[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for PodcastOne, Inc., including the Balance Sheets, Statements of Operations, Stockholders' Equity, and Cash Flows for the periods ended June 30, 2025, and March 31, 2025 (or June 30, 2024, for comparative periods), along with detailed notes explaining the company's organization, accounting policies, and specific financial line items [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | Change | | :----------------------------- | :----------------------------- | :----------------------------- | :----- | | Cash and cash equivalents | $1,870 | $1,079 | +$791 | | Accounts receivable, net | $6,818 | $6,246 | +$572 | | Total Current Assets | $8,819 | $7,555 | +$1,264 | | Total Assets | $22,336 | $21,195 | +$1,141 | | Accounts payable and accrued liabilities | $7,125 | $5,539 | +$1,586 | | Total Current Liabilities | $7,620 | $6,053 | +$1,567 | | Total Liabilities | $7,620 | $6,053 | +$1,567 | | Total stockholders' equity | $14,716 | $15,142 | -$426 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | YoY Change | | :----------------------------- | :------------------------------------ | :------------------------------------ | :--------- | | Revenue | $14,994 | $13,159 | +14% | | Cost of sales | $13,555 | $11,709 | +16% | | Total operating expenses | $16,048 | $14,525 | +10.5% | | Loss from operations | $(1,054) | $(1,366) | -22.8% | | Net loss | $(1,054) | $(1,366) | -22.8% | | Net loss per share – basic and diluted | $(0.04) | $(0.06) | -33.3% | - Amortization of intangible assets decreased by **67% YoY** to **$125 thousand** (from **$377 thousand**)[15](index=15&type=chunk) - Impairment of intangible assets decreased by **100% YoY** to **$0** (from **$176 thousand**)[15](index=15&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity) Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric | As of June 30, 2025 (in thousands) | As of March 31, 2025 (in thousands) | | :----------------------------- | :--------------------------------- | :--------------------------------- | | Additional Paid in Capital | $51,839 | $51,211 | | Accumulated Deficit | $(37,123) | $(36,069) | | Total Stockholders' Equity | $14,716 | $15,142 | - Net loss for the three months ended June 30, 2025, was **$(1,054) thousand**[18](index=18&type=chunk) - Stock-based compensation contributed **$66 thousand** to additional paid-in capital[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Net cash provided by (used in) operating activities | $903 | $(480) | | Net cash used in investing activities | $(112) | $(74) | | Net change in cash and cash equivalents | $791 | $(554) | | Cash and cash equivalents, end of period | $1,870 | $891 | - Adjustments to reconcile net loss to net cash from operating activities included **$1.5 million** in stock-based compensation (up from **$0.4 million** in 2024) and **$0.2 million** in depreciation and amortization (down from **$0.4 million** in 2024)[21](index=21&type=chunk) - Changes in operating assets and liabilities provided **$0.3 million** in cash, compared to a use of **$0.2 million** in the prior year[21](index=21&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 — Organization and Basis of Presentation](index=9&type=section&id=Note%201%20%E2%80%94%20Organization%20and%20Basis%20of%20Presentation) PodcastOne, Inc. is a Delaware corporation and a leading podcast platform, majority-owned by LiveOne, Inc. The financial statements are prepared on a standalone basis, but related party transactions with LiveOne may not be at arm's length. The company has an accumulated deficit and working capital that raise substantial doubt about its ability to continue as a going concern without additional financing - PodcastOne is a leading podcast platform and publisher, a majority-owned subsidiary of LiveOne, Inc.[24](index=24&type=chunk)[25](index=25&type=chunk) - The company has an accumulated deficit of **$37.1 million** and working capital of **$1.2 million** as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern[29](index=29&type=chunk)[182](index=182&type=chunk) - Management anticipates existing cash resources will not be sufficient beyond June 2026 without additional financing[30](index=30&type=chunk) [Note 2 — Summary of Significant Accounting Policies](index=10&type=section&id=Note%202%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This note details the company's significant accounting policies, including revenue recognition, allocation of costs from its parent company, gross versus net revenue recognition, advertising revenue, cost of sales, sales and marketing, product development, stock-based compensation, income taxes, earnings per share, segment reporting, cash and cash equivalents, accounts receivable, related party receivables and payables, property and equipment, goodwill, intangible assets, fair value measurements, concentration of credit risk, and recently adopted/issued accounting pronouncements - Revenue is recognized when control of goods/services is transferred, primarily from advertising sales based on impressions[36](index=36&type=chunk)[40](index=40&type=chunk) - Barter revenue for the three months ended June 30, 2025, was **$7.0 million**, up from **$6.0 million** in 2024[41](index=41&type=chunk) - The company operates as a single segment: a leading podcast platform and publisher[50](index=50&type=chunk) Accounts Receivable, Net (in thousands) | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Accounts receivable, gross | $6,890 | $6,318 | | Less: Allowance for credit losses | $(72) | $(72) | | Accounts receivable, net | $6,818 | $6,246 | - The company adopted ASU 2023-09 (Income Taxes) on April 1, 2025, with no material impact[68](index=68&type=chunk) - ASU 2024-03 (Disaggregation of Income Statement Expenses) is effective for fiscal years beginning after December 15, 2026, and is currently being evaluated[69](index=69&type=chunk) [Note 3 — Property and Equipment](index=17&type=section&id=Note%203%20%E2%80%94%20Property%20and%20Equipment) Net property and equipment decreased to $55 thousand as of June 30, 2025, from $59 thousand as of March 31, 2025. This was primarily due to a $0.9 million write-off of internally developed software no longer in use, offset by new purchases Total Property and Equipment, Net (in thousands) | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :--------------------------------- | :----------------------------- | :----------------------------- | | Total property and equipment, net | $55 | $59 | - During Q2 2025, the company wrote off **$0.9 million** of internally developed software and corresponding accumulated depreciation[72](index=72&type=chunk) - Depreciation expense was **$0.025 million** for Q2 2025, down from **$0.066 million** for Q2 2024[71](index=71&type=chunk) [Note 4 — Goodwill and Intangible Assets](index=17&type=section&id=Note%204%20%E2%80%94%20Goodwill%20and%20Intangible%20Assets) Goodwill remained stable at $12.0 million as of June 30, 2025, with no impairment indicators. Finite-lived intangible assets, primarily content creator relationships and brand/trade names, decreased to $1.1 million net, due to amortization and a prior year impairment charge Goodwill and Intangible Assets, Net (in thousands) | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Goodwill | $12,041 | $12,041 | | Intangible assets, net | $1,061 | $1,186 | - Amortization expense on finite-lived intangible assets was **$0.1 million** for Q2 2025, a significant decrease from **$1.1 million** for Q2 2024[74](index=74&type=chunk) - No impairment charges were recorded for Q2 2025, compared to **$0.2 million** in Q2 2024 due to the winding down of a podcast show[74](index=74&type=chunk) Amortization Schedule for Finite-Lived Intangible Assets (in thousands) | For Years Ending March 31, | Amount (in thousands) | | :------------------------- | :-------------------- | | 2026 (remaining nine months) | $456 | | 2027 | $338 | | 2028 | $101 | | 2029 | $101 | | 2030 | $65 | | Thereafter | $- | | Total | $1,061 | [Note 5 — Accounts Payable and Accrued Liabilities](index=18&type=section&id=Note%205%20%E2%80%94%20Accounts%20Payable%20and%20Accrued%20Liabilities) Total accounts payable and accrued liabilities increased to $7.1 million as of June 30, 2025, from $5.5 million as of March 31, 2025. This increase was driven by higher accounts payable and other accrued liabilities, partially offset by a decrease in accrued revenue share Accounts Payable and Accrued Liabilities (in thousands) | Metric | June 30, 2025 (in thousands) | March 31, 2025 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Accounts payable | $2,409 | $1,285 | | Accrued revenue share | $1,648 | $1,962 | | Other accrued liabilities | $3,068 | $2,292 | | Total | $7,125 | $5,539 | [Note 6 — Related Party Transactions](index=20&type=section&id=Note%206%20%E2%80%94%20Related%20Party%20Transactions) LiveOne, the parent company, owns approximately 71% of PodcastOne's common stock. PodcastOne had a net related party payable to LiveOne of $0.1 million as of June 30, 2025. LiveOne allocated $0.4 million in overhead expenses to PodcastOne for Q2 2025. PodcastOne also issued common stock to LiveOne in exchange for amounts owed under a cost sharing agreement - LiveOne owns approximately **71%** of PodcastOne's common stock as of June 30, 2025[79](index=79&type=chunk)[97](index=97&type=chunk) - Overhead expenses allocated from LiveOne to PodcastOne were **$0.4 million** for Q2 2025 (up from **$0.3 million** in Q2 2024)[80](index=80&type=chunk) - Net related party payable to LiveOne was **$(0.1) million** as of June 30, 2025[56](index=56&type=chunk) - PodcastOne issued **237,113 shares** of common stock (fair value **$0.5 million**) to LiveOne in Q2 2025 for cost sharing[83](index=83&type=chunk) [Note 7 — Commitments and Contingencies](index=21&type=section&id=Note%207%20%E2%80%94%20Commitments%20and%20Contingencies) PodcastOne has contractual obligations for guaranteed payments to content providers totaling $1.2 million through fiscal year 2028. The company entered into new employment agreements with its President and Chief Revenue Officer, including RSU grants. A three-year Enterprise Service and Advertising Agreement with ART19 LLC is expected to drive monetization, with a minimum guarantee of $15.0 million over the term. LiveOne, as the parent, entered into a $16.8 million secured convertible debenture agreement, guaranteed by PodcastOne and secured by its assets - Contractual obligations for guaranteed payments to content providers: **$1.0 million** (FY2026), **$0.1 million** (FY2027), **$0.1 million** (FY2028)[84](index=84&type=chunk) - New employment agreements for President Kit Gray and Chief Revenue Officer Sue McNamara include annual salaries of **$375,000** and **$325,000**, respectively, plus RSU grants[86](index=86&type=chunk)[87](index=87&type=chunk) - Enterprise Service and Advertising Agreement with ART19 LLC includes a minimum guarantee of **$15.0 million** over three years[88](index=88&type=chunk) - Revenue recognized from ART19 agreement: **$1.4 million** for Q2 2025 (none in Q2 2024)[88](index=88&type=chunk) - LiveOne issued **$16.8 million** in Initial Debentures (convertible, **11.75% interest**, maturing May 2028), guaranteed by PodcastOne and secured by a lien on all of PodcastOne's assets[91](index=91&type=chunk)[95](index=95&type=chunk) [Note 8 — Employee Benefit Plan](index=23&type=section&id=Note%208%20%E2%80%94%20Employee%20Benefit%20Plan) PodcastOne employees participate in LiveOne's 401(k) plan, with discretionary matching contributions. Company matching contributions were not material for the three months ended June 30, 2025 and 2024 - Employees participate in LiveOne's 401(k) plan[96](index=96&type=chunk) - Company matching contributions were not material for Q2 2025 and Q2 2024[96](index=96&type=chunk) [Note 9 — Stockholders' Equity](index=23&type=section&id=Note%209%20%E2%80%94%20Stockholders'%20Equity) LiveOne owns approximately 71% of PodcastOne's common stock. The company's authorized capital includes 100 million common shares and 10 million preferred shares. Unrecognized compensation costs for PodcastOne RSUs were $1.8 million as of June 30, 2025, to be recognized over 0.78 years - LiveOne owns approximately **71%** of PodcastOne's issued and outstanding common stock as of June 30, 2025[97](index=97&type=chunk) - Authorized shares: **100,000,000 common stock**, **10,000,000 preferred stock**[98](index=98&type=chunk)[109](index=109&type=chunk) - Unrecognized compensation costs for unvested PodcastOne RSUs: **$1.8 million**, expected to be recognized over **0.78 years**[108](index=108&type=chunk) - Stock-based compensation expense recognized by PodcastOne for LiveOne awards was less than **$0.1 million** for Q2 2025 and **$0.1 million** for Q2 2024[101](index=101&type=chunk) [Note 10 - Subsequent Events](index=25&type=section&id=Note%2010%20-%20Subsequent%20Events) Subsequent to the quarter end, LiveOne completed an equity offering, raising approximately $9.5 million, with proceeds intended for cryptocurrency investments and working capital. LiveOne also amended its debenture terms to permit cryptocurrency purchases and management. Additionally, LiveOne completed a preferred stock exchange, converting Series A Preferred Stock into common stock and warrants - LiveOne completed an equity offering on July 17, 2025, raising approximately **$9.5 million** (gross proceeds) for cryptocurrency acquisition and treasury strategy[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - LiveOne amended its Initial Debentures on August 5, 2025, to allow the purchase and active management of Bitcoin, Solana, or Ethereum (Crypto)[115](index=115&type=chunk) - LiveOne completed a preferred stock exchange on July 15, 2025, converting **$6.75 million** of Series A Preferred Stock into **4.5 million common shares** and **4.5 million three-year warrants**[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) PodcastOne, a leading podcast platform, reported a 14% revenue increase to $15.0 million and a reduced net loss of $1.1 million for Q2 2025. The company continues to expand its content, monetize through advertising, and manage liquidity challenges, including reliance on parent company LiveOne's financing and debt covenants [Overview](index=29&type=section&id=Overview) - PodcastOne is a leading podcast platform and publisher, spun out from LiveOne on September 8, 2023, and trades on Nasdaq under "PODC"[122](index=122&type=chunk)[123](index=123&type=chunk) - The company produces vodcasts, branded podcasts, merchandise, and live events, delivering **millions of monthly impressions**, **6.0+ million monthly unique listeners**, and **17+ million IAB monthly downloads**[124](index=124&type=chunk) - Revenue for Q2 2025 was **$15.0 million**, representing **14% year-over-year growth**[127](index=127&type=chunk) [Recent Developments for the Quarter Ended June 30, 2025](index=29&type=section&id=Recent%20Developments%20for%20the%20Quarter%20Ended%20June%2030,%202025) - Expanded programming slate to **194 shows**[129](index=129&type=chunk) - Surpassed **3.8 billion network downloads**[129](index=129&type=chunk) - Ranked as high as **8** on Podtrac's Top Podcast Publishers list[129](index=129&type=chunk) - Acquired exclusive rights to certain podcasts, including ownership and IP for true crime podcasts for potential TV/film projects[130](index=130&type=chunk) [Our Business Model](index=29&type=section&id=Our%20Business%20Model) - Business model is Ad-Supported Service, providing free content and generating revenue from audio, video, and social advertising impressions[132](index=132&type=chunk) - Focuses on host-read embedded ads and programmatic monetization[132](index=132&type=chunk) - Revenue deals with new talent are based on a percentage split of advertising revenue[134](index=134&type=chunk) [Key Factors Affecting Our Performance](index=31&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) - Digital advertising industry is shifting to "viewable" impression standards and data-driven technologies like automated buying[136](index=136&type=chunk)[137](index=137&type=chunk) - Revenue is generated by charging a cost per thousand impressions (CPM) based on purchased digital ads[138](index=138&type=chunk) - PodcastOne owns one of the largest networks in North America, with over **300 exclusive shows** and over **3.6 billion downloads** in FY2025[139](index=139&type=chunk) - Operates LaunchPadOne, a self-publishing platform for independent podcasters, serving as a talent pool[140](index=140&type=chunk) [Key Business Metric](index=32&type=section&id=Key%20Business%20Metric) Number of Podcast Downloads | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | YoY Growth | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | | Number of podcast downloads | 51,423,500 | 55,856,000 | (8)% | - The decrease in downloads is attributed to modified download behavior by Apple iOS 17 and the departure of non-revenue generating partner networks[142](index=142&type=chunk) [Components of Results of Operations](index=33&type=section&id=Components%20of%20Results%20of%20Operations) - Revenue primarily from sale of audio, video, and display advertising space to third-party exchanges[145](index=145&type=chunk) - Cost of sales consists of revenue sharing expenses owed to content creators and commissions[146](index=146&type=chunk) - Operating expenses include personnel-related expenses, stock-based compensation, and allocated overhead[147](index=147&type=chunk) - Expects operating expenses to increase in dollar amount in the short term but decrease as a percentage of revenue over the longer term[147](index=147&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Results of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | % Change | | :----------------------------- | :------------------------------------ | :------------------------------------ | :------- | | Revenue | $14,994 | $13,159 | 14% | | Cost of sales | $13,555 | $11,709 | 16% | | Sales and marketing expenses | $879 | $847 | 4% | | Product development | $12 | $18 | (33)% | | General and administrative | $1,477 | $1,398 | 6% | | Amortization of intangible assets | $125 | $377 | (67)% | | Impairment of intangible assets | $0 | $176 | (100)% | | Loss from operations | $(1,054) | $(1,366) | (23)% | - Stock-based compensation expense increased by **272%** to **$1.5 million** in Q2 2025, primarily due to a **4082% increase** in cost of sales[154](index=154&type=chunk) [Non-GAAP Financial Measures](index=37&type=section&id=Non-GAAP%20Financial%20Measures) - Contribution Margin is defined as Revenue less Cost of Sales before share-based compensation, depreciation, and amortization of developed technology[164](index=164&type=chunk) - Adjusted EBITDA is defined as net income (loss) before specific non-cash and non-recurring adjustments[165](index=165&type=chunk) Non-GAAP Financial Measures (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :----------------------------- | :------------------------------------ | :------------------------------------ | | Net loss (GAAP) | $(1,054) | $(1,366) | | Adjusted EBITDA | $580 | $(316) | | Revenue | $14,994 | $13,159 | | Contribution Margin | $2,394 | $1,509 | - Adjusted EBITDA improved from a loss of **$(316) thousand** in Q2 2024 to a profit of **$580 thousand** in Q2 2025[167](index=167&type=chunk) - Contribution Margin increased by **58.6%** from **$1.5 million** in Q2 2024 to **$2.4 million** in Q2 2025[167](index=167&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents: **$1.9 million** as of June 30, 2025[169](index=169&type=chunk) - Accumulated deficit: **$37.1 million** as of June 30, 2025[182](index=182&type=chunk) - Working capital: **$1.2 million** as of June 30, 2025[182](index=182&type=chunk) - Management anticipates existing cash resources will not be sufficient beyond August 2026 without additional liquidity[180](index=180&type=chunk) - LiveOne's total outstanding consolidated indebtedness was **$15.9 million** as of June 30, 2025, net of fees and discounts, consisting of Initial Debentures and the Capchase Loan[177](index=177&type=chunk) - PodcastOne's assets are collateral for LiveOne's debt[174](index=174&type=chunk) - LiveOne was in compliance with all debt covenants as of June 30, 2025[175](index=175&type=chunk)[191](index=191&type=chunk) [Sources and Uses of Cash](index=42&type=section&id=Sources%20and%20Uses%20of%20Cash) Cash Flow Activities (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Net cash provided by (used in) operating activities | $903 | $(480) | | Net cash used in investing activities | $(112) | $(74) | | Net cash used in financing activities | $0 | $0 | | Net change in cash, cash equivalents and restricted cash | $791 | $(554) | - Operating cash flow for Q2 2025 benefited from non-cash charges of **$1.7 million** (depreciation, amortization, stock-based compensation) and **$0.3 million** from working capital changes[185](index=185&type=chunk) [Recent Accounting Pronouncements](index=43&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 2 for details on recent accounting pronouncements[192](index=192&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that quantitative and qualitative disclosures about market risk are not required for smaller reporting companies - Not required for smaller reporting companies[193](index=193&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, management, including the President and CFO, concluded that the company's disclosure controls and procedures were effective. The report acknowledges inherent limitations in any control system, such as human error or circumvention. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were effective as of June 30, 2025[195](index=195&type=chunk) - No material changes in internal control over financial reporting during Q2 2025[197](index=197&type=chunk) [PART II — OTHER INFORMATION](index=45&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings arising from its business activities. Management believes, after consulting legal counsel, that routine claims and lawsuits are not significant and are not expected to have a material adverse effect, except as discussed in Note 7 - Company is involved in various legal proceedings[200](index=200&type=chunk) - Routine claims and lawsuits are not expected to have a material adverse effect, except as discussed in Note 7[200](index=200&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) The company operates in a rapidly changing environment with significant risks, including a history of operating and net losses, substantial indebtedness of its parent LiveOne (guaranteed by PodcastOne and secured by its assets), and reliance on key management. These factors raise substantial doubt about the company's ability to continue as a going concern - PodcastOne has incurred significant operating and net losses since inception, with a net loss of **$1.1 million** for Q2 2025 and an accumulated deficit of **$37.1 million** as of June 30, 2025[202](index=202&type=chunk) - The company's ability to continue as a going concern is dependent on increasing revenue, reducing costs, achieving profitability, and obtaining additional financing[205](index=205&type=chunk)[183](index=183&type=chunk) - Reliance on key management, including Executive Chairman Robert Ellin, President Kit Gray, Chief Revenue Officer Sue McNamara, and CFO Ryan Carhart[206](index=206&type=chunk)[207](index=207&type=chunk) - LiveOne's substantial indebtedness (**$15.9 million** as of June 30, 2025) is guaranteed by PodcastOne and secured by a lien on all of PodcastOne's assets[209](index=209&type=chunk)[213](index=213&type=chunk) - LiveOne's debt agreements contain restrictive covenants that may limit PodcastOne's operating flexibility and cash flow[213](index=213&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, PodcastOne issued 63,542 shares of common stock valued at $0.1 million to consultants and 237,113 shares valued at $0.5 million to LiveOne. These issuances were made in reliance on exemptions from registration under the Securities Act. LiveOne also repurchased 291,459 shares of its and/or PodcastOne's common stock during the quarter - Issued **63,542 common shares** (**$0.1 million**) to various consultants in Q2 2025[216](index=216&type=chunk) - Issued **237,113 common shares** (**$0.5 million**) to LiveOne in Q2 2025[216](index=216&type=chunk) Share Repurchases by LiveOne (or PodcastOne) | Period | Total number of shares (or units) purchased | Average price paid per share (or unit) | Total number of shares (or units) purchased as part of publicly announced plans or programs | Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs* | | :----------------------------- | :---------------------------------------- | :------------------------------------- | :---------------------------------------------------------------------------------------- | :-------------------------------------------------------------------------------------------------------------------- | | April 1, 2025 – April 30, 2025 | - | $- | - | $6,500,000 | | May 1, 2025 – May 31, 2025 | 24,056 | $0.74 | 24,056 | $6,500,000 | | June 1, 2025 – June 30, 2025 | 267,403 | $0.81 | 291,459 | $6,500,000 | | Total (April 1, 2025 – June 30, 2025) | 291,459 | $- | 291,459 | $6,500,000 | [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period - None[220](index=220&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[220](index=220&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - None[221](index=221&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's organizational documents, equity incentive plans, employment agreements, indemnification agreements, and certifications required by the Sarbanes-Oxley Act - Includes Amended and Restated Certificate of Incorporation and Bylaws[224](index=224&type=chunk) - Lists the Company's 2022 Equity Incentive Plan and employment agreements for key executives[224](index=224&type=chunk) - Contains certifications of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 and 906 of the Sarbanes-Oxley Act[224](index=224&type=chunk) [Signatures](index=51&type=section&id=Signatures) The report is signed by Kit Gray, President (Principal Executive Officer), and Ryan Carhart, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), on August 14, 2025 - Signed by Kit Gray, President, and Ryan Carhart, Chief Financial Officer[229](index=229&type=chunk)[230](index=230&type=chunk) - Date: August 14, 2025[230](index=230&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $15 million, a 14% increase from $13.1 million in the same quarter last year [12] - Operating loss decreased to $1.05 million from $1.4 million year-over-year, primarily due to lower amortization [12] - Net loss improved to $1.05 million or $0.04 per share, compared to a net loss of $1.4 million or $0.06 per share in the prior year [13] - Adjusted EBITDA turned positive at $600,000, compared to a negative $300,000 in the same quarter last year [13] - The company ended the quarter with zero debt and $1.9 million in cash and cash equivalents [13] Business Line Data and Key Metrics Changes - PodcastOne launched 14 new podcasts, increasing the total to 206 active shows [10] - Video views surged by 218% year-over-year across multiple platforms, indicating strong audience engagement [10] Market Data and Key Metrics Changes - PodcastOne ranked as a top 10 US podcast publisher for the eighth consecutive month, with a monthly unique US audience of 5.4 million and 20.3 million downloads and streams as of July 2025 [8] - The podcast advertising market is projected to see over $2.4 billion in investments this year, highlighting the industry's growth potential [7] Company Strategy and Development Direction - PodcastOne aims to leverage its vertically integrated model to drive long-term value for creators, advertisers, and shareholders [7] - The company is expanding its video production and distribution efforts to enhance audience engagement [11] - PodcastOne is actively exploring M&A opportunities, particularly in acquiring talent and podcast platforms [26][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about building on momentum with high-profile initiatives and events planned for the upcoming months [15] - The company expects full-year revenues to be between $56 million and $60 million, representing at least an 8% increase from the previous fiscal year [14] - Adjusted EBITDA for the full year is anticipated to be between $3 million and $5 million [14] Other Important Information - PodcastOne has upgraded its order management system to improve operational efficiency and sales processes [17] - The company is focused on compelling content, strategic monetization, and maintaining trusted relationships with talent and advertisers [17] Q&A Session Summary Question: How does the growth in video views translate into revenue? - Management indicated that current contracts consider both audio and video views, allowing for higher rates per spot due to increased video viewership [21][22] Question: What is the current M&A environment for platforms? - Management noted that the platform side is dominated by a few major players, but there are still interesting opportunities for acquisition [26][29] Question: What factors could drive revenue to the high end of guidance? - Acquiring a company with good revenues could push the numbers higher, while not acquiring would keep it at the lower end [33] Question: How is stock-based compensation affecting cost of sales? - Management confirmed that stock-based compensation is being used to reduce cash payments, which is part of their strategy to manage costs [39][40] Question: How do consumers interact with video podcasts compared to audio-only? - Management noted that video consumption is significant, with many viewers engaging with content actively, while others may listen passively [49][50]

Filing Information This section details the Form 8-K filing, identifying PodcastOne, Inc. as the registrant, confirming its emerging growth company status, and listing registered securities - The filing is a **Form 8-K Current Report** by PODCASTONE, INC., dated July 30, 2025[1](index=1&type=chunk)[2](index=2&type=chunk) - PodcastOne, Inc. is identified as an **'Emerging growth company'**[2](index=2&type=chunk)[4](index=4&type=chunk) Registered Securities | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common stock, $0.00001 par value per share | PODC | The NASDAQ Capital Market | [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) PodcastOne, Inc. announced preliminary unaudited financial results for the fiscal quarter ended June 30, 2025, cautioning against undue reliance due to their preliminary nature [Announcement of Preliminary Financial Results](index=2&type=section&id=Announcement%20of%20Preliminary%20Financial%20Results) The company issued a press release on July 30, 2025, announcing preliminary financial results for the fiscal quarter ended June 30, 2025 - PodcastOne, Inc. issued a press release on July 30, 2025, announcing **preliminary financial results** for its fiscal quarter ended June 30, 2025[5](index=5&type=chunk) - A copy of the press release is attached as **Exhibit 99.1**[5](index=5&type=chunk) [Disclaimer Regarding Preliminary Nature](index=2&type=section&id=Disclaimer%20Regarding%20Preliminary%20Nature) The company emphasizes the preliminary, unaudited nature of financial results, cautioning against undue reliance as they are subject to change and not independently reviewed - The announced results are **preliminary, unaudited, and subject to change** as financial closing procedures are not yet complete[6](index=6&type=chunk) - The preliminary unaudited financial information has not been **audited, reviewed, or compiled** by the Company's independent registered public accounting firm, MGO[7](index=7&type=chunk) - These estimates should not be viewed as a substitute for the Company's full financial statements prepared in accordance with GAAP, and **undue reliance should not be placed on them**[6](index=6&type=chunk) - The information is not deemed 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934, nor incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference[8](index=8&type=chunk) [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) This item incorporates by reference the information disclosed under Item 2.02, ensuring the preliminary financial results announcement is public disclosure under Regulation FD - The information described under Item 2.02 is **incorporated by reference** in this Item 7.01[9](index=9&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits furnished with the Form 8-K, including the press release detailing preliminary financial results and the Cover Page Interactive Data File Exhibits Furnished | Exhibit No. | Description | | :---------- | :---------- | | 99.1* | Press release, dated July 30, 2025. | | 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) | * Furnished herewith. [SIGNATURES](index=3&type=section&id=SIGNATURES) The report is duly signed on behalf of PodcastOne, Inc. by Ryan Carhart, Chief Financial Officer, confirming its authorization and filing on July 30, 2025 - The report was signed by **Ryan Carhart, Chief Financial Officer** of PODCASTONE, INC., on July 30, 2025[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)

Core Insights - PodcastOne reported record revenue of approximately $15 million for Q1 Fiscal 2026, marking a 14% increase from $13.2 million in Q1 Fiscal 2025 [7][9] - The company achieved an Adjusted EBITDA of $580,000, a significant improvement of 284% year-over-year [9][10] - PodcastOne's guidance for Fiscal 2026 anticipates revenues between $55 million and $60 million, with Adjusted EBITDA projected at $3 million to $5 million [10][9] Management Commentary - Kit Gray, President and Co-Founder, emphasized PodcastOne's legacy in the podcasting industry and its commitment to audio-first entertainment, which has set industry standards [2][6] - The company is well-positioned to leverage relationships with over 500 major advertisers, capitalizing on the growing podcasting market [3][6] Industry Context - The podcasting industry is thriving, with over 4 million podcasts globally and advertising revenues expected to exceed $2.4 billion in the current year [3][6] - PodcastOne has expanded its video production efforts, resulting in a 200% increase in video views year-over-year across platforms like YouTube and TikTok [5][6] Financial Performance - Q1 Fiscal 2026 results showed a net loss of $1.054 million, an improvement from a net loss of $1.366 million in the same quarter last year [7][9] - The company reported a Contribution Margin of approximately $2.4 million, representing a 59% increase from the previous year [9][27] Podcast Offerings - PodcastOne added 14 new podcasts in Q1 Fiscal 2026, bringing the total to over 200 on its network [9][4] - The diverse offerings include popular titles such as LOVE MURDER and Detox Retox, catering to a wide audience [4][5]

Core Viewpoint - PodcastOne is set 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][2]. Company Overview - PodcastOne (NASDAQ: PODC) is a prominent podcast platform that offers a comprehensive solution in sales, marketing, public relations, production, and distribution for creators and advertisers [3]. - The platform has achieved over 3.9 billion total downloads and has a community of 200 top podcasters, including notable names like Adam Carolla and Kaitlyn Bristowe [3]. - PodcastOne's distribution network reaches over 1 billion monthly impressions across various channels, including YouTube, Spotify, Apple Podcasts, and iHeartRadio [3]. - The company also operates PodcastOne Pro, which provides customizable production packages for brands and individuals [3].

Core Insights - PodcastOne reported preliminary financial results for Q1 FY 2026, indicating record revenue of approximately $15 million and an Adjusted EBITDA of $580,000, reflecting a 284% year-over-year increase [5] Financial Performance - The company achieved a contribution margin of approximately $2.4 million, representing 16% of revenue [5] - PodcastOne raised its full-year guidance for FY 2026, projecting revenue between $56 million and $60 million, with Adjusted EBITDA expected to be between $3 million and $5 million [5] Growth and Market Position - In Q1 FY 2026, PodcastOne added 14 new podcasts, bringing the total to over 200 on its network [5] - The company has maintained a position in Podtrac's Top 10 Publishers rankings for seven consecutive months, currently ranking at 9 [5] Company Overview - PodcastOne is a leading podcast platform with over 3.9 billion total downloads and a community of 200 top podcasters [3] - The platform reaches over 1 billion monthly impressions across various channels, including YouTube, Spotify, Apple Podcasts, and iHeartRadio [3]

Core Insights - PodcastOne has announced the relaunch of the popular podcast "Chrisley Confessions" as "Chrisley Confessions 2.0," hosted by Todd and Julie Chrisley, after a two-year hiatus [1][2] - The podcast will focus on themes of faith, family, personal growth, and the couple's journey following their Presidential pardon, aiming to connect with their audience in an unfiltered manner [2][3] - The first episodes of the relaunch debuted on July 16, 2025, featuring guest interviews and listener Q&A segments, maintaining the show's signature humor and authenticity [4] Company Overview - PodcastOne is a leading podcast platform that offers a comprehensive solution in sales, marketing, public relations, production, and distribution, with over 3.9 billion total downloads and a community of 200 top podcasters [5] - The platform reaches over 1 billion monthly impressions across various channels, including YouTube, Spotify, and Apple Podcasts, indicating a strong distribution network [5] - PodcastOne's programming includes a diverse range of genres, showcasing its ability to attract a wide audience and advertisers [4][5]

Financial Data and Key Metrics Changes - Revenue in the fiscal fourth quarter of 2025 increased 20% to $14.1 million compared to $11.7 million in the same quarter a year ago [11] - Operating loss in the fiscal fourth quarter of 2025 was $1.8 million compared to an operating loss of $1.2 million in the same quarter a year ago, primarily driven by higher non-cash stock compensation expense [11][12] - Net loss in the fiscal fourth quarter of 2025 was $1.8 million or a loss of $0.06 per share compared to a net loss of $1 million or $0.05 per share in the quarter a year ago [12] - Adjusted EBITDA in the fiscal fourth quarter of 2025 was positive $900,000 compared to positive $300,000 in the same quarter a year ago [12] - For the fiscal year 2025, revenue increased 20% to $52.1 million compared to $43.3 million in fiscal year 2024 [12][13] - Operating loss for the fiscal year 2025 was $6.4 million compared to an operating loss of $5 million in fiscal year 2024 [13] - Net loss for the fiscal year 2025 was $6.4 million or $0.27 per share compared to a net loss of $14.7 million or $0.68 per share in fiscal year 2024 [14] Business Line Data and Key Metrics Changes - PodcastOne renewed several high-performing legacy shows and expanded partnerships, contributing to a 20% year-over-year revenue increase [11][8] - New original titles launched in the quarter included "Kate and Ty," "Break It Down," and "DetoxRetox with Tom Schwartz," each drawing strong early audiences [10] - The migration to Amazon's Art19 platform introduced a new core monetization channel alongside existing revenue streams [9] Market Data and Key Metrics Changes - Podcasting industry projected to see over $2.4 billion in advertising investment in 2025, with PodcastOne positioned to capitalize on this growth [6] - PodcastOne ranked as a top 10 US podcast publisher with a monthly unique US audience of 6 billion downloads and streams [7] Company Strategy and Development Direction - PodcastOne is focused on diversifying revenue streams and enhancing monetization through partnerships and new content [11][17] - The company is actively evaluating M&A prospects to acquire top content and networks, as well as enhance its platform with production and technology acquisitions [17] - The strategic initiative to enter the crypto space aims to create a new vertical and attract new advertisers [19][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the advertising environment, noting higher CPMs and increased advertiser interest [40] - The company is optimistic about future growth, expecting revenues for fiscal year 2026 to be between $55 million and $60 million [15] - Management highlighted the importance of maximizing opportunities with current inventory while acquiring new content producers [61] Other Important Information - PodcastOne completed a renovation of its Beverly Hills studio, enhancing production capabilities [10] - The company ended the fiscal fourth quarter with no debt and $1.1 million in cash and cash equivalents [12] Q&A Session Summary Question: Increase in stock-based compensation - Management confirmed that the increase in stock-based compensation is related to initiatives to offer talent a larger component of compensation [25][27] Question: Benefits from the Art19 deal - Management reported operational efficiencies and cost savings from the Art19 deal, with revenue generation exceeding expectations [30][32] Question: Cost of sales as a percentage of revenue - Management indicated that cost of sales improved and is expected to hold steady or improve further [34][35] Question: Advertising environment and advertiser appetite - Management noted a positive advertising environment with higher CPMs and more advertisers entering the space [40] Question: Talent acquisition environment - Management stated that there is still good talent available and the company is in a strong position to negotiate favorable terms [44][46] Question: Terms of the Amazon deal - Management explained the minimum guarantee structure based on impressions, with specific thresholds to meet for revenue increases [49][50] Question: Rationale for entering the crypto space - Management highlighted the passionate community in the crypto space and the potential for new advertisers and content opportunities [53][55] Question: Growth compared to the industry - Management expressed confidence in their growth strategy and emphasized the importance of maximizing current partnerships while acquiring new content [59][61]

Financial Data and Key Metrics Changes - Revenue in the fiscal fourth quarter of 2025 increased 20% to $14.1 million compared to $11.7 million in the same quarter a year ago [11] - Operating loss in the fiscal fourth quarter of 2025 was $1.8 million compared to an operating loss of $1.2 million in the same quarter a year ago, primarily driven by higher non-cash stock compensation expense [11] - Net loss in the fiscal fourth quarter of 2025 was $1.8 million or a loss of $0.06 per share compared to a net loss of $1 million or $0.05 per share in the quarter a year ago [12] - Adjusted EBITDA in the fiscal fourth quarter of 2025 was positive $900,000 compared to positive $300,000 in the same quarter a year ago [12] - For the fiscal year 2025, revenue increased 20% to $52.1 million compared to $43.3 million in fiscal year 2024 [13] - Operating loss for the fiscal year 2025 was $6.4 million compared to an operating loss of $5 million in fiscal year 2024 [13] - Net loss for the fiscal year 2025 was $6.4 million or $0.27 per share compared to a net loss of $14.7 million or $0.68 per share in fiscal year 2024 [13] Business Line Data and Key Metrics Changes - PodcastOne renewed several high-performing legacy shows and expanded partnerships, contributing to a 20% year-over-year revenue increase [11][8] - The company successfully began migration to Amazon's Art19 platform, introducing a new core monetization channel [9] - PodcastOne Pro services have begun contributing meaningfully to revenue, with clients relying on the company's infrastructure for high-quality branded content [9] Market Data and Key Metrics Changes - Podcasting industry projected to see over $2.4 billion in advertising investment in 2025, with PodcastOne positioned to capitalize on this growth [6] - PodcastOne ranked as a top 10 US podcast publisher with a monthly unique US audience of 6 billion downloads and streams [7] Company Strategy and Development Direction - The company is focused on diversifying revenue streams and enhancing its content portfolio through strategic partnerships and acquisitions [17] - PodcastOne is actively evaluating M&A prospects to acquire top content and networks, as well as enhance its platform with production and technology acquisitions [17] - The company is exploring opportunities in the crypto space, aiming to consolidate and create a network that leverages the growing interest in cryptocurrency [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the advertising environment, noting higher CPMs and increased advertiser interest despite economic uncertainties [41] - The company is optimistic about future growth, expecting revenues for fiscal year 2026 to be between $55 million and $60 million, with adjusted EBITDA projected between positive $3 million and $5 million [14][15] Other Important Information - The company ended the fiscal fourth quarter with no debt and $1.1 million in cash and cash equivalents [12] - PodcastOne completed financing with JGB Capital, replacing its previous line of credit, which will facilitate business growth [15] Q&A Session Summary Question: Increase in stock-based compensation - Management confirmed that the increase in stock-based compensation is related to initiatives to make it a larger component of talent compensation and indicated that this level is expected to continue [25][27] Question: Advertising environment and advertiser appetite - Management reported a good quarter with higher CPMs and more advertisers entering the space, despite competition from larger players [41][42] Question: Talent acquisition environment - Management indicated that there is still good talent available and expressed confidence in negotiating favorable terms for new shows [45][46] Question: Amazon deal terms and thresholds - Management explained that the deal includes a minimum guarantee based on impressions, with current thresholds set at 90 million and 110 million impressions [51] Question: Rationale for entering the crypto space - Management highlighted the opportunity to consolidate in the crypto podcast space and create a network that connects passionate communities [56][58] Question: Growth compared to the industry - Management stated that while the company is growing, it is important to maximize opportunities with current inventory and partnerships to ensure profitability [61][62]

[Business Overview](index=5&type=section&id=Item%201.%20Business) PodcastOne operates an ad-supported podcast platform, achieving **$52.1 million** revenue in FY2025, while managing download declines and leveraging proprietary technology and strategic partnerships [Company and Business Model](index=5&type=section&id=Overview) PodcastOne, a LiveOne subsidiary, operates an ad-supported podcast platform, offering comprehensive creator services and a self-publishing incubator, with **$52.1 million** revenue in fiscal 2025 - PodcastOne is a leading podcast publisher and a majority-owned subsidiary of LiveOne, Inc., having completed its direct listing on Nasdaq in September 2023[19](index=19&type=chunk)[20](index=20&type=chunk) - The business model is ad-supported, generating revenue from host-read ads, dynamic ad insertion (DAI), and sponsorships, with revenue shared with talent[22](index=22&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - The company operates LaunchpadOne, a free self-publishing platform for independent podcasters, serving as a talent pool for the main network[23](index=23&type=chunk)[39](index=39&type=chunk) Fiscal Year Financial Performance | Metric | FY 2025 | FY 2024 | Growth | | :--- | :--- | :--- | :--- | | Revenue | $52.1 million | $43.3 million | 20% | [Key Business Metrics](index=9&type=section&id=Key%20Business%20Metrics) Podcast downloads, the primary business metric, decreased **44%** to **204.7 million** in fiscal 2025, primarily due to Apple iOS 17 changes and partner network departures - The decrease in podcast downloads is primarily due to modified download behavior by Apple iOS 17 and the departure of non-revenue generating partner networks[41](index=41&type=chunk)[58](index=58&type=chunk) Podcast Downloads (YoY) | Metric | Year Ended March 31, 2025 | Year Ended March 31, 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | Number of podcast downloads | 204,709,000 | 368,812,413 | (44)% | [Growth Strategies](index=9&type=section&id=Growth%20Strategies) Growth strategies include launching and acquiring podcasts, investing in advertising, and partnering with new distribution platforms, with recent revenue growth significantly driven by a single large customer - Key growth strategies include launching new podcasts with relevant creators, acquiring existing podcasts, investing in advertising, and partnering with new distribution platforms[43](index=43&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) - Ad-supported service revenue grew **20%** from **$43.3 million** in FY2024 to **$52.1 million** in FY2025, with **94%** (**$8.2 million**) of this increase from a single largest customer[49](index=49&type=chunk) - In April 2025, the company entered a three-year agreement with Amazon's ART19 for hosting, expecting to drive additional monetization[46](index=46&type=chunk) [Competition and Market Position](index=15&type=section&id=Competition) The company competes for listener attention and advertising revenue with a broad range of digital and traditional media, including major streaming platforms and internet companies - The company competes for listeners with other on-demand audio services, radio providers, and various entertainment forms[76](index=76&type=chunk) - Competition for advertising spend comes from internet companies, social media sites, and traditional channels like radio and television[77](index=77&type=chunk)[129](index=129&type=chunk) [Intellectual Property and Technology](index=14&type=section&id=Intellectual%20Property) The company protects its business through intellectual property and proprietary technology, including a Content Management System (CMS) and the LaunchpadOne self-publishing platform - The company utilizes a proprietary Content Management System (CMS) providing creators with download numbers and analytics, noted as a competitive differentiator[69](index=69&type=chunk)[70](index=70&type=chunk) - LaunchpadOne is a key asset, offering a free, end-to-end podcasting solution for independent creators and serving as a monetization channel through ad insertion[81](index=81&type=chunk) - Since 2019, the company includes passive participation rights in agreements, allowing payment from derivative works without creative control[80](index=80&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including ongoing losses, going concern doubts, intense competition, reliance on advertising, key personnel dependency, and financial exposure through its parent company's debt [Business and Industry Risks](index=20&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) The company faces business and industry risks including recurring losses, going concern doubts, high dependence on volatile advertising demand, intense competition, and reliance on talent with significant minimum guarantee payments - The company has a history of significant operating and net losses, reporting a net loss of **$6.5 million** for fiscal 2025 and **$14.7 million** for fiscal 2024[109](index=109&type=chunk) - The independent auditor's report expresses substantial doubt about the company's ability to continue as a going concern due to recurring losses from operations[123](index=123&type=chunk)[432](index=432&type=chunk) - The business faces intense competition from other podcast providers, internet radio, and large digital media companies with greater resources and brand recognition[126](index=126&type=chunk)[127](index=127&type=chunk) - Revenue is highly dependent on advertising demand, which is subject to economic downturns and shifts in marketing budgets[135](index=135&type=chunk) - Significant minimum guarantee (MG) payments to talent pose a financial risk if revenue forecasts are not met, potentially impacting margins and operating flexibility[132](index=132&type=chunk) [Company-Specific Risks](index=42&type=section&id=Risks%20Related%20to%20Our%20Company) Company-specific risks include previously identified material weaknesses in internal controls, heavy dependence on key management, increased public company compliance costs, and potential impacts from rising inflation - For fiscal 2024, management concluded disclosure and internal controls were ineffective due to material weaknesses, though remediated by fiscal 2025 year-end[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - The company's success is highly dependent on key members of management, including President Kit Gray, Executive Chairman Robert Ellin, and CFO Ryan Carhart[225](index=225&type=chunk) - Operating as a public company results in significant and increasing legal, accounting, and other compliance-related expenses[227](index=227&type=chunk) - Rising inflation poses a risk by increasing costs for labor, technology, and equipment, which may not be fully recoverable through price increases[234](index=234&type=chunk) [Risks Related to LiveOne Relationship and Debt](index=49&type=section&id=Risks%20Related%20to%20Our%20Relationship%20with%20LiveOne%20and%20its%20Indebtedness) As a majority-owned subsidiary, PodcastOne faces risks from LiveOne's substantial debt, which is secured by PodcastOne's assets and includes restrictive covenants, alongside potential conflicts of interest as a controlled company - LiveOne's debt agreements contain restrictive covenants and are secured by substantially all assets of both LiveOne and PodcastOne, potentially limiting operating flexibility[244](index=244&type=chunk)[527](index=527&type=chunk)[558](index=558&type=chunk) - PodcastOne is a "controlled company" under Nasdaq rules due to LiveOne's majority voting stock ownership, though it does not currently intend to use governance exemptions[247](index=247&type=chunk)[248](index=248&type=chunk) - Potential conflicts of interest exist with LiveOne concerning business opportunities, strategic decisions, and competitor relationships[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) [Management's Discussion and Analysis (MD&A)](index=69&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the company's financial performance, liquidity, and critical accounting policies, highlighting revenue growth, reduced net loss, ongoing going concern doubts, and reliance on external financing [Results of Operations](index=74&type=section&id=Results%20of%20Operations) Revenue increased **20%** to **$52.1 million** in fiscal 2025, primarily from a single customer, leading to a reduced net loss of **$6.5 million** due to lower other expenses, while Adjusted EBITDA turned negative - Revenue increased by **$8.8 million** (**20%**), with **$8.2 million** (**94%** of the increase) attributed to a single largest customer[369](index=369&type=chunk) - The significant reduction in net loss from **$14.7 million** to **$6.5 million** was primarily due to a **$9.7 million** decrease in 'Other income (expense), net', including a **$7.6 million** loss on derivative fair value changes and **$2.2 million** in interest expense in fiscal 2024[378](index=378&type=chunk) Consolidated Statement of Operations (in thousands) | | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :--- | :--- | :--- | | **Revenue** | **$52,119** | **$43,302** | | Cost of sales | $47,394 | $37,326 | | Total operating expenses | $58,553 | $48,313 | | **Loss from operations** | **$(6,434)** | **$(5,011)** | | Total other expense, net | $0 | $(9,666) | | **Net loss** | **$(6,458)** | **$(14,732)** | | Net loss per share | $(0.26) | $(0.68) | Non-GAAP Adjusted EBITDA Reconciliation (in thousands) | | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :--- | :--- | :--- | | Net Loss | $(6,458) | $(14,732) | | Adjustments (Depreciation, Stock Comp, etc.) | $5,957 | $15,233 | | **Adjusted EBITDA** | **$(501)** | **$501** | [Liquidity and Capital Resources](index=83&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is constrained by **$1.1 million** cash and an accumulated deficit of **$36.1 million**, raising going concern doubts and necessitating additional financing, with LiveOne's new debt facility secured by PodcastOne's assets - The company has a history of losses and an accumulated deficit of **$36.1 million** as of March 31, 2025, raising substantial doubt about its ability to continue as a going concern[416](index=416&type=chunk)[453](index=453&type=chunk) - Management anticipates existing cash resources of **$1.1 million** will not be sufficient beyond June 2026, requiring additional financing[413](index=413&type=chunk)[454](index=454&type=chunk) - In May 2025, parent company LiveOne secured new senior secured convertible debentures, raising an initial **$15.25 million**, guaranteed by PodcastOne and secured by its assets[409](index=409&type=chunk)[553](index=553&type=chunk) Cash Flow Summary (in thousands) | | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(212) | $2,211 | | Net cash used in investing activities | $(154) | $(1,328) | | Net cash used in financing activities | $0 | $(3,000) | | **Net change in cash** | **$(366)** | **$(2,117)** | [Critical Accounting Policies and Estimates](index=79&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant management estimates, including revenue recognition for advertising and barter, stock-based compensation, business combinations, and complex debt instrument valuation - Advertising revenue, including barter transactions, is a key estimation area, with barter revenue at **$25.0 million** (**48%** of total revenue) in fiscal 2025, up from **$16.7 million** (**39%**) in fiscal 2024, attributed to a single customer[388](index=388&type=chunk)[389](index=389&type=chunk)[462](index=462&type=chunk) - Stock-based compensation is valued using the Black-Scholes-Merton model, requiring subjective estimates for variables like expected volatility and term[390](index=390&type=chunk) - Business combinations require management to estimate the fair value of acquired assets and liabilities, with goodwill tested for impairment annually[392](index=392&type=chunk)[401](index=401&type=chunk) - Complex debt instruments with conversion features are assessed for derivative treatment, requiring fair value measurement at each reporting period[394](index=394&type=chunk)[395](index=395&type=chunk) [Financial Statements and Notes](index=87&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited financial statements, including balance sheets and statements of operations, along with key notes detailing auditor's going concern opinion, bridge loan conversion, commitments, and subsequent financing events [Independent Auditor's Report](index=88&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor's report expresses a fair opinion on financial statements but highlights substantial doubt about the company's going concern ability due to recurring losses - The auditor's report includes a "Going Concern Uncertainty" paragraph, citing recurring losses, negative cash flows, and a net capital deficiency that raise substantial doubt about the company's ability to continue as a going concern[432](index=432&type=chunk) [Consolidated Financial Statements](index=89&type=section&id=Consolidated%20Financial%20Statements) The consolidated balance sheet shows **$21.2 million** in total assets and **$15.1 million** in equity as of March 31, 2025, while the statement of operations reports a **$6.5 million** net loss for fiscal 2025 Consolidated Balance Sheet Highlights (in thousands) | | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,079 | $1,445 | | Total Assets | $21,195 | $24,125 | | Total Liabilities | $6,053 | $7,784 | | Total Stockholders' Equity | $15,142 | $16,341 | Consolidated Statement of Operations Highlights (in thousands) | | Year Ended March 31, 2025 | Year Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $52,119 | $43,302 | | Loss from operations | $(6,434) | $(5,011) | | Net loss | $(6,458) | $(14,732) | [Note 6: Bridge Loan and Warrants](index=104&type=section&id=Note%206%20%E2%80%94%20Bridge%20Loan) The **$8.8 million** PC1 Bridge Loan was converted into common stock upon direct listing in September 2023, and associated **$9.1 million** warrants were reclassified from liability to equity - The PC1 Bridge Loan, taken out in July 2022, was fully converted into common stock upon the direct listing in September 2023[505](index=505&type=chunk)[509](index=509&type=chunk) - Upon the direct listing, the PC1 Warrants became fixed and were reclassified from a **$9.1 million** liability to additional paid-in capital[510](index=510&type=chunk) [Note 8: Commitments and Contingencies](index=107&type=section&id=Note%208%20%E2%80%94%20Commitments%20and%20Contingencies) The company has **$1.5 million** in content provider commitments and a **$15.0 million** minimum guarantee agreement with Amazon's ART19, while also being exposed to LiveOne's debt secured by its assets - As of March 31, 2025, the company has guaranteed payment obligations to content providers of **$1.3 million** for FY2026, **$0.1 million** for FY2027, and **$0.1 million** for FY2028[522](index=522&type=chunk) - A three-year agreement with Amazon's ART19 requires a minimum guarantee of **$15.0 million** to PodcastOne over the term, subject to impression targets, with **$0.8 million** revenue recognized in fiscal 2025[524](index=524&type=chunk) - LiveOne's debt facilities are collateralized by a first lien on all assets of LiveOne and its subsidiaries, including PodcastOne, exposing the company to risks related to its parent's financial health and debt compliance[527](index=527&type=chunk)[528](index=528&type=chunk) [Note 12: Subsequent Events](index=115&type=section&id=Note%2012%20%E2%80%94%20Subsequent%20Events) Subsequent events include LiveOne securing new **$15.25 million** secured convertible debentures guaranteed by PodcastOne, and new employment agreements for key executives with significant RSU grants - In May 2025, LiveOne sold **$16.775 million** in principal amount of senior secured convertible debentures for **$15.25 million**, guaranteed by PodcastOne and secured by its assets[553](index=553&type=chunk)[558](index=558&type=chunk) - In June 2025, new two-year employment agreements were signed with President Kit Gray (annual salary **$375,000**) and CRO Sue McNamara (annual salary **$325,000**), including substantial RSU grants[559](index=559&type=chunk)[560](index=560&type=chunk) [Controls and Procedures](index=116&type=section&id=Item%209A.%20CONTROLS%20AND%20PROCEDURES) This section details management's evaluation of disclosure controls and procedures, confirming their effectiveness and remediation of prior material weaknesses [Evaluation of Controls and Procedures](index=116&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, remediating prior material weaknesses, and no auditor attestation report is required for this smaller reporting company - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[562](index=562&type=chunk)[567](index=567&type=chunk) - This assessment indicates a remediation of the material weaknesses present in the prior fiscal year (ended March 31, 2024)[215](index=215&type=chunk)[570](index=570&type=chunk) - As a smaller reporting company, an attestation report from the independent registered public accounting firm on internal controls is not included[569](index=569&type=chunk) [Other Information (Part III & IV)](index=120&type=section&id=PART%20III) This section incorporates by reference information on governance, compensation, and ownership from the forthcoming proxy statement, and lists financial statements and exhibits [Incorporation by Reference and Exhibits](index=120&type=section&id=Incorporation%20by%20Reference) Information for Items 10-14, including Directors, Executive Compensation, and Security Ownership, is incorporated by reference from the 2025 Proxy Statement, with Item 15 listing financial statements and exhibits - Items 10-14, covering Directors, Executive Officers, Executive Compensation, Security Ownership, Certain Relationships and Related Transactions, and Principal Accounting Fees, are incorporated by reference from the forthcoming 2025 Proxy Statement[577](index=577&type=chunk)[578](index=578&type=chunk)[579](index=579&type=chunk)[580](index=580&type=chunk)[581](index=581&type=chunk)