, and G&A | $10,448 | $8,321 | 26% | | Operating Loss | $(10,448) | $(8,321) | 26% | | Adjusted EBITDA* | $(6,709) | $(6,189) | -8% | [Non-GAAP Measures](index=104&type=section&id=Non-GAAP%20Measures) This section defines and reconciles non-GAAP financial measures used by LiveOne, specifically Contribution Margin and Adjusted EBITDA, to evaluate segment performance and provide insights into operations, separate from non-operational factors - Contribution Margin is a non-GAAP measure defined as Revenue less Cost of Sales[479](index=479&type=chunk) - Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before specific non-cash GAAP adjustments, legal/acquisition fees, severance, legal settlements, depreciation and amortization (including goodwill impairment), and stock-based compensation[480](index=480&type=chunk) - Adjusted EBITDA Margin is a non-GAAP measure defined as the ratio of Adjusted EBITDA to Revenue[481](index=481&type=chunk) Reconciliation of Adjusted EBITDA to Net Loss (in thousands) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :-------------------------------------- | :------------------------ | :------------------------ | | Net Loss | $(20,370) | $(13,311) | | Depreciation and Amortization | $16,981 | $5,222 | | Stock-Based Compensation | $7,643 | $7,965 | | Non-Recurring Acquisition and Realignment Costs | $1,817 | $2,458 | | Other (Income) Expense | $2,498 | $8,525 | | Provision for Taxes | $(185) | $118 | | **Total Adjusted EBITDA** | **$8,384** | **$10,977** | Reconciliation of Gross Profit to Contribution Margin (in thousands) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :----------------------------------- | :------------------------ | :------------------------ | | Revenue | $114,405 | $118,440 | | Less: Cost of sales | $(85,241) | $(86,391) | | Less: Amortization of developed technology | $(3,087) | $(3,009) | | Gross Profit | $26,077 | $29,040 | | Add back amortization of developed technology | $3,087 | $3,009 | | **Contribution Margin** | **$29,164** | **$32,049** | [Critical Accounting Policies and Estimates](index=105&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) LiveOne's financial statements rely on critical accounting policies and estimates, including revenue recognition, allowance for doubtful accounts, valuation of acquired assets and liabilities in business combinations, legal settlement provisions, and impairment assessments of long-lived assets, goodwill, and intangible assets - Critical accounting policies and estimates include revenue recognition, allowance for doubtful accounts, valuation of acquired assets/liabilities in business combinations, legal settlement provisions, and impairment of property, equipment, goodwill, and intangible assets[482](index=482&type=chunk) - Revenue is recognized when performance obligations are satisfied by transferring control of goods or services to customers, with variable consideration estimated using the expected value method[483](index=483&type=chunk)[577](index=577&type=chunk) - Membership services revenue is recognized straight-line over the membership period, as customers simultaneously receive and consume the benefits[485](index=485&type=chunk)[581](index=581&type=chunk) - Goodwill and indefinite-lived assets are tested for impairment annually or when circumstances indicate impairment, using a qualitative or quantitative assessment based on fair value estimates[507](index=507&type=chunk)[510](index=510&type=chunk)[618](index=618&type=chunk)[620](index=620&type=chunk) - The company recorded a goodwill impairment of **$1.7 million in FY2025** and an indefinite-lived asset impairment of **$3.9 million in FY2025** due to changes in forecasted revenues and market conditions[645](index=645&type=chunk)[646](index=646&type=chunk) [Liquidity and Capital Resources](index=112&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, LiveOne's liquidity sources included **$4.1 million in cash and cash equivalents**, but the company reported a net loss of **$20.4 million** and a working capital deficiency of **$21.3 million**, raising substantial doubt about its ability to continue as a going concern - As of March 31, 2025, principal liquidity sources were **$4.1 million in cash and cash equivalents**, including restricted cash[511](index=511&type=chunk) - The company had a net loss of **$20.4 million** and a working capital deficiency of **$21.3 million** as of March 31, 2025, raising substantial doubt about its ability to continue as a going concern[512](index=512&type=chunk) - An amended relationship with the largest OEM customer, effective December 1, 2024, ceased product subsidies for some customers, impacting liquidity and cash flows, with a focus on converting OEM drivers to direct LiveOne subscribers[513](index=513&type=chunk) - In May 2025, LiveOne issued **$16.8 million in Original Issue Discount Senior Secured Convertible Debentures** to institutional investors, with an option to sell an additional **$11.0 million**[514](index=514&type=chunk)[520](index=520&type=chunk) - The company has a universal shelf Registration Statement on Form S-3, effective February 2025, allowing it to raise up to **$150.0 million** from the sale of equity, debt, and/or other financial instruments[526](index=526&type=chunk)[574](index=574&type=chunk) [Credit Agreement and Other Debt](index=115&type=section&id=Credit%20Agreement%20and%20Other%20Debt) LiveOne's debt structure includes a Capchase Loan of **$1.7 million** and, as of May 2025, **$16.8 million in Initial Debentures**, with the previous ABL Credit Facility terminated upon issuance of the Debentures - In August 2023, LiveOne entered into a Loan and Security Agreement with Capchase Inc. for **$1.7 million**, bearing a **9% interest rate**, with final amortization due February 4, 2026[519](index=519&type=chunk)[658](index=658&type=chunk) - In May 2025, the company issued **$16.8 million in Initial Debentures**, maturing May 19, 2028, with an **11.75% annual interest rate**[520](index=520&type=chunk)[760](index=760&type=chunk) - The Debentures include monthly redemption rights for holders, starting at **$100,000 per month** in August 2025, increasing to **$300,000 per month** by May 2027[520](index=520&type=chunk)[760](index=760&type=chunk) - The company paid off and terminated its previous Business Loan Agreement and all related loan agreements in connection with the issuance of the Debentures in May 2025[522](index=522&type=chunk)[682](index=682&type=chunk)[765](index=765&type=chunk) [Sources and Uses of Cash](index=115&type=section&id=Sources%20and%20Uses%20of%20Cash) In FY2025, net cash provided by operating activities was **$6.4 million**, primarily from adjusting a net loss of **$20.4 million** for non-cash charges, while net cash used in investing activities was **$3.1 million**, and net cash used in financing activities totaled **$6.2 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :-------------------------------------- | :------------------------ | :------------------------ | | Net cash provided by operating activities | $6,368 | $6,848 | | Net cash used in investing activities | $(3,123) | $(4,046) | | Net cash used in financing activities | $(6,238) | $(4,309) | | Net change in cash and cash equivalents and restricted cash | $(2,993) | $(1,507) | - Net cash provided by operating activities in FY2025 was **$6.4 million**, resulting from a net loss of **$20.4 million** adjusted for **$22.3 million** in non-cash charges (depreciation, amortization, stock-based compensation, impairment)[529](index=529&type=chunk) - Net cash used in investing activities in FY2025 was **$3.1 million**, primarily for the purchase of property and equipment (**$3.1 million**) and intangible assets (**$0.1 million**)[531](index=531&type=chunk) - Net cash used in financing activities in FY2025 was **$6.2 million**, including **$4.1 million in line of credit payments**, **$1.0 million for treasury stock**, **$0.7 million for Capchase loan payments**, and **$0.5 million in dividends**[534](index=534&type=chunk) [Market Risk Disclosures](index=116&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to LiveOne, Inc. as it is a smaller reporting company - This item is not applicable to smaller reporting companies[536](index=536&type=chunk) [Financial Statements and Supplementary Data](index=117&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents LiveOne's audited consolidated financial statements for the fiscal years ended March 31, 2025 and 2024, including balance sheets, statements of operations, stockholders' deficit, and cash flows, with the independent auditor's report highlighting a going concern uncertainty - The financial statements include consolidated balance sheets, statements of operations, stockholders' equity, and cash flows for the years ended March 31, 2025 and 2024[539](index=539&type=chunk) - The independent auditor's report contains an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern due to recurring losses and negative cash flows[540](index=540&type=chunk) - Goodwill impairment assessment for the Media Group and indefinite-lived asset impairment for Slacker were identified as critical audit matters due to significant management assumptions[545](index=545&type=chunk)[546](index=546&type=chunk)[549](index=549&type=chunk)[550](index=550&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Asset/Liability Category | March 31, 2025 | March 31, 2024 | | :----------------------- | :------------- | :------------- | | Total Current Assets | $15,246 | $24,335 | | Total Assets | $40,517 | $63,863 | | Total Current Liabilities | $36,384 | $46,842 | | Total Liabilities | $48,929 | $57,306 | | Total Equity (Deficit) | $(8,412) | $1,595 | Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :-------------------------------------- | :------------------------ | :------------------------ | | Net cash provided by operating activities | $6,368 | $6,848 | | Net cash used in investing activities | $(3,123) | $(4,046) | | Net cash used in financing activities | $(6,238) | $(4,309) | | Net change in cash, cash equivalents and restricted cash | $(2,993) | $(1,507) | [Note 1 — Organization and Basis of Presentation](index=127&type=section&id=Note%201%20%E2%80%94%20Organization%20and%20Basis%20of%20Presentation) LiveOne, Inc. is a Delaware corporation headquartered in Beverly Hills, California, operating as a creator-first music, entertainment, and technology platform, with its financial statements prepared on a going concern basis despite recurring losses and a working capital deficiency - LiveOne, Inc. is a Delaware corporation, reincorporated in 2017, and is a creator-first music, entertainment, and technology platform[568](index=568&type=chunk)[569](index=569&type=chunk) - Key acquisitions include Slacker (2017), PodcastOne (2020), and Custom Personalization Solutions (2020); PodcastOne became a majority-owned subsidiary after its spin-out and direct listing in September 2023[569](index=569&type=chunk) - The company's financial statements are prepared on a going concern basis, but a net loss of **$20.4 million** and a working capital deficiency of **$21.1 million** as of March 31, 2025, raise substantial doubt about its ability to continue[572](index=572&type=chunk)[573](index=573&type=chunk) - Future operations depend on increasing revenue, reducing costs, achieving profitability, and securing additional financing through equity and/or debt issuances, including a **$150.0 million universal shelf Registration Statement**[574](index=574&type=chunk)[515](index=515&type=chunk) [Note 2 — Summary of Significant Accounting Policies](index=128&type=section&id=Note%202%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines LiveOne's significant accounting policies, including the use of estimates, revenue recognition principles, and the treatment of gross versus net revenue, along with policies for cost of sales, stock-based compensation, income taxes, business combinations, and asset impairment - The preparation of financial statements requires management to make estimates and assumptions, particularly for revenue, allowances, business combinations, asset impairment, equity-based compensation, and deferred taxes[575](index=575&type=chunk) - Revenue is recognized when performance obligations are satisfied, transferring control of goods or services to customers, with variable consideration estimated using the expected value method[577](index=577&type=chunk) - The company reports revenue on a gross or net basis based on whether it acts as a principal or agent in the transaction, acting as principal for membership, sponsorship, and merchandising streams[579](index=579&type=chunk) - Goodwill and indefinite-lived assets are not amortized but are subject to annual impairment testing, or more frequently if circumstances indicate impairment[618](index=618&type=chunk) - The company adopted ASU 2023-07 on segment reporting in April 2024 and is assessing ASU 2023-09 on income tax disclosures, effective in FY2026[636](index=636&type=chunk)[637](index=637&type=chunk) [Note 3 — Revenue](index=141&type=section&id=Note%203%20%E2%80%94%20Revenue) LiveOne's total revenue for FY2025 was **$114.4 million**, a decrease from **$118.4 million in FY2024**, with membership services revenue decreasing by **14%** to **$56.9 million**, advertising revenue increasing by **20%** to **$52.3 million**, and merchandising revenue declining by **37%** to **$5.2 million** Revenue Disaggregation (in thousands) | Revenue Stream | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :---------------------- | :------------------------ | :------------------------ | | Membership services | $56,939 | $66,182 | | Advertising | $52,285 | $43,729 | | Merchandising | $5,181 | $8,271 | | Sponsorship and Licensing | $- | $126 | | Ticket/Event | $- | $132 | | Total Revenue | $114,405 | $118,440 | - One customer accounted for **45% of consolidated revenues in FY2025** and **51% in FY2024**[427](index=427&type=chunk)[439](index=439&type=chunk)[641](index=641&type=chunk) Changes in Contract Liabilities (Deferred Revenue) (in thousands) | Metric | Amount | | :------------------------------------------------------------------ | :----- | | Balance as of April 1, 2023 | $992 | | Revenue recognized that was included in the contract liability at beginning of the year | $(389) | | Increase due to cash received, excluding amounts recognized as revenue during the year | $125 | | Balance as of March 31, 2024 | $728 | | Revenue recognized that was included in the contract liability at beginning of the year | $(302) | | Increase due to cash received, excluding amounts recognized as revenue during the year | $1,715 | | Balance as of March 31, 2025 | $2,141 | [Note 4 — Property and Equipment](index=142&type=section&id=Note%204%20%E2%80%94%20Property%20and%20Equipment) LiveOne's net property and equipment decreased to **$0.9 million** as of March 31, 2025, from **$3.6 million** in the prior year, primarily due to an impairment charge of **$2.8 million** recorded in FY2025, attributed to the Slacker and PodcastOne reporting units Property and Equipment, Net (in thousands) | Category | March 31, 2025 | March 31, 2024 | | :------------------------------------- | :------------- | :------------- | | Computer, machinery, and software equipment | $2,597 | $6,564 | | Furniture and fixtures | $564 | $556 | | Leasehold improvements | $597 | $597 | | Capitalized internally developed software | $18,669 | $18,109 | | Total property and equipment | $22,427 | $25,826 | | Less accumulated depreciation and amortization | $(21,534) | $(22,180) | | **Total property and equipment, net** | **$893** | **$3,646** | - An impairment of **$2.8 million** was recorded for property and equipment in FY2025, attributed to the Slacker and PodcastOne reporting units, driven by the ART19 agreement and changes in terms with the largest OEM[643](index=643&type=chunk) - Depreciation and amortization expense for property and equipment was **$3.4 million in FY2025**, a slight increase from **$3.3 million in FY2024**[442](index=442&type=chunk)[642](index=642&type=chunk) [Note 5 — Goodwill and Intangible Assets](index=143&type=section&id=Note%205%20%E2%80%94%20Goodwill%20and%20Intangible%20Assets) LiveOne's goodwill balance decreased to **$21.7 million** as of March 31, 2025, from **$23.4 million** in the prior year, due to a **$1.7 million impairment charge** in FY2025 related to the Media Group reporting unit, while indefinite-lived intangible assets were impaired by **$3.9 million** Goodwill Carrying Amount (in thousands) | Metric | Amount | | :------------------------- | :----- | | Balance as of April 1, 2023 | $23,379 | | Impairment (FY2025) | $(1,667) | | Balance as of March 31, 2025 | $21,712 | - A non-cash goodwill impairment charge of **$1.7 million** was recorded in FY2025 for the Media Group reporting unit, driven by revised cash flow projections reflecting current market conditions[645](index=645&type=chunk) Indefinite-Lived Intangible Assets (Tradenames) (in thousands) | Metric | Amount | | :------------------------- | :----- | | Balance as of April 1, 2023 | $4,637 | | Impairment losses (FY2025) | $(3,863) | | Balance as of March 31, 2025 | $774 | - An impairment of **$3.9 million** was recorded for indefinite-lived intangible assets in FY2025 due to decreased forecasted revenues resulting from changes in terms with the largest OEM customer[646](index=646&type=chunk) - Total impairment charge on finite-lived intangible assets was **$3.3 million in FY2025**, including **$2.2 million for intellectual property (patents)** in Slacker and **$0.9 million for customer relationships** in Media reporting unit[649](index=649&type=chunk)[650](index=650&type=chunk) [Note 6 — Accounts Payable and Accrued Liabilities](index=144&type=section&id=Note%206%20%E2%80%94%20Accounts%20Payable%20and%20Accrued%20Liabilities) As of March 31, 2025, LiveOne's total accounts payable and accrued liabilities were **$25.2 million**, a decrease from **$27.0 million** in the prior year, with accounts payable remaining stable and accrued liabilities decreasing Accounts Payable and Accrued Liabilities (in thousands) | Category | March 31, 2025 | March 31, 2024 | | :----------------------------- | :------------- | :------------- | | Accounts payable | $15,269 | $15,154 | | Accrued liabilities | $9,911 | $11,708 | | Lease liabilities, current | $- | $91 | | **Total** | **$25,180** | **$26,953** | [Note 7 — Notes Payable](index=146&type=section&id=Note%207%20%E2%80%94%20Notes%20Payable) LiveOne's total notes payable, net, decreased to **$0.8 million** as of March 31, 2025, from **$1.5 million** in the prior year, including an SBA loan of **$0.2 million** and a Capchase loan of **$0.6 million** Notes Payable (in thousands) | Category | March 31, 2025 | March 31, 2024 | | :----------------------------- | :------------- | :------------- | | SBA loan | $150 | $160 | | Capchase loan | $623 | $1,303 | | Total | $773 | $1,463 | | Less: Current portion of Notes payable | $(623) | $(692) | | **Notes payable - long term** | **$150** | **$771** | - The Capchase loan, entered in August 2023, was for **$1.7 million** at a **9% interest rate**, with monthly amortization payments of approximately **$73,100** and a final payment due on February 4, 2026[658](index=658&type=chunk) Maturities of Notes Payable (in thousands) | For Years Ending March 31 | Amount | | :------------------------ | :----- | | 2026 | $627 | | 2027 | $4 | | 2028 | $4 | | 2029 | $4 | | 2030 | $4 | | Thereafter | $130 | | Total | $773 | [Note 8 — PodcastOne Bridge Loan](index=147&type=section&id=Note%208%20%E2%80%94%20PodcastOne%20Bridge%20Loan) In July 2022, PodcastOne completed a private placement of **$8.8 million** in unsecured convertible notes (PC1 Notes) with a **10% original issue discount**, along with warrants (PC1 Warrants), which automatically converted into PodcastOne common stock upon its direct listing in September 2023 - PodcastOne completed a private placement of **$8.8 million** in unsecured convertible notes (PC1 Notes) with a **10% original issue discount** in July 2022[661](index=661&type=chunk) - The PC1 Notes automatically converted into PodcastOne common stock upon its direct listing on The NASDAQ Capital Market on September 8, 2023[664](index=664&type=chunk) - PC1 Warrants, initially classified as liabilities, were reclassified to equity upon the direct listing, with **3,114,001 warrants outstanding** at an exercise price of **$3.00** as of March 31, 2025[666](index=666&type=chunk)[667](index=667&type=chunk) - Redemption features of the PC1 Bridge Loan were treated as embedded derivatives and subsequently cancelled upon the conversion of PC1 Notes into common stock[668](index=668&type=chunk)[670](index=670&type=chunk) [Note 9 — Senior Secured Revolving Line of Credit](index=151&type=section&id=Note%209%20%E2%80%94%20Senior%20Secured%20Revolving%20Line%20of%20Credit) LiveOne's Senior Secured Revolving Line of Credit, initially **$7.0 million**, was converted into an asset-backed loan (ABL Credit Facility) in September 2023, with the principal reduced to **$3.75 million** in January 2025, and all obligations paid off and terminated in May 2025 upon issuance of new Debentures - The company's revolving credit facility was converted into an asset-backed loan (ABL Credit Facility) in September 2023, collateralized by all company assets[676](index=676&type=chunk) - In January 2025, the principal amount outstanding was reduced to **$3.75 million**, with a maturity date extended to November 20, 2025[678](index=678&type=chunk) - The ABL Credit Facility bore a variable interest rate, which was **10.00%** as of March 31, 2025, and required maintaining a minimum cash deposit of **$5.0 million**[679](index=679&type=chunk) - All obligations under the Business Loan Agreement and related loan agreements were paid off and terminated on May 19, 2025, in connection with the issuance of new Debentures[682](index=682&type=chunk)[765](index=765&type=chunk) [Note 10 — Related Party Transactions](index=152&type=section&id=Note%2010%20%E2%80%94%20Related%20Party%20Transactions) Related party transactions include the conversion of Trinad Capital's unsecured notes into Series A Preferred Stock and common stock, with Trinad Capital owning **4,171.78 shares of Series A Preferred Stock** as of March 31, 2025, and the CEO receiving PodcastOne common stock following its direct listing - Trinad Capital, controlled by the CEO, converted unsecured notes into Series A Preferred Stock and common stock, owning **4,171.78 shares of Series A Preferred Stock** as of March 31, 2025[683](index=683&type=chunk) - The CEO received **147,044 shares of PodcastOne common stock** as a result of his ownership of the company's preferred stock following PodcastOne's direct listing[684](index=684&type=chunk) - LiveOne issued **123,425 shares of common stock** (valued at **$0.1 million**) to relatives of the CEO for services in FY2025[685](index=685&type=chunk) - The company received **1,315,880 shares of PodcastOne Common stock** (fair value **$2.5 million**) in FY2025 for services provided to PodcastOne and cost-sharing[686](index=686&type=chunk) [Note 11 — Leases](index=152&type=section&id=Note%2011%20%E2%80%94%20Leases) LiveOne leases office locations, with most terms being less than 12 months or month-to-month, incurring **$0.5 million in rent expense** for short-term leases in FY2025, and capitalizing operating leases with terms greater than 12 months - LiveOne leases office locations, with most lease terms being less than 12 months or on a month-to-month basis[688](index=688&type=chunk) Operating Lease Costs (in thousands) | Category | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :------------------ | :------------------------ | :------------------------ | | Fixed rent cost | $456 | $324 | | Short term lease cost | $88 | $596 | | Total operating lease cost | $544 | $920 | Operating Lease Liabilities (in thousands) | Category | March 31, 2025 | March 31, 2024 | | :------------------------------ | :------------- | :------------- | | Operating lease right-of-use assets | $97 | $88 | | Operating lease liability, current | $- | $91 | | Operating lease liability, noncurrent | $99 | $- | | Total operating lease liabilities | $99 | $91 | - PodcastOne leases premises under a month-to-month operating lease, with rent expense of **$0.3 million in FY2025**[693](index=693&type=chunk) [Note 12 — Other Long-Term Liabilities](index=154&type=section&id=Note%2012%20%E2%80%94%20Other%20Long-Term%20Liabilities) LiveOne's other long-term liabilities increased to **$12.2 million** as of March 31, 2025, from **$9.4 million** in the prior year, including **$7.4 million in accrued royalties**, **$1.6 million in accrued legal expenses**, and **$2.4 million in accrued sales tax** Other Long-Term Liabilities (in thousands) | Category | March 31, 2025 | March 31, 2024 | | :----------------------- | :------------- | :------------- | | Accrued royalties | $7,392 | $7,508 | | Accrued legal | $1,606 | $- | | Accrued sales tax | $2,375 | $1,706 | | Other | $863 | $140 | | **Total other long-term liabilities** | **$12,236** | **$9,354** | - Accrued legal liabilities increased to **$1.6 million in FY2025**, primarily due to the Sound Exchange settlement[695](index=695&type=chunk) [Note 13 — Commitments and Contingencies](index=154&type=section&id=Note%2013%20%E2%80%94%20Commitments%20and%20Contingencies) LiveOne has contractual obligations for guaranteed payments to Content Providers totaling **$11.4 million for FY2026**, and is involved in legal proceedings, including a **$2.6 million claim from Sony Music Entertainment** against Slacker and LiveOne, which the company intends to vigorously defend Contractual Obligations (Guaranteed Payments to Content Providers) (in thousands) | Fiscal Year Ending March 31 | Amount | | :-------------------------- | :----- | | 2026 | $11,400 | | 2027 | $4,500 | | 2028 | $500 | | 2029 | $400 | | Thereafter | $400 | - PodcastOne entered a three-year Enterprise Service and Advertising Agreement with ART19 LLC in January 2025, requiring a minimum guarantee of **$15.0 million** based on achieving certain impression amounts[700](index=700&type=chunk) - The company has employment agreements with two named executive officers, providing annual salary payments of **$0.7 million** and target bonus compensation of up to **$0.3 million**, plus potential severance[703](index=703&type=chunk) - Sony Music Entertainment filed a complaint in June 2025 alleging Slacker owes **$2.6 million in unpaid licensing fees**, with LiveOne's guarantee limited to **$250,000**[707](index=707&type=chunk)[768](index=768&type=chunk) [Note 14 — Employee Benefit Plan](index=157&type=section&id=Note%2014%20%E2%80%94%20Employee%20Benefit%20Plan) LiveOne sponsors a 401(k) plan for all eligible employees, making discretionary matching contributions up to **100% of participant deferrals**, capped at **5% of annual compensation**, and contributed **$0.2 million** to the plan in both FY2025 and FY2024 - LiveOne sponsors a 401(k) plan for all employees, with discretionary matching contributions up to **100% of deferrals**, capped at **5% of annual compensation**[710](index=710&type=chunk) 401(k) Plan Contributions (in thousands) | Fiscal Year Ended March 31 | Contribution Amount | | :------------------------- | :------------------ | | 2025 | $200 | | 2024 | $200 | [Note 15 — Stockholders' Equity](index=157&type=section&id=Note%2015%20%E2%80%94%20Stockholders%27%20Equity) LiveOne is authorized to issue up to **500 million shares of common stock** and **10 million shares of preferred stock**, with a stock repurchase program of up to **$12.0 million** authorized, and Series A Preferred Stock convertible into common stock at **$2.10 per share** - The company is authorized to issue up to **500 million shares of common stock** and **10 million shares of preferred stock**[711](index=711&type=chunk) - A stock repurchase program of up to **$12.0 million** has been authorized, with **$1.0 million repurchased in FY2025** and **$2.6 million in FY2024**[714](index=714&type=chunk) - Series A Preferred Stock bears a **12% annual dividend**, is perpetual, and is convertible into common stock at **$2.10 per share**; **14,002 shares** were outstanding as of March 31, 2025[715](index=715&type=chunk)[722](index=722&type=chunk) - The 2016 Equity Incentive Plan has **17.6 million shares reserved**, with **2.3 million shares available for future issuance** as of March 31, 2025[725](index=725&type=chunk)[728](index=728&type=chunk) - PodcastOne's 2022 Equity Incentive Plan reserved **2.0 million shares**, with incentive awards underlying **1.4 million shares granted** and **232,350 nonvested** as of March 31, 2025[729](index=729&type=chunk)[730](index=730&type=chunk) - Non-controlling interest in PodcastOne was **29.18%** as of March 31, 2025, following its spin-out in September 2023[731](index=731&type=chunk) [Note 16 — Income Tax Provision](index=164&type=section&id=Note%2016%20%E2%80%94%20Income%20Tax%20Provision) LiveOne reported a total income tax benefit of **$0.2 million in FY2025**, compared to a provision of **$0.1 million in FY2024**, on pre-tax losses of **$20.6 million** and **$13.2 million**, respectively, with federal net operating loss (NOL) carryforwards of **$148.7 million** and state NOLs of **$85.8 million** Pretax Loss and Income Tax (Benefit) Expense (in thousands) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :-------------------------- | :------------------------ | :------------------------ | | Loss before income taxes | $(20,555) | $(13,193) | | Total provision for income taxes | $(185) | $118 | - As of March 31, 2025, the company had federal NOL carryforwards of approximately **$148.7 million** and state NOLs of **$85.8 million**, subject to Section 382 and 383 limitations[742](index=742&type=chunk)[744](index=744&type=chunk) - A valuation allowance of **$45.8 million** was recorded against deferred tax assets in FY2025, reflecting management's assessment that the ultimate realization of potential tax benefits is unlikely[748](index=748&type=chunk) - PodcastOne ceased to be a member of LiveOne's federal consolidated tax group after its spin-out in FY2024, now filing a separate federal income tax return[743](index=743&type=chunk) [Note 17 — Business Segments and Geographic Reporting](index=166&type=section&id=Note%2017%20%E2%80%94%20Business%20Segments%20and%20Geographic%20Reporting) LiveOne operates and reports its business in three segments: PodcastOne, Slacker, and Media Group, with all material revenues and long-lived assets derived from and located in the United States, and one external OEM customer accounting for **45% of total revenues in FY2025** - LiveOne has three operating segments: PodcastOne, Slacker, and Media Group, which align with how the Chief Executive Officer (CODM) manages the business[750](index=750&type=chunk)[751](index=751&type=chunk) - All material revenues and long-lived assets are derived from and located in the United States[753](index=753&type=chunk) - One external OEM customer accounted for **45% of total revenues in FY2025** and **51% in FY2024**, and **10% of total accounts receivable in FY2025**[752](index=752&type=chunk) Segment Revenue and Net Income (Loss) (in thousands) | Segment | Year Ended March 31, 2025 Revenue | Year Ended March 31, 2025 Net Income (Loss) | Year Ended March 31, 2024 Revenue | Year Ended March 31, 2024 Net Income (Loss) | | :----------- | :-------------------------------- | :------------------------------------------ | :-------------------------------- | :------------------------------------------ | | PodcastOne | $52,119 | $(6,458) | $43,302 | $(14,732) | | Slacker | $56,787 | $3,570 | $65,959 | $13,382 | | Media | $5,499 | $(8,166) | $9,179 | $(1,397) | | Corporate expenses | $- | $(9,316) | $- | $(10,564) | | Total | $114,405 | $(20,370) | $118,440 | $(13,311) | [Note 18 — Fair Value Measurements](index=168&type=section&id=Note%2018%20%E2%80%94%20Fair%20Value%20Measurements) LiveOne's financial liabilities measured at fair value on a recurring basis include a bifurcated embedded derivative on Series A Preferred Stock, which was **$0.6 million** as of March 31, 2024, and was reduced to zero by March 31, 2025, due to changes in fair value reported in earnings Fair Value of Financial Liabilities (in thousands) | Liability Category | March 31, 2024 Fair Value | Hierarchy Level | | :----------------------------------------------- | :------------------------ | :-------------- | | Bifurcated embedded derivative on Series A Preferred Stock | $607 | Level 3 | Reconciliation of Level 3 Financial Liabilities (in thousands) | Metric | Amount | | :------------------------------------------------------------------ | :----- | | Balance as of April 1, 2023 | $3,698 | | Change in fair value of bifurcated embedded derivatives, reported in earnings | $4,460 | | Conversion of embedded derivatives to equity | $(1,481) | | Conversion of warrant liability to non-controlling interest | $(5,896) | | Change in fair value of contingent consideration liabilities, reported in earnings | $(174) | | Balance as of March 31, 2024 | $607 | | Change in fair value of bifurcated embedded derivatives, reported in earnings | $(607) | | Balance as of March 31, 2025 | $- | - The fair values of cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued expenses are estimated to equal their carrying values due to short maturities[757](index=757&type=chunk) [Note 19 — Subsequent Events](index=169&type=section&id=Note%2019%20%E2%80%94%20Subsequent%20Events) Subsequent to March 31, 2025, LiveOne issued **$16.8 million in Original Issue Discount Senior Secured Convertible Debentures** in May 2025, with an option for an additional **$11.0 million**, and PodcastOne entered new two-year employment agreements with its President and Chief Revenue Officer - On May 19, 2025, LiveOne sold **$16.8 million in Initial Debentures**, with an option for an additional **$11.0 million**, convertible into common stock at **$2.10 per share**[759](index=759&type=chunk) - The Initial Debentures mature on May 19, 2028, and accrue interest at **11.75% per year**, with holders having monthly redemption rights starting August 2025[760](index=760&type=chunk) - The company paid off and terminated its previous Business Loan Agreement and all related loan agreements using proceeds from the Debentures[765](index=765&type=chunk) - PodcastOne entered new two-year employment agreements with its President and Chief Revenue Officer in June 2025, including grants of restricted stock units[766](index=766&type=chunk)[767](index=767&type=chunk) - Sony Music Entertainment filed a complaint on June 6, 2025, against Slacker and LiveOne, alleging **$2.6 million in unpaid licensing fees**, with LiveOne's guarantee limited to **$250,000**[768](index=768&type=chunk) [Changes in Accountants](index=171&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure - There have been no changes in or disagreements with accountants on accounting and financial disclosure[770](index=770&type=chunk) [Controls and Procedures](index=171&type=section&id=Item%209A.%20Controls%20and%20Procedures) LiveOne's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective as of March 31, 2025, and the internal control over financial reporting was also assessed as effective for the same period, based on the COSO framework - LiveOne's CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[771](index=771&type=chunk) - Management assessed the effectiveness of internal control over financial reporting as of March 31, 2025, based on the COSO framework, and concluded it was effective[775](index=775&type=chunk)[776](index=776&type=chunk) - Controls and procedures, regardless of design, can only provide reasonable assurance and are subject to inherent limitations[772](index=772&type=chunk)[774](index=774&type=chunk) - As a smaller reporting company and non-accelerated filer, LiveOne's independent auditor is not required to attest to the effectiveness of its internal control over financial reporting[777](index=777&type=chunk) [Other Information](index=172&type=section&id=Item%209B.%20Other%20Information) During the three-month period ended March 31, 2025, no officer or director adopted any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No officer or director adopted any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three-month period ended March 31, 2025[780](index=780&type=chunk) [Foreign Jurisdictions Inspection Disclosure](index=172&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspection) This item is not applicable to LiveOne, Inc - This item is not applicable[781](index=781&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=173&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The information required for this item is incorporated by reference from the company's definitive Proxy Statement for its 2025 Annual Meeting of Stockholders - Information for this item is incorporated by reference from the 2025 Proxy Statement[783](index=783&type=chunk) [Executive Compensation](index=173&type=section&id=Item%2011.%20Executive%20Compensation) The information required for this item is incorporated by reference from the company's definitive Proxy Statement for its 2025 Annual Meeting of Stockholders - Information for this item is incorporated by reference from the 2025 Proxy Statement[784](index=784&type=chunk) [Security Ownership and Related Matters](index=173&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) The information required for this item is incorporated by reference from the company's definitive Proxy Statement for its 2025 Annual Meeting of Stockholders - Information for this item is incorporated by reference from the 2025 Proxy Statement[785](index=785&type=chunk) [Related Transactions and Director Independence](index=173&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The information required for this item is incorporated by reference from the company's definitive Proxy Statement for its 2025 Annual Meeting of Stockholders - Information for this item is incorporated by reference from the 2025 Proxy Statement[786](index=786&type=chunk) [Principal Accounting Fees and Services](index=173&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) The information required for this item is incorporated by reference from the company's definitive Proxy Statement for its 2025 Annual Meeting of Stockholders - Information for this item is incorporated by reference from the 2025 Proxy Statement[787](index=787&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=173&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements included in the Annual Report, such as Consolidated Balance Sheets, Statements of Operations, Stockholders' Deficit, and Cash Flows, along with their accompanying notes, and provides a comprehensive list of exhibits filed with the report - The financial statements included in this Annual Report are the Consolidated Balance Sheets, Statements of Operations, Statements of Stockholders' (Deficit) Equity, and Statements of Cash Flows for the years ended March 31, 2025 and 2024, along with their notes[789](index=789&type=chunk)[790](index=790&type=chunk) - All financial statement schedules have been omitted as they are either not applicable or the information is contained elsewhere in the Annual Report[789](index=789&type=chunk) - A comprehensive list of exhibits is provided, including corporate governance documents, various warrants, debt agreements (e.g., Debentures, Capchase Loan), employment agreements, and certifications[791](index=791&type=chunk)[794](index=794&type=chunk) [Form 10-K Summary](index=175&type=section&id=Item%2016.%20Form%2010-K%20Summary) LiveOne has elected not to include summary information for its Form 10-K - The company has elected not to include summary information for its Form 10-K[793](index=793&type=chunk)