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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission File Number: 001-38249

LIVEONE, INC.

(Exact name of registrant as specified in its charter)

Delaware		98-0657263
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

269 S. Beverly Dr., Suite #1450 Beverly Hills, California		90212
(Address of principal executive offices)		(Zip Code)

(310) 601-2505

(Registrant’s telephone number, including area code)

n/a

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which

registered

Common stock, $0.001 par value per share

LVO

The NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant is required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 12, 2025, there were 11,629,124 shares of the registrant’s common stock, $0.001 par value per share, issued and outstanding.

Table of Contents

LIVEONE, INC.

TABLE OF CONTENTS

		Page
PART I — FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20

Item 4.	Controls and Procedures	20

PART II — OTHER INFORMATION		21

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults Upon Senior Securities	38

Item 4.	Mine Safety Disclosures	39

Item 5.	Other Information	39

Item 6.	Exhibits	39

	Signatures	41

Table of Contents

REVERSE STOCK SPLIT

Effective September 26, 2025, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of Common Stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 10 shares of the Company's issued and outstanding pre-Reverse Stock Split shares of common stock, $0.001 par value per share (the “common stock”), were combined into one share of Common Stock. Stockholders who otherwise were entitled to receive fractional shares of 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 the Company’s outstanding warrants and its 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 the Company's warrants and stock options and conversion of its other convertible instruments held immediately prior to the Reverse Stock Split represent one share of 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 common stock attributable to the Company's warrants and stock options and the conversion price of its other convertible instruments immediately prior to the Reverse Stock Split was proportionately increased by a multiple of 10 following the Reverse Stock Split.

All common stock share and per share data, and exercise price data for applicable common stock equivalents, included in this Quarterly Report on Form 10-Q, including the financial statements, have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

	Page
Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and March 31, 2025 (audited)	F-1

Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2025 and 2024 (unaudited)	F-2

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and six months ended September 30, 2025 and 2024 (unaudited)	F-3

Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2025 and 2024 (unaudited)	F-4

Notes to the Condensed Consolidated Financial Statements (unaudited)	F-5

Table of Contents

LiveOne, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except share and per share amounts)

	*September 30,*			*March 31,*
	*2025*			*2025*
				(Audited)
Assets
Current Assets
Cash and cash equivalents	$	11,724		$	4,119
Restricted cash		30			30
Accounts receivable, net		7,650			8,299
Inventories		1,462			1,586
Prepaid expense and other current assets		1,446			1,212
Total Current Assets		22,312			15,246
Property and equipment, net		2,515			893
Goodwill		21,712			21,712
Intangible assets, net		2,279			2,569
Intangible digital assets		4,921			-
Other assets		81			97
Total Assets	$	53,820		$	40,517

Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts payable and accrued liabilities	$	29,144		$	25,180
Accrued royalties		4,757			5,490
Notes payable, current portion		284			623
Convertible note, current portion		300			-
Deferred revenue		967			2,141
Senior secured line of credit		-			2,950
Total Current Liabilities		35,452			36,384
Notes payable, net		149			150
Lease liabilities, noncurrent		76			99
Convertible note, noncurrent		14,885			-
Other long-term liabilities		11,206			12,236
Deferred income taxes		60			60
Total Liabilities		61,828			48,929

Commitments and Contingencies

Stockholders’ Equity (Deficit)
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 7,947 and 14,002 shares issued and outstanding as of September 30, 2025 and March 31, 2025, respectively		7,947			14,002
Common stock, $0.001 par value; 500,000,000 shares authorized; 11,467,091 and 9,672,451 shares issued and outstanding as of September 30, 2025 and March 31, 2025, net of treasury shares, respectively*		11			10
Additional paid in capital*		251,593			233,582
Treasury stock*		(835	)		(250	)
Accumulated deficit		(274,949	)		(265,119	)
Total LiveOne Stockholders’ Deficit		(16,233	)		(17,775	)
Non-controlling interest		8,225			9,363
Total stockholders' deficit		(8,008	)		(8,412	)
Total Liabilities and Stockholders’ Deficit	$	53,820		$	40,517

* After giving effect to the Reverse Stock Split - See Note 16 - Stockholders' Deficit

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-1

Table of Contents

LiveOne, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except share and per share amounts)

	*Three Months Ended*						*Six Months Ended*
	*September 30,*						*September 30,*
	*2025*			*2024*			*2025*			*2024*

Revenue:	$	18,762		$	32,594		$	37,969		$	65,672

Operating expenses:
Cost of sales		16,166			24,518			32,991			49,605
Sales and marketing		870			1,491			2,131			2,922
Product development		442			1,160			1,376			2,231
General and administrative		5,707			6,283			9,782			11,790
Amortization of intangible assets		146			542			291			1,134
Impairment of intangible assets		-			-			-			176
Total operating expenses		23,331			33,994			46,571			67,858
Loss from operations		(4,569	)		(1,400	)		(8,602	)		(2,186	)

Other income (expense):
Interest expense, net		(1,003	)		(808	)		(1,690	)		(1,667	)
Change in fair value of digital assets		79			-			79			-
Other income (expense)		(172	)		(118	)		684			18
Total other income (expense), net		(1,096	)		(926	)		(927	)		(1,649	)

Loss before provision for (benefit from) income taxes		(5,665	)		(2,326	)		(9,529	)		(3,835	)

Provision for (benefit from) income taxes		40			(9	)		40			40
Net loss		(5,705	)		(2,317	)		(9,569	)		(3,875	)
Net loss attributable to non-controlling interest		(163	)		(458	)		(434	)		(846	)
Net loss attributed to LiveOne	$	(5,542	)	$	(1,859	)	$	(9,135	)	$	(3,029	)

Net loss per share – basic and diluted*	$	(0.52	)	$	(0.24	)	$	(0.98	)	$	(0.43	)
Weighted average common shares – basic and diluted*		11,170,612			9,465,818			10,048,453			9,460,506

* After giving effect to the Reverse Stock Split - See Note 16 - Stockholders' Deficit

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-2

Table of Contents

LiveOne, Inc.

Condensed Consolidated Statement of Stockholders’ Equity (Deficit) and Mezzanine Equity

(Unaudited, in thousands, except share and per share amounts)

		Mezzanine										11,501
	*Equity -*
	*Redeemable*																												*Total*
	*Convertible*														*Additional*								*Common Stock in*						*Stockholders’*
	*Preferred Stock*				*Preferred Stock*						*Common Stock*				*Paid in*		*Accumulated*			*Non-controlling*			*Treasury*						*Equity*
	*Shares*		*Amount*		*Shares*			*Amount*			Shares*		Amount*		Capital*		*Deficit*			*Interest*			Shares*			*Amount*			*(Deficit)*
Balance as of March 31, 2025		-	$	-		14,002		$	14,002			9,688,016	$	10	$	233,582	$	(265,119	)	$	9,363			(15,565	)	$	(250	)	$	(8,412	)
Stock-based compensation		-		-		-			-			-		-		157		-			-			-			-			157
Shares issued pursuant to restricted stock units		-		-		-			-			3,576		-		-		-			-			-			-			-
Dividends on Series A preferred stock		-		-		426			426			-		-		-		(426	)		-			-			-			-
Common stock issued for services		-		-		-			-			17,565		-		149		-			-			-			-			149
Issuance of PodcastOne common stock		-		-		-			-			-		-		460		-			(342	)		-			-			118
Treasury stock purchases		-		-		-			-			-		-		-		-			-			(29,146	)		(240	)		(240	)
Net loss		-		-		-			-			-		-		-		(3,593	)		(271	)		-			-			(3,864	)
Balance as of June 30, 2025		-	$	-		14,428		$	14,428			9,709,157	$	10	$	234,348	$	(269,138	)	$	8,750			(44,711	)	$	(490	)	$	(12,092	)
Stock-based compensation		-		-		-			-			-		-		258		-												258
Shares issued pursuant to restricted stock units		-		-		-			-			8,781		-		-		-												-
Dividends on Series A preferred stock		-		-		269			269			-		-		-		(269	)											-
Conversion of preferred stock		-		-		(6,750	)		(6,750	)		450,000		-		6,750		-			-			-			-			-
Common stock issued for settlement of accrued expenses		-		-		-			-			27,727		-		152		-			-			-			-			152
Issuance of common stock and common stock warrants		-		-		-			-			1,360,833		1		9,377		-			-			-			-			9,378
Common stock issued for services		-		-		-			-			17,065		-		128		-												128
Issuance of PodcastOne common stock		-		-												580		-			(362	)								218
Treasury stock purchases		-		-		-			-			-		-		-		-						(61,761	)		(345	)		(345	)
Net loss		-		-		-			-			-		-		-		(5,542	)		(163	)								(5,705	)
Balance as of September 30, 2025		-	$	-		7,947		$	7,947			11,573,563	$	11	$	251,593	$	(274,949	)	$	8,225			(106,472	)	$	(835	)	$	(8,008	)

	*Mezzanine*
	*Equity -*
	*Redeemable*
	*Convertible*																	*Additional*									*Common Stock in*						*Total*
	*Preferred Stock*						*Preferred Stock*						*Common Stock*					*Paid in*			*Accumulated*			*Non-controlling*			*Treasury*						*Stockholders’*
	*Shares*			*Amount*			*Shares*			*Amount*			Shares*			Amount*		Capital*			*Deficit*			*Interest*			Shares*			*Amount*			*Equity*
Balance as of March 31, 2024		5,000		$	4,962			18,814		$	18,814			9,248,746		$	9	$	216,199		$	(238,984	)	$	10,339			(386,004	)	$	(4,782	)	$	1,595
Stock-based compensation		-			-			-			-			-			-		782			-			-			-			-			782
Shares issued pursuant to restricted stock units		-			-			-			-			16,150			-		-			-			-			-			-			-
Dividends on Series A preferred stock		-			-			378			378			-			-		-			(378	)		-			-			-			-
Conversion of Series A preferred stock into common stock and common stock warrants		(5,000	)		(4,962	)		(6,395	)		(6,395	)		542,623			1		11,672			(316	)		-			-			-			4,962
Common stock issued for services		-			-			-			-			76,552			-		1,577			-			-			-			-			1,577
Issuance of PodcastOne common stock		-			-			-			-			-			-		(468	)		-			468			-			-			-
Treasury stock purchases		-			-			-			-			-			-		-			-			-			(40,259	)		(749	)		(749	)
Net loss		-			-			-			-			-			-		-			(1,169	)		(388	)		-			-			(1,557	)
Balance as of June 30, 2024		-		$	-			12,797		$	12,797			9,884,071		$	10	$	229,762		$	(240,847	)	$	10,419			(426,263	)	$	(5,531	)		6,610
Stock-based compensation		-			-			-			-			-			-		1,570			-			-			-			-			1,570
Issuance of shares pursuant to restricted stock units		-			-			-			-			47,573			-		-			-			-			-			-			-
Dividends on Series A preferred stock		-			-			390			390			-			-		-			(390	)		-			-			-			-
Treasury stock retirement		-			-			-			-			(426,263	)		-		-			(5,527	)		-			426,263			5,531			4
Dividends from spin-off of PodcastOne		-			-			-			-			-			-		-			-			-			-			-			-
Issuance of PodcastOne common stock		-			-			-			-			-			-		(545	)		-			545			-			-			-
Common stock issued for services		-			-			-			-			5,927			-		231			-			-			-			-			231
Treasury stock purchases		-			-			-			-			-			-		-			-			-			(1,557	)		(250	)		(250	)
Net loss		-			-			-			-			-			-		-			(1,859	)		(458	)		-			-			(2,317	)
Balance as of September 30, 2024		-		$	-			13,187		$	13,187			9,511,308		$	10	$	231,018		$	(248,623	)	$	10,506			(1,557	)	$	(250	)		5,848

* After giving effect to the Reverse Stock Split - See Note 16 - Stockholders' Deficit

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-3

Table of Contents

LiveOne, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	*Six Months Ended*
	*September 30,*
	*2025*			*2024*
Cash Flows from Operating Activities:
Net loss	$	(9,569	)	$	(3,875	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		513			2,764
Stock-based compensation		3,619			3,287
Amortization of debt discount		186			-
Change in fair value of bifurcated embedded derivatives		-			(607	)
Change in fair value of cryptocurrencies		(79	)		-
(Recovery of) provision for credit loss		129			(10	)
Impairment of intangible assets		-			176
Changes in operating assets and liabilities:
Accounts receivable		520			(863	)
Prepaid expenses and other current assets		(234	)		415
Inventories		123			126
Other assets		17			(29	)
Deferred revenue		(1,175	)		(79	)
Accounts payable and accrued liabilities		(3,143	)		3,425
Accrued royalties		4,213			2,106
Other liabilities		(1,374	)		278
Net cash (used in) provided by operating activities		(6,254	)		7,114

Cash Flows from Investing Activities:

Purchases of property and equipment		(1,844	)		(1,325	)
Purchases of intangibles - cryptocurrencies, net		(5,000	)		-
Net cash used in investing activities		(6,844	)		(1,325	)

Cash Flows from Financing Activities:
Payment on Capchase loan		(339	)		-
Payment of dividends		-			(509	)
Repayment on notes payable		-			(340	)
Repayment on line of credit		(2,950	)		-
Proceeds from common stock offering, net of issuance cost		9,378			-
Proceeds from Convertible Debt, net of issuance cost		15,199			-
Purchase of treasury stock		(585	)		(999	)
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, cash equivalents and restricted cash, beginning of period		4,149			7,142
Cash, cash equivalents and restricted cash, end of period	$	11,754		$	11,083

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	686		$	982

Supplemental disclosure of non-cash investing and financing activities:
Common stock issued for prepaid expenses	$	-		$	366
Common stock issued to settle accrued expenses	$	152		$	-
Fair value of shares issued to settle accrued stock to be issued at period end	$	-		$	378
Fair value of preferred stock exchanged for common stock	$	6,750		$	-
Fair value of shares received of PodcastOne common stock to settle payables owed	$	1,040		$	736
Purchase of intangible assets accrued for at period end	$	-		$	118
Addition of ROU assets	$	-		$	119
Stock compensation expense capitalized as internally-developed software	$	-		$	290

* After giving effect to the Reverse Stock Split - See Note 16 - Stockholders' Deficit

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LiveOne, Inc.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three and Six Months Ended September 30, 2025 and 2024

Note 1 — Organization and Basis of Presentation

Organization

LiveOne, Inc. together with its subsidiaries (“we,” “us,” “our”, the “Company” or “LiveOne”) is a Delaware corporation headquartered in Beverly Hills, California. The Company is a creator-first, music, entertainment and technology platform focused on delivering premium experiences and content worldwide through memberships, live and virtual events.

The Company was reincorporated in the State of Delaware on August 2, 2017, pursuant to a reincorporation merger of Loton, Corp (“Loton”) with and into LiveXLive Media, Inc., Loton’s wholly owned subsidiary at the time. As a result of the reincorporation merger, Loton ceased to exist as a separate entity, with LiveXLive Media, Inc. being the surviving entity. On December 29, 2017, the Company acquired Slacker, Inc. (“Slacker”), an Internet music and radio streaming service incorporated in the state of Delaware, and it became a wholly owned subsidiary of LiveOne. On February 5, 2020, the Company acquired (i) React Presents, LLC a Delaware limited liability company (“React Presents”), and it became a wholly owned subsidiary of LiveXLive Events, LLC, a wholly owned subsidiary of the Company and (ii) indirectly Spring Awakening, LLC, which is a wholly owned subsidiary of React Presents, a producer, promoter and manager of in person live music festivals and events. On July 1, 2020, the Company through its wholly owned subsidiary, LiveXLive PodcastOne, Inc., acquired PodcastOne, Inc. (formerly Courtside Group, Inc.) (“PodcastOne”). On December 22, 2020, the Company through its wholly owned subsidiary LiveXLive Merchandising, Inc., acquired Custom Personalization Solutions, Inc. (“CPS”). Effective as of October 5, 2021, the Company changed its corporate name to "LiveOne, Inc." On February 28, 2023, the Company acquired a majority interest in Splitmind LLC and Drumify LLC. On September 8, 2023, PodcastOne completed a spin out from the Company to become a standalone publicly trading company resulting in its direct listing on The NASDAQ Capital Market on such date (the "Direct Listing"). As of the date of this Quarterly Report, PodcastOne continues to be a majority owned subsidiary of the Company.

Basis of Presentation

The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2025, and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s interim unaudited condensed consolidated financial statements for the three and six months ended September 30, 2025. The results for the three and six months ended September 30, 2025 are not necessarily indicative of the results expected for the full fiscal year ending March 31, 2026 (“fiscal 2026”). The condensed consolidated balance sheet as of March 31, 2025 has been derived from the Company’s audited balance sheet included in the Company’s 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”).

The interim unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete audited financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the 2025 Form 10-K.

Reverse Stock Split

Effective September 26, 2025, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of Common Stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 10 shares of the Company's issued and outstanding pre-Reverse Stock Split shares of common stock, $0.001 par value per share (the “common stock”), were combined into one share of Common Stock. Stockholders who otherwise were entitled to receive fractional shares of 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 the Company’s outstanding warrants and its 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 the Company's warrants and stock options and conversion of its other convertible instruments held immediately prior to the Reverse Stock Split represent one share of 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 common stock attributable to the Company's warrants and stock options and the conversion price of its other convertible instruments immediately prior to the Reverse Stock Split was proportionately increased by a multiple of 10 following the Reverse Stock Split.

All common stock share and per share data, and exercise price data for applicable common stock equivalents, included in this Quarterly Report on Form 10-Q, including these financial statements, have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated.

Going Concern and Liquidity

The Company’s interim unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

The Company’s principal sources of liquidity have historically been its debt and equity issuances and its cash and cash equivalents (which cash, cash equivalents and restricted cash amounted to $11.8 million as of September 30, 2025). As reflected in its interim unaudited condensed consolidated financial statements included elsewhere herein, the Company has a history of losses, incurred a net loss of $9.6 million for the six months ended September 30, 2025, and used cash of $6.3 million in operating activities 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 the Company’s ability to continue as a going concern within one year from the date that these financial statements are filed. The Company’s interim unaudited 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 the Company be unable to continue as a going concern.

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The Company’s ability to continue as a going concern is dependent on its ability to execute its growth strategy and on its ability to raise additional funds. The Company filed a new universal shelf Registration Statement on Form S-3 (the “Shelf S-3”) with the SEC on February 13, 2025, which was declared effective by the SEC on February 26, 2025. Under the Shelf S-3, the Company has the ability to raise up to $150.0 million in cash from the sale of its equity, debt and/or other financial instruments, subject to any limitation as applicable under General Instruction I.B.6 of Form S-3. In May 2024, the Company entered into an at-the-market agreement with Roth Capital Partners, LLC ("Roth Capital"), pursuant to which the Company may, while the Shelf S-3 is effective, offer and sell shares of the Company’s common stock, $0.001 par value per share (the “common stock”), having an aggregate offering price of up to $25 million from time to time through Roth Capital acting as the Company's sales agent. As of the filing of this Quarterly Report, the Company has not sold any shares under such agreement. The uncertain market conditions may limit the Company’s ability to access capital, may reduce demand for its services and may negatively impact its ability to retain key personnel. Management may seek additional funds, primarily through the issuance of equity and/or debt securities for cash to operate the Company’s business. No assurance can be given that any future financing will be available or, if available, that it be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain terms that result in undue restrictions on its operations, in the case of debt financing or cause substantial dilution for its stockholders, in case of equity and/or convertible debt financing. If the Company is unable to obtain sufficient financing when needed, the Company 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.

Principles of Consolidation

The Company's interim unaudited condensed consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. Acquisitions are included in the Company’s interim unaudited condensed consolidated financial statements from the date of the acquisition. The Company uses purchase accounting for its acquisitions, which results in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All intercompany balances and transactions have been eliminated in consolidation.

Note 2 — Summary of Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies from those previously disclosed in the consolidated financial statements included in the 2025 Form 10-K, other than those included below.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with the United States of America generally accepted accounting principles (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue, allowance for doubtful accounts, the assigned value of acquired assets and assumed and contingent liabilities associated with business combinations and the related purchase price allocation, useful lives and impairment of property and equipment, intangible assets, goodwill and other assets, inventory calculations and reserves, the fair value of the Company’s equity-based compensation awards, fair value of the Company's cryptocurrency and convertible debt and debenture instruments, fair values of derivatives, and contingencies. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. There is a reasonable possibility that actual results could differ from those estimates and such differences could be material to the financial position and results of operations, specifically in assessing when the collectability of revenue related consideration is probable, and the impairment assessment of goodwill, indefinite lived assets or long-lived assets that are depreciated or amortized.

Segment Reporting

The Company presents the financial statements by segment in accordance with ASC Topic No. 280, Segment Reporting (“ASC 280”), to provide investors with transparency into how the chief operating decision maker (“CODM”) manages the business. The Company determined the CODM is its Chief Executive Officer. The CODM reviews financial information and allocates resources across the Company's three operating segments.

Revenue Recognition Policy

The Company accounts for a contract with a customer when an approved contract exists, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and the collectability of substantially all of the consideration is probable. Revenue is recognized when the Company satisfies its obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company uses the expected value method to estimate the value of variable consideration on advertising and with original equipment manufacturer contracts to include in the transaction price and reflect changes to such estimates in periods in which they occur. Variable consideration for these services is allocated to and recognized over the related time period such advertising and membership services are rendered as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company’s efforts to satisfy its performance obligation. The amount of variable consideration included in revenue is limited to the extent that it is probable that the amount will not be subject to significant reversal when the uncertainty associated with the variable consideration is subsequently resolved.

Practical Expedients

The Company elected the practical expedient and recognized the incremental costs of obtaining a contract, if any, as an expense when incurred if the amortization period of the asset that would have been recognized is one year or less.

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Gross Versus Net Revenue Recognition

The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction and is evaluated on a transaction by transaction basis. To the extent the Company acts as the principal, revenue is reported on a gross basis net of any sales tax from customers, when applicable. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service prior to transfer to the customer. Where applicable, the Company has determined that it acts as the principal in all of its membership service, sponsorship, and merchandising streams and may act as principal or agent for its ticketing/live events, advertising and licensing revenue streams.

The Company’s revenue is principally derived from the following services:

Membership Services

Membership services revenue substantially consist of monthly to annual recurring membership fees, which are primarily paid in advance by credit card or through direct billings arrangements. The Company defers the portions of monthly to annual recurring membership fees collected in advance and recognizes them in the period earned. Membership revenue is recognized in the period of services rendered. The Company’s membership revenue consists of performance obligations that are satisfied over time. This has been determined based on the fact that the nature of services offered are membership based where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services or not. As a result, the Company has concluded that the best measure of progress toward the complete satisfaction of the performance obligation over time is a time-based measure. The Company recognizes membership revenue straight-line through the membership period.

Membership Services consist of:

Direct member, mobile service provider and mobile app services

The Company generates revenue for membership services on both a direct basis and through memberships sold through certain third-party mobile service providers and mobile app services (collectively the “Mobile Providers”). For memberships sold through the Mobile Providers, the member executes an on-line agreement with Slacker outlining the terms and conditions between Slacker and the member upon purchase of the membership. The Mobile Providers promote the Slacker app through their e-store, process payments for memberships, and retain a percentage of revenue as a fee. The Company reports this revenue gross of the fee retained by the Mobile Providers, as the member is Slacker’s customer in the contract and Slacker controls the service prior to the transfer to the member. Membership revenues from monthly memberships sold directly through Mobile Providers are subject to such Mobile Providers’ refund or cancellation terms. Revenues from Mobile Providers are recognized net of any such adjustments for variable consideration, including refunds and other fees. The Company’s payment terms vary based on whether the membership is sold on a direct basis or through Mobile Providers. Memberships sold on a direct basis require payment before the services are delivered to the customer. The payment terms for memberships sold through Mobile Providers vary, but are generally payable within 30 days.

Third-Party Original Equipment Manufacturers

The Company generates revenue for membership services through memberships sold through a third-party Original Equipment Manufacturer (the “OEM”). For memberships sold through the OEM, the OEM executes an agreement with Slacker outlining the terms and conditions between Slacker and the OEM upon purchase of the membership. The OEM installs the Slacker app in their equipment and provides the Slacker service to the OEM’s customers. The monthly fee charged to the OEM is based upon a fixed rate per vehicle, multiplied by the variable number of total vehicles which have signed up for a paid membership. The number of customers, or the variable consideration, is reported by OEMs and resolved on a monthly basis. The Company’s payment terms with OEM are up to 30 days.

Advertising Revenue

Advertising revenue primarily consist of revenues generated from the sale of audio, video, and display advertising space to third-party advertising exchanges. Revenues are recognized based on delivery of impressions over the contract period to the third-party exchanges, either when an ad is placed for listening or viewing by a visitor or when the visitor “clicks through” on the advertisement. The advertising exchange companies report the variable advertising revenue performed on a monthly basis which represents the Company’s efforts to satisfy the performance obligation. Additionally, following the acquisition of PodcastOne, we began deriving revenue from podcast advertising. PodcastOne earns advertising revenues primarily for fees earned from advertisement placement purchased by the customer during the time the podcast is delivered to the viewing audience, under the terms and conditions as set forth in the applicable podcasting agreement calculated using impressions.

From time to time the Company enters into barter transactions involving advertising provided in exchange for goods and services. Revenue from barter transactions is recognized ratably over time based on the terms of the contract as delivery of impressions is performed on a consistent basis. The transaction price for these contracts is measured at the estimated fair value of the non-cash consideration received unless this is not reasonably estimable, in which case the consideration is measured based on the standalone selling price of the advertising spots promised or delivered to the customer. Services received are charged to expense in the same manner. Barter revenue for the three months ended September 30, 2025 and 2024 was $7.0 million and $6.0 million, respectively. Barter revenue for the six months ended September 30, 2025 and 2024 was $14.0 million and $12.0 million, respectively.

Licensing Revenue

Licensing revenue primarily consists of sales of licensing rights to digitally stream the Company’s live music services. Licensing revenue is recognized when the Company satisfies its performance obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, which is typically when the live event has aired. Any license fees collected in advance of an event are deferred until the event airs. We report our licensing revenue on a gross basis as we act as the principal in the underlying transactions.

Sponsorship Revenue

Sponsorship revenue primarily consists of sales of sponsorship programs that provide sponsors with opportunities to reach the Company’s customers. Sponsorship revenue is recognized as the event airs. Any sponsorship fees collected in advance of the contract term (typically an event) are deferred until the event airs. The Company reports sponsorship revenue on a gross basis as the Company acts as the principal in the underlying transactions.

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Merchandising Revenue

Revenue is recognized upon the transfer of control to the customer. The Company recognizes revenue and measures the transaction price net of taxes collected from customers and remitted to governmental authorities. Sales also include shipping and handling charges billed to customers, with the related freight costs included in cost of goods sold. Sales commissions are expensed as incurred and are recorded in sales and marketing expenses in the accompanying condensed consolidated statements of operations. The Company’s customer contracts do not have a significant financing component due to their short durations, which are typically effective for one year or less and have payment terms that are generally 30 to 60 days. Wholesale revenue is generally recognized when products are shipped, depending on the applicable contract terms. The Company records a refund liability for expected returns based on prior returns history, recent trends, and projections for returns on sales in the current period. The refund liability at September 30, 2025 and 2024 was less than $0.1 million, respectively.

Net Income (Loss) Per Share

Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period adjusted to add back dividends (declared or cumulative undeclared) applicable to the Company’s Series A Perpetual Convertible Preferred Stock (the “Series A Preferred Stock”). Diluted earnings (loss) per share is computed using the weighted-average number of common shares and the dilutive effect of contingent shares outstanding during the period. Potentially dilutive contingent shares, which primarily consist of stock options issued to employees, directors and consultants, restricted stock units, warrants issued to third parties and accounted for as equity instruments and convertible notes would be excluded from the diluted earnings per share calculation because their effect is anti-dilutive.

Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities such as our preferred stock. Under the two-class method, basic and diluted net income (loss) per share attributable to common stockholders is computed by dividing the basic and diluted net income (loss) attributable to common stockholders by the basic and diluted weighted-average number of shares of common stock outstanding during the period. Diluted net income per share attributable to common stockholders adjusts basic net income per share for the potentially dilutive impact of stock options and restricted stock units (RSUs).

The treasury stock method is used to calculate the potentially dilutive effect of stock options and RSUs. The if-converted method is used to calculate the potentially dilutive effect of the Preferred Stock. In both methods, diluted net income (loss) attributable to common stockholders and diluted weighted-average shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.

At September 30, 2025 and 2024, the Company had 209,916 and 225,167 options outstanding, respectively, 237,649 and 172,623 restricted stock units outstanding, respectively, and 687,903 and 494,940 common stock warrants, respectively, that are excluded from the calculation of diluted earnings per share as their effect is anti-dilutive.

The following table shows the calculation of basic and diluted earnings per share for the periods Series A Preferred Stock was outstanding:

	*Three Months Ended*						*Six Months Ended*
In thousands, except per share amounts	*September 30, 2025*			*September 30, 2024*			*September 30, 2025*			*September 30, 2024*
Net loss attributed to LiveOne	$	(5,542	)	$	(1,859	)	$	(9,135	)	$	(3,029	)
Deemed dividends upon redemption of Series A Preferred Stock		-			-			-			(316	)
Dividends on Series A Preferred Stock		(269	)		(390	)		(695	)		(768	)
Net loss attributed to LiveOne	$	(5,811	)	$	(2,249	)	$	(9,830	)	$	(4,113	)
Basic and diluted weighted average number of shares outstanding		11,170,612			9,465,818			10,048,453			9,460,506
Net loss per share – basic and diluted*	$	(0.52	)	$	(0.24	)	$	(0.98	)	$	(0.43	)

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include all highly liquid investments with original maturities, when purchased, of three months or less.

The following table provides amounts included in cash, cash equivalents and restricted cash presented in the Company’s condensed consolidated statements of cash flows for the periods ended September 30, 2025 and March 31, 2025 (in thousands):

	*September 30, 2025*		*March 31, 2025*
Cash and cash equivalents	$	11,724	$	4,119
Restricted cash		30		30
Total cash and cash equivalents and restricted cash	$	11,754	$	4,149

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Non-Controlling Interest

The Company consolidates entities in which the Company has a controlling financial interest. The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than 50% of the voting rights. Non-controlling interests represent third-party equity ownership interests in the Company’s consolidated entities. The amount of net income (loss) attributable to non-controlling interests is disclosed in the accompanying interim unaudited condensed consolidated statements of operations.

Restricted Cash and Cash Equivalents

The Company maintains certain letters of credit agreements with its banking provider, which are secured by the Company’s cash for periods of less than one year. As of September 30, 2025 and March 31, 2025, the Company had restricted cash of $30,000 and $30,000, respectively.

Allowance for Credit Losses

The Company evaluates the collectability of its accounts receivable based on a combination of factors. Generally, it records specific reserves to reduce the amounts recorded to what it believes will be collected when a customer’s account ages beyond typical collection patterns, or the Company becomes aware of a customer’s inability to meet its financial obligations.

The Company believes that the credit risk with respect to trade receivables is limited due to the large and established nature of its largest customers and the nature of its membership receivables. At September 30, 2025, the Company had no customers that made up 10% of the total accounts receivable balance. At September 30, 2024, the Company had one customer that made up 45% of the total accounts receivable balance.

The Company’s accounts receivable at September 30, 2025 and March 31, 2025 is as follows (in thousands):

	*September 30,*			*March 31,*
	*2025*			*2025*
Accounts receivable, gross	$	9,009		$	9,390
Less: Allowance for credit losses		(1,359	)		(1,091	)
Accounts receivable, net	$	7,650		$	8,299

Inventories

Inventories, principally raw materials awaiting final customization process, are stated at the lower of cost or net realizable value. Inventories are relieved on a first-in, first-out basis.

The carrying value of inventories is reduced for any excess and obsolete inventory. Excess and obsolete reductions are determined based on currently available information, including the likely method of disposition, such as through sales to individual customers and liquidations, and the age of inventory.

Concentration of Credit Risk

The Company maintains cash balances at commercial banks. Cash balances commonly exceed the $250,000 amount insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts, and management believes that the Company is not exposed to any significant credit risk with respect to such cash and cash equivalents.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions The Company adopted ASU 2023-09 on April 1, 2025 on a prospective basis. The adoption of this standard did not have an impact on the Company’s interim condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-08, Intangibles — Goodwill and Other — Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). This ASU is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 requires a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period in which the entity adopts the amendment and is effective for all reporting companies for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early adoption permitted. The adoption of this standard did not have an impact on the Company’s interim condensed consolidated financial statements.

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Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in ASU 2024-03 require a public business entity to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods. The objective of the disclosure requirements is to provide disaggregated information about a public business entity’s expenses to help investors (i) better understand the entity’s performance, (ii) better assess the entity’s prospects for future cash flows, and (iii) compare an entity’s performance over time and with that of other entities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2024-03.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures.

Note 3 — Revenue

The following table represents a disaggregation of revenue from contracts with customers for the three months ended September 30, 2025 and 2024 (in thousands):

	*Three Months Ended*				*Six Months Ended*
	*September 30,*				*September 30,*
	*2025*		*2024*		*2025*		*2024*
Revenue
Membership Services	$	3,072	$	19,477	$	6,397	$	38,326
Advertising		15,183		12,309		30,275		25,383
Merchandising		507		808		1,297		1,963
Total Revenue	$	18,762	$	32,594	$	37,969	$	65,672

For some contracts, the Company may invoice up front for services recognized over time or for contracts in which the Company has unsatisfied performance obligations. Payment terms and conditions vary by contract type, although terms generally cover monthly payments. In the circumstances where the timing of invoicing differs from the timing of revenue recognition, the Company has determined its contracts do not include a significant financing component. The Company has elected to apply the practical expedient under ASC 606-10-50-14 and not provide disclosure of the amount and timing of performance obligations as the performance obligations are part of a contract that has an original expected duration of one year or less.

For the three months ended September 30, 2025 and 2024, two customers accounted for 45% and 75% of the Company’s consolidated revenues, respectively. For the six months ended September 30, 2025 and 2024, two customers accounted for 45% and 73% of the Company’s consolidated revenues, respectively.

The following table summarizes the significant changes in the deferred revenue balances during the six months ended September 30, 2025 (in thousands):

	*Deferred*
	*Revenue*
Balance as of March 31, 2025	$	2,141
Revenue recognized that was included in the contract liability at beginning of period		(1,518	)
Increase due to cash received, excluding amounts recognized as revenue during the period		344
Balance as of September 30, 2025	$	967

Note 4 — Property and Equipment

The Company’s property and equipment at September 30, 2025 and March 31, 2025 was as follows (in thousands):

	*September 30,*			*March 31,*
	*2025*			*2025*
Property and equipment, net
Computer, machinery, and software equipment	$	2,584		$	2,597
Furniture and fixtures		564			564
Leasehold improvements		597			597
Capitalized internally developed software		19,694			18,669
Total property and equipment		23,439			22,427
Less accumulated depreciation and amortization		(20,924	)		(21,534	)
Total property and equipment, net	$	2,515		$	893

Depreciation expense was $0.1 million and $0.8 million for the three months ended September 30, 2025 and 2024, respectively. Depreciation expense was $0.2 million and $1.6 million for the three months ended September 30, 2025 and 2024, respectively. During the six months ended September 30, 2024, the Company disposed of $3.3 million of equipment with a corresponding write-off to accumulated depreciation.

During the six months ended September 30, 2025, the Company wrote off $0.9 million of internally developed software and the corresponding accumulated depreciation as a result of no longer using the software in operations.

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Note 5 — Goodwill and Intangible Assets

Goodwill

The following table presents the changes in the carrying amount of goodwill for the six months ended September 30, 2025 (in thousands):

	*Goodwill*
Balance as of March 31, 2025	$	21,712
Acquisitions		-
Impairment losses		-
Balance as of September 30, 2025	$	21,712

Indefinite-Lived Intangible Assets

The following table presents the changes in the carrying amount of indefinite-lived brand and trade names intangible assets that are only in the Company’s Slacker operating segment for the three months ended September 30, 2025 (in thousands):

	*Tradenames*
Balance as of March 31, 2025	$	774
Acquisitions		-
Impairment losses		-
Balance as of September 30, 2025	$	774

Finite-Lived Intangible Assets

The Company’s finite-lived intangible assets were as follows as of September 30, 2025 (in thousands):

	*Gross*				*Net*
	*Carrying*		*Accumulated*		*Carrying*
	*Value*		*Amortization*		*Value*
Software	$	19,281	$	19,281	$	-
Intellectual property (patents)		3,146		2,623		523
Customer relationships		6,570		6,570		-
Content creator relationships		3,229		2,774		455
Domain names		123		70		53
Brand and trade names		1,071		597		474
Total	$	33,420	$	31,915	$	1,505

The Company’s finite-lived intangible assets were as follows as of March 31, 2025 (in thousands):

	*Gross*				*Net*
	*Carrying*		*Accumulated*		*Carrying*
	*Value*		*Amortization*		*Value*
Software	$	19,281	$	19,281	$	-
Intellectual property (patents)		3,146		2,593		553
Customer relationships		6,570		6,570		-
Content creator relationships		3,228		2,574		654
Domain names		123		66		57
Brand and trade names		1,071		540		531
Customer list		2,673		2,673		-
Total	$	36,092	$	34,297	$	1,795

Intangible assets are amortized over their estimated useful lives based on the pattern in which the economic benefits associated with the asset are expected to be consumed, which to date has approximated the straight-line method of amortization. The estimated useful lives for patents, customer relationships, domain names, brand and tradename and customer list are generally three to 15 years, one to two years, two to five years, seven to ten years and three to four years, respectively.

The Company’s amortization expense on its finite-lived intangible assets was $0.1 million and $0.5 million for the three months ended September 30, 2025 and 2024, respectively. The Company’s amortization expense on its finite-lived intangible assets was $0.3 million and $1.1 million for the three months ended September 30, 2025 and 2024, respectively. The Company recorded an impairment charge attributed to finite-lived intangibles of none and $0.2 million for the six months ended September 30, 2025 and 2024, respectively. The impairment for the six months ended September 30, 2024 was the result of the winding down of a podcast show acquired by PodcastOne.

Finder's Agreement

In September 2023, PodcastOne entered into a finder's fee arrangement pursuant to which it agreed to issue shares of PodcastOne common stock at a price of $8.00 per share (subject to adjustment in certain limited circumstances) as a finder’s fee to a certain third party podcast platform in the event certain former and/or current podcasts creators of such platform entered into new podcasting agreements with PodcastOne, with the amount of the fee to be based on the amount of revenues actually derived by PodcastOne from such podcasts during a predetermined period. Payments made to such third party attributed to PodcastOne entering into new podcast contracts were capitalized to content creator relationship intangibles. As of September 30, 2025 and March 31, 2025, the Company has capitalized $2.6 million of payments made to such third party. $2.6 million capitalized of payments made to such third party which was paid with PodcastOne common stock at a price of $8.00 per share.

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The Company expects to record amortization of intangible assets for fiscal years ending March 31, 2026 and future fiscal years as follows (in thousands):

For Years Ending March 31,
2026 (remaining six months)	$	363
2027		366
2028		182
2029		182
2030		182
Thereafter		230
	$	1,505

Note 6 — Intangible Digital Assets

On August 28, 2025, the Company adopted Bitcoin as its primary treasury reserve asset. Under this new treasury strategy, the Company purchases and holds Bitcoin for long term investment purposes. The Company accounts for its Bitcoin as in indefinite-lived intangible asset in accordance with ASC 350, Intangibles-Goodill and Other and has ownership over its Bitcoin, which are included in intangible digital assets in the Unaudited Condensed Consolidated Balance Sheets. As of June 30, 2025, there were no contractual restrictions on the Company sale of its Bitcoin.

Bitcoin investment

The Company's Bitcoin purchased for investment purpose are initially recorded at cost, inclusive of transaction costs and fees. Subsequently, the Company remeasure its Bitcoin investment at fair value at the end of each reporting period with changes recognized in net income through other (expense) income, net on the Company's Condensed Consolidated Statements of Operations. As of September 30, 2025, the Company held approximately 43.15 Bitcoins with a cost basis of $5.0 million and a fair value of $4.9 million.

The Company began cryptocurrency activities during the three months ended September 30, 2025. The Company purchased $5.0 million of cryptocurrency during the three months ended September 30, 2025, and recognized a loss of $79,000 associated with the change in fair value during the period. The Company did not sell any of its cryptocurrency during the three months ended September 30, 2025.

Note 7 — Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at September 30, 2025 and March 31, 2025 were as follows (in thousands):

	*September 30,*		*March 31,*
	*2025*		*2025*
Accounts payable	$	18,653	$	15,269
Accrued liabilities		6,436		7,879
Accrued stock to be issued		4,045		2,032
Lease liabilities, current		10		-
	$	29,144	$	25,180

Accrued revenue share can be attributed to monies owed to content creators who provide their podcast or other media content for the Company to sell to consumers. The Company accrues a liability based on the percentage of revenue owed to each content creator at the time that revenue is recognized. Accrued stock to be issued can be attributed to monies to be paid out to content providers in stock.

Note 8 — Notes Payable

Notes payable at September 30, 2025 and March 31, 2025 were as follows (in thousands):

	*September 30,*			*March 31,*
	*2025*			*2025*
SBA loan	$	149		$	150
Capchase loan		284			623
		433			773
Less: Current portion of Notes payable		(284	)		(623	)
Notes payable	$	149		$	150

SBA Loan

On June 17, 2020, the Company received the proceeds from a loan in the amount of less than $0.2 million from the United States. Small Business Administration (the “SBA”). Installment payments, including principal and interest, begin 12-months from the date of the promissory note. The balance is payable 30-years from the date of the promissory note, and bears interest at a rate of 3.75% per annum. There are no covenants associated with the SBA loan.

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Loan and Security Agreement

In August 2023, the Company entered into a Loan and Security Agreement with Capchase Inc. (“Capchase”) pursuant to which the Company borrowed the amount of $1.7 million to further develop and acquire certain podcasts acquired by PodcastOne and for general working capital. The debt is subordinated to the Debentures (as defined below) 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. As of September 30, 2025, the Company was in compliance with covenants under the Capchase agreement.

Maturities of notes payables as of September 30, 2025 were as follows (in thousands):

For Years Ending March 31,
2026 (remaining six months)	$	289
2027		4
2027		4
2028		4
2029		4
Thereafter		128
Total	$	433

Note 9 — Convertible Note

Securities Purchase Agreement

On May 19, 2025 (the “Closing Date”), the Company, 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) the Company sold to the Purchasers the Company’s 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 $15,250,000, and (ii) if certain conditions are satisfied as set forth in the SPA, including at least one of the Conditions (as defined below), the Company may sell at its option to the Purchasers the Company’s 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 the Company’s 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. The Company 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 the Company 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 the Company 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, the Company 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 the Company); 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 the Company). Subject to the satisfaction of certain conditions, the Company 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.

Debentures Amendment

On August 5, 2025, the Company amended certain defined terms contained in the Initial Debentures, to provide that the Company and/or its subsidiaries shall be permitted to purchase Bitcoin, Solana or Ethereum (collectively, “Crypto”) up to an amount as agreed to by the parties from time to time in one or more transactions in accordance with the investment guidelines adopted by the Company from time to time and reasonably acceptable to the Purchasers (the “Guidelines”), and that the Company may retain one or more investment managers to engage in a Bitcoin yield strategy or other active management of any purchased Crypto in accordance with the Guidelines, in each case to further enable the Company to pursue its recently announced digital asset treasury strategy. The terms of the Initial Debentures and other transactions documents entered into in connection therewith remain unchanged. Pursuant to the Security Agreement entered into by the parties in connection with the issuance of the Initial Debentures, the Purchasers will have a security interest in any purchased Crypto.

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The resulting discount from the original issuance discount and underwriting fees, of $1.6 million and is being amortized using the effective interest method. Interest expense resulting from the amortization of the discount for the three and six months ended September 30, 2025 was $0.1 million and $0.3 million, respectively.

Interest expense with respect to the Initial Debentures for the three and six months ended September 30, 2025 was $0.2 million and $0.7 million, respectively. The Initial Debentures include a covenant relating to the requirement to maintain a certain amount cash in the amount of $7.5 million.

As of September 30, 2025, the Company was in compliance with its debt covenants associated with the Initial Debentures.

Note 10 — Senior Secured Line of Credit

On June 2, 2021, the Company entered into a Business Loan Agreement (the "Original Business Loan Agreement") with East West Bank (the “Senior Lender”), which provided for a revolving credit facility collateralized by all of the assets of the Company and its subsidiaries. In connection with the Original Business Loan Agreement, the Company issued a promissory note, dated as of June 2, 2021, to the Senior Lender in the principal amount of $7.0 million (the "Promissory Note") and established the revolving line of credit in the amount of $7.0 million (the “Revolving Credit Facility”), originally maturing on June 2, 2023.

In July 2022, the Company extended the maturity date of its revolving credit facility to June 2024 and its variable interest rate was increased to 2.5%. The Revolving Credit Facility bears interest at a variable rate equal to the Wall Street Journal Prime Rate, plus 2.5%. The interest rate for the period ended September 30, 2025 was 10.00%

On September 8, 2023 and effective as of August 22, 2023, the Company entered into a new Business Loan Agreement (the “2023 Business Loan Agreement”) with the Senior Lender, to convert the Company’s revolving credit facility with the Senior Lender into an assets backed loan credit facility with the Senior Lender, which continued to be collateralized by a first lien on all of the assets of the Company and its subsidiaries (the “ABL Credit Facility”). The 2023 Business Loan Agreement provided the Company with borrowing capacity of up to the Borrowing Base (as defined in the 2023 Business Loan Agreement). Pursuant to the 2023 Business Loan Agreement, the requirement that the Company and its related entities shall at all times maintain a certain minimum deposit with the Senior Lender was reduced from $8,000,000 to $5,000,000.

On May 31, 2024, the Company was granted an extension of 90 days on the maturity date, therefore the Revolving Credit Facility was scheduled to mature in September 2024. On November 1, 2024, the Company extended the maturity date of its promissory note issued to the Senior Lender, underlying the ABL Credit Facility, from September 15, 2024 to November 20, 2024 and the principal amount of the note was decreased to $6.0 million

On January 28, 2025, the Company entered into a new Business Loan Agreement (the “2025 Business Loan Agreement”) with the Senior 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, reflecting the Company’s 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. Pursuant to the Change in Terms Agreement, dated as of January 28, 2025 (the “2025 Change in Terms Agreement”), entered into between the Company and the Senior Lender in connection with the 2025 Business Loan Agreement, the Company is agreed to repay the remaining outstanding principal amount of the Promissory Note in 9 equal monthly payments of $400,000 each beginning February 20, 2025, and the final 10th payment of $151,291.67 on November 20, 2025. Pursuant to the 2025 Business Loan Agreement, the requirement that the Company and its related entities shall at all times maintain a certain minimum cash deposit with the Senior Lender is maintained at $5,000,000. The ABL Credit Facility continues to be collateralized by a first lien on all of the assets of the Company and its subsidiaries.

Borrowings under the ABL Credit Facility were subject to certain covenants as set forth in the 2025 Business Loan Agreement and bear interest at a rate equal to the “Money Rate” column of The Wall Street Journal (Western Edition) as determined by the Senior Lender plus 2.50%, resulting in the initial rate of 10.00% and provided, that it shall not be less than 7.50%. The Company may prepay at any time without penalty all or a portion of the amount owed to the Senior Lender. The 2025 Business Loan Agreement included customary events of default and various financial and other covenants with which the Company had to comply in order to maintain borrowing availability, including maintaining required minimum liquidity amount and Borrowing Base capacity. The occurrence of an event of default could have resulted in the acceleration of all obligations of the Company to the Senior Lender with respect to indebtedness, whether under the 2025 Business Loan Agreement or otherwise. Other covenants included, but were not limited to, covenants limiting or restricting the Company’s ability to incur indebtedness, incur liens, enter into mergers or consolidations involving debt, dispose of assets, make loans and investments and pay dividends.

In connection with the 2025 Business Loan Agreement, the Promissory Note issued to the Senior Lender continued in effect except as modified by the 2025 Business Loan Agreement and the 2025 Change in Terms Agreement.

As a result of the issuance of the Initial Debentures, the Company paid off the balance of the ABL Credit Facility in full. Interest expense for the six months ended September 30, 2025 and 2024 was $0.2 million and $0.8 million, respectively.

Note 11 — Related Party Transactions

As of March 31, 2022, the Company had unsecured 8.5% Senior Secured Convertible Notes previously issued to Trinad Capital (as defined below). In February 2023, the Trinad Notes along with accrued interest thereunder were converted into 6,177 shares of Series A Preferred Stock, with a stated value of $1,000 per share of Series A Preferred Stock and convertible at $2.10 per share, and Trinad Capital also received 200,000 shares of the Company's common stock. On April 1, 2024, Trinad Capital converted 3,395.09 shares of Series A Preferred Stock into 161,671 shares of the Company’s common stock and received 53,540 three-year warrants to purchase the Company’s common stock exercisable at a price of $21.00 per share. For the six months ended September 30, 2025 and 2024, the Company issued 289.69 and 228.76 shares of its Series A Preferred Stock, respectively, to Trinad Capital as dividend payments required by the terms of the Series A Preferred Stock. As of September 30, 2025, Trinad Capital owned 4,298.81 shares of Series A Preferred Stock.

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On September 8, 2023, PodcastOne completed its Direct Listing on the Nasdaq Capital Market which resulted in the Company owning 15,672,186 shares of common stock of PodcastOne along with 1,100,000 common stock warrants to purchase shares of PodcastOne's common stock with an exercise price of $3.00 per share, which remain outstanding of September 30, 2025. Also, on September 8, 2023, PodcastOne issued 147,044 shares of PodcastOne common stock to the Company's CEO as a result of his ownership of the Company's Series A Preferred Stock and its terms requiring such issuance.

During the six months ended September 30, 2025 and the year ended March 31, 2025, the Company received 584,418 and 1,315,880 shares of PodcastOne's common stock with a fair value of $0.8 million and $2.5 million, respectively, in exchange for amounts owed under a cost sharing arrangement between PodcastOne and the Company.

During the six months ended September 30, 2025 and 2024, the Company issued or reserved for issuance 2,241 and 4,611 shares of its common stock with a value of $0.1 million and $0.1 million to relatives of the CEO for services performed, respectively.

Note 12 — Leases

The Company leases locations with lease terms that are less than 12 months or are on month to month terms. Operating leases with lease terms of greater than 12 months are capitalized in operating lease right-of-use assets and operating lease liabilities in the accompanying condensed consolidated balance sheets. Rent expense for these operating leases totaled $ 0.1 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively. Rent expense for these operating leases totaled $0.2 million and $0.4 million for the six months ended September 30, 2025 and 2024, respectively.

Operating lease costs for the six months ended September 30, 2025 and 2024 consisted of the following (in thousands):

	*Six Months Ended*		*Six Months Ended*
	*September 30,*		*September 30,*
	*2025*		*2024*
Fixed rent cost	$	153	$	243
Short term lease cost		70		110
Total operating lease cost	$	223	$	353

Supplemental balance sheet information related to leases was as follows (in thousands):

	*September 30,*		*March 31,*
Operating leases	*2025*		*2025*
Operating lease right-of-use assets	$	80	$	97

Operating lease liability, current	$	10	$	-
Operating lease liability, noncurrent		76		99
Total operating lease liabilities	$	86	$	99

The operating lease right-of-use assets are included in other assets and current operating lease liabilities are included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets.

Significant judgments

Discount rate – the Company’s lease is discounted using the Company’s incremental borrowing rate of 8.5% as the rate implicit in the lease is not readily determinable.

Options – the lease term is the minimum noncancelable period of the lease. The Company does not include option periods unless the Company determined it is reasonably certain of exercising the option at inception or when a triggering event occurs.

Lease and non-lease components – non-lease components were considered and determined not to be material.

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Note 13 — Other Long-Term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	*September 30,*		*March 31,*
	*2025*		*2025*
Accrued royalties	$	7,734	$	7,392
Accrued legal		55		1,606
Accrued sales tax		3,416		2,375
Other long-term liabilities		1		863
Total other long-term liabilities	$	11,206	$	12,236

The Company classified $7.5 million and $7.4 million of accrued royalties into long term based on contractual arrangements with the royalty holders as of September 30, 2025 and March 31, 2025, respectively. In addition, the Company accrued $0.1 million and $1.6 million into long term liabilities as a result of the Sound Exchange settlement as of September 30, 2025 and March 31, 2025, respectively.

Note 14 — Commitments and Contingencies

Contractual Obligations

As of September 30, 2025, the Company is obligated under agreements with various music right holders and labels, festivals, clubs, events, concerts, artists, promoters, venues, music labels and publishers and other contractual obligations to make guaranteed payments as follows: $8.9 million for the fiscal year ending March 31, 2026, $4.5 million for the fiscal year ending March 31, 2026, $0.5 million for the fiscal year ending March 31, 2027, $0.4 million for the fiscal year ending March 31, 2028 and $0.4 million thereafter.

On a quarterly basis, the Company records the greater of the cumulative actual content acquisition costs incurred or the cumulative minimum guarantee based on forecasted usage for the minimum guarantee period. The minimum guarantee period of time is the period that the minimum guarantee relates to, as specified in each agreement, which may be annual or a longer period. The cumulative minimum guarantee, based on forecasted usage, considers factors such as listening hours, revenue, members, and other terms of each agreement that impact the Company’s expected attainment or recoupment of the minimum guarantees based on the relative attribution method.

Several of the Company’s content acquisition agreements also include provisions related to the royalty payments and structures of those agreements relative to other content licensing arrangements, which, if triggered, could cause the Company’s payments under those agreements to escalate, which included payments to be made in common stock. In addition, record labels, publishers and performing rights organizations with whom the Company has entered into direct license agreements have the right to audit the Company’s content acquisition payments, and any such audit could result in disputes over whether the Company has paid the proper content acquisition costs. However, as of September 30, 2025, the Company does not believe it is probable that these provisions of its agreements discussed above will, individually or in the aggregate, have a material adverse effect on its business, financial position, results of operations or cash flows.

On January 15, 2025, PodcastOne entered into a three-year Enterprise Service and Advertising Agreement (the “Agreement”) with ART19 LLC (“ART19”), a subsidiary of Amazon.com, Inc. to move the existing network of PodcastOne programming to the ART19 hosting platform. The Agreement is expected to drive additional monetization opportunities across PodcastOne’s vast library of popular podcasts. Pursuant to the Agreement ART19 is required to pay PodcastOne a minimum guarantee of $15.0 million over the term of the Agreement based on PodcastOne achieving certain minimum impressions amount, which guarantee is subject to adjustment as provided in the Agreement, including if PodcastOne achieves higher minimum impressions amounts. In addition, the Agreement provides for a revenue share split between PodcastOne and ART19 based on gross sales revenue achieved by PodcastOne under the Agreement. During the three and six months ended September 30, 2025 the Company recognized $1.4 million and $2.8 million in revenue associated with the minimum guarantee, respectively.

Employment Arrangements

As of September 30, 2025, the Company has an employment agreement and employment arrangement with its two named executive officers (“Section 16 Officers”) that provide salary payments of $0.7 million and target bonus compensation of up to $0.3 million on an annual basis. Furthermore, such employment agreement contains a severance clause that could require severance payments in the aggregate amount of $0.03 million (excluding the value of potential payouts of discretionary bonuses, pro-rata bonuses, and potential accelerated vesting of equity awards granted to such executive officer) to the Company’s CFO.

On June 27, 2025 and effective as of June 1, 2025 (the “Effective Date”), PodcastOne entered into a new employment agreement with Kit Gray, the Company’s current President of PodcastOne (the “Gray Employment Agreement”). Pursuant to the Gray Employment Agreement, Mr. Gray was granted, among other things, 15,000 restricted stock units of the Company.

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On June 27, 2025 and effective as of the Effective Date, the Company entered into a new employment agreement with Sue McNamara, the Company’s current Chief Revenue Officer of PodcastOne (the “McNamara Employment Agreement”). Pursuant to the McNamara Employment Agreement, Ms. McNamara was granted, among other things, 2,500 restricted stock units of the Company.

The Company’s CEO agreed to forgive his salary of $0.5 million per annum for the period from August 2021 until December 31, 2022 in exchange for shares of the Company’s common stock and/or restricted stock units to be issued in the future. As of September 30, 2025, the Company’s board of directors has not yet determined the number of shares of the Company’s common stock and/or restricted stock units to be issued to the CEO as such compensation.

Legal Proceedings

From time to time, the Company is involved in legal proceedings and other matters arising in connection with the conduct of its business activities. Many of these proceedings may be at the preliminary stages and/or seek an indeterminate amount of damages. In the opinion of management, after consultation with legal counsel, such routine claims and lawsuits are not significant and we do not currently expect them to have a material adverse effect on our business, financial condition, results of operations, or liquidity.

In April 2021, Schuyler Hoversten, a former employee of the Company, filed a complaint in the Superior Court of the State of California, County of Los Angeles (Central) against each of the Company and Mr. Ellin. The plaintiff alleged claims for breach of oral contract, breach of implied covenant of good faith and fair dealing, breach of implied contract, intentional misrepresentation, negligent misrepresentation, promissory estoppel and nonpayment of wages. Plaintiff is seeking monetary damages and punitive and exemplary damages in an amount to be proven at trial and or constitutionally permissible, as well as interest and reasonable attorneys’ fees. The trial in this matter was held in late September and early October 2025. On October 8, 2025, after a conclusion of the jury trial in this matter, the court issued an order with the jury’s verdict awarding the plaintiff a total of approximately $800,000 as monetary damages. The plaintiff may also be entitled to pre- and post-judgment interest at the statutory rate of 10%. The Company plans to appeal the verdict in this matter and believes that it has strong grounds to prevail in this matter on appeal and/or seek a settlement of this matter for a reduced amount of damages.

Note 15 — Employee Benefit Plan

The Company sponsors a 401(k) plan (the “401(k) Plan”) covering all employees. Prior to March 31, 2019, only Slacker employees were eligible to participate in the 401(k) Plan. Employees are eligible to participate in the 401(k) Plan the first day of the calendar month following their date of hire. The Company may make discretionary matching contributions to the 401(k) Plan on behalf of its employees up to a maximum of 100% of the participant’s elective deferral up to a maximum of 5% of the employees’ annual compensation. The Company’s matching contributions were not material to the financial statements for the three and six months ended September 30, 2025 and 2024.

Note 16 — Stockholders’ Deficit

Authorized Common Stock and Authority to Create Preferred Stock

The Company has the authority to issue up to 510,000,000 shares, consisting of 500,000,000 shares of the Company’s common stock, $0.001 par value per share, and 10,000,000 shares of the Company’s preferred stock, $0.001 par value per share (the “preferred stock”).

The Company may issue shares of preferred stock from time to time in one or more series, each of which will have such distinctive designation or title as shall be determined by the Company’s board of directors and will have such voting powers, full or limited, or no voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in the resolution or resolutions providing for the issue of such class or series of preferred stock as may be adopted from time to time by the Company’s board of directors. The Company’s board of directors will have the power to increase or decrease the number of shares of preferred stock of any series after the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased, the shares constituting such decrease will resume the status of authorized but unissued shares of preferred stock.

It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of the common stock until and unless the Company’s board of directors determines the specific rights of the holders of the preferred stock; however, these effects may include: restricting dividends on the common stock, diluting the voting power of the common stock, impairing the liquidation rights of the common stock, or delaying or preventing a change in control of the Company without further action by the stockholders.

Reverse Stock Split

Effective September 26, 2025, the Company effected a 1-for-10 reverse stock split of its issued and outstanding shares of Common Stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 10 shares of the Company's issued and outstanding pre- Reverse Stock Split shares of common stock, were combined into one share of Common Stock. Stockholders who otherwise were entitled to receive fractional shares of 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 the Company’s outstanding warrants and its 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 the Company's warrants and stock options and conversion of its other convertible instruments held immediately prior to the Reverse Stock Split represent one share of 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 common stock attributable to the Company's warrants and stock options and the conversion price of its other convertible instruments immediately prior to the Reverse Stock Split was proportionately increased by a multiple of 10 following the Reverse Stock Split.

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Stock Repurchase Program

In December 2020, the Company announced that its board of directors has authorized the repurchase of up to two million shares of its outstanding common stock from time to time. In November 2022, the Company announced that its board of directors has authorized it to expand its stock repurchase program by up to an additional $2,000,000 worth of shares of its common stock to be repurchased from time to time. The timing, price, and quantity of purchases under the program will be at the discretion of our management and will depend upon a variety of factors including share price, general and business market conditions, compliance with applicable laws and regulations, corporate and regulatory requirements, and alternative uses of capital. The program may be expanded, suspended, or discontinued by our board of directors at any time. Although our board of directors has authorized this stock repurchase program, there is no guarantee as to the exact number of shares, if any, that will be repurchased by us, and we may discontinue purchases at any time that management determines additional purchases are not warranted. We cannot guarantee that the program will be consummated, fully or all, or that it will enhance long-term stockholder value. The program could affect the trading price of our common stock and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our common stock. In addition, this program could diminish our cash reserves. The Company purchased 61,761 and 41,816 shares of its common stock under its stock repurchase program for the six months ended September 30, 2025 and 2024 for a total of $0.6 million and $1.0 million, respectively.

Series A Preferred Stock

The Series A Preferred Stock is convertible at any time at a Holder’s option into shares of the Company’s common stock, at a price of $2.10 per share of common stock, bears a dividend of 12% per annum, is perpetual and has no maturity date. At the option of the Company, the dividend was to be paid in-kind for the first 12 months after April 1, 2024, and thereafter, the Holders had the option to select whether subsequent dividend payments shall be paid in kind or in cash; provided, that as long as any Series A Preferred Stock is held by the Harvest Funds (as defined below), Trinad Capital shall receive the dividend solely in kind. The Series A Preferred Stock shall have no voting rights, except as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series A Perpetual Convertible Preferred Stock of the Company, dated as of February 2, 2023 (the “Certificate of Designation”) or as otherwise required by law.

The Company had the option (the “Optional Redemption Right”), on or before the Mandatory Redemption Date (as defined herein), to purchase up to $5,000,000 in aggregate of the then outstanding shares of Series A Preferred Stock held by the Harvest Funds at a cash redemption price per share of Series A Preferred Stock equal to the Stated Value (the “Redemption Price”). The Company was required on or before August 3, 2024 (the “Mandatory Redemption Date”), and in any event if prior to the Mandatory Redemption Date the Company consummated any financing transaction in which the Company, directly or indirectly, raised, in aggregate, gross proceeds of more than $20,000,000 of new capital, to purchase $5,000,000 in aggregate of the then outstanding shares of Series A Preferred Stock held by the Harvest Funds (the “Mandatory Redemption Amount”) at the Redemption Price (the “Mandatory Redemption”). If the Optional Redemption Right was exercised up to the full $5,000,000 amount, the Mandatory Redemption requirement would be terminated; provided that if the Optional Redemption Right was exercised in any amount less than $5,000,000, the Mandatory Redemption Amount would be reduced by the amount that the Optional Redemption Right has been elected and exercised. Without the prior express consent of the majority of the votes entitled to be cast by the holders of Series A Preferred Stock outstanding at the time of such vote (the “Majority Holders”), the Company shall not authorize or issue any additional or other shares of its capital stock that are (i) of senior rank to the Series A Preferred Stock or (ii) of pari passu rank to the Series A Preferred Stock, in each case in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation. Pursuant to the Letter Agreements (as defined below), the Harvest Funds agreed (x) that any future dividends payable on the Series A Preferred Stock shall be paid in-kind or in cash at the option of the Company; provided, that as long as any Series A Preferred Stock is held by the Harvest Funds, Trinad Capital shall receive the dividend solely in kind, (y) to delete the Mandatory Redemption requirement.

Pursuant to the Exchange Agreements, the Company agreed that at any time that any of the shares of Series A Preferred Stock issued to the Harvest Funds are outstanding, (i) to directly or through its 100% owned subsidiaries (as applicable), to own on a fully diluted basis at least 66% of the total equity and voting rights of any and all classes of securities of each of PodcastOne, Slacker, PPV One, Inc., and LiveXLive Events, LLC subsidiaries of the Company, (ii) not to issue shares of its common stock or convertible equity securities at a price less than $2.10 per share (subject to certain exceptions), provided, that such consent shall not be required in connection with any merger, acquisition or other business combinations of the Company and/or any of its subsidiaries with any unaffiliated third party, (iii) not to raise more than an aggregate of $20,000,000 of capital in one or more offerings, including without limitation, one or more equity or debt offerings or a combination thereof, on an accumulated basis commencing after February 3, 2023 (the “Qualified Offering”); provided, that such consent shall not be required for any equity financing of the Company at a price of $2.25 per share or above, and (iv) if after February 3, 2023 the Company distributes any of its assets or any shares of its common stock or Common Stock Equivalents (as defined in the Exchange agreements) of any of its subsidiaries pro rata to the record holders of any class of shares of its common stock, the Company shall distribute to the Holders its pro rata portion of any such distribution (calculated on an as-converted basis with respect to the then outstanding Series A Preferred Stock) concurrently with the distribution to the then record holders of any class of its common stock (including an applicable distribution of shares of PodcastOne’s common stock to the Harvest Funds in connection with PodcastOne’s Spin-Out (as defined below) and special dividend of PodcastOne’s common stock to the Company’s stockholders of record), in each case without the Majority Holders’ prior written consent. Any breach of the aforementioned covenants shall constitute a material breach, which if uncured, shall result in the issuance of an aggregate of 56,473 shares of the Company’s restricted common stock (the “Default Shares”) to the Holders for each five trading days (or pro rata thereof) after the date of the breach; provided, that if such breach is cured within the applicable cure period, no Default Shares shall be issued.

On April 1, 2024, the Company entered into Letter Agreements (collectively, the “Agreements”) with (i) Harvest Small Cap Partners Master, Ltd. (“HSCPM”), (ii) Harvest Small Cap Partners, L.P. (“HSCP” and together with HSCPM, the “Harvest Funds”), and (iii) Trinad Capital Master Fund Ltd., a fund controlled by Mr. Ellin, the Company’s Chief Executive Officer, Chairman, director and principal stockholder (“Trinad Capital” and collectively with the Harvest Funds, the “Holders”), the holders of the Company’s Series A Perpetual Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), with a stated value of $1,000 per share. Pursuant to the Agreements (i) the Holders converted approximately $11.4 million worth of shares of Series A Preferred Stock into shares of the Company’s common stock, at a price of $2.10 per share, as follows: HSCPM converted 5,602.09 shares of Series A Preferred Stock into 2,667,664 shares of the Company’s common stock, HSCP converted 2,397.91 shares of Series A Preferred Stock into 1,141,860 shares of the Company’s common stock, and Trinad Capital converted 3,395.09 shares of Series A Preferred Stock into 1,616,709 shares of the Company’s common stock (collectively, the “Shares”), and (ii) HSCPM, HSCP and Trinad Capital received 910,340, 389,660 and 535,399 three-year warrants to purchase the Company’s common stock exercisable at a price of $2.10 per share (collectively, the “Warrants”).

Each share of Series A Preferred Stock is entitled to receive cumulative dividends payable at a rate per annum of 12% of the Series A Stated Value. During the six months ended September 30, 2025 and 2024, the Company issued 426 and 378 shares of its Series A Preferred Stock as a dividend in accordance with terms of the Certificate of Designation. As of September 30, 2025, there were 7,947 shares of Series A Preferred Stock issued and outstanding, and 378,417 shares of the Company’s common stock were underlying such shares of Series A Preferred Stock as of such date based on its conversion price.

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Preferred Stock Exchange

On July 15, 2025, the Company entered into letter agreements (collectively, the “Agreements”) with the Harvest Funds and Trinad Capital Master Fund Ltd., a fund controlled by Mr. Ellin, the Company’s Chief Executive Officer, Chairman, director and principal stockholder (“Trinad Capital” and collectively with the Harvest Funds, the “Holders”), the holders of the Company’s Series A Preferred Stock, which has a stated value of $1,000 per share. Pursuant to the Agreements (i) the Harvest Funds exchanged $4,500,000 worth of its shares of Series A Preferred Stock into 3,000,000 shares of the Company’s common stock, at a price of $1.50 per share, and Trinad Capital exchanged $2,250,000 worth of shares of its Series A Preferred Stock into 1,500,000 shares of the Company’s common stock at the same price (collectively, the "Shares"), and (ii) the Harvest Funds and Trinad Capital received 3,000,000 and 1,500,000 three-year warrants to purchase the Company’s common stock exercisable at a price of $0.01 per share (collectively, the "Warrants").

The Company further agreed, on or prior to the date that is 45 days after the Effective Date, to prepare and file with the SEC a Registration Statement on Form S-3 (or such other form as applicable) covering the resale under the Securities Act of the Shares, the Warrants and the Warrant Shares. The Company agreed to use its commercially reasonable best efforts to cause such registration statement to be declared effective promptly thereafter on or before 45 days after the filing of such registration statement (or if the SEC issues any comments with respect to such registration statement, on or before 90 days after the filing of such registration statement). Upon effectiveness of such Registration Statement, the Company agreed to use its reasonable best efforts to keep the Registration Statement effective with the SEC for a period equal to three years from the Effective Date for the Warrants, and with respect to the Warrant Shares, so long as any Warrants are outstanding, and to supplement, amend and/or re-file such Registration Statement to comply with such effectiveness requirement.

Equity Offering

On July 15, 2025, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Lucid Capital Markets, LLC (the “Underwriter”) pursuant to which the Company issued and sold to the Underwriter 1,360,833 shares (the “Shares”) of the Company’s common stock at an offering price of $7.50 per Share and which included the grant to the Underwriter of an option for the issuance and sales of up to 177,500 additional Shares (the “Option”) to be sold by the Company (the “Offering”). The aggregate gross proceeds to the Company from the Offering was approximately $9.5 million (including the exercise of the Underwriter’s Option), after deducting an underwriting discount of 7% of the price to the public, but before deducting expenses payable by the Company in connection with the Offering. Pursuant to the Underwriting Agreement the Company has also agreed to issue the Underwriter’s common stock purchase warrants to purchase up to 4% of the securities sold in the Offering at an exercise price of $9.375. On July 16, 2025, the Underwriter exercised the Option. The Offering, including the Option, closed on July 17, 2025.

LiveOne 2016 Equity Incentive Plan

The Company’s board of directors and stockholders approved the Company’s 2016 Equity Incentive Plan, as amended (the “2016 Plan”) which reserved a total of 1,260,000 shares of the Company’s common stock for issuance. On September 17, 2020, our stockholders approved the amendment to the 2016 Plan to increase the number of shares available for issuance under the plan by 500,000 shares increasing the total up to 1,760,000 shares which the Company formally increased on June 30, 2021. Incentive awards authorized under the 2016 Plan include, but are not limited to, nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and stock appreciation rights. If an incentive award granted under the 2016 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to the Company in connection with the exercise of an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2016 Plan.

The Company recognized share-based compensation expense of $3.6 million and $4.0 million during the six months ended September 30, 2025 and 2024, respectively. The Company recognized share-based compensation expense of $2.2 million and $2.3 million during the six months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, unrecognized compensation costs for unvested awards was $0.3 million, which is expected to be recognized over a weighted-average service period of 1.5 years. The total tax benefit recognized related to share-based compensation expense was none for each of the three and six months ended September 30, 2025 and 2024.

The following table summarizes the activity of our options issued under the 2016 Plan to employees during the six months ended September 30, 2025:

				*Weighted-Average*
				*Exercise Price per*
	*Number of Shares*			*Share*
Outstanding as of March 31, 2025		220,167		$	37.20
Granted		-			-
Exercised		-			-
Forfeited or expired		(10,001	)	$	50.60
Outstanding as of September 30, 2025		210,166		$	37.36
Exercisable as of September 30, 2025		209,916		$	37.34

The following table summarizes the activity of our restricted stock units under the 2016 Equity Plan issued to employees during the six months ended September 30, 2025:

	*Number of Shares*
Outstanding as of March 31, 2025		49,395
Granted		17,500
Vested		(16,853	)
Cancelled		(5,059	)
Outstanding as of September 30, 2025		44,983

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PodcastOne 2022 Equity Plan

On December 15, 2022, PodcastOne’s board of directors and the Company as the sole stockholder, through its wholly owned subsidiary, LiveXLive PodcastOne, Inc., approved PodcastOne’s 2022 Equity Incentive Plan (the “2022 Plan”) which reserved a total of 2,000,000 shares of PodcastOne’s common stock for issuance. Incentive awards authorized under the 2022 Plan include, but are not limited to, nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section 162(m) of the Code and stock appreciation rights. If an incentive award granted under the 2022 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to PodcastOne in connection with the exercise of an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2022 Plan.

The following table summarizes the activity of PodcastOne's restricted stock units issued to its employees under the 2022 Plan during the six months ended September 30, 2025:

	*Number of*
	*Shares*
Nonvested as of March 31, 2025		232,350
Granted		850,000
Vested		(120,150	)
Forfeited or expired		(75,000	)
Nonvested as of September 30, 2025		887,200

Unrecognized compensation costs for unvested PodcastOne restricted stock units issued to employees was $2.1 million, which is expected to be recognized over a weighted-average service period of 1.64 years.

The following table summarizes the stock compensation expense for the three and six months ended September 30, 2025 and 2024:

	*Three Months Ended*				*Six Months Ended*
	*September 30,*				*September 30,*
	*2025*		*2024*		*2025*		*2024*
Stock-based compensation expense
Cost of sales	$	1,107	$	335	$	2,126	$	650
Sales and marketing		15		101		33		62
Product development		45		144		98		262
General and administrative		996		1,711		1,362		3,017
Total stock-based compensation expense	$	2,163	$	2,291	$	3,619	$	3,991

Non- Controlling Interest

On September 8, 2023, the Company completed its spin out of PodcastOne from the Company with PodcastOne becoming a standalone publicly trading company (the "Spin-Out"), as a result of which 4.3 million shares of PodcastOne common stock were issued to holders outside of the Company resulting in a non-controlling interest in PodcastOne of 21.64%. The stock dividend of 4.3 million shares was a non-reciprocal transfer between PodcastOne and non-LiveOne shareholders. As a result, the transaction was recorded as a change in non-controlling interest under ASC 810, which resulted in an increase to non-controlling interest of $ $1.5 million. In the Spin-Out, PodcastOne issued an additional 3.2 million shares to non-LVO holders primarily from the conversion of the PC1 Bridge Loan which resulted in a non-controlling interest of 26.50%, resulting in an increase of $2.5 million to non-controlling interest within the accompanying condensed consolidated statement of stockholders' deficit and mezzanine equity during the year ended March 31, 2024. In addition, as a result of the completion of the Spin-Out and PodcastOne's shares of common stock being publicly traded, the variability in the terms of the warrants issued as part of the PC1 Bridge Loan was resolved so that the warrants issued to purchase PodcastOne's common stock were reclassified to equity and classified within non-controlling interest in the amount of $5.9 million during the year ended March 31, 2024. The Company had a non-controlling interest of 29.29% as of September 30, 2025.

Note 17 — Business Segments and Geographic Reporting

The Company determined its operating segments in accordance with ASC 280.

Beginning in the second quarter of Fiscal 2024, management has determined that the Company has three operating segments (PodcastOne, Slacker and Media Group). The Audio Group consists of the Company's PodcastOne and Slacker subsidiaries and the Media Group consists of the Company's remaining subsidiaries. As a result of the Spin-Out of PodcastOne, the Company’s chief operating decision maker (“CODM”) began to make decisions and allocate resources based on three operating segments of the business (PodcastOne, Slacker and Media group). The Company’s operating segments reflects the manner in which its CODM reviews results and allocates resources. The CODM reviews operating segment performance exclusive of share-based compensation expense, amortization of intangible assets, depreciation, and other expenses (including legal fees, expenses, and accruals) related to acquisitions, associated integration activities, and certain other non-cash charges.

The Company’s three operating segments are also consistent with its internal organizational structure, which is the way the Company assesses operating performance and allocates resources.

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Customers

The Company has one external customer that accounts for more than 10% of its revenue and accounts receivable. Such original equipment manufacturer (the “OEM”) provides premium Slacker service in its new vehicles. Total revenues from the OEM were $1.4 million and $18.5 million for the three months ended September 30, 2025 and 2024, respectively. Total revenues from the OEM were $3.1 million and $36.0 million for the six months ended September 30, 2025 and 2024, respectively. Total receivables from the OEM were 9% and 29% of total accounts receivable as of September 30, 2025 and March 31, 2025, respectively.

Segment and Geographic Information

The Company’s operations are based in the United States. All material revenues of the Company are derived from the United States. All long-lived assets of the Company are located in the United States, of which $0.1 million resides in PodcastOne, $2.5 million in Slacker and $0.1 million is attributed to our Media Operations as of September 30, 2025.

We manage our working capital on a consolidated basis. Accordingly, segment assets are not reported to, or used by, our management to allocate resources to or assess performance of our segments, and therefore, total segment assets and related depreciation and amortization have not been presented.

The following tables present the results of operations for our reportable segments for the three and six months ended September 30, 2025 and 2024:

	*Three months ended*
	*September 30, 2025*
										*Corporate*
	*PodcastOne*			*Slacker*			*Media*			*expenses*			*Total*

Revenue	$	15,156		$	3,071		$	535		$	-		$	18,762
Net income (loss)	$	(975	)	$	(716	)	$	(1,035	)	$	(2,979	)	$	(5,705	)

	Three months ended
	September 30, 2024
									Corporate
	PodcastOne			Slacker		Media			expenses			Total

Revenue	$	12,154		$	19,558	$	882		$	-		$	32,594
Net income (loss)	$	(1,669	)	$	3,866	$	(1,687	)	$	(2,827	)	$	(2,317	)

	*Six months ended*
	*September 30, 2025*
										*Corporate*
	*PodcastOne*			*Slacker*			*Media*			*expenses*			*Total*

Revenue	$	30,150		$	6,455		$	1,364		$	-		$	37,969
Net income (loss)	$	(2,029	)	$	(499	)	$	(2,026	)	$	(5,015	)	$	(9,569	)

	Six months ended
	September 30, 2024
									Corporate
	PodcastOne			Slacker		Media			expenses			Total

Revenue	$	25,312		$	38,262	$	2,098		$	-		$	65,672
Net income (loss)	$	(3,035	)	$	7,218	$	(3,078	)	$	(4,980	)	$	(3,875	)

Geographic Information

All material revenues of the Company are derived from the United States. All long-lived assets of the Company are located in the United States.

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Item 2. 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.

Table of Contents

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.

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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

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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.

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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.

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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.

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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.

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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

	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

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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.

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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	%

LiveOne, Inc. 10-Q