gaia-10q_20210930.htm

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended September 30, 2021

☐	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 000-27517

GAIA, INC.

(Exact name of registrant as specified in its charter)

COLORADO

84-1113527

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

833 WEST SOUTH BOULDER ROAD,

LOUISVILLE, COLORADO 80027

(Address of principal executive offices)

(303) 222-3600

(Registrant’s telephone number, including area code)

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



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	GAIA	NASDAQ Global 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 was 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 ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class		Outstanding at October 28, 2021
Class A Common Stock ($0.0001 par value)		13,917,987
Class B Common Stock ($0.0001 par value)		5,400,000

GAIA, INC.

FORM 10-Q

INDEX

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):	3

	Condensed Consolidated Balance Sheets at September 30, 2021 and December 31, 2020	4

	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020	5

	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2021 and 2020	6

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	7

	Notes to interim condensed consolidated financial statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15

Item 4.	Controls and Procedures	16

PART II—OTHER INFORMATION		17

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults Upon Senior Securities	17

Item 4.	Mine Safety Disclosures	17

Item 5.	Other Information	17

Item 6.	Exhibits	18

	SIGNATURES	19

PART I—FINANCIAL INFORMATION

Item 1.Financial Statements (Unaudited)

Unaudited Interim Condensed Consolidated Financial Statements

We have prepared our unaudited interim condensed consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission. While certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to these rules and regulations, we believe that the disclosures made are adequate to make the information not misleading. In our opinion, the unaudited interim condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly, in all material respects, our consolidated financial position as of September 30, 2021, the interim results of operations for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. Operating results for the three and nine months ended September 30, 2021 and 2020 are not necessarily indicative of the results that may be expected for a full year or any future interim period. These interim statements have not been audited. The balance sheet as of December 31, 2020 was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K. The interim condensed consolidated financial statements contained herein should be read in conjunction with our audited consolidated financial statements, including the notes thereto, for the year ended December 31, 2020.

GAIA, INC.

Condensed Consolidated Balance Sheets

	September 30,			December 31,
(in thousands, except share and per share data)	2021			2020
	(unaudited)
ASSETS
Current assets:
Cash	$	14,428		$	12,605
Accounts receivable		2,589			2,024
Prepaid expenses and other current assets		1,863			1,746
Total current assets		18,880			16,375
Media library, software and equipment, net		42,246			39,231
Right-of-use lease asset, net		8,061			8,622
Real estate, investment and other assets, net		29,199			28,500
Goodwill		17,289			17,289
Total assets	$	115,675		$	110,017
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued and other liabilities	$	9,855		$	8,947
Deferred revenue		14,130			12,376
Total current liabilities		23,985			21,323
Long-term mortgage, net		6,146			6,250
Long-term lease liability		7,416			7,952
Deferred taxes		257			257
Total liabilities		37,804			35,782
Shareholders' equity:
Class A common stock, $0.0001 par value, 150,000,000 shares authorized, 13,917,987 and 13,782,951 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		1			1
Class B common stock, $0.0001 par value, 50,000,000 shares authorized, 5,400,000 shares issued and outstanding at September 30, 2021 and December 31, 2020		1			1
Additional paid-in capital		152,055			150,067
Accumulated deficit		(74,186	)		(75,834	)
Total shareholders' equity		77,871			74,235
Total liabilities and shareholders' equity	$	115,675		$	110,017

See accompanying notes to the interim condensed consolidated financial statements.

GAIA, INC.

Condensed Consolidated Statements of Operations

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
(in thousands, except per share data)	2021			2020		2021			2020
	(unaudited)					(unaudited)
Revenues, net	$	20,405		$	17,537	$	58,744		$	48,201
Cost of revenues		2,626			2,264		7,573			6,248
Gross profit		17,779			15,273		51,171			41,953
Expenses:
Selling and operating		15,544			13,479		44,820			42,354
Corporate, general and administration		1,509			1,426		4,506			4,716
Total operating expenses		17,053			14,905		49,326			47,070
Income (loss) from operations		726			368		1,845			(5,117	)
Interest and other income (expense), net		(79	)		5,946		(197	)		5,395
Income before income taxes		647			6,314		1,648			278
Provision for income taxes		—			—		—			69
Net income	$	647		$	6,314	$	1,648		$	209

Earnings per share:
Basic	$	0.03		$	0.33	$	0.09		$	0.01
Diluted	$	0.03		$	0.32	$	0.08		$	0.01
Weighted-average shares outstanding:
Basic		19,318			19,183		19,262			18,834
Diluted		19,812			19,737		19,787			19,442

See accompanying notes to the interim condensed consolidated financial statements.

GAIA, INC.

Condensed Consolidated Statements of Changes in Shareholders’ Equity

	(unaudited)
(in thousands, except shares)	Total Shareholders' Equity			Accumulated Deficit			Common Stock Amount		Additional Paid-in Capital		Common Stock Shares
Balance at December 31, 2019	$	68,914		$	(76,353	)	$	2	$	145,265		18,423,231
Issuance of Gaia, Inc. common stock for RSU releases, employee stock purchase plan, stock option exercises and share-based compensation		585			—			—		585		335,712
Net loss		(3,580	)		(3,580	)		—		—		—
Balance at March 31, 2020	$	65,919		$	(79,933	)	$	2	$	145,850		18,758,943
Issuance of Gaia, Inc. common stock for RSU releases, stock option exercises and share-based compensation		410			—			—		410		26,920
Issuance of Gaia, Inc. common stock for note conversion and business combination		2,929			—			—		2,929		386,887
Net loss		(2,525	)		(2,525	)		—		—		—
Balance at June 30, 2020	$	66,733		$	(82,458	)	$	2	$	149,189		19,172,750
Issuance of Gaia, Inc. common stock for RSU releases, stock option exercises and share-based compensation		404			—			—		404		10,201
Net income		6,314			6,314			—		—

SEC Form 10-Q filed by Gaia, Inc.