podc20260630c

podc20260630c_10q.htm

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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 June 30, 2026

☐ 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: 001-41795

PODCASTONE, INC.

(Exact name of registrant as specified in its charter)

Delaware		35-2503373
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

345 North Maple Drive Suite 295 Beverly Hills, CA		90210
(Address of principal executive offices)		(Zip Code)

(310) 858-0888

(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, $0.00001 par value per share		PODC		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 August 12, 2026, there were 30,252,696 shares of the registrant’s common stock, $0.00001 par value per share, issued and outstanding.

Table of Contents

PODCASTONE, INC.

TABLE OF CONTENTS

			Page
PART I — FINANCIAL INFORMATION			F-1

	Item 1.	Financial Statements	F-1

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15

	Item 4.	Controls and Procedures	15

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	19

	Item 3.	Defaults Upon Senior Securities	20

	Item 4.	Mine Safety Disclosures	20

	Item 5.	Other Information	20

	Item 6.	Exhibits	21

		Signatures	22

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

	Page
Condensed Consolidated Balance Sheets as of June 30, 2026 (unaudited) and March 31, 2026	F-2

Condensed Consolidated Statements of Operations for the three months ended June 30, 2026 and 2025 (unaudited)	F-3

Condensed Consolidated Statement of Stockholders’ Equity for the three months ended June 30, 2026 and 2025 (unaudited)	F-4

Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2026 and 2025 (unaudited)	F-5

Notes to the Condensed Consolidated Financial Statements (unaudited)	F-6 – F-21

F-1

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PODCASTONE, INC.

Condensed Consolidated Balance Sheets

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

	*June 30,*			*March 31,*
	*2026*			*2026*
	(Unaudited)			(Audited)
Assets
Current Assets
Cash and cash equivalents	$	7,014		$	3,509
Accounts receivable, net		7,588			7,331
Prepaid expense and other current assets		137			231
Total Current Assets		14,739			11,071
Property and equipment, net		173			204
Goodwill		12,041			12,041
Intangible assets, net		455			613
Related party receivable		10,877			5,268
Total Assets	$	38,285		$	29,197

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities	$	8,481		$	6,932
Lease liabilities		44			70
Related party payable, net		5,528			5,004
Total Current Liabilities		14,053			12,006
Lease liabilities		97			97
Total Liabilities		14,150			12,103

Commitments and Contingencies (Note 8)

Stockholders’ Equity
Preferred stock, $0.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of June 30, 2026 and March 31, 2026, respectively		-			-
Common stock, $0.00001 par value; 100,000,000 shares authorized; 30,134,290 and 27,315,634 shares issued and outstanding as of June 30, 2026 and March 31, 2026, respectively		-			-
Additional paid in capital		64,406			55,807
Accumulated deficit		(40,271	)		(38,713	)
Total stockholders’ equity		24,135			17,094
Total Liabilities and Stockholders’ Equity	$	38,285		$	29,197

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

F-2

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PODCASTONE, INC.

Condensed Consolidated Statements of Operations

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

	*Three Months Ended*
	*June 30,*
	*2026*			*2025*

Revenue:	$	16,125		$	14,994

Operating expenses:
Cost of sales		14,223			13,555
Sales and marketing		783			879
Product development		12			12
General and administrative		2,505			1,477
Amortization of intangible assets		158			125
Total operating expenses		17,681			16,048
Loss from operations		(1,556	)		(1,054	)

Other income (expense):
Other income (expense)		(2	)		-
Total other (expense) income, net		(2	)		-

Loss before provision for income taxes		(1,558	)		(1,054	)

Provision for income taxes		-			-
Net loss	$	(1,558	)	$	(1,054	)

Net loss per share – basic and diluted	$	(0.05	)	$	(0.04	)
Weighted average common shares – basic and diluted		28,813,806			24,133,630

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

F-3

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PODCASTONE, INC.

Condensed Consolidated Statements of Stockholders’ Equity

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

					*Additional*					*Total*
	*Common Stock*				*Paid in*		*Accumulated*			*Stockholders’*
	*Shares*		*Amount*		*Capital*		*Deficit*			*Equity*
Balance as of March 31, 2026		27,315,634	$	-	$	55,807	$	(38,713	)	$	17,094
Stock-based compensation		-		-		430		-			430
Vested employee restricted stock units		201,180		-		-		-			-
Exercise of common stock warrants		2,417,331		-		7,252		-			7,252
Common stock issued for services		200,145		-		917		-			917
Net loss		-		-		-		(1,558	)		(1,558	)
Balance as of June 30, 2026		30,134,290	$	-	$	64,406	$	(40,271	)	$	24,135

					*Additional*					*Total*
	*Common Stock*				*Paid in*		*Accumulated*			*Stockholders’*
	*Shares*		*Amount*		*Capital*		*Deficit*			*Equity*
Balance as of March 31, 2025		26,016,107	$	-	$	51,211	$	(36,069	)	$	15,142
Stock-based compensation		-		-		66		-			66
Contribution from parent		237,113		-		460		-			460
Common stock issued for services		63,542		-		102		-			102
Net loss		-		-		-		(1,054	)		(1,054	)
Balance as of June 30, 2025		26,316,762	$	-	$	51,839	$	(37,123	)	$	14,716

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

F-4

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PODCASTONE, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	*Three Months Ended*
	*June 30,*
	*2026*			*2025*
Cash Flows from Operating Activities:
Net loss	$	(1,558	)	$	(1,054	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		164			241
Stock-based compensation		2,897			1,465
(Reversal of) Provision for credit losses		(84	)		-
Changes in operating assets and liabilities:
Accounts receivable		(173	)		(573	)
Prepaid expenses and other current assets		50			99
Related party receivables/payables		(3,335	)		435
Accounts payable and accrued liabilities		1,592			290
Other liabilities		-			-
Net cash (used in) provided by operating activities		(447	)		903

Cash Flows from Investing Activities:
Purchases of property and equipment		-			(112	)
Net cash used in investing activities		-			(112	)

Cash Flows from Financing Activities:
Proceeds from the issuance of common stock warrants		3,952			-
Net provided by financing activities		3,952			-

Net change in cash and cash equivalents		3,505			791
Cash and cash equivalents, beginning of period		3,509			1,079
Cash and cash equivalents, end of period	$	7,014		$	1,870

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

Supplemental disclosure of non-cash investing and financing activities:
Common stock accrued for to repay with intercompany balance	$	-		$	460

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

F-5

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PODCASTONE, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months Ended June 30, 2026 and 2025

Note 1 — Organization and Basis of Presentation

Organization

PodcastOne, Inc. (“we,” “us,” “our”, the “Company” or “PodcastOne”), is a Delaware corporation headquartered in Beverly Hills, California. The Company is a leading podcast platform and publisher that makes its content available to audiences via all podcasting distribution platforms, including its website (www.podcastone.com), its PodcastOne app, Apple Podcasts, Spotify, Amazon Music and more.

The Company was incorporated in the State of Delaware on February 25, 2014, and is a majority owned subsidiary of LiveOne, Inc. (“LiveOne”), a Nasdaq listed company. On July 1, 2020, LiveOne through its wholly owned subsidiary, LiveXLive PodcastOne, Inc., acquired the Company. Acquisitions are included in the Company’s 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. In connection with the acquisition, the accounts of the Company were adjusted using the push down basis of accounting to recognize the allocation of the net assets acquired which was determined to be $16.1 million. In accordance with the push down basis of accounting, the Company’s net assets were adjusted to their fair values as of the date of the acquisition based upon an independent appraisal. The Company has two wholly owned subsidiaries, Courtside, LLC, a Delaware limited liability company, and PodcastOne Sales, LLC, a California limited liability company.

Basis of Presentation

The results of operations and financial position of the Company are consolidated with LiveOne’s financial statements and these financial statements have been derived as if the Company had operated on a standalone basis during the three months ended June 30, 2026 and 2025. 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, 2026, 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 months ended June 30, 2026. The amounts recorded for related party transactions with LiveOne may not be considered arm’s length transactions and therefore, the financial statements may not necessarily reflect the Company’s results of operations, financial position and cash flows had the Company engaged in such transactions with an unrelated third party during the three months ended June 30, 2026 and 2025. Accordingly, the Company’s historical financial information is not necessarily indicative of what the Company’s results of operations, financial position and cash flows will be in the future, if and when the Company contracts at arm’s length with unrelated third parties for services they receive from LiveOne. The results for the three months ended June 30, 2026 are not necessarily indicative of the results expected for the full fiscal year ending March 31, 2027 (“fiscal 2027”). The condensed consolidated balance sheet as of March 31, 2026 has been derived from the Company’s audited balance sheet included in the Company’s Annual Report on Form 10-K (the "Annual Report"), filed with the United States Securities and Exchange Commission (the “SEC”) on June 29, 2026.

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 in accordance with Article 10 of Regulation S-X. They do not include all the information and footnotes required by GAAP for complete audited financial statements. Therefore, these interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Annual Report.

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.

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The Company’s principal sources of liquidity have historically been its debt issuances and its cash and cash equivalents (which cash and cash equivalents amounted to $7.0 million as of June 30, 2026). The Company has an accumulated deficit of $40.3 million and working capital of $1.4 million as of June 30, 2026. 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.

The Company is looking for additional financing sources to attempt to secure additional interim financing, which is needed to continue its current level of business operations and satisfy its current obligations, unless such financing is provided by LiveOne, if at all. In the absence of additional sources of liquidity, management anticipates that existing cash resources will not be sufficient to meet current operating and liquidity needs beyond July 2027. There is no assurance that management will be able to obtain additional liquidity or be successful in raising additional funds or that such required funds, if available, or that LiveOne will provide any financing to the Company, if at all, or that any such financing will be available on attractive terms or that it will not have a significant dilutive effect on the Company’s existing stockholders. In addition, management is unable to determine at this time whether any of these potential sources of liquidity will be adequate to support the Company’s future business operations. While the Company does not currently anticipate delays or hindrances to its current business operations and initiatives schedule due to liquidity constraints, without additional funding the Company may not be able to continue its current level of business operations in the future. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business.

Principles of Consolidation

The Company's interim unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Acquisitions are included in the Company’s interim audited 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.

LiveOne Reverse Stock Split

Effective September 26, 2025, LiveOne 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 LiveOne's issued and outstanding pre-Reverse Stock Split shares of common stock, $0.001 par value per share, were combined into one share of LiveOne's common stock. Stockholders who otherwise were entitled to receive fractional shares of LiveOne's common stock received cash (without interest) in lieu of any fractional shares. As a result of the Reverse Stock Split, equitable adjustments corresponding to the Reverse Stock Split ratio were made to LiveOne’s outstanding warrants and its other convertible instruments and upon the exercise or vesting of all stock options such that every 10 shares of LiveOne's common stock that may be issued upon the exercise of LiveOne's warrants and stock options and conversion of its other convertible instruments held immediately prior to the Reverse Stock Split represent one share of LiveOne's 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 LiveOne's common stock attributable to LiveOne'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 LiveOne's common stock share and per share data, and exercise price data for applicable LiveOne common stock equivalents, included in this Quarterly Report on Form 10-Q, have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated.

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 Annual Report, except as noted below.

Use of Estimates

The preparation of the Company’s interim unaudited condensed consolidated financial statements in conformity with 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, the fair value of the Company’s equity-based compensation awards 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.

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation.

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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 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 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.

Allocation of Costs

The Company’s interim unaudited condensed consolidated financial statements include an allocation of costs that have been incurred by LiveOne on the Company’s behalf. Such expenses incurred include, but are not limited to, salaries, benefits, share-based compensation expense, insurance, accounting, tax, legal and technology services. Such expenses were allocated to the Company based upon certain assumptions and estimates that were made in order to allocate a reasonable share of such expenses to the Company, so that the Company’s interim unaudited condensed consolidated financial statements reflect substantially all costs of doing business. The authoritative guidance to allocate such costs is set forth in Staff Accounting Bulletin, or SAB Topic 1-B “Allocations of Expenses and Related Disclosures in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity.”

Had the Company been operating on a stand-alone basis, the cost allocated would not be materially different for the three months ended June 30, 2026 and 2025, respectively.

Gross Versus Net Revenue Recognition

The Company reports revenue on a gross basis for all advertising contracts 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 and gross of revenue sharing expenses owed to the content creators. 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. The gross amount of revenue recognized is equal to the amounts received from our customer, gross of revenue sharing expenses owed to the content creators.

Advertising Revenue

Advertising revenue primarily consists 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. The Company 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. The Company estimates the fair value of the transaction price based on prices charged to similar customers and services provided for similar services. Barter revenue for the three months ended June 30, 2026 and 2025 was $7.0 million and $7.0 million, respectively.

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Cost of Sales

Cost of sales consists of direct costs comprised of revenue sharing expenses owed to content creators and commissions.

Sales and Marketing

Sales and Marketing include the direct and indirect costs related to the Company’s event advertising and marketing. Additionally, sales and marketing include merchandising advertising and royalty costs. Advertising expenses to promote the Company’s services are expensed as incurred. Advertising expenses included in sales and marketing expense were $0.1 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively.

Product Development

Product development costs not capitalized are primarily expenses for research and development, product and content development activities, including internal software development and improvement costs which have not been capitalized by the Company.

Stock-Based Compensation

Stock-based compensation is allocated to the Company from its parent LiveOne based on the amount of stock-based compensation granted to employees of the Company in the form of stock-based compensation of LiveOne in accordance with SAB Topic 1-B “Allocations of Expenses and Related Disclosures in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity.”

LiveOne and the Company measures stock-based compensation cost at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period, on an accelerated basis. LiveOne and the Company accounts for awards with graded vesting as if each vesting tranche is valued as a separate award. LiveOne and the Company uses the Black-Scholes-Merton option pricing model to determine the grant date fair value of stock options. This model requires LiveOne and the Company to estimate the expected volatility and the expected term of the stock options which are highly complex and subjective variables. The variables take into consideration, among other things, actual and projected employee stock option exercise behavior. LiveOne and the Company uses a predicted volatility of its stock price during the expected life of the options that is based on the historical performance of LiveOne and the Company’s stock price as well as including an estimate using guideline companies. The expected term is computed using the simplified method as LiveOne and the Company’s best estimate given its lack of actual exercise history. LiveOne and the Company has selected a risk-free rate based on the implied yield available on U.S. Treasury securities with a maturity equivalent to the expected term of the option. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. Compensation expense resulting from granted restricted stock units and restricted stock awards is measured at fair value on the date of grant and is recognized as share-based compensation expense over the applicable vesting period. Stock-based awards are comprised principally of stock options, restricted stock, restricted stock units (“RSUs”), and restricted stock awards (“RSAs”). Forfeitures are recognized as incurred. LiveOne records the fair value of these equity-based awards and expense at their cost ratably over related vesting periods.

During the year ended March 31, 2024, the Company began to issue equity awards in the form of RSUs directly to its employees under its 2022 Equity Incentive Plan that was approved in December 2022.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Company’s consolidated statements of operations in the period that includes the enactment date.

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Earnings (Loss) Per Share

Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. 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 consist of stock options issued to employees, directors, vendors and consultants, restricted stock units, and convertible notes would be excluded from the diluted earnings per share calculation because their effect is anti-dilutive.

Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect.

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. Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one segment, which is the business of being a leading podcast platform and publisher that makes its content available to audiences via all podcasting distribution platforms. The Company determined the CODM is its President. The CODM reviews financial information and allocates resources across its one operating segment.

The CODM evaluates the performance of the operating segment and allocates resources based on net loss that also is reported on the consolidated statements of operations as net loss. The measure of the operating segment assets is reported on the consolidated balance sheet as total assets. All of the Company's revenue is attributable to the United States and all of the Company's assets are located in the Unites States.

Cash and Cash Equivalents

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 and cash equivalents presented in the Company’s interim unaudited condensed consolidated statements of cash flows as of June 30, 2026 and March 31, 2026 (in thousands):

	*June 30,*		*March 31,*
	*2026*		*2026*
Total cash and cash equivalents	$	7,014	$	3,509

Accounts Receivable

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 receivables.

The Company’s accounts receivable at June 30, 2026 and March 31, 2026 are as follows (in thousands):

	*June 30,*			*March 31,*
	*2026*			*2026*
Accounts receivable, gross	$	7,927		$	7,586
Less: Allowance for credit losses		(339	)		(255	)
Accounts receivable, net	$	7,588		$	7,331

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Related Party Receivables and Payables

LiveOne has historically maintained an intercompany lending relationship with the Company in order to supplement the Company’s working capital needs. As of June 30, 2026 and March 31, 2026, the net receivable was $6.1 million and $0.3 million, respectively. LiveOne and the Company do not charge interest on these borrowings.

Property and Equipment

Property and equipment are recorded at cost. Costs of improvements that extend the economic life or improve service potential are also capitalized. Capitalized costs are depreciated over their estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred. The Company capitalizes certain costs related to the development of its platform and other software applications for internal use. In accordance with authoritative guidance, the Company begins to capitalize its costs to develop software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. The Company stops capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, generally estimated to be two years. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditure will result in additional functionality and expense costs incurred for maintenance and minor upgrades and enhancements. Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred and recorded within product development expenses in the Company’s consolidated statements of operations.

Depreciation is recorded using the straight-line method over the assets’ estimated useful lives, which are generally as follows: computer, machinery, and software equipment (3 to 5 years), furniture and fixtures (3 to 5 years), leasehold improvements are depreciated over the shorter of the estimated useful life or the lease term and capitalized software (2 years).

The Company evaluates the carrying value of its property and equipment if there are indicators of potential impairment. If there are indicators of potential impairment, the Company performs an analysis to determine the recoverability of the asset group carrying value by comparing the expected undiscounted future cash flows to the net book value of the asset group. If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset group, the excess of the net book value over the estimated fair value is recorded in the Company’s consolidated statements of operations. Fair value is generally estimated using valuation techniques that consider the discounted cash flows of the asset group using discount and capitalization rates deemed reasonable for the type of assets, as well as prevailing market conditions, appraisals, recent similar transactions in the market and, if appropriate and available, current estimated net sales proceeds from pending offers.

Goodwill

Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination and is carried at cost. Goodwill is not amortized, but is subject to an annual impairment testing, as well as between annual tests when events or circumstances indicate that the carrying value may not be recoverable. The Company performs its annual impairment testing at January 1 of each year.

The Company’s annual goodwill impairment test is performed at the reporting unit level. The Company generally tests goodwill for possible impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If a qualitative assessment is not used, or if the qualitative assessment is not conclusive, a quantitative impairment test is performed. If a quantitative test is performed, the Company determines the fair value of the related reporting unit and compares this value to the recorded net assets of the reporting unit, including goodwill. The fair value of the Company’s reporting unit is determined using a market approach based on quoted prices in active markets. In the event the recorded net assets of the reporting unit exceed the estimated fair value of such assets, an impairment charge is recorded. No indicators of impairments of goodwill were identified during the three months ended June 30, 2026 and 2025, respectively.

Estimations and assumptions regarding future performance, results of the Company’s operations and comparability of its market capitalization and net book value will be used.

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Intangible Assets with Finite Useful Lives

The Company has certain finite-lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of Intellectual Property and Content Creator Relationships resulting from business combinations. Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives, which are generally as follows: Brand and Trade Names (10 years), Customer, and Content Creator (2 years).

The Company reviews all finite lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, the Company recognizes an impairment loss for the excess carrying value over the fair value in its consolidated statements of operations. The Company recorded impairment losses of none and $0.2 million during the three months ended June 30, 2026 and 2025, respectively.

Fair Value Measurements - Valuation Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (i.e., an exit price). The Company uses the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company’s own assumptions about the data market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized below:

Level 1

Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2

Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

Level 3

Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety. Proper classification of fair value measurements within the valuation hierarchy is considered each reporting period. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared.

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.

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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 — Property and Equipment

The Company’s property and equipment at June 30, 2026 and March 31, 2026 was as follows (in thousands):

	*June 30,*			*March 31,*
	*2026*			*2026*
Property and equipment, net
Computer, machinery, and software equipment	$	134		$	134
Furniture and fixtures		14			14
Leasehold improvements		91			91
Right-of-use assets		140			166
Total property and equipment		379			405
Less accumulated depreciation and amortization		(206	)		(201	)
Total property and equipment, net	$	173		$	204

Depreciation expense was $5,000 and $25,000 for the three months ended June 30, 2026 and 2025, respectively.

During the three months ended June 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.

Note 4 — Goodwill and Intangible Assets

Goodwill

The Company currently has one reporting unit. The following table presents the changes in the carrying amount of goodwill for the three months ended June 30, 2026 (in thousands):

	*Goodwill*
Balance as of March 31, 2026	$	12,041
Acquisitions		-
Balance as of June 30, 2026	$	12,041

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Finite-Lived Intangible Assets

The Company’s finite-lived intangible assets were as follows as of June 30, 2026 (in thousands):

	*Gross*				*Net*
	*Carrying*		*Accumulated*		*Carrying*
	*Value*		*Amortization*		*Value*
Content creator relationships	$	3,229	$	3,178	$	51
Brand and trade names		1,010		606		404
Total	$	4,239	$	3,784	$	455

The Company’s finite-lived intangible assets were as follows as of March 31, 2026 (in thousands):

	*Gross*				*Net*
	*Carrying*		*Accumulated*		*Carrying*
	*Value*		*Amortization*		*Value*
Content creator relationships	$	3,229	$	3,045	$	184
Brand and trade names		1,010		581		429
Total	$	4,239	$	3,626	$	613

The Company's amortization expense on its finite-lived intangible assets was $0.2 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively.

The Company expects to record amortization of intangible assets for fiscal years ending March 31, 2027 and future fiscal years as follows (in thousands):

For Years Ending March 31,
2027 (remaining nine months)	$	127
2028		101
2029		101
2030		101
2031		25
	$	455

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Note 5 — Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at June 30, 2026 and March 31, 2026 were as follows (in thousands):

	*June 30,*		*March 31,*
	*2026*		*2026*
Accounts payable	$	1,000	$	965
Accrued revenue share		6,485		5,164
Other accrued liabilities		996		803
	$	8,481	$	6,932

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 of sale.

Note 6 — Related Party Transactions

As of June 30, 2026, the Company’s parent, LiveOne, owns approximately 20.4 million shares of the Company's common stock. In addition, as of June 30, 2026, directors and management affiliated with LiveOne beneficially own approximately 2.35 million shares of the Company's common stock.

During the three months ended June 30, 2026 and 2025, the Company was allocated expenses by its parent company, LiveOne, attributed to the overhead expenses incurred on behalf of the Company. The amount allocated to the Company from LiveOne for the three months ended June 30, 2026 and 2025 was $0.4 million and $0.4 million, respectively.

As of June 30, 2026 and March 31, 2026, the Company had a related party payable owed to LiveOne of $5.5 million and $5.0 million, respectively, which primarily consisted of expenses related to overhead expenses paid on behalf of the Company. As of June 30, 2026 and March 31, 2026, the Company had a related party receivable from LiveOne of $10.9 million and $5.3 million, respectively, which primarily consisted of cash allocated to LiveOne.

During the three months ended June 30, 2026 and 2025, the Company issued none and 237,113 shares of its common stock, respectively, with a fair value of $0 and $0.5 million, respectively, in exchange for amounts owed under a cost sharing agreement between LiveOne and the Company.

Note 7 — Leases

The Company's 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 $0.1 million for the three months ended June 30, 2026 and 2025, respectively.

Operating lease cost for the three months ended June 30, 2026 and 2025 consist of the following (in thousands):

	*Three Months Ended*		*Three Months Ended*
	*June 30,*		*June 30,*
	*2026*		*2025*
Fixed rent cost	$	26	$	9
Short term lease cost		4		20
Total operating lease cost	$	30	$	29

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

	*June 30,*		*March 31,*
Operating leases	*2026*		*2026*
Operating lease right-of-use assets	$	140	$	166

Operating lease liability, current	$	44	$	70
Operating lease liability, noncurrent		97		97
Total operating lease liabilities	$	141	$	167

Significant judgments

Discount rate – the Company’s lease is discounted using the Company’s incremental borrowing rate of 3.43% 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.

Future maturities of our operating lease is as follows (in thousands):

For Years Ending March 31,
2027 (remaining nine months)	$	77
2027		68
2028		-
Total lease payments		145
Less: imputed interest		(4	)
Present value of operating lease liabilities	$	141

Note 8 — Commitments and Contingencies

Contractual Obligations

As of June 30, 2026, the Company is obligated under agreements with its content providers and other contractual obligations to make guaranteed payments as follows: $6.5 million. $4.2 million and $0.2 million for the fiscal years ending March 31, 2027, 2028 and 2029, respectively.

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.

On June 27, 2025 and effective as of June 1, 2025 (the “Effective Date”), the Company entered into a new employment agreement with Kit Gray, the Company’s current President (the “Gray Employment Agreement”). The term of the Gray Employment Agreement is for two years from the Effective Date at an annual salary of $375,000. Mr. Gray is eligible to earn a discretionary annual performance bonus for each whole or partial fiscal year of his employment period with the Company in accordance with the Company’s annual bonus plan applicable to the Company’s executive officers. Mr. Gray’s “target” performance bonus shall be 100% of his average annualized base salary during the fiscal year for which the performance bonus is earned. Pursuant to the Gray Employment Agreement, Mr. Gray was granted: (i) 700,000 restricted stock units of the Company, and (ii) 15,000 restricted stock units of LiveOne, the Company’s parent.

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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 (the “McNamara Employment Agreement”). The term of the McNamara Employment Agreement is for two years from the Effective Date at an annual salary of $325,000. Ms. McNamara is eligible to earn a discretionary annual performance bonus for each whole or partial fiscal year of her employment period with the Company in accordance with the Company’s annual bonus plan applicable to the Company’s executive officers. Ms. McNamara’s “target” performance bonus shall be 100% of her average annualized base salary during the fiscal year for which the performance bonus is earned. Pursuant to the McNamara Employment Agreement, Ms. McNamara was granted 15,000 Company RSUs and 2,500 restricted stock units of LiveOne, the Company’s parent.

On January 15, 2025, the Company 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 the Company’s vast library of popular podcasts. Pursuant to the Agreement ART19 is required to pay the Company a minimum guarantee of $15.0 million over the term of the Agreement based on the Company achieving certain minimum impressions amount, which guarantee is subject to adjustment as provided in the Agreement, including if the Company achieves higher minimum impressions amounts. In addition, the Agreement provides for a revenue share split between the Company and ART19 based on gross sales revenue achieved by the Company under the Agreement. During the three months ended June 30, 2026 and 2025 the Company recognized revenue of $2.1 million and $1.4, respectively, from the Agreement.

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 preliminary stages and/or seek an indeterminate amount of damages. In the opinion of management, after consultation with legal counsel, except as set forth below, 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.

Parent Company Debt

On May 19, 2025 (the “Closing Date”), LiveOne and the Company entered into a Securities Purchase Agreement (the “SPA”) with certain institutional investors (each, a “Purchaser” and collectively, the “Purchasers”), pursuant to which (i) LiveOne sold to the Purchasers LiveOne’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 $15.25 million, and (ii) if certain conditions are satisfied as set forth in the SPA, including at least one of the Conditions (as defined below), LiveOne may sell at its option to the Purchasers LiveOne’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 LiveOne’s common stock at the holder’s option at a conversion price of $21.00 per share, subject to certain customary adjustments such as stock splits, stock dividends and stock combinations. LiveOne 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 $42.00 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 LiveOne to redeem an aggregate of up to $100,000 of the outstanding principal amount of the Debentures per month. 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 LiveOne 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.

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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, LiveOne 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 LiveOne); 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 LiveOne). Subject to the satisfaction of certain conditions, LiveOne 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, LiveOne 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, LiveOne 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.

LiveOne’s obligations under the Debentures can be accelerated upon the occurrence of certain customary events of default. In the event of default and acceleration of LiveOne’s obligations, LiveOne would be required to pay the applicable prepayment amount described above.

LiveOne’s obligations under the Debentures were guaranteed under a Subsidiary Guarantee, dated as of the Closing Date (the “Subsidiary Guarantee”), by certain of its subsidiaries, including the Company, Slacker, Inc. and LiveXLive, Corp. (collectively, the “Guarantors”). LiveOne’s obligations under the Debentures and the Guarantors’ obligations under the Subsidiary Guarantee are secured under a Security Agreement (the “Security Agreement”) entered into on the Closing Date among LiveOne, the Company and the other Guarantors, certain Purchasers and JGB Collateral, LLC (the “Agent”) as agent for the Purchasers (the “Security Agreement”), by a lien on all of LiveOne’s, the Company’s and the other Guarantors’ assets, subject to certain exceptions. In addition, pursuant to the Security Agreement, LiveOne, the Company and the other Guarantors agreed to pay to the Agent a collateral monitoring fee on the outstanding principal balance of the Debentures at per annum rate of 1%, which fee shall accrue daily and shall be payable to the Agent in cash on the last business day of each calendar month. LiveOne must also maintain a specified minimum cash balance (as set forth in the Debentures) and maintain minimum amounts of liquidity. As of June 30, 2026, LiveOne was in compliance with its debt covenants associated with the Initial Debentures.

On August 5, 2025, LiveOne amended certain defined terms contained in the Initial Debentures to provide that LiveOne 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 LiveOne from time to time and reasonably acceptable to the Purchasers (the “Guidelines”), and that LiveOne 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 LiveOne to pursue its then 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 have a security interest in any purchased Crypto.

In June 2026, LiveOne determined to discontinue its digital asset treasury strategy, which it originally adopted in July 2025. LiveOne no longer intends to pursue a digital asset treasury strategy or hold digital assets as a treasury reserve asset, and as of June 30, 2026, it disposed of all of its digital asset holdings. LiveOne does not expect the discontinuation of the strategy to affect its or our ongoing business operations.

LiveOne Equity Offering

On July 15, 2025, LiveOne entered into an underwriting agreement (the “Underwriting Agreement”) with Lucid Capital Markets, LLC (the “Underwriter”) pursuant to which LiveOne will issue and sell to the Underwriter 1,360,833 shares (the “Shares”) of LiveOne’s common stock, $0.001 par value per share (the “common stock”), at an offering price of $7.50 per Share and which includes 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 LiveOne (the “Offering”). The aggregate gross proceeds to LiveOne from the Offering will be 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 LiveOne in connection with the Offering. Pursuant to the Underwriting Agreement LiveOne 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.

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LiveOne used the net proceeds from the Offering to fund the acquisition of cryptocurrencies, the development and implementation of a cryptocurrency treasury strategy and for working capital and general corporate purposes.

LiveOne Preferred Stock Exchange

On July 15, 2025, LiveOne entered into letter agreements (collectively, the “Agreements”) with the Harvest Funds and Trinad Capital Master Fund Ltd., a fund controlled by Mr. Ellin, LiveOne’s Chief Executive Officer, Chairman, director and principal stockholder of LiveOne and Executive Chairman of our Company (“Trinad Capital” and collectively with the Harvest Funds, the “Holders”), the holders of LiveOne’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 300,000 shares of LiveOne’s common stock, at a price of $15.00 per share, and Trinad Capital exchanged $2,250,000 worth of shares of its Series A Preferred Stock into 150,000 shares of LiveOne’s common stock at the same price, and (ii) the Harvest Funds and Trinad Capital received 300,000 and 150,000 three-year warrants to purchase LiveOne’s common stock exercisable at a price of $0.10 per share.

Note 9 — Employee Benefit Plan

The Company’s parent LiveOne sponsors a 401(k) plan (the “401(k) Plan”) covering all the Company’s employees. 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 interim unaudited condensed consolidated financial statements for the three months ended June 30, 2026 and 2025.

Note 10 — Stockholders’ Equity

Spin-Out

Prior to the Spin-Out, LiveOne, through its wholly owned subsidiary, LiveXLive PodcastOne, Inc., canceled 127,984,230 shares of the Company’s common stock. As of June 30, 2026, LiveOne owned approximately 20.4 million shares of the Company’s common stock (not including any shares of common stock underlying the PC1 Warrants held by LiveOne), which constituted approximately 67.8% of the Company’s issued and outstanding shares of common stock as of June 30, 2026.

Pursuant to the Company’s Amended and Restated Certificate of Incorporation which was approved by the Company’s board of directors and LiveOne as the sole stockholder on December 15, 2022, which became effective on September 12, 2023, in connection with the completion of the Spin-Out, the Company is authorized to issue up to 110,000,000 shares, consisting of 100,000,000 shares of the Company’s common stock and 10,000,000 shares of the Company’s preferred stock, $0.00001 par value per share (the "preferred stock").

On September 8, 2023, the Company completed the Spin-Out and converted the outstanding PC1 Bridge Loan into 2,340,707 shares of common stock based on a fair value of $4.39 per share, which was the closing price of the stock on the date of conversion. The book value of the PC1 Bridge Loan and the bifurcated embedded derivative were converted into additional paid in capital, which equaled the fair value of the 2,340,707 shares issued for the conversion of the PC1 Bridge Loan. As a result of the completion of the Spin-Out and the Company's shares of common stock becoming publicly traded, the Company reclassified its warrant liability to equity as a result of the strike price and number of warrants becoming fixed at $3.00 per share, which resulted in a $9.1 million increase to additional paid in capital. In addition, the Company's derivative liability was written to zero as the redemption feature was unexercised.

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LiveOne 2016 Equity Incentive Plan

LiveOne’s board of directors and stockholders approved its 2016 Equity Incentive Plan, as amended (the “2016 Plan”) which reserved a total of 1,260,000 shares of LiveOne’s common stock for issuance. On September 17, 2020, LiveOne’s stockholders approved the amendment to the 2016 Plan to increase the number of shares available for issuance under the 2016 Plan by 5,000,000 shares increasing the total up to 1,760,000 shares, which increase was formally adopted by LiveOne on June 28, 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 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 LiveOne 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’s employees were awarded options and restricted stock awards under the 2016 Plan, therefore an allocation of the share-based compensation was made to the Company from LiveOne. The Company recognized stock-based compensation expense of less than $0.1 million and $0.1 million during the three months ended June 30, 2026 and 2025, respectively. The total tax benefit recognized related to share-based compensation expense was none for the three months ended June 30, 2026 and 2025, respectively.

LiveOne Options Grants to the Company’s Employees

Stock option awards are granted with an exercise price equal to the fair market value of LiveOne’s common stock at the date of grant based on the closing market price of its common stock as reported on The Nasdaq Capital Market. The option awards generally vest over two to four years and are exercisable any time after vesting. The stock options expire ten years after the date of grant.

As of June 30, 2026, unrecognized compensation costs for unvested awards to the Company's employees was none.

The following table summarizes the activity of LiveOne’s options granted to the Company's employees during the three months ended June 30, 2026:

			*Weighted-*
			*Average*
			*Exercise*
	*Number of*		*Price per*
	*Shares*		*Share*
Outstanding as of March 31, 2026		12,500	$	10.80
Granted		-	$	-
Exercised		-	$	-
Forfeited or expired		-	$	-
Outstanding as of June 30, 2026		12,500	$	10.80
Exercisable as of June 30, 2026		12,500	$	10.80

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The weighted-average remaining contractual term for options to the Company's employees outstanding and options to the Company's employees exercisable as of June 30, 2026 was 4.96 years and 4.96 years, respectively. The intrinsic value of options to employees outstanding and options to employees exercisable was none and none, respectively, at June 30, 2026.

The fair value of stock options outstanding and exercisable at June 30, 2026 was $0.1 million and $0.1 million, respectively. The fair value of stock options outstanding and exercisable at June 30, 2025 was $0.2 million and $0.2 million, respectively.

Restricted Stock Units Grants to the Company's Employees

As of June 30, 2026, unrecognized compensation costs for unvested LiveOne restricted stock units awards to the Company's employees was none.

The following table summarizes the activity of LiveOne’s restricted stock units granted to the Company's employees during the three months ended June 30, 2026:

	*Number of*
	*Shares*
Outstanding as of March 31, 2026		13,125
Granted		-
Vested		(4,375	)
Forfeited		-
Outstanding as of June 30, 2026		8,750

The fair value of restricted stock units that vested during the three months ended June 30, 2026 and 2025 was less than $0.1 million and $0.1 million, respectively.

PodcastOne 2022 Equity Incentive Plan

On December 15, 2022, the Company’s board of directors and LiveOne as the sole stockholder, through its wholly owned subsidiary, LiveXLive PodcastOne, Inc., approved the Company’s 2022 Equity Incentive Plan (the “2022 Plan”) which reserved a total of 2,000,000 shares of the Company’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 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 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 2022 Plan.

On April 8, 2026, the Company amended its 2022 Plan to increase the number of shares of its common stock available for issuance under the 2022 Plan by 2,000,000 shares, which increase was previously approved by the Company’s board of directors and is subject to approval of the Company's stockholders.

The following table summarizes the activity of the Company's restricted stock units issued to its employees under the 2022 Plan during the three months ended June 30, 2026:

	*Number of*
	*Shares*
Nonvested as of March 31, 2026		943,450
Granted		250,000
Vested		(267,700	)
Forfeited or expired