Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

As used herein, "LiveOne," the "Company," "we," "our" or "us" and similar terms include LiveOne, Inc. and its subsidiaries, unless the context indicates otherwise. The following discussion and analysis of our business and results of operations for the three and six months ended September 30, 2025, and our financial conditions at that date, should be read in conjunction with our condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report").

Forward-Looking Statements

Certain statements contained in this Quarterly Report that are not statements of historical fact constitute "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified. These forward-looking statements relate to expectations or forecasts for future events, including without limitation our earnings, revenues, expenses or other future financial or business performance or strategies, or the impact of legal or regulatory matters on our business, results of operations or financial condition. These statements may be preceded by, followed by or include the words "may," "might," "will," "would," "could," "should," "will likely result," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "continue," "target" or the negative or other variations thereof or comparable terminology. These forward-looking statements are not guarantees of future performance and are based on information available to us as of the date of this Quarterly Report and on our current expectations, forecasts and assumptions, and involve substantial risks and uncertainties. Actual results may vary materially from those expressed or implied by the forward-looking statements herein due to a variety of factors, including: our reliance on our largest OEM customer for a substantial percentage of our revenue; our ability to consummate any proposed financing, acquisition, spin-out, special dividend, distribution or transaction, including the proposed special dividend and spin-out of our pay-per-view business, the timing of the consummation of such proposed event, including the risks that a condition to consummation of such proposed event would not be satisfied within the expected timeframe or at all or that the consummation of any proposed financing, acquisition, spin-out, special dividend, distribution or transaction, the timing of the consummation of such proposed event will not occur; our ability to continue as a going concern; our reliance on one key customer for a substantial percentage of our revenue; if and when required, our ability to obtain additional capital, including to fund our current debt obligations and to fund potential acquisitions and capital expenditures; our ability to attract, maintain and increase the number of our users and paid members; our ability to identify, acquire, secure and develop content; our ability to successfully implement our growth strategy, our ability to acquire and integrate our acquired businesses, the ability of the combined business to grow, including through acquisitions which we are able to successfully integrate, and the ability of our executive officers to manage growth profitably; uncertain and unfavorable outcome(s) of any legal proceedings pending or that may be instituted against us, our subsidiaries, or third parties to whom we owe indemnification obligations and/or our ability to pay any amounts due in connection with any such legal proceedings; changes in laws or regulations that apply to us or our industry; our ability to recognize and timely implement future technologies in the music and live streaming space; our ability to capitalize on investments in developing our service offerings, including the LiveOne App to deliver and develop upon current and future technologies; significant product development expenses associated with our technology initiatives; our ability to deliver end-to-end network performance sufficient to meet increasing customer demands; our ability to timely and economically obtain necessary approval(s), releases and or licenses on a timely basis for the use of our music content on our service platform; our ability to obtain and maintain international authorizations to operate our service over the proper foreign jurisdictions our customers utilize; our ability to expand our service offerings and deliver on our service roadmap; our ability to timely and cost-effectively produce, identify and or deliver compelling content that brands will advertise on and or customers will purchase and or subscribe to across our platform; general economic and technological circumstances in the music and live streaming digital markets; our ability to obtain and maintain licenses for content used on our music platforms; the loss of, or failure to realize benefits from, agreements with our music labels, publishers and partners; unfavorable economic conditions in our industry and economy as a whole; our ability to expand our domestic or international operations, including our ability to grow our business with current and potential future music labels, festivals, publishers, or partners; the effects of service interruptions or delays, technology failures, material defects or errors in our software, damage to our equipment or geopolitical restrictions; costs associated with defending pending or future intellectual property infringement actions and other litigation or claims and/or our ability to pay any amounts due in connection with any such litigation or claims; increases in our projected capital expenditures due to, among other things, unexpected costs incurred in connection with the roll out of our technology roadmap or our plans of expansion in North America and internationally; fluctuation in our operating results; the demand for live and music streaming services and market acceptance for our products and services; our ability to generate sufficient cash flow to make payments on our indebtedness; our incurrence of additional indebtedness in the future; our ability to extend and/or refinance our indebtedness and/or repay our indebtedness when due; the effect of the conditional conversion feature of our Series A Preferred Stock; our compliance with the covenants in our debt agreements; our ability to implement our recently announced digital asset treasury strategy and/or purchase digital assets from time to time pursuant to such strategy, including for the maximum announced amount, and other risks related to such strategy; significant legal, commercial, regulatory and technical uncertainty and risks related to Bitcoin, Ethereum and other digital assets; regulatory developments related to digital assets and digital asset markets; our intent to repurchase shares of our and/or PodcastOne's common stock from time to time under our announced stock repurchase program and the timing, price, and quantity of repurchases, if any, under the program; risks and uncertainties applicable to the businesses of our subsidiaries; and other risks and uncertainties set forth herein. Other factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those set forth below in Part II - Item 1A. Risk Factors of this Quarterly Report and in Part I - Item 1A. Risk Factors of our 2025 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the "SEC") on July 15, 2025 (the "2025 Form 10-K"), as well as other factors and matters described herein or in the annual, quarterly and other reports we file with the SEC. Except as required by law, we do not undertake any obligation to update forward-looking statements as a result of as a result of new information, future events or developments or otherwise.

Overview of the Company

We are a pioneer in the acquisition, distribution and monetization of live music, Internet radio, podcasting and music-related streaming and video content. Our principal operations and decision-making functions are located in North America. We manage and report our businesses as three operating segments. Our senior management regularly reviews our operating results, principally to make decisions about how we allocate our resources and to measure our segments and consolidated operating performance. In prior fiscal years we generated a majority of our revenue primarily through membership services from our streaming radio and music services and to a lesser extent, through advertising and licensing across our music platform. In May 2020, we launched a new pay-per-view ("PPV") offering enabling new forms of artist revenue including digital tickets, tipping, digital meet and greets, merchandise sales and sponsorship. In July 2020, we entered the podcasting business with the acquisition of PodcastOne and in December 2020, we entered the merchandising business with the acquisition of CPS. Through the operations of our DayOne Music Publishing, Drumify and Splitmind subsidiaries, we operate our music publishing and artist and brand development businesses.

For the six months ended September 30, 2025 and 2024, we reported revenue of $38.0 million and $65.7 million, respectively. We have two customers that accounted for 45% and 73% of our revenue during the six months ended September 30, 2025 and 2024 The customer is an original equipment manufacturer (the "OEM") whose in-car music dashboard contains LiveOne music streaming button/icon, which allows OEM customers to directly connect their subscription to LiveOne. In the six months ended September 30, 2025 and 2024, total revenue from the OEM was $3.1 million and $36.0 million, respectively. In addition we have an advertising partner customer which had revenue of $14.0 million and $12.0 million for the six months ended September 30, 2025 and 2024, respectively.

Recent Developments

On July 15, 2025, holders of our Series A Preferred Stock exchanged $6.75 million of their Series A Preferred Stock into shares of our common stock at a price of $1.50 per share and were issued accompanying warrants.

On July 16, 2025, in connection with the anticipated closing of the public offering discussed below, we announced our intent to launch our bitcoin yield treasury strategy, as part of our board of directors' approval of our up to $500 million digital asset treasury strategy.

On July 17, 2025, we completed an underwritten public offering of shares of our common stock for aggregate gross proceeds to us of approximately $9.5 million (including the exercise of the underwriter's option), after deducting an underwriting discount, but before other offering expenses. We expect to use the net proceeds from the public offering to fund the acquisition of digital assets, the development and implementation of our digital currency treasury strategy and for working capital and general corporate purposes.

Effective September 26, 2025, we effected a 1-for-10 reverse stock split of our issued and outstanding shares of common stock (the "Reverse Stock Split"). As a result of the Reverse Stock Split, every 10 shares of our issued and outstanding pre-Reverse Stock Split shares of common stock were combined into one share of our common stock. Stockholders who otherwise were entitled to receive fractional shares of our common stock received cash (without interest) in lieu of any fractional shares. In connection with the Reverse Stock Split, there was no change in the par value per share of common stock of $0.001. As a result of the Reverse Stock Split, equitable adjustments corresponding to the Reverse Stock Split ratio were made to our outstanding warrants and our other convertible instruments and upon the exercise or vesting of all stock options such that every 10 shares of common stock that may be issued upon the exercise of our warrants and stock options and conversion of our other convertible instruments held immediately prior to the Reverse Stock Split represent one share of our common stock that may be issued upon exercise of such warrants and stock options and conversion of the other convertible instruments immediately following the Reverse Stock Split. Correspondingly, the exercise price per share of our common stock attributable to our warrants and stock options and the conversion price of our other convertible instruments immediately prior to the Reverse Stock Split was proportionately increased by a multiple of 10 following the Reverse Stock Split.

Basis of Presentation

The following discussion and analysis of our business and results of operations and our financial conditions is presented on a consolidated basis. In addition, a brief description is provided of significant transactions and events that have an impact on the comparability of the results being analyzed.

Opportunities, Challenges and Risks

During our six months ended September 30, 2025 we derived 17% of our revenue from paid memberships and 80% from advertising and the remainder from merchandising and licensing.

We believe our operating results and performance are, and will continue to be, driven by various factors that affect the music industry. Our ability to attract, grow and retain users to our platform is highly sensitive to rapidly changing public music preferences and technology and is dependent on our ability to maintain the attractiveness of our platform, content and reputation to our customers. Beyond fiscal year 2024, the future revenue and operating growth across our music platform will rely heavily on our ability to grow our member base in a cost effective manner, continue to develop and deploy quality and innovative new music services, provide unique and attractive content to our customers, continue to grow the number of listeners on our platform and live music festivals we stream, grow and retain customers and secure sponsorships to facilitate future revenue growth from advertising and e-commerce across our platform.

As our music platform continues to evolve, we believe there are opportunities to expand our services by adding more content in a greater variety of formats such as podcasts and video podcasts, extending our distribution to include pay television, OTT and social channels, deploying new services for our members, artist merchandise and live music event ticket sales, and licensing user data across our platform. Our acquisitions of PodcastOne and CPS are reflective of our flywheel operating model. Conversely, the evolution of technology presents an inherent risk to our business. Today, we see large opportunities to expand our music services within North America and other parts of the world where we will need to make substantial investments to improve our current service offerings. As a result, and during the fiscal year ending March 31, 2026, we will continue to invest in product and engineering to further develop our future music apps and services, and we expect to continue making significant product development investments to our existing technology solutions over the next 12 to 24 months to address these opportunities.

On October 1, 2024, we announced an amended relationship with our largest OEM customer. Effective December 1, 2024, the OEM customer no longer subsidizes our products to some of its customers, however, we offer all OEM customer vehicles in North America the opportunity to convert to become direct subscribers of our LiveOne music app. The direct subscription to our LiveOne app allows such users for the first time to access their LiveOne music and LiveOne's other service offerings directly across all of their devices. Our LiveOne music streaming button/icon, which allows users to directly connect their subscription to LiveOne, is expected to remain in the OEM customer's music streaming services dashboard in perpetuity. As a result, we believe that we now have a unique opportunity to convert as many of such OEM's drivers as possible to a higher priced LiveOne subscription service creating a meaningful upside opportunity for us, and we are working in good faith with such OEM customer to convert as many of these drivers as possible. The OEM customer will continue to pay us monthly for qualifying grandfathered vehicles for the term of the OEM license agreement.

As our platform matures, we also expect our Contribution Margins*, adjusted earnings before income tax, depreciation and amortization ("Adjusted EBITDA")* and Adjusted EBITDA Margins* to improve in the near and long term, which are non-GAAP measures as defined in section following below titled, "Non-GAAP Measures". Historically, our live events business has not generated enough direct revenue to cover the costs to produce such events, and as a result generated negative Contribution Margins*, Adjusted EBITDA*, Adjusted EBITDA Margins* and operating losses. Historically, we produced and digitally distributed the live music performances of many of these large global music events to fans all around the world.

Growth in our music services is also dependent upon our ability to convert as many of the OEM drivers as possible to become direct subscribers of our LiveOne app, the number of customers that use and pay for our services, the attractiveness of our music platform to sponsors and advertisers and our ability to negotiate favorable economic terms with music labels, publishers, artists and/or festival owners, and the number of consumers who use our services. Growth in our margins is heavily dependent on our ability to convert as many of the OEM drivers as possible to become direct subscribers of our LiveOne app and to otherwise grow our membership base in a cost-efficient manner, coupled with the managing the costs associated with implementing and operating our services, including the costs of licensing music with the music labels, producing, streaming and distributing video and audio content and sourcing and distributing personalized products and gifts. Our ability to attract and retain new and existing customers will be highly dependent on our ability to convert as many of the OEM drivers as possible to become direct subscribers of our LiveOne app, on our ability to execute on our B2B opportunities pipeline that would allow us to convert as many of their customers as we can into direct subscribers of our LiveOne app and to implement and continually improve upon our technology and services on a timely basis and continually improve our network and operations as technology changes and as we experience increased network capacity constraints as we continue to grow.

For the six months ended September 30, 2025 and 2024, all material amounts of our revenue were derived from customers located in the United States and moreover, our largest OEM customer accounted for 8% and 55% of our consolidated revenue, respectively. This significant concentration of revenue from one customer poses risks to our operating results, and any change in the means this customer utilizes our services beyond September 30, 2025 could cause our revenue to fluctuate significantly.

In the long term, we plan to expand our business internationally in places such as Europe, Asia Pacific and Latin America, and as a result will continue to incur significant incremental upfront expenses associated with these growth opportunities.

Consolidated Results of Operations

Three Months Ended September 30, 2025, as compared to Three Months Ended September 30, 2024

The following tables set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results (in thousands):

		Three Months Ended
		September 30,
		2025				2024
Revenue:		$	18,762			$	32,594
Operating expenses:
Cost of sales			16,166				24,518
Sales and marketing			870				1,491
Product development			442				1,160
General and administrative			5,707				6,283
Amortization of intangible assets			146				542
Total operating expenses			23,331				33,994
Loss from operations			(4,569	)			(1,400	)
Other income (expense):
Interest expense, net			(1,003	)			(808	)
Change in fair value of digital assets			79				-
Other expense			(172	)			(118	)
Total other income (expense), net			(1,096	)			(926	)
Loss before income taxes			(5,665	)			(2,326	)
Provision for (benefit from) income taxes			40				(9	)
Net loss			(5,705	)			(2,317	)
Net loss attributable to non-controlling interest			(163	)			(458	)
Net loss attributed to LiveOne		$	(5,542	)		$	(1,859	)
Net loss per share - basic and diluted		$	(0.52	)		$	(0.20	)
Weighted average common shares - basic and diluted			11,170,612				9,465,818

The following table sets forth the depreciation expense included in the above line items (in thousands):

		Three Months Ended
		September 30,
		2025				2024				% Change
Depreciation expense
Cost of sales		$	3			$	39				-92	%
Sales and marketing			2				64				-97	%
Product development			18				464				-96	%
General and administrative			53				243				-78	%
Total depreciation expense		$	76			$	810				-91	%

The following table sets forth the stock-based compensation expense included in the above line items (in thousands):

		Three Months Ended
		September 30,
		2025				2024				% Change
Stock-based compensation expense
Cost of sales		$	1,107			$	335				230	%
Sales and marketing			15				101				-85	%
Product development			45				144				-69	%
General and administrative			996				1,711				-42	%
Total stock-based compensation expense		$	2,163			$	2,291				-6	%

The following table sets forth our results of operations, as a percentage of revenue, for the periods presented:

		Three Months Ended
		September 30,
		2025				2024
Revenue			100	%			100	%
Operating expenses
Cost of sales			86	%			75	%
Sales and marketing			5	%			5	%
Product development			2	%			4	%
General and administrative			30	%			19	%
Amortization of intangible assets			1	%			2	%
Impairment of intangible assets			0	%			0	%
Total operating expenses			124	%			104	%
(Loss) income from operations			-24	%			-4	%
Other income (expense), net			-6	%			-3	%
Income (loss) before income taxes			-30	%			-7	%
Income tax provision (benefit)			0	%			0	%
Net loss			-30	%			-7	%
Net loss attributable to non-controlling interest			-1	%			-1	%
Net loss attributed to LiveOne			-30	%			-6	%

Revenue

Revenue was as follows (in thousands):

		Three Months Ended
		September 30,
		2025				2024				% Change
Membership services		$	3,072			$	19,477				-84	%
Advertising			15,183				12,309				23	%
Merchandising			507				808				-37	%
Total Revenue		$	18,762			$	32,594				-42	%

Membership Revenue

Membership revenue decreased $16.4 million, or 84%, to $3.1 million for the three months ended September 30, 2025, as compared to $19.5 million for the three months ended September 30, 2024. The decrease was primarily a result of the change in terms with our largest OEM customer. Beginning on December 1, 2024, we began converting customers directly to our LiveOne music app as our largest OEM customer no longer subsidized our product.

Advertising Revenue

Advertising revenue increased $2.9 million, or 23%, to $15.2 million for the three months ended September 30, 2025, as compared to $12.3 million for the three months ended September 30, 2024, which is primarily attributable to growth in our advertising revenue of $2.0 million as a result of new partnerships and barter revenue which increased $1.0 million quarter-over-quarter.

Merchandising

Merchandising revenue decreased $0.3 million, or 37%, to 0.5 million for the three months ended September 30, 2025, as compared to $0.8 million the three months ended September 30, 2024, which is due to a reduction in demand from both retail partners and our direct to consumer merchandising business.

Cost of Sales

Cost of sales was as follows (in thousands):

		Three Months Ended
		September 30,
		2025				2024				% Change
Membership		$	2,097				12,395				-83	%
Advertising			14,001				11,368				23	%
Production			15				47				-68	%
Merchandising			53				708				-93	%
Total Cost of Sales		$	16,166			$	24,518				-34	%

Membership

Membership cost of sales decreased by $10.3 million, or 83%, to $2.1 million for the three months ended September 30, 2025, as compared to $12.4 million for the three months ended September 30, 2024. The decrease was in line with the lower membership revenues noted above.

Advertising

Advertising cost of sales increased by $2.6 million, or 23%, to $14.0 million for the three months ended September 30, 2025, as compared to $11.4 million for the three months ended September 30, 2024. The increase was primarily attributable to growth in our revenue share expense which is in line with increases in revenue noted above.

Production

Production cost of sales decreased by $32,000, or 68%, to $15,000 for the three months ended September 30, 2025, as compared to $47,000 for the three months ended September 30, 2024. The decrease can be attributed to lower resources used as we look to close out some of our defunct operations.

Merchandising

Merchandising cost of sales decreased by $0.6 million, or 92%, to $0.1 million for the three months ended September 30, 2025, as compared to $0.7 million for the three months ended September 30, 2024 due to the Company purchasing a higher amount of merchandise in the prior year based on higher demand.

Other Operating Expenses

Other operating expenses were as follows (in thousands):

		Three Months Ended
		September 30,
		2025				2024				% Change
Sales and marketing expenses		$	870			$	1,491				-42	%
Product development			442				1,160				-62	%
General and administrative			5,707				6,283				-9	%
Amortization of intangible assets			146				542				-73	%
Total Other Operating Expenses		$	7,165			$	9,476				-24	%

Sales and Marketing Expenses

Sales and Marketing expenses decreased by $0.6 million, or 42%, to $0.9 million for the three months ended September 30, 2025, as compared to $1.5 million for the three months ended September 30, 2024, primarily driven by employee costs.

Product Development

Product development expenses decreased by $0.8 million, or 62%, to $0.4 million for the three months ended September 30, 2025, as compared to $1.2 million for the three months ended September 30, 2024, which was driven by an decrease in employee costs.

General and Administrative

General and administrative expenses decreased by $0.6 million, or 9%, to $5.7 million for the three months ended September 30, 2025, as compared to $6.3 million for the three months ended September 30, 2024, largely due to a decrease in employee cost and depreciation as a result of impairments to long lived assets in the fourth quarter of our fiscal year ended March 31, 2025 ("fiscal 2025").

Amortization of Intangible Assets

Amortization of intangible assets decreased by $0.4 million, or 73%, to $0.1 million for the three months ended September 30, 2025, as compared to $0.5 million for the three months ended September 30, 2024. The decrease can be attributed to a portion of the intangible assets reaching their full lives of amortization and impairments recorded in the fourth quarter of fiscal 2025.

Total Other Income (Expense)

Total other income (expense) was as follows (in thousands):

		Three Months Ended
		September 30,
		2025				2024				% Change
Total other income (expense), net		$	(1,096	)		$	(926	)			18	%

Total other expense increased by $0.2 million, or 18%, to an expense of $1.1 million for the three months ended September 30, 2025, as compared to $0.9 million of expense for the three months ended September 30, 2024. The increase is primarily driven by an increase in interest expense as a result of the convertible debentures offset by a reduction interest expense due to the pay down of the line of credit.

Net Income (Loss) Attributable to Non-Controlling Interests

Net loss attributable to non-controlling interests for the three months ended September 30, 2025 was $0.5 million compared to $0.5 million for the three months ended September 30, 2024, which resulted from the spin out of PodcastOne from our Company with PodcastOne becoming a standalone publicly trading company (the "Spin-Out").

Business Segment Results

Three Months Ended September 30, 2025, as compared to Three Months Ended September 30, 2024

Audio Group - PodcastOne Operations

Our Audio Group Operations, which include our PodcastOne operating results were, and discussions of significant variances are, as follows (in thousands):

		Three Months Ended
		September 30,
		2025				2024				% Change
Revenue		$	15,156			$	12,154				25	%
Cost of Sales			13,543				11,142				22	%
Sales & Marketing, Product Development and G&A			2,047				2,171				-6	%
Intangible Asset Amortization			125				328				-62	%
Operating Income (Loss)		$	(559	)		$	(1,487	)			-62	%
Operating Margin			-4	%			-12	%			-70	%
Adjusted EBITDA*		$	1,086			$	(403	)			-369	%
Adjusted EBITDA Margin*			7	%			-3	%			10	%

*	See "-Non-GAAP Measures" below for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin.

Revenue

Revenue increased $3.0 million, or 25%, during the three months ended September 30, 2025, primarily due to increased advertising and new partners signed up to revenue contracts.

Operating Income (Loss)

Operating loss decreased by $0.9 million or 62%, for the three months ended September 30, 2025, as the increase in revenue was complimented by the decrease in operating expenses due to growing the business.

Adjusted EBITDA

Adjusted EBITDA* increased by $1.5 million, or 369%, to $1.1 million for the three months ended September 30, 2025, as compared to $(0.4) million for the three months ended September 30, 2024. This was largely due to an increase in revenue and talent based expenses.

Audio Group - Slacker Operations

Our Audio Group Operations, which include our Slacker operating results were, and discussions of significant variances are, as follows (in thousands):

		Three Months Ended
		September 30,
		2025				2024				% Change
Revenue		$	3,071			$	19,558				-84	%
Cost of Sales			2,555				12,622				-80	%
Sales & Marketing, Product Development and G&A			726				2,186				-67	%
Intangible Asset Amortization			18				89				-80	%
Operating Income (Loss)		$	(228	)		$	4,661				-105	%
Operating Margin			-7	%			24	%			-131	%
Adjusted EBITDA*		$	(397	)		$	5,807				-107	%
Adjusted EBITDA Margin*			-13	%			30	%			-43	%

*	See "-Non-GAAP Measures" below for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin.

Revenue

Revenue decreased $16.5 million, or 84%, during the three months ended September 30, 2025, primarily due to a change in terms with our largest OEM customer.

Operating Income (loss)

Operating income decreased by $4.9 million, or 105%, for the three months ended September 30, 2025, driven by the decrease in revenue which was higher than the reduction in operating expenses.

Adjusted EBITDA

Adjusted EBITDA* decreased by $6.2 million, or 107%, to $(0.4) million for the three months ended September 30, 2025, as compared to $5.8 million for the three months ended September 30, 2024. This was largely due to lower revenue achieved for the three months ended September 30, 2025, which resulted in a lower Contribution Margin in the current period.

Media Group Operations

Our Media Group Operations which consist of all of our other operating subsidiaries outside of PodcastOne and Slacker operating results were, and discussions of significant variances are, as follows (in thousands):

		Three Months Ended
		September 30,
		2025				2024				% Change
Revenue		$	535			$	882				-39	%
Cost of Sales			68				754				-91	%
Sales & Marketing, Product Development and G&A			1,398				1,660				-16	%
Intangible Asset Amortization			3				125				-98	%
Operating Income (Loss)		$	(934	)		$	(1,657	)			-44	%
Operating Margin			-175	%			-188	%			-7	%
Adjusted EBITDA*		$	(264	)		$	(841	)			-69	%
Adjusted EBITDA Margin*			-49	%			-95	%			46	%

*	See "-Non-GAAP Measures" below for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin.

Revenue

Revenue decreased $0.3 million, or 39%, to $0.5 million during the three months ended September 30, 2025, as compared to $0.9 million for the three months September 30, 2024, primarily due to decrease in merchandising revenue due to a reduction in demand from both retail partners and our direct to consumer business.

Operating Income (Loss)

Operating loss decreased by $0.7 million, or 44%, to $0.9 million for the three months ended September 30, 2025 from $1.7 million for the three months ended September 30, 2024, as a result of a decrease in Contribution Margin.

Adjusted EBITDA

Adjusted EBITDA* loss decreased by $0.6 million, or 69%, to a $(0.3) million loss for the three months ended September 30, 2025, as compared to a $(0.8) million loss for the three months September 30, 2024. This was largely due to the decrease in expenses compared to the prior year.

Corporate expense

Our Corporate operating results and discussions of significant variances are, as follows (in thousands):

										%
		Three months ended								Change
		September 30,								2025 vs.
		2025				2024				2024
Sales & Marketing, Product Development, and G&A		$	2,848			$	2,917				-2	%
Operating Loss		$	(2,848	)		$	(2,917	)			-2	%
Operating Margin			N/A				N/A				-	%
Adjusted EBITDA*		$	(1,443	)		$	(1,678	)			-14	%

*	See "-Non-GAAP Measures" below for the definition and reconciliation of Adjusted EBITDA.

Operating Loss

Operating loss decreased by $0.1 million, or 2%, to $2.8 million for the three months ended September 30, 2025, as compared to $2.9 million for the three months ended September 30, 2024, largely due to a decrease in employee costs.

Adjusted EBITDA

Corporate Adjusted EBITDA* loss decreased $0.3 million, or 14%, to $(1.4) million for the three months ended September 30, 2025 as compared to $(1.7) million for the three months ended September 30, 2024. The decrease was largely due to the decrease in costs noted above.

Six Months Ended September 30, 2025, as compared to Six Months Ended September 30, 2024

The following tables set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results (in thousands):

		Six Months Ended
		September 30,
		2025				2024
Revenue:		$	37,969			$	65,672
Operating expenses:
Cost of sales			32,991				49,605
Sales and marketing			2,131				2,922
Product development			1,376				2,231
General and administrative			9,782				11,790
Amortization of intangible assets			291				1,134
Impairment of intangible assets			-				176
Total operating expenses			46,571				67,858
Loss from operations			(8,602	)			(2,186	)
Other income (expense):
Interest expense, net			(1,690	)			(1,667	)
Change in fair value of digital assets			79				-
Other income (expense)			684				18
Total other expense, net			(927	)			(1,649	)
Loss before provision for income taxes			(9,529	)			(3,835	)
Provision for income taxes			40				40
Net loss			(9,569	)			(3,875	)
Net loss attributable to non-controlling interest			(434	)			(846	)
Net loss attributed to LiveOne		$	(9,135	)		$	(3,029	)
Net loss per share - basic and diluted		$	(0.98	)		$	(0.43	)
Weighted average common shares - basic and diluted			10,048,453				9,460,506

The following table sets forth the depreciation expense included in the above line items (in thousands):

		Six Months Ended
		September 30,
		2025				2024				% Change
Depreciation expense
Cost of sales		$	26			$	76				-66	%
Sales and marketing			75				131				-43	%
Product development			601				926				-35	%
General and administrative			(481	)			498				-197	%
Total depreciation expense		$	221			$	1,631				-86	%

The following table sets forth the stock-based compensation expense included in the above line items (in thousands):

		Six Months Ended
		September 30,
		2025				2024				% Change
Stock-based compensation expense
Cost of sales		$	2,126			$	650				227	%
Sales and marketing			33				62				-47	%
Product development			98				262				-63	%
General and administrative			1,362				3,017				-55	%
Total stock-based compensation expense		$	3,619			$	3,991				-9	%

The following table sets forth our results of operations, as a percentage of revenue, for the periods presented:

		Six Months Ended
		September 30,
		2025				2024
Revenue			100	%			100	%
Operating expenses
Cost of sales			87	%			76	%
Sales and marketing			6	%			4	%
Product development			4	%			3	%
General and administrative			26	%			18	%
Amortization of intangible assets			1	%			2	%
Impairment of intangible assets			0	%			0	%
Total operating expenses			123	%			103	%
Loss from operations			-23	%			-3	%
Other income (expense)			2	%			0	%
Loss before income taxes			-25	%			-6	%
Income tax provision			0	%			0	%
Net loss			-25	%			-6	%
Net loss attributable to non-controlling interest			-1	%			-1	%
Net loss attributed to LiveOne			-24	%			-5	%

Revenue

Revenue was as follows (in thousands):

		Six Months Ended
		September 30,
		2025				2024				% Change
Membership services		$	6,397			$	38,326				-83	%
Advertising			30,275				25,383				19	%
Merchandising			1,297				1,963				-34	%
Total Revenue		$	37,969			$	65,672				-42	%

Membership Revenue

Membership revenue decreased $31.9 million, or 83%, to $6.4 million for the six months ended September 30, 2025, as compared to $38.3 million for the six months ended September 30, 2024. The decrease was primarily a result of the change in terms with our largest OEM customer. Beginning on December 1, 2024, we began converting customers directly to our LiveOne music app as our largest OEM customer no longer subsidized our product.

Advertising Revenue

Advertising revenue increased $4.9 million, or 19%, to $30.3 million for the six months ended September 30, 2025, as compared to $25.4 million for the six months ended September 30, 2024, which is primarily attributable to growth in our advertising revenue of $2.8 million and barter revenue which increased $2.0 million quarter-over-quarter.

Merchandising

Merchandising revenue decreased $0.7 million, or 34%, to $1.3 million for the six months ended September 30, 2025, as compared to $2.0 million the six months ended September 30, 2024, which is due to a reduction in demand from both retail partners and our direct to consumer merchandising business.

Cost of Sales

Cost of sales was as follows (in thousands):

		Six Months Ended
		September 30,
		2025				2024				% Change
Membership		$	4,465			$	24,560				-82	%
Advertising			27,827				23,214				20	%
Production			573				115				398	%
Merchandising			126				1,716				-93	%
Total Cost of Sales		$	32,991			$	49,605				-33	%

Membership

Membership cost of sales decreased by $20.1 million, or 82%, to $4.5 million for the six months ended September 30, 2025, as compared to $24.6 million for the six months ended September 30, 2024. The decrease was in line with the lower membership revenues noted above.

Advertising

Advertising cost of sales increased by $4.6 million, or 20%, to $27.8 million for the six months ended September 30, 2025, as compared to $23.2 million for the six months ended September 30, 2024. The increase was primarily attributable to growth in our revenue share expense which is in line with increases in revenue noted above.

Production

Production cost of sales increased by $0.5 million, or 398%, to $0.6 million for the six months ended September 30, 2025, as compared to $0.1 million for the six months ended September 30, 2024. The increase can be attributed to additional resources hired to close out some of the operations.

Merchandising

Merchandising cost of sales decreased by $1.6 million, or 93%, to $0.1 million for the six months ended September 30, 2025, as compared to $1.7 million for the six months ended September 30, 2024 due to the Company purchasing a higher amount of merchandise in the prior year based on higher demand.

Other Operating Expenses

Other operating expenses were as follows (in thousands):

		Six Months Ended
		September 30,
		2025				2024				% Change
Sales and marketing expenses		$	2,131			$	2,922				-27	%
Product development			1,376				2,231				-38	%
General and administrative			9,782				11,790				-17	%
Amortization of intangible assets			291				1,134				-74	%
Impairment of intangible assets			-				176				-100	%
Total Other Operating Expenses		$	13,580			$	18,253				-26	%

Sales and Marketing Expenses

Sales and Marketing expenses decreased by $0.8 million, or 27%, to $2.1 million for the six months ended September 30, 2025, as compared to $2.9 million for the six months ended September 30, 2024, primarily driven by employee costs.

Product Development

Product development expenses decreased by $0.8 million, or 38%, to $1.4 million for the six months ended September 30, 2025, as compared to $2.2 million for the six months ended September 30, 2024, which was driven by an increase in employee costs.

General and Administrative

General and administrative expenses decreased by $2.0 million, or 17%, to $9.8 million for the six months ended September 30, 2025, as compared to $11.8 million for the six months ended September 30, 2024, largely due to a decrease in depreciation of $0.9 million as a result of impairments to long lived assets in the fourth quarter of our fiscal year ended March 31, 2025 ("fiscal 2025").

Amortization of Intangible Assets

Amortization of intangible assets decreased by $0.8 million, or 74%, to $0.3 million for the six months ended September 30, 2025, as compared to $1.1 million for the six months ended September 30, 2024. The decrease can be attributed to a portion of the intangible assets reaching their full lives of amortization and impairments recorded in the fourth quarter of fiscal 2025.

Impairment of Intangible Assets

Impairment of intangible assets decreased $0.2 million to none for the six months ended September 30, 2025, as compared to $0.2 million for the six months ended September 30, 2024, which is attributed to the impairment of intangible assets of PodcastOne (see Note 4 - Goodwill and Intangible Assets to our condensed consolidated financial statements included elsewhere in this Quarterly Report).

Total Other Income (Expense)

Total other income (expense) was as follows (in thousands):

		Six Months Ended
		September 30,
		2025				2024				% Change
Total other expense, net		$	(927	)		$	(1,649	)			-44	%

Total other expense decreased by $0.7 million, or 44%, to expense of $0.9 million for the six months ended September 30, 2025, as compared to $1.6 million of expense for the six months ended September 30, 2024. The decrease is primarily driven by an increase in interest expense attributed to the convertible debt offset by a reduction of interest expense due to the pay down of the line of credit.

Net Income (Loss) Attributable to Non-Controlling Interests

Net loss attributable to non-controlling interests for the six months ended September 30, 2025 was $0.7 million compared to $0.8 million for the six months ended September 30, 2024, which resulted from the Spin-Out of PodcastOne.

Business Segment Results

Six Months Ended September 30, 2025, as compared to Six Months Ended September 30, 2024

Audio Group - PodcastOne Operations

Our Audio Group Operations, which include our PodcastOne operating results were, and discussions of significant variances are, as follows (in thousands):

		Six Months Ended
		September 30,
		2025				2024				% Change
Revenue		$	30,150			$	25,312				19	%
Cost of Sales			27,097				22,851				19	%
Sales & Marketing, Product Development and G&A			4,058				4,260				-5	%
Intangible Asset Amortization			250				881				-72	%
Operating Loss		$	(1,255	)		$	(2,680	)			-53	%
Operating Margin			-4	%			-11	%			-61	%
Adjusted EBITDA*		$	1,666			$	(710	)			-335	%
Adjusted EBITDA Margin*			6	%			-3	%			-297	%

*	See "-Non-GAAP Measures" below for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin.

Revenue

Revenue increased $4.8 million, or 19%, during the six months ended September 30, 2025, primarily due to increased advertising.

Operating Income (Loss)

Operating loss decreased by $1.4 million or 53%, for the six months ended September 30, 2025, as the increase in revenue was complimented by the decrease in operating expenses due to growing the business.

Adjusted EBITDA

Adjusted EBITDA* increased by $2.4 million, or 335%, to $1.7 million for the six months ended September 30, 2025, as compared to $(0.7) million for the six months ended September 30, 2024. This was largely due to an increase in revenue and expenses.

Audio Group - Slacker Operations

Our Audio Group Operations, which include our Slacker operating results were, and discussions of significant variances are, as follows (in thousands):

		Six Months Ended
		September 30,
		2025				2024				% Change
Revenue		$	6,455			$	38,262				-83	%
Cost of Sales			5,196				24,294				-79	%
Sales & Marketing, Product Development and G&A			1,647				4,306				-62	%
Intangible Asset Amortization			39				179				-78	%
Operating Income		$	(427	)		$	9,483				-105	%
Operating Margin			-7	%			25	%			-127	%
Adjusted EBITDA*		$	(587	)		$	11,232				-105	%
Adjusted EBITDA Margin*			-9	%			29	%			-131	%

*	See "-Non-GAAP Measures" below for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin.

Revenue

Revenue decreased $31.8 million, or 83%, during the six months ended September 30, 2025, primarily due to a change in terms with our largest OEM customer.

Operating Income (loss)

Operating loss increased by $9.9 million, or 105%, for the six months ended September 30, 2025, driven by the decrease in revenue which was higher than the reduction in operating expenses.

Adjusted EBITDA

Adjusted EBITDA* decreased by $11.8 million, or 105%, to $(0.6) million for the six months ended September 30, 2025, as compared to $11.2 million for the six months ended September 30, 2024. This was largely due to lower revenue achieved for the six months ended September 30, 2025, which resulted in a lower Contribution Margin in the current period.

Media Group Operations

Our Media Group Operations which consist of all of our other operating subsidiaries outside of PodcastOne and Slacker operating results were, and discussions of significant variances are, as follows (in thousands):

		Six Months Ended
		September 30,
		2025				2024				% Change
Revenue		$	1,364			$	2,098				-35	%
Cost of Sales			698				2,460				-72	%
Sales & Marketing, Product Development and G&A			2,557				3,034				-16	%
Intangible Asset Amortization			2				250				-99	%
Operating Loss		$	(1,893	)		$	(3,646	)			-48	%
Operating Margin			-139	%			-174	%			-20	%
Adjusted EBITDA*		$	(979	)		$	(1,479	)			-34	%
Adjusted EBITDA Margin*			-72	%			-70	%			2	%

*	See "-Non-GAAP Measures" below for the definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin.

Revenue

Revenue decreased $0.7 million, or 35%, to $1.4 million during the six months ended September 30, 2025, as compared to $1.4 million for the six months September 30, 2024, primarily due to decrease in merchandising revenue due to a reduction in demand from both retail partners and our direct to consumer business.

Operating Income (Loss)

Operating loss decreased by $1.8 million, or 48%, to $1.9 million for the six months ended September 30, 2025 from $3.6 million for the six months ended September 30, 2024, primarily as a result of the $1.8 million decrease in cost of sales as the company reduced spending on some lines of their business.

Adjusted EBITDA

Adjusted EBITDA* loss decreased by $0.5 million, or 34%, to $(1.0) million for the six months ended September 30, 2025, as compared to a $(1.5) million loss for the six months September 30, 2024. This was largely due to the decrease in revenue compared to the prior year.

Corporate expense

Our Corporate operating results and discussions of significant variances are, as follows (in thousands):

												%
		Six months ended								Change
		September 30,								2025 vs.
		2025				2024				2024
Sales & Marketing, Product Development, and G&A		$	5,027			$	5,343				-6	%
Operating Loss		$	(5,027	)		$	(5,343	)			-6	%
Operating Margin			N/A				N/A				-	%
Adjusted EBITDA*		$	(2,929	)		$	(3,255	)			-10	%

*	See "-Non-GAAP Measures" below for the definition and reconciliation of Adjusted EBITDA.

Operating Loss

Operating loss decreased by $0.3 million, or 6%, to $5.0 million for the six months ended September 30, 2025, as compared to $5.3 million for the six months ended September 30, 2024, largely due to a decrease in employee costs.

Adjusted EBITDA

Corporate Adjusted EBITDA* loss increased $0.3 million, or 10%, to $(2.9) million for the six months ended September 30, 2025 as compared to $(3.3) million for the six months ended September 30, 2024. The increase was largely due to the increase in costs noted above.

Non-GAAP Measures

Contribution Margin

Contribution Margin is a non-GAAP financial measure defined as Revenue less Cost of Sales before share-based compensation, depreciation and amortization of developed technology.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) before (a) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (b) legal, accounting and other professional fees directly attributable to acquisition activity, (c) employee severance payments and third party professional fees directly attributable to acquisition or corporate realignment activities, (d) certain non-recurring expenses associated with legal settlements or reserves for legal settlements in the period that pertain to historical matters that existed at acquired companies prior to their purchase date, (e) depreciation and amortization (including goodwill impairment, if any), and (f) certain stock-based compensation expense. We use Adjusted EBITDA to evaluate the performance of our operating segment. We believe that information about Adjusted EBITDA assists investors by allowing them to evaluate changes in the operating results of our business separate from non-operational factors that affect net income (loss), thus providing insights into both operations and the other factors that affect reported results. Adjusted EBITDA is not calculated or presented in accordance with GAAP. A limitation of the use of Adjusted EBITDA as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in our business. Accordingly, Adjusted EBITDA should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.

Adjusted EBITDA Margin

Adjusted EBITDA Margin is a non-GAAP financial measure that we define as the ratio of Adjusted EBITDA to Revenue.

The following table sets forth the reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure for the three and six months ended September 30, 2025 and 2024 (in thousands):

														Non-
														Recurring
		Net				Depreciation								Acquisition and				Other				(Benefit)
		Income				and				Stock-Based				Realignment				(Income)				Provision				Adjusted
		(Loss)				Amortization				Compensation				Costs				Expense				for Taxes				EBITDA
Three Months Ended September 30, 2025
Operations - PodcastOne		$	(975	)		$	131			$	1,930			$	-			$	-			$	-			$	1,086
Operations - Slacker			(716	)			29				(29	)			2				317				-				(397	)
Operations - Other			(1,035	)			63				572				35				101				-				(264	)
Corporate			(2,979	)			-				(310	)			1,128				678				40				(1,443	)
Total		$	(5,705	)		$	223			$	2,163			$	1,165			$	1,096			$	40			$	(1,018	)
Three Months Ended September 30, 2024
Operations - PodcastOne		$	(1,669	)		$	394			$	861			$	-			$	-			$	11			$	(403	)
Operations - Slacker			3,866				743				526				30				642				-				5,807
Operations - Other			(1,687	)			214				198				404				30				-				(841	)
Corporate			(2,827	)			2				706				207				254				(20	)			(1,678	)
Total		$	(2,317	)		$	1,353			$	2,291			$	641			$	926			$	(9	)		$	2,885

														Non-
														Recurring
						Depreciation								Acquisition and				Other				(Benefit)
		Net Income				and				Stock-Based				Realignment				(Income)				Provision				Adjusted
		(Loss)				Amortization				Compensation				Costs				Expense				for Taxes				EBITDA
Six Months Ended September 30, 2025
Operations - PodcastOne		$	(2,029	)		$	283			$	3,395			$	17			$	-			$	-			$	1,666
Operations - Slacker			(499	)			100				63				(8	)			(243	)			-				(587	)
Operations - Other			(2,026	)			129				753				35				130				-				(979	)
Corporate			(5,015	)			1				(592	)			1,597				1,040				40				(2,929	)
Total		$	(9,569	)		$	513			$	3,619			$	1,641			$	927			$	40			$	(2,829	)
Six Months Ended September 30, 2024
Operations - PodcastOne		$	(3,035	)		$	1,013			$	1,263			$	38			$	-			$	11			$	(710	)
Operations - Slacker			7,218				1,493				1,032				176				1,313				-				11,232
Operations - Other			(3,078	)			431				508				600				60				-				(1,479	)
Corporate			(4,980	)			3				1,188				229				276				29				(3,255	)
Total		$	(3,875	)		$	2,940			$	3,991			$	1,043			$	1,649			$	40			$	5,788

The following table sets forth the reconciliation of Contribution Margin to Revenue, the most comparable GAAP financial measure (in thousands):

		Three Months Ended
		September 30,
		2025				2024
Revenue:		$	18,762			$	32,594
Less:
Cost of sales			(16,166	)			(24,518	)
Amortization of developed technology			(155	)			(691	)
Gross Profit			2,441				7,385
Add back:
Share-based compensation			1,107				335
Depreciation			3				39
Developed technology			155				691
Contribution Margin		$	3,706			$	8,450

		Six Months Ended
		September 30,
		2025				2024
Revenue:		$	37,969			$	65,672
Less:
Cost of sales			(32,991	)			(49,605	)
Amortization of developed technology			(367	)			(1,466	)
Gross Profit			4,611				14,601
Add back:
Share-based compensation			2,126				22
Depreciation			26				37
Developed technology			367				60
Contribution Margin		$	7,130			$	14,720

Liquidity and Capital Resources

Current Financial Condition

As of September 30, 2025, our principal sources of liquidity were our cash and cash equivalents, including restricted cash balances in the amount of $11.8 million, which primarily are invested in Bitcoin and cash in banking institutions in the U.S. The vast majority of our cash proceeds were received as a result of our operations, incurrence of debt, the issuance of convertible notes and public offerings of our common shares. On July 16, 2025, in connection with the closing of our public offering, we announced our intent to launch our bitcoin yield treasury strategy, as part of our board of directors' approval of our up to $500 million digital asset treasury strategy. As of September 30, 2025, we have a convertible note balance of $15.2 million, the Capchase Loan (as defined below) of $0.5 million and an SBA loan balance of $0.1 million.

As reflected in our condensed consolidated financial statements included elsewhere in this Quarterly Report, we have a history of losses and incurred a net loss of $9.6 million for the six months ended September 30, 2025, and cash used in operating activities of $6.3 million for the six months ended September 30, 2025 and had a working capital deficiency of $13.1 million as of September 30, 2025. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year from the date that the financial statements are issued. Our condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to execute our strategy and on our ability to raise additional funds through the sale of equity and/or debt securities via public and/or private offerings.

On October 1, 2024, we announced an amended relationship with our largest OEM customer. Effective December 1, 2024, the OEM customer no longer subsidizes our products to some of its customers, however, we offer all OEM customer vehicles in North America the opportunity to convert to become direct subscribers of our LiveOne music app. The direct subscription to our LiveOne app allows such users for the first time to access their LiveOne music and LiveOne's other service offerings directly across all of their devices. Our LiveOne music streaming button/icon, which allows users to directly connect their subscription to LiveOne, is expected to remain in the OEM customer's music streaming services dashboard in perpetuity. The OEM customer will continue to pay us monthly for grandfathered vehicles for the term of the OEM license agreement. Accordingly, the change in our relationship with the OEM customer in October 2024 is likely to cause our liquidity and cash flows to fluctuate significantly beyond September 30, 2025. Our liquidity will depend upon our ability to convert as many of the OEM drivers as possible to become direct subscribers of our LiveOne app and the OEM customer continuing to pay for any grandfather users, as well as our ability to enter into new B2B agreements to provide our services that could materially contribute to our liquidity and cash flows. In addition, our liquidity will depend on our ability to negotiate with our music labels, publishers and other partners to achieve flexibility in the terms of our license agreements to match our OEM driver conversions. Furthermore, our liquidity will be dependent on our ability to extend and/or refinance the terms of our senior secured line of credit and/or our ability to pay any amounts that we have agreed to pay under the SX Settlement Agreement.

Our long-term ability to continue as a going concern is dependent upon our ability to increase revenue, reduce costs, achieve a satisfactory level of profitable operations, and obtain additional sources of suitable and adequate financing. Our ability to continue as a going concern is also dependent its ability to further develop and execute on our business plan. We may also have to reduce certain overhead costs through the reduction of salaries and other means and settle liabilities through negotiation. There can be no assurance that management's attempts at any or all of these endeavors will be successful.

Sources of Liquidity

On September 8 2023, we entered into a Business Loan Agreement (the "2023 Business Loan Agreement") with our then senior lender, to convert our then existing revolving credit facility into an assets backed loan credit facility, which is continued to be collateralized by a first lien on all of the assets of our Company and our subsidiaries (the "ABL Credit Facility"). The 2023 Business Loan Agreement provided us with borrowing capacity of up to the Borrowing Base (as defined in the 2023 Business Loan Agreement). On May 31, 2024, we extended the maturity date of the ABL Credit Facility to September 2, 2024. On January 28, 2025, we entered into a new Business Loan Agreement (the "2025 Business Loan Agreement") with such lender to update certain terms of the ABL Credit Facility, including to reduce the principal amount outstanding under the Promissory Note to $3,750,000, reflected in our repayment of $3,250,000 of the principal amount of the Promissory Note as of such date, and to extend the maturity date of the Promissory Note to November 20, 2025.

In August 2023, we entered into a Loan and Security Agreement with Capchase Inc. ("Capchase") pursuant to which we borrowed $1.7 million to further develop and acquire certain podcasts acquired by PodcastOne and for general working capital (the "Capchase Loan"). The Capchase Loan is subordinated to the ABL Credit Facility and bears an interest rate of 9%, which is included in the monthly amortization payments of approximately $73,100, with the final amortization payment due on February 4, 2026.

On May 19, 2025 (the "Closing Date"), we and PodcastOne entered into a Securities Purchase Agreement (the "SPA") with certain institutional investors (each, a "Purchaser" and collectively, the "Purchasers"), pursuant to which (i) we sold to the Purchasers our Original Issue Discount Senior Secured Convertible Debentures (the "Initial Debentures") in an aggregate principal amount of $16,775,000 for an aggregate cash purchase price of $15.25 million, and (ii) if certain conditions are satisfied as set forth in the SPA, including at least one of the Conditions (as defined below), we may sell at its option to the Purchasers our additional Original Issue Discount Senior Secured Convertible Debentures in an aggregate principal amount of $11,000,000 on substantially the same terms as the Initial Debentures (the "Additional Debentures" and collectively with the Initial Debentures, the "Debentures"), in a private placement transaction. The Debentures are convertible into shares of our common stock at the holder's option at a conversion price of $2.10 per share, subject to certain customary adjustments such as stock splits, stock dividends and stock combinations. We may sell to the Purchasers the Additional Debentures if within 15 months of the Closing Date either of the following conditions have been satisfied during such 15-month period (the "Conditions"): (x) the VWAP (as defined in the SPA) of the common stock has been equal to or greater than $4.20 per share (subject to certain customary adjustments such as stock splits, stock dividends and stock combinations) for 30 consecutive trading days, or (y) Free Cash Flow (as defined in the SPA) has been equal to or greater to $3,000,000 for three consecutive fiscal quarters, and has increased in each of the foregoing quarters from the immediately preceding fiscal quarter. The Initial Debentures mature on May 19, 2028 and accrue interest at 11.75% per year. Commencing with the calendar month of August 2025 (subject to the following sentence), the holders of the Initial Debentures will have the right, at their option, to require us to redeem an aggregate of up to $100,000 of the outstanding principal amount of the Debentures per month. For the month of August 2025, the holders may not submit a redemption notice for such a redemption prior to August 18, 2025. Commencing from November 18, 2025, May 18, 2026 and May 18, 2027, the holders of the Initial Debentures will have the right, at their option, to require us to redeem an aggregate of up to $150,000, $250,000 and $300,000, respectively, of the outstanding principal amount of the Initial Debentures per month.

Subject to the satisfaction of certain conditions, including applicable prior notice to the holders of the Initial Debentures, at any time after May 19, 2026, we may elect to prepay all, but not less than all, of the then outstanding Initial Debentures for a prepayment amount equal to the outstanding principal balance of then outstanding Initial Debentures plus all accrued and unpaid interest thereon, together with a prepayment premium equal to the following (the "Prepayment Premium"): (a) if the Initial Debentures are prepaid after May 19, 2026, but on or prior to May 19, 2027, 5% of the entire outstanding principal balance of the outstanding Initial Debentures (or the applicable portion thereof required to be prepaid by us); and (c) if the Initial Debentures are prepaid on or after May 19, 2027, but prior to the maturity date of the Initial Debentures, 4% of the entire outstanding principal balance of then outstanding Initial Debentures (or the applicable portion thereof required to be prepaid by us). Subject to the satisfaction of certain conditions, we shall be required to prepay the entire outstanding principal amount of all of then outstanding Initial Debentures in connection with a Change of Control Transaction (as defined in the Initial Debentures) for a prepayment amount equal to the outstanding principal balance of then outstanding Initial Debentures, plus all accrued and unpaid interest thereon, plus the applicable Prepayment Premium based on when such Change of Control Transaction occurs within the period set forth above applicable to such Prepayment Premium; provided, that (x) if a Change of Control Transaction occurs on or prior to May 19, 2026, plus 10% of the entire outstanding principal balance of then outstanding Initial Debentures; (y) if the Specified Carve-Out Transaction (as defined in the Debentures) in consummated, the Company shall be required to prepay the Initial Debentures, in an aggregate amount equal to the lower of the outstanding principal balance of then outstanding Initial Debentures and $7,500,000, in each case, plus the applicable Prepayment Premium, and (z) if a Permitted Disposition (as defined in the Debentures) pursuant to clause (g) of the definition thereof is consummated, the Company shall be required to prepay the Initial Debentures in an aggregate amount equal to the lower of the outstanding principal balance of then outstanding Initial Debentures and 50% of the first $1,000,000 of net proceeds resulting from such Permitted Disposition up to $1,000,000 and 25% of such net proceeds in excess of $1,000,000, in each case, plus the applicable Prepayment Premium. Our obligations under the Debentures can be accelerated upon the occurrence of certain customary events of default. In the event of default and acceleration of our obligations, we would be required to pay the applicable prepayment amount described above.

In connection with the issuance of the Debentures, we paid off all obligations owed thereunder, and terminated the 2025 Business Loan Agreement and all related loan agreements.

On July 16, 2025, in connection with the anticipated closing of the public offering discussed below, we announced our intent to launch our bitcoin yield treasury strategy, as part of our board of directors' approval of our up to $500 million digital asset treasury strategy. During the three months ended September 30, 2025 we purchased $5.0 million of Bitcoin.

On July 17, 2025, we completed an underwritten public offering of shares of our common stock for aggregate gross proceeds to us of approximately $9.5 million (including the exercise of the underwriter's option), after deducting an underwriting discount, but before other offering expenses. We expect to use the net proceeds from the public offering to fund the acquisition of cryptocurrencies, the development and implementation of our digital assset treasury strategy and for working capital and general corporate purposes.

Our cash flows from operating activities are significantly affected by our cash-based investments in our operations, including acquiring live music events and festivals rights, our working capital, corporate infrastructure to support our ability to generate revenue and conduct operations through cost of services, product development, sales and marketing and general and administrative activities, and to further implement our digital asset treasury strategy. Cash used in investing activities has historically been, and is expected to be, impacted significantly by our investments in business combinations, our platform, our infrastructure and equipment for our business offerings, and sale of our investments, and to further implement our digital asset treasury strategy. We expect to make additional strategic acquisitions to further grow our business and continue to implement our digital asset treasury strategy, which may require significant investments, capital raising and/or acquisition of additional debt in the near and long term. Over the next twelve to eighteen months, our net use of our working capital could be substantially higher or lower depending on the number and timing of new live festivals and paid users that we add to our businesses and capital resources needed to implement our digital asset treasury strategy, including for the maximum announced amount.

Subject to applicable limitations in the instruments governing our outstanding indebtedness, we may from time to time repurchase our debt, including the Debentures, in the open market, through tender offers, through exchanges for debt or equity securities, in privately negotiated transactions or otherwise.

In the future, we may utilize additional commercial financings, bonds, notes, debentures, lines of credit and term loans with a syndicate of commercial banks or other bank syndicates and/or issue equity securities (publicly or privately) for general corporate purposes, including acquisitions and investing in our intangible assets, music equipment, platform and technologies, and to further implement our digital asset treasury strategy. We may also use our current cash and cash equivalents to repurchase some or all of our Debentures, and pay down our debt, in part or in full, subject to repayment limitation set forth in the applicable debt agreements. Management plans to fund our operations over the next twelve months through the combination of improved operating results, spending rationalization, and the ability to access sources of capital such as through the issuance of our equity and/or debt securities. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. We filed a new universal shelf Registration Statement on Form S-3 (the "Shelf S-3") with the SEC on February 4, 2025, which was declared effective by the SEC on February 17, 2025. Under the Shelf S-3, we have the ability to raise up to $150.0 million in cash from the sale of our equity, debt and/or other financial instruments. In May 2024, we entered into an at-the-market agreement with Roth Capital Partners, LLC ("Roth"), pursuant to which we may, while the Shelf S-3 continues to be effective, offer and sell shares of our common stock having an aggregate offering price of up to $25 million from time to time through Roth acting as our sales agent. As of the filing of this Quarterly Report, we have not sold any shares under such at-the-market agreement.

Sources and Uses of Cash

The following table provides information regarding our cash flows for the six months ended September 30, 2025 and 2024 (in thousands):

		Six Months Ended
		September 30,
		2025				2024
Net cash (used in) provided by operating activities		$	(6,254	)		$	7,114
Net cash used in investing activities			(6,844	)			(1,325	)
Net cash provided by (used in) financing activities			20,703				(1,848	)
Net change in cash, cash equivalents and restricted cash		$	7,605			$	3,941

Cash Flows (Used in) Provided by Operating Activities

For the six months ended September 30, 2025

Net cash used in operating activities of $6.3 million primarily resulted from our net loss during the period of $9.6 million, which included non-cash charges of $4.5 million largely comprised of depreciation and amortization and stock-based compensation. The remainder of our sources of cash used in operating activities of $1.2 million was from changes in our working capital, primarily from timing of accounts receivable, accounts payable and accrued liabilities, accrued royalties, and deferred revenue.

For the six months ended September 30, 2024

Net cash provided by operating activities of $7.1 million primarily resulted from our net loss during the period of $3.9 million, which included non-cash charges of $5.6 million largely comprised of depreciation and amortization, stock-based compensation, change in fair value of derivatives and impairment of intangibles. The remainder of our sources of cash used in operating activities of $5.4 million was from changes in our working capital, primarily from timing of accounts receivable, accounts payable and accrued liabilities, accrued royalties, and deferred revenue.

Cash Flows Used In Investing Activities

For the six months ended September 30, 2025

Net cash used in investing activities of $6.8 million was due to the purchase of equipment and crypto digital assets of $5.0 million during the six months ended September 30, 2025.

For the six months ended September 30, 2024

Net cash used in investing activities of $1.3 million was due to the purchase of equipment during the six months ended September 30, 2024.

Cash Flows Provided by (Used in) Financing Activities

For the six months ended September 30, 2025

Net provided by financing activities of $20.7 million was due proceeds received of $15.2 million from our convertible debt and $9.4 million from the common stock offering offset by the repayment on our line of credit of $3.0 million, repayment of our Capchase Loan of $0.2 million and repurchase of common stock under the Company's share repurchase program of $0.6 million.

For the six months ended September 30, 2024

Net cash used in financing activities of $1.8 million was due to the payment of dividends of $0.5 million, repayment of our Capchase Loan of $0.4 million and repurchase of common stock under the Company's share repurchase program of $1.0 million.

Debt Covenants

As of September 30, 2025 we were in compliance under the Capchase Loan and the Initial Debentures.