# EDGAR Filing Document

**Accession Number:** 0001491419
**File Stem:** 0001437749-25-022739
**Filing Date:** 2025-7
**Character Count:** 802174
**Document Hash:** a0d12f761f36051177fbb6e424cdc7df
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-022739.hdr.sgml**: 20250715

**ACCESSION NUMBER**: 0001437749-25-022739

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 114

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20250715

**DATE AS OF CHANGE**: 20250715

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LiveOne, Inc.
- **CENTRAL INDEX KEY:** 0001491419
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-EATING PLACES [5812]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 980657263
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0331

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38249
- **FILM NUMBER:** 251125531

**BUSINESS ADDRESS:**
- **STREET 1:** 269 SOUTH BEVERLY DRIVE
- **STREET 2:** SUITE 1450
- **CITY:** BEVERLY HILLS
- **STATE:** CA
- **ZIP:** 90212
- **BUSINESS PHONE:** (310) 601-2505

**MAIL ADDRESS:**
- **STREET 1:** 269 SOUTH BEVERLY DRIVE
- **STREET 2:** SUITE 1450
- **CITY:** BEVERLY HILLS
- **STATE:** CA
- **ZIP:** 90212

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LiveXLive Media, Inc.
- **DATE OF NAME CHANGE:** 20170808

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LOTON, CORP
- **DATE OF NAME CHANGE:** 20100507

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

(Mark One)

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

For the fiscal year ended **March 31, 2025**

or

**☐ 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)

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| | |
|:---|:---|
| **Delaware** | **98-0657263** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |
| **269 S. Beverly Dr., Suite #1450** <br> **Beverly Hills, California** | **90212** |
| (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code **(310) 601-2505**

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** |

---

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant's most recently completed second fiscal quarter ended September 30, 2024, was approximately $73.0 million. For the sole purpose of making this calculation, the term "non-affiliate" has been interpreted to exclude directors, executive officers, affiliated holders of 10% or more of the registrant's common stock and their affiliates.

As of July 11, 2025 the registrant had 97,128,164 shares of common stock outstanding.

**DOCUMENTS INCORPORATED BY REFERENCE**

Part III of this Annual Report on Form 10-K (this "Form 10-K") incorporates by reference certain information from the registrant's definitive Proxy Statement for its 2025 annual meeting of stockholders (the "Proxy Statement"), which the registrant intends to file pursuant to Regulation 14A with the U.S. Securities and Exchange Commission not later than 120 days after the registrant's fiscal year end of March 31, 2025. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of this Form 10-K.

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**TABLE OF CONTENTS**

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| | | |
|:---|:---|:---|
|  | [**PART I**](#part1) | [2](#part1) |
| **Item 1.** | [Business](#part1) | [2](#part1) |
| **Item 1A.** | [Risk Factors](#risk) | [14](#risk) |
| **Item 1B.** | [Unresolved Staff Comments](#unresolved) | [66](#unresolved) |
| **Item 1C.** | [Cybersecurity](#item1c) | [66](#item1c) |
| **Item 2.** | [Properties](#properties) | [67](#properties) |
| **Item 3.** | [Legal Proceedings](#legal) | [67](#legal) |
| **Item 4.** | [Mine Safety Disclosures](#mine) | [67](#mine) |
|  | [**PART II**](#part2) | [68](#part2) |
| **Item 5.** | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#market) | [68](#market) |
| **Item 6.** | [\[Reserved\]](#item6) | [69](#item6) |
| **Item 7.** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#mda) | [70](#mda) |
| **Item 7A.** | [Quantitative and Qualitative Disclosures About Market Risk](#quantitative) | [85](#quantitative) |
| **Item 8.** | [Financial Statements and Supplementary Data](#fin) | [F-1](#fin) |
| **Item 9.** | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#item9) | [95](#item9) |
| **Item 9A.** | [Controls and Procedures](#item9a) | [95](#item9a) |
| **Item 9B.** | [Other Information](#otherinfo) | [96](#otherinfo) |
| **Item 9C.** | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspection](#disclosure) | [96](#disclosure) |
|  | [**PART III**](#part3) | [97](#part3) |
| **Item 10.** | [Directors, Executive Officers and Corporate Governance](#item10) | [97](#item10) |
| **Item 11.** | [Executive Compensation](#item11) | [97](#item11) |
| **Item 12.** | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#item12) | [97](#item12) |
| **Item 13.** | [Certain Relationships and Related Transactions, and Director Independence](#item13) | [97](#item13) |
| **Item 14.** | [Principal Accounting Fees and Services](#item14) | [97](#item14) |
|  | [**PART IV**](#part4) | [97](#part4) |
| **Item 15.** | [Exhibits, Financial Statement Schedules](#item15) | [97](#item15) |
| **Item 16.** | [Form 10-K Summary](#item16) | [99](#item16) |
|  | [SIGNATURES](#sigs) | [100](#sigs) |

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**Use of Market and Industry Data**

This Annual Report on Form 10-K (this "Annual Report") includes market and industry data that we have obtained from third party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management's estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third-party sources referred to in this Annual Report are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this Annual Report or ascertained the underlying economic assumptions relied upon by such sources. Furthermore, references in this Annual Report to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this Annual Report.

Forecasts and other forward-looking information obtained from these sources involve risks and uncertainties and are subject to change based on various factors, including those discussed in sections entitled "Forward-Looking Statements," "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report.

**Trademarks, Service Marks and Trade Names**

This Annual Report contains references to our trademarks, service marks and trade names and to trademarks, service marks and trade names belonging to other entities. Solely for convenience, trademarks, service marks and trade names referred to in this Annual Report, including logos, artwork and other visual displays, may appear without the® or <sup>TM</sup> symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies' trade names, service marks or trademarks or any artists' or other individuals' names to imply a relationship with, or endorsement or sponsorship of us by, any other companies or persons.

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**PART I**

**Item 1. Business**

**Overview**

We generate revenue through the sale of membership-based services and advertising from our music offerings, from the licensing, advertising and sponsorship of our live music and podcast content rights and services, from our expanding pay-per-view offerings and from retail sales of merchandise and gifts.

**Operations** 

Historically, we acquired the rights to stream our live and recorded music and broadcasts from a combination of festival owners and promoters, such as Anschutz Entertainment Group ("AEG") and Live Nation Entertainment, Inc. ("Live Nation"), music labels, including Universal Music, Warner Music and Sony Music, and through individual music publishers and rights holders. Beginning mid-March 2020, the pandemic associated with COVID-19 temporarily shut down the production of all on-ground, live music festivals and. As a result, we pivoted our production to 100% streaming, and began producing, curating, and broadcasting streaming music festivals, concerts and events across our platform. In May 2020, we launched our first pay-per-view ("PPV") performances across our platform, allowing artists and fans to access a new digital compliment to live festivals, concerts and events.

The majority of our content acquisition agreements provide us the exclusive rights to produce, license, broadcast and distribute live broadcast streams of these festivals and events throughout the world and across any digital platform, including cable, Internet, video, audio, video-on-demand ("VOD") and virtual reality ("VR"). We are working to expand our VOD, PPV, content catalog and content capabilities. Since 2018, we launched LiveZone, a traveling studio originating from live music events and festivals all over the world. LiveZone combines music news, commentary, festival updates and artist interviews, and provide context to premiere events by showcasing exotic locales, unique venues, and artist backstories, adding "pre-show" and "post-show" segments to livestreamed artist performances and original festival-based content. During fiscal years ended March 31, 2023 and 2022, we launched our own franchises including "Music Lives," our multi-artist virtual festival, "Music Lives ON," our series of virtual live-streaming performances, "Self Made" our music competition platform, "The Lockdown Awards", our award show celebrating the best in quarantine content, "The Snubbys", our award show celebrating deserving artists who should have been but were not nominated for applicable awards, "The Breakout Awards," our award show celebrating some of the year's most iconic music, celebrities and pop culture moments and "One Rising" an emerging artist program that breaks up and coming talent across the music landscape.

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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. On February 28, 2023, we acquired a majority interest in Splitmind LLC and Drumify LLC. On September 8, 2023, PodcastOne completed a Qualified Event (as defined below) (its spin out from the Company to become a standalone publicly trading company) as a result of its direct listing on The NASDAQ Capital Market on such date (the "Direct Listing"). Through the operations of our DayOne Music Publishing, Drumify and Splitmind subsidiaries, we operate our music publishing and artist and brand development businesses.

*Digital Internet Radio and Music Services*

Our digital Internet radio and music services are available to users online and through automotive and mobile original equipment manufacturers ("OEMs") on a white label basis, which allow certain OEMs to customize the radio and music services with their own logos, branding and systems. Our users are able to listen to a variety of music, radio personalities, news, sports, comedy and the audio of live music events. Our revenue structure for our digital Internet radio and music services varies and may be in the form of (i) a free service to the listener supported by paid advertising, (ii) paid premium membership services, and/or (iii) a fixed fee per user. The fees generated from ad-supported and membership services are generally subject to revenue sharing arrangements with music right holders and labels, and fees to festivals, clubs, events, concerts, artists, promoters, venues, music labels and publishers ("Content Providers").

*Podcast Services*

Our podcasts are available to users online alongside our digital Internet radio. Our users are able to listen to a variety of podcasts, from music, radio personalities, news, entertainment, comedy and sports. PodcastOne has built a distribution network reaching over 1 billion listeners a month across all of its own properties, LiveOne platforms, Spotify, Apple Podcasts, iHeartRadio, Samsung and over 150 shows exclusively available in Tesla vehicles. Similar to our digital Internet radio fee structure, we monetize podcasts through (i) paid advertising or (ii) paid premium membership services. We own one of the largest networks of podcast content in North America, which has over 200 exclusive podcast shows that produces over 300 episodes per week and has generated over 204 million downloads during the year ended March 31, 2025.

PodcastOne and its roster of top performing hosts are also able to integrate unique visual elements into the podcasts they produce and distribute them via YouTube, with PodcastOne becoming the first podcast network to utilize Adori, a pioneering interface technology. Adori's unique YouTube integration technology allows podcast hosts and networks to seamlessly import episodes from RSS feeds, enhance them with visual elements and upload enriched assets directly to YouTube. Adori's patented technology embeds contextual visuals, multi-format ads, augmented reality ("AR") experiences, buy buttons, polls, and other "call to action" features in the audio creating a more enhanced and richer listener experience. In creating visually enhanced podcasts, Adori's YouTube product provides additional monetization avenues for PodcastOne's slate of original programming, increased discoverability and search engine optimization presence.

In addition to PodcastOne's core business, it also built, owns and operates a solution for the growing number of independent podcasters, LaunchpadOne. LaunchpadOne is a self-publishing podcast platform, created to provide a low or no cost tool for independent podcasters without access to parent podcasting networks or state of the art equipment to create shows. LaunchpadOne serves as a talent pool for us to find new podcasts and talent.

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In June 2023, we launched PodcastOne TV, a free ad-supported streaming television ("FAST") channel that will stream the video content from PodcastOne's slate of award-winning podcasts, to be distributed through MuxIP to 60 outlets, using MuxIP's FASTHub for OTT platform. MuxIP will enable PodcastOne to expand its content to viewers of niche content on Smart TVs and a wide range of devices. MuxIP is a global leader in powering the rapidly growing TV business model centered on FAST.

On September 8, 2023, PodcastOne completed its spin out from the Company to become a standalone publicly traded company (the "Spin-Out")) as a result of PodcastOne's direct listing on The NASDAQ Capital Market on such date.

*Merchandise*

Via the operations of CPS, we own and operate a group of web-oriented businesses specializing in the merchandise personalization industry. CPS develops, manufactures, and distributes personalized products for wholesale and direct-to-consumer distribution. CPS offers thousands of exclusive personalized gift items for family, home, seasonal holidays, and special events along with personalized jewelry.

*Ancillary Products and Services*

We also provide our customers the following:

● *Regulatory Support* – streaming of music is generally subject to copyright protection. Whenever possible, we use our best efforts to clear music copyright licenses, artist streaming preferences and music publishing rights in advance of usage.

● *Post-Implementation Support* – once our customer's content is activated on the LiveOne App, we provide technical and network support, which includes 24/7 operational assistance and monitoring of our services and performance.

*Live Music Events*

We produce, edit, curate and stream live music events through (i) broadband transmission over the Internet and/or satellite networks to our users throughout the world, where permitted ("Digital Live Events") both advertisers supported and PPV events, and (ii) physical ticket sales of on-location music events and festivals at a variety of indoor clubs and outdoor venues and arenas ("On-premise Live Events"). These services allow our users to access live music content in person and over the Internet, including the ability to chat and communicate over our platform. LiveOne provides Digital Live Events for free to our users; however, beginning in May 2020 we launched PPV capabilities and began charging our users to view certain Digital Live Events. We monetize these live events through third party advertising and sponsorship, including with brands such as Volkswagen, Hyundai, Facebook, Tik Tok, Porsche, and Pepsi, and selling territorial licensing rights to Tencent in China and Ocesa in Mexico. Our cost structure varies by music event, and may include set upfront fees/artist guarantees, the amount of which is often dependent on specific artist. A festival's existing production infrastructure or lack thereof, and, in turn results in, us having a production/financial commitment to the live stream, and in some cases, we may also share the associated revenue. The fees generated from any advertising, sponsored content, VOD/PPV and other services are generally subject to the aforementioned revenue sharing arrangements with certain artists, festival owners and/or music right holders, when applicable.

**Our Industry**

Globally, it's estimated that recorded music revenues increased to $29.6 billion in 2024, up 4.8% year over year. We believe that by 2030, global recorded music revenues will increase to $80 billion. Our addressable market includes streaming of live music and entertainment, Internet radio, audio downloadable music, podcasts and online VOD services. These markets are experiencing significant growth and now represent the majority of the music industry's overall revenue, as physical and digital record sales have steadily declined. We both capitalize on these trends and provide additional earnings opportunities to industry stakeholders, including agents, managers, distributors, producers, labels, publishers, advertisers and social influencers (collectively, "Industry Stakeholders").

***Live Music Industry***

The live music industry is a large, growing market that creates, manages and promotes live performances and events, ranging from festivals to concerts and events in stadiums, arenas, and other smaller venues. We expect live music industry revenues to grow to $30 billion by 2025. Festivals, which is where our live concert promotion has focused on, have become an increasingly important cultural phenomenon. Each festival can attract hundreds of thousands of people over multiple day periods. The most popular festivals based on attendance include Coachella, EDC, Glastonbury, Outside Lands Music and Arts Festival, Rock Werchter, Rock in Rio, Roskilde, Tomorrowland and Ultra Music Festival. The live event industry is a global market with only a fraction of the leading live music events located in the U.S. In addition to festivals, there are thousands of live music events and performances that occur nightly in large and small venues such as arenas, theatres, clubs, bars and lounges. As a result of the popularity of live music performances, there has been a growing interest in experiencing live events and performances via online streaming distribution.

With the onset of COVID-19 in early calendar year 2020, substantially all major live music events to be held in calendar year 2020 were cancelled, including our own Spring Awakening. To address the demand for live music events, we shifted our focus to live digital concerts and festivals, and our platform experienced tremendous growth in the number of live events streamed and overall viewership.

Additionally, the growth of the live music industry benefits ancillary verticals, such as merchandise and primary/secondary ticket marketplaces. Merchandise includes the retail sales of licensed music-related goods and is estimated to be larger than $3.5 billion since 2018.

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***Digital Music Streaming Industry***

The addressable market for paid digital music streaming is large and growing, representing almost half of global music revenue. According to vinylmeplease.com, in 2024, streaming revenue was $20.4 billion or approximately 69% of global music sales, and we further expect paid streaming users to surpass 1.2 billion by 2030.

We believe that the demand for live music and music-related content that is optimized for Internet-connected devices will continue to grow with the further development of mobile devices and increases in mobile carrier bandwidth. We intend to continue to extend our global reach by executing deals with new partners and strengthening our business model to enable us to further monetize the content offered on our network across these devices.

***Podcasting Industry***

The podcasting industry continues to benefit from both a broad audience, with attractive demographics and loyal listeners. According to Edison One and Triton Digital, an estimated 135 million people listened to a podcast each month in 2024 and is expected to reach 158 million in 2025. As podcast listening grows, the addressable market for podcast advertising spend continues to grow. PricewaterhouseCoopers estimated that podcast advertising spend was $2.43 billion in 2024 and is slated to reach $4.6 billion by 2025.

**Technology**

We own 46 registered or pending patents on our streaming Internet radio services, including patents over playback of digital media content, method for providing user personalized content, systems for portable personalized radio, method for interactive distribution of digital content and systems for scoring and raking digital content based on activity of network users. Key components of this technology include:

● User authorization system

● Data Warehouse/Data Management Platform, including user preferences and behavior

● Enterprise Content Management and Delivery Platform for Music

● Relevancy and Personalization Technology

● Patented off-line mode

● Mobile and OTT Development

● Development around the balance between curated and programmatically generated content

● Integrated carrier billing with most major carriers

● Service-based technology systems which allows for easier development of new products

We intend to protect our trademarks, brands, copyrights, patents and other original and acquired works, ancillary goods and services. In connection with the Slacker, Inc. ("Slacker") acquisition, we acquired a trademark for the Slacker name. We believe that certain trademarks and other proprietary rights that we may apply for or otherwise obtain will have significant value and will be important to our brand-building efforts and the marketing of our services. We cannot predict, however, whether steps taken by us to protect our proprietary rights will be successful or adequate to prevent misappropriation, infringement or other violation of these rights. Upon the consummation of any future acquisitions, we may acquire additional registered trademarks, as well as applied-for trademarks potentially for worldwide use.

*Streaming Internet Radio*

We continuously obtain high-quality digital content and associated data from the record labels. These master files are stored in a secure database and transcoded into various audio formats that are then pushed to our production environment. The production system supports numerous streaming formats as required to serve the numerous end-user consumption devices that our service supports, including mobile handsets, connected car audio systems, smart TVs, HTML web players, etc. The production infrastructure consists of servers housed in our data center and caching servers, managed by our partners, distributed across the Internet. The caching servers temporarily store the content and related formats that are in high demand, thereby placing the most popular content closest to user endpoints, reducing latency and the number of content requests sent to our data center. When a given user makes a play request from their mobile device, the web, connected car, etc., the system sets up a secure connection to that user's device, automatically detects the proper format and the highest quality bitrate that can be streamed, and delivers the stream to our users.

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*Live Music*

Technology is a key component of our network that brings our ecosystem to life for our users and Content Providers. We currently deliver our video viewer experience through our LiveOne App and an HTML-based website compatible with most major web browsers (e.g., Chrome, Safari, Internet Explorer) and operating systems (e.g., Windows, MacOS, iOS, Android). Our developers bring extensive experience building technology solutions for the leading media companies of the world, including the design of live and VOD workflows, the video content management system and delivery of content on mobile, OTT and desktop clients.

More recently, we built and launched a pioneering technology stack for delivering our content to users on nearly any Internet-connected device. Our most recent version of the LiveOne App is available on the iOS and Android operating systems and through Apple TV, Roku, Samsung and Amazon Fire platforms. We believe our full-service, delivery-to-distribution back-end will allow us to capitalize on monetization opportunities and is the first step in creating a digital supply chain for live music and music-related video content.

*Podcasting*

PodcastOne has built an internal Content Management System ("CMS") that creators and producers can use to track metrics about shows on an episode-by-episode basis. CMS is the platform where podcast episodes are uploaded, RSS feeds are created and distributed to listening platforms, and the listening data is analyzed and displayed in a dashboard for the creators / producers to see. PodcastOne is one of the few podcast networks with proprietary CMS/Content Delivery Network ("CDN") that allows for optimized programmatic capabilities and improved audience analytics. Our hosts/talent are also able to view their download numbers, trends and analytics on this proprietary software, something many competitors don't provide. This fully owned and operated enterprise CMS rivals other paid platforms such as Megaphone (Spotify owned), Art19 (Amazon owned) and SimpleCast (SiriusXM/Pandora owned). The CMS day to day operation and maintenance is managed by a vendor we contract with and is constantly being updated to be a best-in-class system. We provide analytical support that creators need to optimize their performance and focus on doing what they do best — creating unique, entertaining experiences to share with fans around the world. For example, many creators have used our analytics to inform tour locations by citing the geographical audience insights provided in the CMS that would otherwise not have been known. PodcastOne is focused on continuously improving its technology so that it is user-friendly and sets it apart from other independent publishers.

PodcastOne also majority owns LaunchPadOne, a free innovative podcast hosting, distribution, and monetization platform that provides an end-to-end podcast solution.

**Members**

We currently stream our music services for live events globally to music fans worldwide, and with users located in North America for our digital music streaming services. We are currently developing plans to expand our music presence internationally. Our music streaming customers include individual users and OEMs such as Tesla, Verizon, T-Mobile, and, to a lesser extent, advertisers and third-party licensees. In December 2021, we also launched LiveOne on Google's Android Automotive platform, a full-stack, open source, highly customizable software platform powering the vehicle's numerous safety, environmental, and infotainment systems, enabling implementers to differentiate and tailor the content experience specific to a brand's identity. Android Automotive continues to see wide adoption from virtually all the major automotive OEMs including Ford, GMC, Dodge, Chrysler, Volvo, Polestar, Ford, Lincoln, Chevrolet, Nissan, Volkswagen, Mitsubishi, and others. For the fiscal year ended March 31, 2025 and 2024, we had one single customer that represented approximately 45% and 51% of our total consolidated revenue in the period, respectively.

We provide live production and content curating and processing services to our festival and event partners on an exclusive basis, globally. These agreements are generally for three to seven years in duration. Our customers also include major cable networks, where we have historically agreed to share production costs for certain festivals.

**Competitive Advantage**

We are producers, acquirers and distributors of live and digital music and Internet radio entertainment services, and work closely with major and independent labels, music festival owners and other content producers to provide unique and compelling music content across our platform for our listeners. Accordingly, our significant operating and deal-making experience and relationships with Content Providers, OEMs such as Tesla, cable networks, major advertisers and music publishers and distribution companies in our industry gives us a number of competitive advantages and may present us with a substantial number of additional business targets and relationships to facilitate growth going forward. We believe that we have sustainable competitive advantages due to our growing market position in live events, technology and relationships with important music labels, content suppliers and festival owners.

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Our fully owned and operated enterprise CMS rivals other paid platforms such as Megaphone (Spotify owned), Art19 (Amazon owned) and SimpleCast (SiriusXM/Pandora owned).

Our leadership team, consisting of our senior and executive management and our board of directors, collectively brings a wealth of industry relationships and expertise in the fields of programming, promotion, marketing, sales, distribution, web, digital, linear, mobile, legal and finance. The members of our Advisory Board are renowned in their respective fields, are considered thought leaders in the entertainment industry by their peers, further enhance our credibility and provide strategic guidance to our management team.

Many of the members of our leadership team have built businesses as entrepreneurs and/or have been executives at Fortune 500 companies. The team includes seasoned finance executives that have collectively been extensively involved in mergers and acquisitions in the live event, recorded music, music publishing, fashion, technology and other media and entertainment businesses. Our leadership team provides the knowledge to source, analyze, negotiate and complete acquisition transactions, partnerships and other business combinations.

**Strategy**

*Content*

Our near-term strategy is to continue aggressively producing, acquiring and aggregating live and on-demand performances (e.g., on stage sets) and non-performance (e.g., behind the scenes, interviews) music-related video content from festivals, clubs, events, concerts, artists, promoters, venues, music labels and publishers (collectively, the "Content Providers"); acquiring and producing original music-related video and audio content; and curating existing online and digital radio premium content. In addition to acquiring and/or partnering with third party Content Providers, our digital studio, LiveOne Studios, plans to develop and produce original music-related video content, including digital magazine-style news programming and original-concept digital pilots and documentaries. During fiscal years ended March 31, 2023 and 2022, we launched our own franchises including "Music Lives," our multi-artist virtual festival, "Music Lives ON," our series of virtual live-streaming performances, "The Lockdown Awards", our award show celebrating the best in quarantine content, "Self Made" our music competition platform, "The Snubbys", our award show celebrating deserving artists who should have been but were not nominated for applicable awards, and "The Breakout Awards," our award show celebrating some of the year's most iconic music, celebrities and pop culture moments.

Over the long term, our strategy is to combine our live events with our audio music and radio services (collectively, the "Music Services"). We believe that the combination of these Music Services will serve as our user engagement platform, differentiate our Music Services from our competitors and provide us more opportunities to expand and grow our current membership base and revenues from membership fees, advertising, sponsorship and licensing. Moreover, we plan to drive more audience to our Music Services platform as we grow our streamed live events, helping us leverage and lower our overall marketing spending and drive more user growth.

Approximately 50% and 56% of our revenue for the years ended March 31, 2025 and 2024, respectively, was from our membership services platform. We believe the data we generate from our platform will be valuable to Industry Stakeholders and the ability to reach our audience to market more efficiently to them products and services.

*Platform Innovation*

Our platform engagement strategy is to build a compelling online and digital experience for our users, anchored by a pioneering website and our custom LiveOne App. Our LiveOne platform offers access to some of the world's leading music festivals and live events with multi-day and simultaneous multi-stage coverage, unique concerts, intimate performances and premium original programming. It is fueled by our LiveOne App, which we believe will drive 24/7/365 user engagement and data that we will be able to convert to earnings and cash flow through multiple potential revenue streams.

We continuously redesign and develop our custom LiveOne App with interactive features that enhance the live music experience and, when combined with our platform's functionality, unique features and underlying music service, create an immersive digital experience in and of itself. We believe the combination of the intuitive, modern LiveOne user interface and cross-platform capabilities will be instrumental in creating a deeply engaging, personally-tailored central hub for live music, music-related video content and streaming music content, particularly for those users who are otherwise unable to attend live events in person. Our aim is to also include features for personalization, social interaction services, multiple live channels, vertical video, merchandise and other offerings to further solidify users' affinity toward our platform and their interests.

In addition, we also support B2B partnership integrations via application programming interfaces, web software development kits ("SDKs"), and other custom systems as necessary. We support unique content offerings and application versions dependent on the country. We've also developed a rich set of features for music, podcasts, video, and other user generated content. Collectively, these capabilities illustrate our technical excellence and provide the foundational architecture and knowledge base to continue innovating and building world-class experiences for both our B2C and B2B customers.

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We currently run on a responsive HTML-based website that has been developed to work across browsers on any Internet-connected screen. The website's home page includes featured content portals used for programming the most relevant content. The remainder of the page features video content and music stations that are updated regularly and covers a full spectrum of music genres. As our content library and user data grows, the featured content portals and other aspects of the user experience will be individually personalized and tailored to a user's preferences and interests. We have added video, display and other advertising to the website to generate additional revenue. We will work with our developers to continue to iterate, add and tweak features based on internal and external feedback.

Our unified LiveOne App ecosystem includes live streaming video, VOD, streaming music stations, podcasts, vodcasts, push notifications, festival-specific functionality, original content video, locally sold and programmatic ads capability, the capability to display time-shifted content and enhanced functionality that will support social media sharing and user community engagement. The main Live page of our LiveOne App includes a top hero carousel depicting featured performances and options for viewing concurrent programming located below the top carousel. Our LiveOne App also includes a Live Video experience tab dedicated to ongoing and past festivals. For this section, we allow users to view multiple stages of a single festival broadcasting live simultaneously when applicable. We believe this fun and simple interface layout, together with LiveZone, will highlight key content and encourage users to also discover our other content offerings.

Our unified LiveOne App showcases several features that we believe will encourage and facilitate user engagement and interactivity, including:

**Artist Picker - Personalization** — This feature is foundational for personalization and recommendations of content with user profile integration; artists that are picked will track to user profiles for personalization. Through our acquisition of Slacker, we are able to add their highly developed enterprise content and user management systems to the LiveOne platform. Once they have been upgraded to work with video as well as audio, they will form the core of our data management platform and personalization system.

**Personalized and Programmed Content Carousels** — Content carousels are a key feature of the new unified App with the ability to feature multiple programmed and personalized content of Live events, VOD featured content and audio streams.

**Slacker-Powered Music Service** — With the unification convergence of two content services, this integration includes the Slacker music service for streaming radio stations with data informed human curation. Slacker's expertise and toolset for generating both human curated and programmatically generated media channels allow LiveOne to quickly bring both audio and video channels to market for a fraction of the expense typically associated with those activities.

**Live Video Experience** — The centerpiece foundation of our digital live experience to engage music fans is the Live Video experience section in which livestream video feeds, video on-demand, set-time schedules, real-time user interface elements and community interaction come together in a single unique digital environment.

**Dynamic Video Player** — Our player supports both Live streams and VOD playback, and also supports Vertical Video, which displays video with an edge-to-edge format in portrait view. This is how younger generations consume video and is a commonly familiar format catering to Millennials and Gen Zers.

**Multiple Live Channels** — For Live video broadcasts, this video player feature allows for easily switching between multi-channel perspectives covering different performances and stages of the live event being watched.

**Social Sharing** — With this social sharing functionality, app users are able to share content to Facebook, Instagram, X (formerly Twitter), TikTok, Email, by SMS text and more.

**Chat** — In our endeavor to enhance the live event experience digitally, we will feature an integrated user chat system so users can connect, share and comment regarding the live content. The integrated chat will allow users to connect, comment and share, all without leaving the LiveOne App.

**Community Features** — Central to the consumption of live music online is the ability for the audience to interact with each other, our hosts and influencers, and the artists themselves. We are building out the social features for our social community based around highly engaging, exclusive live music festival broadcasts that will enable us to innovate our social engagement tools beyond the competition.

**Pay-Per-View (**"**PPV**"**)** — Due to the growing demand for digital-only events post COVID-19, we created our own PPV platform, which allows artists, venues, promoters and festivals to charge users direct for digital access to live events. We also expect our PPV platform to continue to grow substantially in the long term.

By executing the above strategies, we are creating a platform that is dedicated to live music and has the breadth and depth of content to reach and be relevant to a global audience of all ages.

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*Expanding Podcasting Reach*

PodcastOne and its roster of top performing hosts are also able to integrate unique visual elements into the podcasts they produce and distribute them via YouTube, with PodcastOne becoming the first podcast network to utilize Adori, a pioneering interface technology. Adori's unique YouTube integration technology allows podcast hosts and networks to seamlessly import episodes from RSS feeds, enhance them with visual elements and upload enriched assets directly to YouTube. Adori's patented technology embeds contextual visuals, multi-format ads, augmented reality ("AR") experiences, buy buttons, polls, and other "call to action" features in the audio creating a more enhanced and richer listener experience. In creating visually enhanced podcasts, Adori's YouTube product provides additional monetization avenues for PodcastOne's slate of original programming, increased discoverability and search engine optimization presence.

In June 2023, we launched PodcastOne TV, a FAST channel that will stream the video content from PodcastOne's slate of award-winning podcasts, to be distributed through MuxIP to 60 outlets, using MuxIP's FASTHub for OTT platform. MuxIP will enable PodcastOne to expand its content to viewers of niche content on Smart TVs and a wide range of devices. MuxIP is a global leader in powering the rapidly growing TV business model centered on FAST.

PodcastOne has built, owns and operates a solution for the growing number of independent podcasters called LaunchPadOne. LaunchPadOne is a free innovative self-publishing podcast hosting, distribution, and monetization platform that provides an end-to-end podcast solution. LaunchPadOne was created to provide a low or no cost tool for independent podcasters without access to parent podcasting networks or state of the art equipment to create shows. LaunchPadOne serves as a talent pool for us to find new podcasts and talent. With over 1,000 available podcasts, LaunchPadOne offers creators a 360 podcasting ecosystem - a cutting-edge technology hosting platform, customizable design elements, a podcast player, distribution tools to publish on all major listening apps, including Apple Podcasts, Spotify, Google Podcasts, Overcast and Pocket Casts and others, and a deep network of shows. LaunchPadOne's robust platform technology, promotion and monetization opportunities will allow podcast creators to leverage unique opportunities from PodcastOne, such as the ability to accumulate new listeners, get discovered, and collaborate with the established podcast network. PodcastOne will monetize the audience of the LaunchPadOne network through ad insertion technology platform, which generates revenue for PodcastOne. Simultaneously, LaunchPadOne creators will receive free hosting and also have the opportunity to generate revenue for their own podcasts by embedding any ads they sell on their own.

**Competition**

While the broader market for live entertainment remains highly competitive, the digital distribution of live and music-related video content is still a nascent market. We believe live streamed music video content is the only remaining media genre without a dominant brand. We believe there is a tremendous amount of high-quality live music content available to be captured and produced but without a singular home for distribution and access by the public at large.

We expect to compete for the time and attention of our users with other Content Providers based on a number of factors, including: quality of experience, relevance, acceptance and diversity of content, ease of use, price, accessibility, perceptions of advertisement load, brand awareness and reputation. We also expect to compete for the time and attention of users based on the presence and/or visibility of the LiveOne platform as compared with other platforms and Content Providers that deliver content through Internet-connected screens.

Our competitors include (i) broadcast radio providers, including terrestrial radio providers such as CBS and satellite radio providers such as Sirius XM, (ii) interactive on-demand audio content and pre-recorded entertainment, such as Apple Music, Amazon Music, Spotify and Pandora that allow listeners to stream music or select the audio content that they stream or purchase, (iii) podcast providers, including Amazon Music, Apple Music, Apple Podcasts, Spotify and iHeartMusic, (iv) large merchandise retailers, online and traditional specialty retailers, (v) other forms of entertainment, including Facebook, Twitch, Instagram, Google/YouTube and X (formerly Twitter), and (v) promoters and producers of content on mobile, online and AR/VR platforms such as Red Bull TV, Live Nation TV and independent content owners. Conversely, these content platforms can also become valuable distribution partners. For example, we have livestreamed our music festivals and events across Facebook, YouTube and Twitch, and partnered with iHeartMedia to livestream multiple iHeart-sponsored events across our music platform, and our podcasts are available on Spotify, Amazon Music, Apple Podcasts, and iHeartMusic, among others.

We may also face direct competition from other large live music event competitors with regards to online distribution of live music and music-related video content, ticketing and sponsorship opportunities, including from Live Nation, AEG, and LiveStyle (formerly SFX). Furthermore, there are many smaller, regional companies that compete in the market as well.

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**Music Copyright and Rights Regulation**

As a participant in the global music and radio industries, we are subject to a variety of copyright and regulatory obligations.

● Broadcast Music, Inc. ("BMI") – BMI is a bridge between songwriters and the business and organizations that want to play their music publicly. BMI supports businesses and organizations that play music publicly by offering blanket music licenses that permit them to play nearly 17 million musical works.

● The American Society of Composers, Authors and Publishers ("ASCAP") – ASCAP is a membership association of more than 800,000 songwriters, composers and music publishers. ASCAP licenses songs and scores to the businesses that play them publicly.

● SoundExchange, Inc. – SoundExchange ("SX") collects and distributes digital performance royalties on behalf of more than 245,000 recording artists and master rights owners and licensees.

● The Music Modernization Act (MMA) updated the copyright law to make statutory licensing more efficient for digital music providers. Under the new law, the U.S. Copyright Office has designated the Mechanical Licensing Collective, Inc. (The MLC) to collect and distribute mechanical royalty payments. As of January 1, 2021, LiveOne has a blanket license in place with the MLC that enables us to make all songs delivered by our recorded music label partners available to our users in our music service upon delivery, eliminating any need for further rights clearances, making our service more robust and current.

● Other performing right organizations.

**Government Regulation**

Our operations are subject to various federal, state and local laws statutes, rules, regulations, policies and procedures, both domestically and internationally, governing matters such as:

● labor and employment laws;

● the United States Foreign Corrupt Practice Act (the "FCPA") and similar regulations and laws in other countries;

● sales and other taxes and withholding of taxes;

● U.S. Securities and Exchange Commission (the "SEC") requirements;

● privacy laws and protection of personally identifiable information;

● marketing activities online; and

● United States copyright laws.

We believe that we are in material compliance with these laws. We are also required to comply with the laws of the countries we operate in and anti-bribery regulations under the FCPA. Such regulations make it illegal for us to pay, promise to pay, or receive money or anything of value to, or from, any government or foreign public official for the purpose of directly or indirectly obtaining or retaining business. This ban on illegal payments and bribes also applies to agents or intermediaries who use funds for purposes prohibited by the statute.

From time to time, governmental bodies have proposed legislation that could have an effect on our business. For example, some legislatures have proposed laws in the past that would impose potential liability on promoters and producers of live music events for entertainment taxes and for incidents that occur at such events, particularly incidents relating to drugs and alcohol. More recently, some jurisdictions have proposed legislation that would restrict ticketing methods and mandate ticket inventory disclosure.

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**Privacy Policy**

As a company conducting business on the Internet, we are subject to a number of foreign and domestic laws and regulations relating to information security, data protection and privacy, among others. Many of these laws and regulations are still evolving and could be interpreted in ways that could hurt our business. In the area of information security and data protection, the laws in several states require companies to implement specific information security controls to protect certain types of personally identifiable information. Likewise, all but a few states have laws in place requiring companies to notify users if there is a security breach that compromises certain categories of their personally identifiable information. Any failure on our part to comply with these laws may subject us to significant liabilities.

We are also subject to federal and state laws regarding privacy of listener data. Our privacy policy and terms of use describe our practices concerning the use, transmission and disclosure of listener information and are posted on our website. Any failure to comply with our posted privacy policy or privacy-related laws and regulations could result in proceedings against us by governmental authorities or others, which could harm our business. Further, any failure by us to adequately protect the privacy or security of our users' information could result in a loss of confidence in our brand among existing and potential users, and ultimately, in a loss of users and advertising users, which could adversely affect our business.

We also collect and use certain types of information from our users in accordance with the privacy policies posted on our websites. We collect personally identifiable information directly from our platform's users when they register to use our service, fill out their listener profiles, post comments, use our service's social networking features, participate in polls and contests and sign up to receive email newsletters. We may also obtain information about our platform's users from other platform users and third parties. We also collect information from users using our other websites in order to provide ticketing services and other user support. Our policy is to use the collected information to customize and personalize our offerings for platform users and other users and to enhance the listeners' experience when using our service.

The sharing, use, disclosure and protection of personally identifiable information and other user data are governed by existing and evolving federal, state and international laws. We could be adversely affected if legislation or regulations are expanded to require changes in business practices or privacy policies, or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition and results of operations. We intend to attract users from all over the world, and as we expand into new jurisdictions, the costs associated with compliance with these regulations increases. It is possible that government or industry regulation in these markets will require us to deviate from our standard processes, which will increase operational cost and risk. We intend to commit capital resources to ensure our compliance with any such regulations.

**Intellectual Property**

We own 39 registered or pending patents on our streaming Internet radio services, including patents over playback of digital media content, method for providing user personalized content, systems for portable personalized radio, method for interactive distribution of digital content and systems for scoring and raking digital content based on activity of network users. We also own over 25 trademarks and trademark applications covering our various brands, channels and product names.

We intend to protect our trademarks, brands, copyrights, patents and other original and acquired works, ancillary goods and services. In connection with the Slacker acquisition, we acquired a trademark for the Slacker name. We believe that certain trademarks and other proprietary rights that we may apply for or otherwise obtain will have significant value and will be important to our brand-building efforts and the marketing of our services. We cannot predict, however, whether steps taken by us to protect our proprietary rights will be successful or adequate to prevent misappropriation, infringement or other violation of these rights. Upon the consummation of any future acquisitions, we may acquire additional registered trademarks, as well as applied-for trademarks potentially for worldwide use. See section below entitled "Item 1A. Risk Factors — We may be unable to adequately protect our intellectual property rights."

**Human Capital Management**

Our business relies on our ability to attract and retain talented employees. In order to do so, we seek to provide a work environment that creates a diverse, inclusive and supportive workplace, with opportunities for our employees to grow and develop in their careers, which is supported by competitive compensation, benefits, and health and wellness programs.

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*Workforce Composition*

As of March 31, 2025, we had a total of 113 employees as well as other persons who provide to us consulting and other services, including through our subsidiaries. These employees represent the diverse and complex nature of LiveOne with skills in programming operations, sales, engineering, podcasting, digital and beyond, as well as corporate support, such as information technology, legal, human resources, communications and finance.

*Total Rewards*

We operate in a highly-competitive environment and make significant investments in our people and provide competitive pay and comprehensive benefits including:

● Employer sponsored health insurance;

● Paid sick, holidays and vacation;

● 401(k) plan; and

● An Employee Assistance Program, which is available to all full-time employees and their household members at no cost and provides services such as in person and telephonic counseling sessions, consultation on legal and financial matters and referrals for services such as child-care and relocation.

In response to COVID-19 we quickly took action enabling our employees, where possible, to work from home, voluntarily expanding our paid sick leave benefits to include additional paid time off for COVID-related illness, testing, and implementing flexible work policies and reasonable accommodations for our employees on a case by case basis, including making resources available to parents who were homeschooling their children and offering a mid-year annual enrollment to give our employees the opportunity to elect additional coverage if they so desired.

*Diversity*

Diversity, equity and inclusion are keys to our success. As a company, we value diversity and respect all voices, from both inside and outside our organization. One of our top human capital priorities at LiveOne is to create an inclusive organizational culture to attract and develop a dynamic workforce that is as diverse as the audiences and communities we serve which includes and supports gender identity, race, sexual orientation, sexual identity, ethnicity, religion, socioeconomic background, age, disability, national origin and more. Our ongoing recruiting efforts include including targeting minority enrolled universities, working with minority and woman owned talent and search firms, working hand and hand with them to create job descriptions that are both gender neutral and culturally sensitive to attract the most diverse and inclusive candidate pools. In addition, our board of directors is committed to seeking director candidates who can best contribute to the future success of our Company and represent stockholder interests through the exercise of sound judgment and leveraging of the group's diversity of skills and experience, resulting in board members with diverse backgrounds, including, among other attributes, gender, ethnicity and professional experience.

*Workplace Safety*

Employee health and safety in the workplace is of utmost importance to our Company. We believe that all employees, regardless of our job role or title, have a shared responsibility in the promotion of health and safety in the workplace. We collectively are committed to providing and following all safety laws and rules, including internal policies and procedures. This means carrying out company activities in ways that preserve and promote a clean, safe and healthy environment.

The global effects associated with the COVID-19 pandemic have been unprecedented in their scope and depth. We have been and will continue to be following recommendations of the U.S. Center for Disease Control and other applicable agencies to maximize the safety and well-being of our employees. With respect to job roles that can be performed remotely, we quickly implemented a Work from Home policy that enabled our employees to continue working while also keeping themselves and their loved ones safe.

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**Geographic Information**

For additional information regarding our segments, including information about our financial results by geography, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1 – Organization and Basis of Presentation to our consolidated financial statements included elsewhere in this Annual Report.

**Going Concern**

We are dependent upon the receipt of capital investment and other financing to fund our ongoing operations and to execute our business plan. If continued funding and capital resources are unavailable at reasonable terms, we may not be able to implement our plan of operations. We may be required to obtain alternative or additional financing, from financial institutions or otherwise, in order to maintain and expand our existing operations. The failure by us to obtain such financing would have a material adverse effect upon our business, financial condition and results of operations.

Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern within one year after the date that the financial statements are issued. We may be required to cease operations which could result in our stockholders losing all or almost all of their investment. Management's plans in regard to these matters are described in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1 – Organization and Basis of Presentation to our consolidated financial statements included elsewhere in this Annual Report.

**Corporate History**

On August 2, 2017, our name changed from "Loton, Corp" to "LiveXLive Media, Inc.", and we reincorporated from the State of Nevada to the State of Delaware, pursuant to the reincorporation merger of Loton, Corp ("Loton"), a Nevada corporation, with and into LiveXLive Media, Inc., a Delaware corporation and Loton's wholly owned subsidiary, effected on the same date. As a result of such reincorporation merger, Loton ceased to exist as a separate entity, with LiveXLive Media, Inc. being the surviving entity. On October 6, 2021, our name changed from "LiveXLive, Media Inc." to "LiveOne, Inc." Our principal executive offices are located at 269 S. Beverly Drive, Suite #1450, Beverly Hills, CA 90212.

**Available Information**

Our main corporate website address is www.liveone.com. Copies of our Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K, Current Reports on Form 8-K and our other reports and documents filed with or furnished to the SEC, and any amendments to the foregoing, will be provided without charge to any shareholder submitting a written request to the Secretary at our principal executive offices or by calling (310) 601-2505. All of our SEC filings are also available on our website at http://ir.liveone.com/ir-home as soon as reasonably practicable after having been electronically filed or furnished to the SEC. All of our SEC filings are also available at the SEC's website at www.sec.gov.

We provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, and press and earnings releases on the investor relations section of our corporate website. Investors can receive notifications of new press releases and SEC filings by signing up for email alerts on our website. Further corporate governance information, including our board committee charters and code of ethics, is also available on our website at http://ir.liveone.com/ir-home. The information included on our website or social media accounts, or any of the websites of entities that we are affiliated with, is not incorporated by reference into this Annual Report or in any other report or document we file with the SEC, and any references to our website or social media accounts are intended to be inactive textual references only.

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**Item 1A. Risk Factors**

*You should carefully consider the risks described below, together with all of the other information included in this Annual Report, before deciding whether to invest in our common stock. The occurrence of any of the risks described below could have a material adverse effect on our business, financial condition, results of operations and future growth prospects. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your investment. Many of the following risks and uncertainties are, and will be, exacerbated by Russia's invasion of Ukraine, the Israel-Hamas War and any worsening of the global business and economic environment as a result.*

**RISK FACTORS SUMMARY**

*The risks contained in this Risk Factors Summary are not exhaustive and it is not possible for us to predict all risks that could cause our actual results to differ materially. The risks speak only as of the date hereof, and new risks may emerge or changes to the foregoing risks may occur that could impact our business. Some of the material risk include, but are not limited to, the following:*

**Risks Related to Our Business and Industry**

● We rely on our largest OEM customer for a substantial percentage of our revenue. The loss of our largest OEM customer or the significant reduction of business or growth of business from such customer could significantly adversely affect our business, financial condition and results of operations.

● We rely on our relationship with our largest OEM customer for a substantial percentage of our potential subscribers who are now eligible to convert to become direct customers of LiveOne. Our inability to convert a significant number of these subscribers could cause a significant reduction of our business and could significantly adversely affect our business, financial condition and results of operations.

● We have incurred significant operating and net losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

● We may require additional capital, including to fund our current debt obligations and to fund potential acquisitions and capital expenditures, which may not be available on terms acceptable to us or at all and which depends on many factors beyond our control.

● Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our common stock and penny stock trading.

● There is substantial doubt about our ability to continue as a going concern.

● Our business is partially dependent on our ability to secure music streaming rights from Content Providers and to stream their live music and music-related video content on our platform, and we may not be able to secure such content on commercially reasonable terms or at all.

● We may be unable to fund any significant up-front and/or guaranteed payment cash requirements associated with our live music streaming rights, which could result in the inability to secure and retain such streaming rights and may limit our operating flexibility, which may adversely affect our business, operating results and financial condition.

● We face intense competition from competitors, and we may not be able to increase our revenues, which could adversely impact our business, financial condition and results of operations.

● We may be subject to risks associated with artificial intelligence and machine learning technology.

● Advancements in AI technology may adversely affect our business model and competitive position.

**Risks Related to Our Company**

● For the fiscal year ended March 31, 2024, our management concluded that our disclosure controls and procedures and our internal control over financial reporting were not effective. If we are unable to establish and maintain effective disclosure controls and internal control over financial reporting, our ability to produce accurate financial statements on a timely basis or prevent fraud could be impaired, and the market price of our securities may be negatively affected.

● We heavily depend on relationships with our Content Providers and other Industry Stakeholders and adverse changes in these relationships, could adversely affect our business, financial condition and results of operations.

● We rely on key members of management, particularly our Chairman and Chief Executive Officer, Mr. Robert Ellin, and our Chief Financial Officer, Ryan Carhart, and the loss of their services or investor confidence in them could adversely affect our success, development and financial condition.

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● Unfavorable outcomes in legal proceedings may adversely affect our business, financial conditions and results of operations.

● Our debt agreements contain restrictive and financial covenants that may limit our operating flexibility and our substantial indebtedness may limit cash flow available to invest in the ongoing needs of our business. 

● We may not have the ability to repay the amounts then due under our senior Debentures and/or Capchase Loan (each as defined below) at maturity, required redemption payments and/or to the holders of our Series A Preferred Stock, which would have a material adverse effect on our business, operating results and financial condition.

● If we do not comply with the provisions of our senior Debentures, the holders of the Debentures may accelerate our obligations to them and require us to repay all outstanding amounts owed thereunder.

● Our ability to satisfy the conditions to issue the Additional Debentures (as defined below).

● We may incur substantially more debt or take other actions that would intensify the risks related to our indebtedness.

**Risks Related to Our Acquisition Strategy**

● We can give no assurances as to when we will consummate any future acquisitions or whether we will consummate any of them at all. 

**Risks Related to Technology and Intellectual Property**

● We rely heavily on technology to stream content and manage other aspects of our operations and on our Content Management System. The failure of any of this technology to operate effectively could adversely affect our business.

**Risks Related to Our PodcastOne Business**

● PodcastOne generates a substantial portion of it revenues from its podcast and advertising sales. If PodcastOne fails to maintain or grow podcasting and advertising revenue, our financial results may be adversely affected.

● PodcastOne faces and will continue to face competition for listeners and listener listening time.

● PodcastOne's business is dependent upon the performance of the podcasts and their talent.

● If PodcastOne fails to increase the number of listeners consuming its podcast content, our business, financial condition and results of operations may be adversely affected.

● PodcastOne's podcasting revenue and operating results are highly dependent on the overall demand for advertising.

● PodcastOne relies on integrations with advertising platforms, demand-side platforms ("DSPs"), proprietary platforms and ad servers, over which we exercise very little control.

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**Risks Related to Our E-commerce Merchandising Business**

● Our business is affected by seasonality, which could result in fluctuations in our operating results.

● We are subject to data security and privacy risks that could negatively affect our results, operations or reputation.

● Changes in tax treatment of companies engaged in e-commerce may adversely affect the commercial use of our sites and our financial results.

**Risks Related to the Ownership of Our Common Stock**

● The market price of our common stock may be highly volatile.

● We cannot guarantee that our stock repurchase program will be consummated, fully or all, or that it will enhance long-term shareholder value. Stock repurchases could also increase the volatility of the trading price of our stock and could diminish our cash reserves.

● Our Chairman and Chief Executive Officer and stockholders affiliated with him own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

● Sales of a substantial number of shares of our common stock in the public market by certain of our stockholders could cause our stock price to fall.

● We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.

● Provisions in our Certificate of Incorporation and Bylaws and provisions under Delaware law could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, and may prevent or frustrate attempts by our stockholders to replace or remove our current management.

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**Risks Related to Our Business and Industry**

***We rely on our largest OEM customer for a substantial percentage of our revenue. The loss of our largest OEM customer or the significant reduction of business or growth of business from such customer could significantly adversely affect our business, financial condition and results of operations.***

Our business is dependent, and we believe that it will continue to depend, on our customer relationship with Tesla, which accounted for 45% of our consolidated revenue for the year ended March 31, 2025 and 51% of our consolidated revenue for the year ended March 31, 2024.

Our existing agreement with Tesla governs our music services to certain of its car user base in North America, including our audio music streaming services. As of May 2025, Tesla has extended the term of our license agreement (the "license agreement") until at least May 2026, and the license agreement is expected to continue to be renewed thereafter on its terms. Tesla has agreed to pay us for any grandfathered users for the term of the license agreement, however Tesla no longer pays us for any other users beginning December 2024. If we fail to maintain certain minimum service level requirements related to our service with Tesla or other obligations related to our technology or services, Tesla may terminate the license agreement to provide them with such service. Tesla may also terminate our license agreement for convenience at any time with prior notice to us. If Tesla terminates our license agreement, further modifies the services that we provide to Tesla under such agreement, requires us to renegotiate the terms of such agreement or we are unable to renew such agreement on mutually agreeable terms, no longer pays for and/or makes our music services available to Tesla's paid grandfathered car user base, no longer makes an option for its car users to sign up for LiveOne, becomes a native music service provider, replaces our music services with one or more of our competitors and/or we experience a significant further reduction of business from Tesla, our business, financial condition and results of operations would be materially adversely affected.

In addition, membership revenue we generate from Tesla from grandfathered car users is indirectly subsidized by Tesla to its customers, which Tesla plans to carry indefinitely but is not obligated to do so, including its ability to reclassify or renegotiate with us the definition of a paid grandfathered member under the license agreement and/or make available, terminate and/or change our music services for convenience at any time with prior notice to us. Should our membership revenue services no longer be subsidized by and/or made available by Tesla to its grandfathered customers or if Tesla reclassifies or renegotiates with us the definition of a paid grandfathered member or demands credit for past members that no longer meet such requirement, there can be no assurance that we will continue to maintain the same number of paid grandfathered members or receive the same levels of membership service revenue from such members in the future. There is no assurance that we would be able to replace Tesla or lost business with Tesla with one or more B2B customers that generate comparable revenue. Furthermore, there could be no assurance that Tesla will continue indefinitely to pay us for grandfathered car users.

Tesla has also integrated Spotify Premium to its cars' in-dash touchscreen for its Model S, Model X and Model 3 vehicles. Tesla owners now have access to our music streaming services, as well as those of Spotify and TuneIn natively. There is no assurance that our music streaming services will be available in every current and/or future Tesla model. Furthermore, our current and future competitors like Spotify, Apple Music, Tesla (if it becomes a native music service provider) and others may have more well-established brand recognition, more established relationships with, and superior access to content providers and other industry stakeholders, greater financial, technical and other resources, more sophisticated technologies or more experience in the markets in which we compete. If we are unable to compete successfully for users against our competitors by maintaining and increasing our presence and visibility, the number of users of our network may fail to increase as expected or decline and our advertising sales, membership fees and other revenue streams will suffer.

***We rely on our relationship with our largest OEM customer for a substantial percentage of our potential subscribers who are now eligible to convert to become direct customers of LiveOne. Our inability to convert a significant number of these subscribers could cause a significant reduction of our business and could significantly adversely affect our business, financial condition and results of operations.***

Our business is dependent, and we believe that it will continue to depend on our customer relationship with Tesla, our largest OEM customer. Commencing in October 2024, we began working with Tesla to convert Tesla's connectivity package users to become direct subscribers (members) of our Premium or Plus service. The direct subscription to LiveOne allows such users for the first time to access their LiveOne music and LiveOne's other service offerings directly across all of their devices. LiveOne's music streaming button/icon, which allows users to directly connect their subscription to LiveOne, is expected to remain in Tesla's music streaming services dashboard in perpetuity. As a result, we believe we now have a unique opportunity to convert as many of Tesla's drivers as possible to a higher priced LiveOne subscription service creating a meaningful upside opportunity for our Company, and we are working in good faith with Tesla to convert as many of these drivers as possible.

We believe that with the full cooperation from Tesla, we can convert a substantial number of such users to become direct subscribers of LiveOne. However, there is no assurance that we would be able to convert a substantial number of such users to become direct subscribers of LiveOne and/or replace Tesla or lost business with Tesla with one or more other B2B customers that generate comparable revenue. If we fail to convert a significant number of these drivers as direct subscribers of LiveOne that could cause a significant reduction of our business and could significantly adversely affect our business, financial condition and results of operations. In addition, even such drivers elect to directly pay for their subscription to LiveOne services, there can be no assurance that we will continue to maintain the same number of paid subscribers or receive the same levels of subscription service revenue and subscription revenue may substantially fluctuate accordingly. Accordingly, there could be no assurance that our revenue and/or EBITDA continues to grow at the same rate of growth as in our 2025 fiscal year or at all.

***We have incurred significant operating and net losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.***

As reflected in our consolidated financial statements included elsewhere herein, we have a history of losses, incurred significant operating and net losses in each year since our inception, including net losses of $20.4 million and $13.3 million for the fiscal years ended March 31, 2025 and 2024, respectively, and provided cash and used cash in operating activities of $6.4 million and $6.8 million for the fiscal years ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $265.1 million.

We expect to continue to incur substantial and increased expenses as we continue to execute our business approach, including expanding and developing our content and platform and potentially making other accretive acquisitions, and anticipate incurring additional losses until such time that we can generate significant increases to our revenues, and/or reduce our operating costs and losses. To date, we have financed our operations exclusively through the sale of equity and/or securities (including convertible securities), and after PodcastOne's acquisition by us on July 1, 2020, through our sale of PodcastOne's and our equity and/or debt securities (including convertible securities). The size of our future net losses will depend, in part, on the rate of future expenditures and our ability to significantly grow our business and increase our revenues. We expect to continue to incur substantial and increased expenses as we grow our business. We also expect a continued increase in our expenses associated with our operations as a publicly-traded company. We may incur significant losses in the future for a number of other reasons, including unsuccessful acquisitions, costs of integrating new businesses, expenses, difficulties, complications, delays and other unknown events. As a result of the foregoing, we expect to continue to incur significant losses for the foreseeable future and we may not be able to achieve or sustain profitability.

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The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a growing company, the difficulties that may be encountered with integrating acquired companies and the highly competitive environment in which we operate. For example, while several companies have been successful in the digital music streaming industry and the online video streaming industry, companies have had no or limited success in operating a premium Internet network devoted to live music and music-related video content. We cannot assure you that our business will be profitable or that we will ever generate sufficient revenue to fully meet our expenses and support our anticipated activities

Our ability to meet our total liabilities, as reported in the accompanying consolidated balance sheets, and to continue as a going concern, is dependent on our ability to increase revenue, reduce costs, achieve a satisfactory level of profitable operations, obtain additional sources of suitable and adequate financing and further develop and execute on our business plan. We may never achieve profitability, and even if we do, we may not be able to sustain being profitable. As a result of the going concern uncertainty, there is an increased risk that you could lose the entire amount of your investment in our company, which assumes the realization of our assets and the satisfaction of our liabilities and commitments in the normal course of business.

***We may require additional capital, including to fund our current debt obligations and to fund potential acquisitions and capital expenditures, which may not be available on terms acceptable to us or at all and which depends on many factors beyond our control.***

Historically, we have funded our business operations and capital expenditures primarily through equity and/or debt issuances (including convertible securities). To support our growing business, we must have sufficient capital to continue to make significant investments in our platform and product offerings. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to those of our common stock, and our existing stockholders may experience dilution. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. Any refinancing of our indebtedness could be at significantly higher interest rates, require additional restrictive financial and operational covenants, or require us to incur significant transaction fees, issue warrants or other equity securities, or issue convertible securities. These restrictions and covenants may restrict our ability to finance our operations and engage in, expand, or otherwise pursue our business activities and strategies. Our ability to comply with these covenants and restrictions may be affected by events beyond our control, and breaches of these covenants and restrictions could result in a default and an acceleration of our obligations under a debt agreement. If we raise additional funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or our solutions under development, or grant licenses on terms that are not favorable to us, which could lower the economic value of those programs to us.

We evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our development efforts, business plans and operating performance and the condition of the capital markets at the time we seek financing and to an extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot be certain that additional financing will be available to us on favorable terms, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited, and our business, financial condition and results of operations could be adversely affected.

***There is substantial doubt about our ability to continue as a going concern***

Our independent registered public accounting firm has issued an opinion on our audited financial statements included in this Annual Report that contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern because we have experienced recurring losses, negative cash flows from operations, and limited capital resources. These events and conditions indicate that a material uncertainty exists that may cast significant doubt on our ability to continue as a going concern. The perception that we may not be able to continue as a going concern may have a material adverse effect on our share price and our ability to raise new capital (whether it is through the issuance of equity or debt securities or otherwise), enter into critical contractual relations with third parties and otherwise execute our business objectives. Until we can generate significant profit from operations and positive cash flow from operations, we expect to satisfy our future cash needs through debt and/or equity financing. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to continue as a going concern, we may have to curtail some or all of our ongoing operations and/or liquidate some or all of our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.

***Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our common stock and penny stock trading.***

In March 2025, we received a notice from the Listing Qualifications Department the Nasdaq Stock Market ("Nasdaq"), regarding the fact that the market price of our shares of common stock was below the $1.00 minimum bid price requirement for continued listing (the "Bid Price Rule"). There can be no assurance that we will be able to correct the Bid Price Rule deficiency, or that we will be able to continue to meet all of the other criteria necessary for Nasdaq to allow us to remain listed. If we fail to satisfy the applicable continued listing requirement and continue to be in non-compliance after notice and the applicable grace period ends (which is six months in the case of the Bid Price Rule, subject to an additional six-month extension), Nasdaq may commence delisting procedures against our Company (during which we may have additional time of up to six months to appeal and correct our non-compliance). At that time, we may appeal the relevant delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules. However, there can be no assurance that, if we do appeal the delisting determination by Nasdaq to the panel, that such appeal would be successful. We will continue to actively monitor the closing bid price of our common stock and will evaluate available options to resolve the deficiency and regain compliance with the Bid Price Rule. There can be no assurance that we will be able to regain compliance with the Bid Price Rule and thereby to maintain the listing of its common stock on The Nasdaq Capital Market.

If our common stock is ultimately delisted from Nasdaq, our common stock would likely then trade only in the over-the-counter market and the market liquidity of our common stock could be adversely affected and their market price could decrease. If our common stock were to trade on the over-the-counter market, selling our common stock could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity with respect to our securities; a determination that our shares are a "penny stock," which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; a reduced amount of news and analyst coverage for our Company; and a decreased ability to issue additional securities or obtain additional financing in the future. These factors could result in lower prices and larger spreads in the bid and ask prices for our common stock and would substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer development opportunities for us.

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In addition to the foregoing, if our common stock are ultimately delisted from Nasdaq and they trade on the over-the-counter market, the application of the "penny stock" rules could adversely affect the market price of our common stock and increase the transaction costs to sell those shares. The SEC has adopted regulations which generally define a "penny stock" as an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. If our common stock are ultimately delisted from Nasdaq and then trade on the over-the-counter market at a price of less than $5.00 per share, our common stock would be considered a penny stock. The SEC's penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules generally require that before a transaction in a penny stock occurs, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our common stock and may affect the ability of investors to sell their shares, until our common stock is no longer considered a penny stock.

***Our business is partially dependent on our ability to secure music streaming rights from Content Providers and to stream their live music and music-related video content on our platform, and we may not be able to secure such content on commercially reasonable terms or at all.***

Our business is dependent on our ability to secure rights to stream on our platform a variety of popular content from Content Providers. Our licensing, distribution and/or production arrangements with Content Providers may be short-term and do not guarantee the continuation or renewal of these arrangements on commercially reasonable terms, if at all. Additionally, while our agreements with music festivals and other live music events and venues allow us to stream content from such events and venues, we typically require additional permission from the artists performing at such events, other rights holders and venues. While the majority of artists at music festivals and other live music events and venues that we have contracts with have in the past agreed to allow us to stream their performances, there is no guarantee that artists at an event will agree to allow us to stream their performances. Any unwillingness of such partners to supply content to us or lack of availability of popular artists to perform at such venues and events could limit our ability to enhance user experience and deepen user engagement with our platform and therefore reduce our revenue opportunities. If we are unable to secure rights to steam our content, then our business, financial condition and results of operations would be adversely affected. Additionally, to the extent any music festival or other live music event that we have rights to stream is cancelled or delayed, whether as a result of cancellation by a pandemic, artists, weather, terrorism or otherwise, we may receive little or no content from such live event.

In the 2019 fiscal year, we also began livestreaming our own digital live events under "LiveOne Presents". In the 2021 fiscal year, we also began livestreaming our own digital festivals and live events under "Music Lives" and "Music Lives ON", with "Music Lives" returning in March 2021 for its second edition. As we continue to livestream and grow our own live events, we may directly compete with our current and prospective Content Providers. This direct competition with our current and prospective Content Providers could harm our existing and future relationships with our Content Providers, and may result in a decline in the number of live events partnership, license, distribution and/or production opportunities available to us, which could adversely affect our business, financial condition and results of operations.

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Some Content Providers and distributors, currently or in the future, may also take action to make it more difficult or impossible for us to partner with, license, distribute and/or produce their content, including as a result of them offering a competing product. Other content owners, providers or distributors may seek to limit our access to, increase the cost of, or otherwise restrict or prohibit our use of such content. As a result, we may be unable to offer a wide variety of content at reasonable prices with acceptable usage rules or expand our geographic reach.

Additionally, some content on our platform is currently provided free of digital rights management to prevent the unauthorized redistribution of digital media. If our business model changes, we may have to develop or license digital rights management technology. There is no assurance that we will be able to develop or license such technology at a reasonable cost and in a timely manner. In addition, certain countries have passed or may propose and adopt legislation that would require us to license our digital rights management, if any, which could weaken the protection of content, subject us to piracy and also negatively affect arrangements with our Content Providers.

***We may be unable to fund any significant up-front and/or guaranteed payment cash requirements associated with our live music streaming rights, which could result in the inability to secure and retain such streaming rights and may limit our operating flexibility, which may adversely affect our business, operating results and financial condition.***

In order to secure event and festival live music streaming rights, we may be required to fund significant up-front and/or minimum guaranteed cash payment requirements to artists or festival or event promoters prior to the event or festival taking place ("MGs"). While some MGs are recoupable by us as a direct cost before we share any revenue with the underlying partners, such future MGs are not tied to a number of users, active users, paid members or the number of times we stream such content on our platform. Accordingly, our ability to achieve and sustain profitability and operating leverage on our services in part depends on our ability to increase our revenues through increased sales of premium services and advertising sales on terms that maintain an adequate gross margin. The duration of our content acquisition agreements that contain MGs is typically between three to seven years, but our paid members may cancel their memberships at any time. If our forecasts for paid members do not meet our expectations or the number of our paid members or advertising sales do not materialize and/or decline significantly during the term of our content acquisition agreements, our margins may be materially and adversely impacted. To the extent our premium service revenue growth or advertising sales do not meet our or our partners' collective expectations, our business, operating results and financial condition also could be adversely impacted as a result of such MGs. In addition, the fixed cost nature of these MGs may limit our flexibility in planning for, or reacting to, changes in our business and the market segments in which we operate.

We rely on estimates of the market share of licensable content controlled by each content provider, as well as our own user growth and forecasted advertising revenue, to forecast whether such MGs could be recouped against our actual content acquisition costs incurred over the duration of each content acquisition agreement. To the extent that this revenue and/or market share estimates underperform relative to our expectations, leading to content acquisition costs that do not exceed such up-front and minimum guarantees, our margins may be materially and adversely impacted. If we do not have sufficient cash on hand or available capacity to advance the necessary cash for any given artist, event or festival, we would not be able to retain the rights for that artist, festival or event, such counter parties may be able to terminate their content acquisition agreements with us, and as a result our business, financial condition and results of operations may be adversely affected.

***If we fail to increase the number of users consuming our music and music-related video content on our platform, and/or the number of members to Slacker, our business, financial condition and results of operations may be adversely affected.***

The size of our user base is critical to our success, and we will need to develop and grow our user base to be successful. We currently generate revenue from Slacker's operations and expect to generate additional revenue based upon membership, VOD, PPV, advertising and sponsorship, licensing, e-commerce and data, which is dependent on the number of users we retain and attract. For example, if we are unable to retain and attract users, we may be unable to attract users to our network and/or increase the frequency of users' engagement with our platform. In addition, if users do not perceive our content as original, entertaining or engaging, we may not be able to attract sponsorship opportunities and/or increase the resulting frequency of users' engagement with our platform and content. If we are unable to retain and attract users, our network and services could also be less attractive to potential new users, as well as to Content Providers and other Industry Stakeholders, which could have a material and adverse impact on our business, financial condition and results of operations.

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***Our ability to attract and retain users and/or the number of members to Slacker is highly sensitive to rapidly changing public tastes in music and technology.***

Our ability to attract and retain users and/or members to Slacker is highly sensitive to rapidly changing public tastes in music and technology and is dependent on our ability to maintain the attractiveness of our platform, content, technology and reputation as a place where quality online live music and music-related video content can be accessed and enjoyed. We will rely on the popularity of our Content Providers and the quality of their respective content to retain users and/or members to Slacker, secure sponsorships and to facilitate growth in revenue from advertising and e-commerce. Maintaining the popularity of our content will be challenging, and our relationship with music fans could be harmed for many reasons, including the quality and diversity of our online content, quality of the experience with a particular festival, event or club, our competitors developing relationships with more popular festivals, events or clubs or attracting talent from our businesses, adverse occurrences or publicity in connection with a festival, event or club and changes to public tastes that are beyond our control and difficult to anticipate. For example, if users and/or members to Slacker do not perceive our platform, including Slacker Radio, and their respective services to be original, entertaining, engaging, useful, reliable or trustworthy, we may be unable to attract and retain users and/or members to our network or Slacker and/or increase the frequency of users' and Slacker's members engagement with our platform. Additionally, any cancellation or delay in the number of podcasts, music festivals, concerts or other live music events that we have rights to stream or broadcast, or are otherwise associated with, may harm our reputation and make any related content less desirable to our users. A number of consumer-oriented music and/or tech websites that achieved early popularity have since seen their user bases or levels of engagement decline, in some cases precipitously. There is no guarantee that we will not experience a similar erosion of our user and member base. If our platform or content become less popular with music fans, our growth strategy would be harmed, which could in turn harm our business and financial results.

Our ability to attract and retain users and/or members to Slacker depends upon many additional factors both within and beyond our control. In addition to the popularity of our content, we believe that our ability to attract and retain users and/or members to Slacker depends upon many factors both within and beyond our control, including:

● the popularity, usefulness, ease of use, performance and reliability of our platform, products and services, including Slacker, our LiveOne App and our PodcastOne application ("PodcastOne App"), compared to those of our competitors;

● the timing and market acceptance of our platform, products and services, including Slacker, LiveOne App and PodcastOne App;

● users' and members' willingness to pay for membership rights to our and Slacker's platforms;

● our ability to develop and monetize an effective strategy to attract advertisers and sponsor of our platform;

● the frequency and relative prominence of the ads displayed by us or our competitors;

● our ability to establish and maintain relationships with our Content Providers to provide new content for our network;

● user and member concerns related to user privacy and our ability to keep user and member data secure;

● changes mandated by, or that we elect to make to address, legislation, regulatory authorities or litigation, including settlements and consent decrees, some of which may have a disproportionate effect on us;

● our ability to attract, retain and motivate talented employees, particularly engineers, designers and platform and content managers;

● fluctuations in costs of content which we may be unwilling or unable to pass through to our users and members;

● competitors' offerings that may include more favorable terms than we offer in order to obtain agreements for new content or venue, festival or ticketing arrangements;

● technological changes and innovations that we are unable to adopt or are late in adopting that offer more attractive entertainment alternatives than we or other live streamed entertainment providers currently offer;

● general economic conditions which could cause consumers to reduce discretionary spending;

● our ability to develop and monetize an effective strategy to buildout our e-commerce revenue stream;

● acquisitions or consolidation within our industry, which may result in more formidable competitors; and

● our reputation and the brand strength and awareness relative to our competitors.

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In addition to attracting and retaining users and members, we will need to minimize user and member churn and attract lapsed users and members back to our platform and services, while ensuring that our user and member acquisition cost does not exceed user and member life-time value.

If we are unable to attract and retain users and members, minimize user and member churn, fail to attract lapsed users and members and/or ensure that our user and member acquisition cost does not exceed our user and member life-time value, any of these factors could adversely affect our business, financial condition and results of operations.

***Our ability to increase the number of our listeners (including members) depends in part on our ability to establish and maintain relationships with automakers, automotive suppliers and consumer electronics manufacturers with products that integrate our service.***

A key element of our strategy to expand the reach of our service and increase the number of our users (including members) and user/member hours spend on our platform is to establish and maintain relationships with automakers, automotive suppliers and consumer electronics manufacturers that integrate our service into and with their products. Working with certain third-party distribution partners, we currently offer listeners (including members) the ability to access our service through a variety of consumer electronics products used in the home and devices connected to or installed in automobiles. We intend to broaden our ability to reach additional listeners and members, and increase current listener (including member) hours, through other platforms and partners over time, including through direct integration into connected cars. However, product design cycles in consumer products and automotive manufacturing are lengthy, and we may not be able to achieve our goals in our desired timeframe, which could adversely impact our ability to grow our business.

Our existing agreements with partners in the automobile and consumer electronics industries generally do not obligate those partners to offer our service in their products. In addition, some automobile manufacturers or their supplier partners may terminate their agreements with us for convenience with minimal notice. Our business could be adversely affected if our automobile partners and consumer electronics partners do not continue to provide access to our service or are unwilling to do so on terms acceptable to us. If we are forced to amend the business terms of our distribution agreements as a result of competitive pressure, our ability to maintain and expand the reach of our service and increase listener hours would be adversely affected, which would reduce our revenue and harm our operating results.

***We are a party to many content acquisition and other license agreements that are complex and impose numerous obligations upon us which may make it difficult to operate our business, and a breach of such agreements could adversely affect our business, operating results and financial condition.***

Many of our content acquisition and other license agreements are complex and impose numerous obligations on us, including obligations to, among other things:

● calculate and make payments based on complex royalty structures, which requires tracking usage of content on our service that may have inaccurate or incomplete metadata necessary for such calculation;

● provide periodic reports on the exploitation of the content in specified formats;

● represent that we will obtain all necessary publishing licenses and consents and pay all associated fees, royalties, and other amounts due for the licensing of musical compositions;

● provide advertising inventory;

● comply with certain broadcasting limitations and restrictions;

● comply with certain marketing and advertising restrictions; and

● comply with certain security and technical specifications.

Some of our content acquisition and other license agreements grant the licensor the right to audit our compliance with the terms and conditions of such agreements. In addition, some of our content acquisition and other license agreements require consent to undertake certain business initiatives and without such consent, our ability to undertake new business initiatives may be limited. This could hurt our competitive position.

If we materially breach any of these obligations or any other obligations set forth in any of our content acquisition and other license agreements, or if we use content in ways that are found to exceed the scope of such agreements, we could be subject to monetary penalties and our rights under such license agreements could be terminated, either of which could have a material adverse effect on our business, operating results and financial condition. We may enter into settlement agreements in the future requiring us to make substantial payments as a result of claims that we are in breach of certain provisions in, or have exceeded the scope of, our content acquisition and other license agreements.

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***We may be unsuccessful in developing our original content.***

We currently produce and plan to continue to produce original music-related video content, including LiveZone and One Rising, and our other digital magazine-style news programming and original-concept digital pilots, documentaries and other original content. We believe that a positive reputation with users concerning our original content is important in attracting and retaining users. To the extent our content, in particular, our original programming, is perceived as low quality, offensive or otherwise not compelling to users, our ability to establish and maintain a positive reputation may be adversely impacted. If the original content we produce does not attract new users, we may not be able to cover our expenses to produce such programs, and our business, financial condition and results of operations may be adversely affected.

As we continue to develop our original content, we will become responsible for higher production costs and other expenses. We may also take on risks associated with production, such as completion and key talent risk. To the extent we do not accurately anticipate costs or mitigate risks, or if we become liable for content we acquire, produce, license and/or distribute, our business may suffer. Litigation to defend these claims could be costly and the expenses and damages arising from any liability or unforeseen production risks could harm our results of operations. We may not be indemnified against claims or costs of these types and we may not have insurance coverage for these types of claims.

***We face competition for users***' ***attention and time.***

The market for entertainment video and radio content is intensively competitive and subject to rapid change. We compete against other entertainment video and radio providers, such as (i) interactive on-demand audio content and pre-recorded entertainment, (ii) broadcast radio providers, including terrestrial and Internet radio providers, (iii) cable, satellite and Internet television and movie content providers, (iv) video gaming providers and (v) other sources of entertainment for our users' attention and time. These content and service providers pose a competitive threat to the extent existing or potential users choose to consume their content or use their services rather than our content or our services. The online marketplace for live music and music-related content may rapidly evolve and provide users with a number of alternatives or new access models, which could adversely affect our business, financial condition and results of operations.

***We face intense competition from competitors, and we may not be able to increase our revenues, which could adversely impact our business, financial condition and results of operations.***

The music streaming industry is highly competitive. The music streaming industry competes with other forms of entertainment for consumers' discretionary spending, and within this industry we compete with other platforms to secure rights to content. In the markets in which we promote our streaming live music and music-related content, we face competition from other promoters and streaming operators. These competitors may engage in more extensive development efforts, undertake more far-reaching marketing campaigns, adopt more aggressive pricing policies and make more attractive offers to existing and potential artists. Our competitors may also develop services, advertising options or music platforms that are equal or superior to those we provide or that achieve greater market acceptance and brand recognition than we achieve. It is possible that new competitors may emerge and rapidly acquire significant market share.

Our current and future competitors may have more well-established brand recognition, more established relationships with, and superior access to, Content Providers and other Industry Stakeholders, greater financial, technical and other resources, more sophisticated technologies or more experience in the markets in which we compete. These competitors may also compete with us for key employees and other individual service providers who have relationships with popular music artists or other Content Providers and that have a history of being able to book such artists or secure the rights to stream their music. If we are unable to compete successfully for users against other providers by maintaining and increasing our presence and visibility, the number of users of our network may fail to increase as expected or decline and our advertising sales, membership fees and other revenue streams will suffer.

***Our new platform features, services and initiatives, changes to existing features, services and initiatives and our plan to continue to increase the number of live events that we produce could fail to attract users and members, content partners, advertisers and platform partners or generate revenue.***

Our new platform features, services and initiatives and changes to existing features, services and initiatives could fail to attract users and members, content partners, advertisers and platform partners or generate revenue. Our industry is subject to rapid and frequent changes in technology, evolving customer needs and the frequent introduction by our competitors of new and enhanced offerings. We must constantly assess the playing field and determine whether we need to improve or re-allocate resources amongst our existing platform features and services or create new products (independently or in conjunction with third parties). Our ability to increase the size and engagement of our user and member base, attract content partners, advertisers and platform partners and generate revenue will depend on those decisions. We may introduce significant changes to our existing platform and services or develop and introduce new and unproven products and services, including technologies with which we have little or no prior development or operating experience. If new or enhanced platform features or services fail to engage users and members, content partners and advertisers, we may fail to attract or retain users and members or to generate sufficient revenue or operating profit to justify our investments, and our business and operating results could be adversely affected.

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In addition, in the 2021 fiscal year, we started producing live events, including digital and PPV events, and expect to continue to produce digital and PPV events, which generated revenue and which we believe will enhance our attractiveness to users, content partners and advertisers. We hope to drive increased advertising to monetize our live events and our platform and services through advertising and sponsorship opportunities associated with live streaming and music-related content. In the future, we may invest in new products, product features, services and initiatives and may produce a greater number of live events to generate revenue, but there is no guarantee these approaches will be successful. We may not be successful in future efforts to generate advertising and/or sponsorship opportunities and generate revenue from or able to monetize our new products or services and live events produced by us. If such strategic initiatives do not enhance our ability to monetize our existing platform and services, enable us to develop new approaches to monetization or meet the expectations of our users or third-party business partners, we may not be able to maintain or grow our revenue or recover any associated development costs and our operating results could be adversely affected.

***Expansion of our content beyond live events and pre-recorded music, such as podcasts, subjects us to additional business, legal, financial and competitive risks.***

Expansion of our operations into delivery of content beyond live events and pre-recorded music involves numerous risks and challenges, including increased capital requirements, new competitors and the need to develop new strategic relationships. Growth into these new areas may require changes to our existing business model and cost structure, modifications to our infrastructure and exposure to new regulatory and legal risks, including infringement liability, any of which may require additional expertise that we currently do not have. There is no guarantee that we will be able to generate sufficient revenue from advertising sales associated with podcasts or other non-prerecorded-music content to offset the costs of acquiring this content. Further, we have established a reputation as a live music provider and our ability to gain acceptance and listenership for podcasts or other non-music content, and thus our ability to attract advertisers to this content, is not certain. Failure to obtain or retain rights to podcasts or other non-music content on acceptable terms, or at all, to successfully monetize and generate revenues from such content, or to effectively manage the numerous risks and challenges associated with such expansion could adversely affect our business and financial condition.

***We face significant competition for advertiser and sponsorship spend.***

We face significant competition for advertiser spend. Substantially all of our revenue to date is generated through memberships to our music platform, sponsorships and advertising on our website and mobile app, and advertising and sponsorship sales for PodcastOne's podcasts. We compete against online and mobile businesses, including those referenced above, traditional media outlets, such as television, radio and print, for advertising budgets, and established podcast platforms. We also compete with advertising networks, exchanges, demand side platforms and other platforms, such as Google AdSense, DoubleClick Ad Exchange, Oath advertising platform and Microsoft Media Network, for marketing budgets and in the development of the tools and systems for managing and optimizing advertising campaigns. Slacker competes with platforms, such as Apple's iTunes Music Store and Apple Music, Spotify, SiriusXM Satellite Radio, YouTube, Tidal, Napster and Amazon Prime that provide interactive on-demand audio content and pre-recorded entertainment. PodcastOne competes with podcast platforms, such as Apple Podcasts, Spotify and Amazon Music that distribute podcasts and other pre-recorded entertainment. In order to grow our revenues and improve our operating results, we will need to increase our share of spending on advertising relative to our competitors, many of which are larger companies that offer more traditional and widely accepted advertising products. In addition, some of our larger competitors have substantially larger resources, broader product and service offerings and leverage their relationships based on other products or services to gain additional share of advertising budgets. If we are not able to compete effectively for users and advertisers spend, our business, financial condition and results of operations would be materially and adversely affected.

***Emerging industry trends in digital advertising may pose challenges for our ability to forecast or optimize our advertising inventory, which may adversely impact our ad-supported revenue.***

The digital advertising industry is introducing new ways to measure and price advertising inventory. For example, a significant portion of advertisers are in the process of moving from purchasing advertisement impressions based on the number of advertisements served by the applicable ad server to a new "viewable" impression standard (based on number of pixels in view and duration) for select products. In the absence of a uniform industry standard, agencies and advertisers have adopted several different measurement methodologies and standards. In addition, measurement services may require technological integrations, which are still being evaluated by the advertising industry without an agreed-upon industry standard metric. As these trends in the industry continue to evolve, our advertising revenue may be adversely affected by the availability, accuracy, and utility of the available analytics and measurement technologies as well as our ability to successfully implement and operationalize such technologies and standards.

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Further, the digital advertising industry is shifting to data-driven technologies and advertising products, such as automated buying. These data-driven advertising products and automated buying technologies allow publishers and advertisers to use data to target advertising toward specific groups of users who are more likely to be interested in the advertising message delivered to them. These advertising products and programmatic technologies are currently more developed in terms of advertising technology and industry adoption on the web than they are on mobile or on other software applications, and may not integrate with our desktop software version of the ad-supported services. Because the majority of our ad-supported user hours occur on mobile devices, if we are unable to deploy effective solutions to monetize the mobile device usage by our ad-supported user base, our ability to attract advertising spend, and ultimately our advertising revenue, may be adversely affected by this shift. In addition, we rely on third-party advertising technology platforms to participate in automated buying, and if these platforms cease to operate or experience instability in their business models, it also may adversely affect our ability to capture advertising spend.

***Our services and software are highly technical and may contain undetected software bugs or vulnerabilities, which could manifest in ways that could seriously harm our reputation and our business.***

Our services and software are highly technical and complex. Our services or any other products we may introduce in the future, may contain undetected software bugs, hardware errors, and other vulnerabilities. These bugs and errors can manifest in any number of ways in our products, including through diminished performance, security vulnerabilities, malfunctions, or even permanently disabled products. We have a practice of regularly updating our products and some errors in our products may be discovered only after a product has been used by users, and may in some cases be detected only under certain circumstances or after extended use. Any errors, bugs or other vulnerabilities discovered in our code or backend after release could damage our reputation, drive away users, allow third parties to manipulate or exploit our software (including, for example, providing mobile device users a means to suppress advertisements without payment and gain access to features only available to the ad-supported service), lower revenue and expose us to claims for damages, any of which could seriously harm our business. Additionally, errors, bugs, or other vulnerabilities may—either directly or if exploited by third parties—affect our ability to make accurate royalty payments.

We also could face claims for product liability, tort or breach of warranty. Defending a lawsuit, regardless of its merit, is costly and may divert management's attention and seriously harm our reputation and our business. In addition, if our liability insurance coverage proves inadequate or future coverage is unavailable on acceptable terms or at all, our business could be seriously harmed.

***Interruptions, delays or discontinuations in service arising from our own systems or from third parties could impair the delivery of our services and harm our business.***

We rely on systems housed in our own facilities and upon third parties, including bandwidth providers and third-party "cloud" data storage services, to enable our users to receive our content in a dependable, timely, and efficient manner. We have experienced and may in the future experience periodic service interruptions and delays involving our own systems and those of third parties that we work with. Both our own facilities and those of third parties are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures, and similar events. They also are subject to break-ins, sabotage, intentional acts of vandalism, the failure of physical, administrative, technical, and cyber security measures, terrorist acts, natural disasters, human error, the financial insolvency of third parties that we work with, and other unanticipated problems or events. The occurrence of any of these events could result in interruptions in our services and to unauthorized access to, or alteration of, the content and data contained on our systems and that these third parties store and deliver on our behalf.

Any disruption in the services provided by these third parties could materially adversely impact our business reputation, customer relations, and operating results. Upon expiration or termination of any of our agreements with third parties, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, which are favorable to us, and a transition from one third party to another could subject us to operational delays and inefficiencies until the transition is complete.

***We rely upon the Google Cloud Platform (***"***GCP***"***) and Amazon Web Services (***"***AWS***"***) to operate certain aspects of our business and to store certain data, and any disruption of or interference with our use of the GCP and AWS could have a material adverse effect on our business, operating results, and financial condition.***

GCP provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a cloud computing service. We have designed our software and computer systems to utilize data processing, storage capabilities, and other services provided by GCP. Currently, we are in the process of transitioning certain of our data storage (including personal data of users and music data licensed from rights holders) and computing from our own servers to GCP. We cannot easily switch our GCP operations to another cloud provider. In addition, we rely upon the AWS to operate certain aspects of our business and to store certain data. Any disruption of, or interference with, our use of GCP or AWS could have a material adverse effect on our business, operating results, and financial condition.

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***If we fail to accurately predict, recommend, and stream and play music that our users enjoy, we may fail to retain existing users and attract new users in sufficient numbers to meet investor expectations for growth or to operate our business profitably.***

We believe that a key differentiating factor between our Company and other music Content Providers is our ability to predict music that our users will enjoy. Our system for predicting user content and music preferences and selecting content and music tailored to our users' individual music tastes is based on advanced data analytics systems and our proprietary algorithms. We have invested, and will continue to invest, significant resources in refining these technologies; however, we cannot assure you that such investments will yield an attractive return or that such refinements will be effective. The effectiveness of our ability to predict user content and music preferences and select content and music tailored to our users' individual music tastes depends in part on our ability to gather and effectively analyze large amounts of user data. In addition, our ability to offer users content and songs that they have not previously seen or heard and impart a sense of discovery depends on our ability to acquire and appropriately categorize additional content and songs that will appeal to our users' diverse and changing tastes. While we are continuously increasing our content and have a large catalog of songs available to stream, we must continuously produce, acquire, identify and analyze additional content and songs that our users will enjoy and we may not effectively do so. Our ability to predict and select content and music that our users enjoy is critical to the perceived value of our services among users and failure to make accurate predictions could materially adversely affect our ability to adequately attract and retain users, increase hours our users spend on our platforms and sell advertising to meet investor expectations for growth or to operate the business profitably.

***If we are unable to increase revenue from our services on mobile devices, such as smartphones, our results of operations may be materially adversely affected.***

Our business model with respect to monetization of our services on mobile and connected devices is still evolving. As users migrate away from personal computers, there is increasing pressure to monetize mobile. In substantially all markets, we offer our ad-supported services on mobile, from which we generate advertising revenue. However, to date we primarily rely on our premium services to generate revenue on mobile and other connected devices. If we are unable to effectively monetize our services on mobile and connected devices, our business, operating results and financial condition may suffer.

***Negative media coverage could adversely affect our business.***

We receive sizable media coverage around the world. Unfavorable publicity regarding, for example, our brands, payments to music labels, publishers, artists and other copyright owners, our privacy practices, terms of service, service changes, service quality, litigation or regulatory activity, government surveillance, the actions of our Content Providers, the actions of our advertisers, the actions of our developers whose services are integrated with our services, the use of our services for illicit, objectionable or illegal ends, the quality and integrity of content streamed on our services or the actions of other companies that provide similar services to us, could materially adversely affect our reputation. Such negative publicity also could have an adverse effect on the size, engagement and loyalty of our user base and result in decreased revenue, which could materially adversely affect our business, operating results and financial condition.

***Our business depends on a strong brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our base of ad-supported users, paid members and advertisers.***

We have developed strong "Slacker" and "PodcastOne" brands and are developing what we hope to be a strong "LiveOne" brand in the future that we believe contributes and will contribute significantly to the success of our business. Maintaining, protecting and enhancing the "LiveOne", "Slacker" and "PodcastOne" brands is critical to expanding our base of ad-supported users, paid members and advertisers, and will depend largely on our ability to continue to develop and provide an innovative and high-quality experience for our users and to attract advertisers, content owners, mobile device manufacturers, and other consumer electronic product manufacturers to work with us, which we may not do successfully. If we do not successfully maintain a strong brand, our business could be harmed.

Our brands may be impaired by a number of other factors, including any failure to keep pace with technological advances on our platform or with our services, slower load times for our services, a decline in the quality or quantity of the content available on our services, a failure to protect our intellectual property rights or any alleged violations of law, regulations, or public policy. Additionally, the actions of our developers, advertisers, and content partners may affect our brand if users do not have a positive experience using third-party applications or websites integrated with us or that make use of our content. Further, if our partners fail to maintain high standards for products that are integrated into our services, fail to display our trademarks on their products in breach of our agreements with them, or use our trademarks incorrectly or in an unauthorized manner, or if we partner with manufacturers of products that our users reject, the strength of our brand could be adversely affected.

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We have historically been required to spend significant resources to establish and maintain our brands. If we are unable to maintain the growth rate in the number of our ad-supported users and paid members, we may be required to expend greater resources on advertising, marketing and other brand-building efforts to preserve and grow consumer awareness of our brand, which would adversely affect our operating results and may not be effective.

Our trademarks, trade dress and other designations of origin are important elements of our brand. We have registered "LiveOne", "Slacker" and "PodcastOne" as a trademark in the United States and certain other jurisdictions around the world. Nevertheless, competitors or other companies may adopt marks similar to ours, or use our marks and confusingly similar terms as keywords in Internet search engine advertising programs, thereby impeding our ability to build brand identity and possibly leading to confusion among our users. We cannot assure you that our trademark applications, even for key marks, will be approved. We may face opposition from third parties to our applications to register key trademarks in foreign jurisdictions in which we have expanded or may expand our presence. If we are unsuccessful in defending against these oppositions, our trademark applications may be denied. Whether or not our trademark applications are denied, third parties may claim that our trademarks infringe upon their rights. As a result, we could be forced to pay significant settlement costs or cease the use of these trademarks and associated elements of our brand in those or other jurisdictions. Doing so could harm our brand or brand recognition and adversely affect our business, financial condition and results of operation.

***We are subject to a number of risks related to credit card and debit card payments we accept.***

We accept payments mainly through credit and debit card transactions. For credit and debit card payments, we pay interchange and other fees, which may increase over time. An increase in those fees would require us to either increase the prices we charge for our premium service, which could cause us to lose paid members and membership revenue, or suffer an increase in our costs without a corresponding increase in the price we charge for our premium service, either of which could harm our business, operating results and financial condition.

Additionally, we rely on third-party service providers for payment processing services, including the processing of credit and debit cards. In particular, we rely on one third-party service provider, Cybersource, for all of our payment processing. Our business could be materially disrupted if these third-party service providers become unwilling or unable to provide these services to us.

If we or our service providers for payment processing services have problems with our billing software, or the billing software malfunctions, it could have a material adverse effect on our user satisfaction and could cause one or more of the major credit card companies to disallow our continued use of their payment products. In addition, if our billing software fails to work properly and, as a result, we do not automatically charge our paid members' credit cards on a timely basis or at all, our business, financial condition and results of operations could be materially adversely affected.

We also are subject to payment card association operating rules, certification requirements, and rules governing electronic funds transfers, which could change or be reinterpreted to make it more difficult for us to comply. Currently, we are fully compliant with the Payment Card Industry Data Security Standard v3.2 ("PCI DSS"), a security standard with which companies that collect, store, or transmit certain data regarding credit and debit cards, credit and debit card holders, and credit and debit card transactions are required to comply. This is an annual certification exercise, and if we fail to comply, we may violate payment card association operating rules, U.S. federal and state laws and regulations, and the terms of our contracts with payment processors and merchant banks. Such failure to comply fully also may subject us to fines, penalties, damages, and civil liability, and may result in the loss of our ability to accept credit and debit card payments. Further, there is no guarantee that, even if we are in compliance with PCI DSS, we will maintain PCI DSS compliance or that such compliance will prevent illegal or improper use of our payment systems or the theft, loss, or misuse of data pertaining to credit and debit cards, credit and debit card holders, and credit and debit card transactions.

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If we fail to adequately control fraudulent credit card transactions, we may face civil liability, diminished public perception of our security measures, and significantly higher credit card-related costs, each of which could adversely affect our business, financial condition, and results of operations. If we are unable to maintain our chargeback rate or refund rates at acceptable levels, credit card and debit card companies may increase our transaction fees or terminate their relationships with us. Any increases in our credit card and debit card fees could adversely affect our results of operations, particularly if we elect not to raise our rates for our premium services to offset the increase. The termination of our ability to process payments on any major credit or debit card would significantly impair our ability to operate our business.

***We are subject to a number of risks related to other payment solution providers.***

We accept payments through various payment solution providers, such as telco integrated billings and third-party payment processors. These payment solution providers provide services to us in exchange for a fee, which may be subject to change. Furthermore, we rely on their accurate and timely reports on sales and redemptions. If such accurate and timely reports are not being provided, it will affect the accuracy of our reports to our licensors, and also affect the accuracy of our financial reporting.

***Our business emphasizes rapid innovation and prioritizes long-term user engagement over short-term financial condition or results of operations. That strategy may yield results that sometimes do not align with the market***'***s expectations. If that happens, our stock price may be negatively affected.***

As our business grows and becomes more complex, our success will depend on our ability to quickly develop and launch new and innovative products. We believe our culture fosters this goal. Our focus on complexity and quick reactions could result in unintended outcomes or decisions that are poorly received by our users, advertisers, or partners. Our culture also prioritizes our long-term user engagement over short-term financial condition or results of operations. We frequently make decisions that may reduce our short-term revenue or profitability if we believe that the decisions benefit the aggregate user experience and will thereby improve our financial performance over the long-term. These decisions may not produce the long-term benefits that we expect, in which case, our user growth and engagement, our relationships with advertisers and partners, as well as our business, operating results, and financial condition could be seriously harmed.

***Streaming depends on effectively working with third-party platforms, operating systems, online platforms, hardware, networks, regulations, and standards we do not control. Changes in our services or those operating systems, hardware, networks, regulations, or standards, and our limitations on our ability to access those platforms, operating systems, hardware or networks may seriously harm our business.***

Our services require high-bandwidth data capabilities. If the costs of data usage increase or access to data networks is limited, our business may be seriously harmed. Additionally, to deliver high-quality audio, video, and other content over networks, our services must work well with a range of technologies, systems, networks, regulations and standards that we do not control. In addition, the adoption of any laws or regulations that adversely affect the growth, popularity, or use of the Internet, including laws governing Internet neutrality, could decrease the demand for our Service and increase our cost of doing business. Previously, Federal Communications Commission (the "FCC") "open Internet rules" prohibited mobile providers in the United States from impeding access to most content, or otherwise unfairly discriminating against Content Providers like us. These rules also prohibited mobile providers from entering into arrangements with specific Content Providers for faster or better access over their data networks. However, on December 14, 2017, the FCC voted to repeal the "open Internet rules" and as a result, broadband services are now subject to less U.S. federal regulation. A number of parties have already stated they would appeal this order, and it is possible United States Congress may adopt legislation restoring some of the "open Internet rules." If, as a result of the repeal of "open Internet rules," broadband providers in the United States decrease access to certain content, start entering into arrangements with specific Content Providers for faster or better access over their data networks, or otherwise unfairly discriminate against Content Providers like us, this could increase our cost of doing business and put us at a competitive disadvantage relative to larger competitors. Additionally, mobile providers may be able to limit our users' ability to access our platforms or make them a less attractive alternative to our competitors' applications. If that occurs, our business, operating results and financial condition would be seriously harmed.

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The European Union (the "EU") currently requires equal access to Internet content. Additionally, as part of its Digital Single Market initiative, the EU may impose network security, disability access, or 911-like obligations on "over-the-top" services such as those provided by us, which could increase our costs. If the EU or the courts modify these open Internet rules, mobile providers may be able to limit our users' ability to access our platforms or make them a less attractive alternative to our competitors' applications. If that occurs, our business, operating results and financial condition would be seriously harmed.

We rely on a variety of operating systems, online platforms, hardware, and networks to reach our customers. These platforms range from desktop and mobile operating systems and application stores to wearables and intelligent voice assistants. The owners or operators of these platforms may not share our interests and may restrict our access to them or place conditions on access that would materially affect our ability to access those platforms. In particular, where the owner of a platform is also our direct competitor, the platform may attempt to use this position to affect our access to customers and ability to compete. For example, an online platform might arbitrarily remove our services from its platform, deprive us of access to business-critical data, or engage in other harmful practices. Online platforms also may unilaterally impose certain requirements that negatively affect our ability to convert users to the premium service, such as conditions that limit our freedom to communicate promotions and offers to our users. Similarly, online platforms may force us to use the platform's payment processing systems which may be inferior to and more costly than other payment processing services available in the market.

Online platforms frequently change the rules and requirements for services like ours to access the platform, and such changes may adversely affect the success or desirability of our services. Online platforms may limit our access to information about users, limiting our ability to convert and retain them. Online platforms also may deny access to application programming interfaces ("API") or documentation, limiting functionality of our services on the platform.

There can be no assurance that we will be able to comply with the requirements of those operating systems, online platforms, hardware, networks, regulations and standards on which our services depend, and failure to do so could result in serious harm to our business.

***If our security systems are breached, we may face civil liability, and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract and retain paid members, ad-supported users, advertisers, Content Providers and other business partners.***

Techniques used to gain unauthorized access to data and software are constantly evolving, and we may be unable to anticipate or prevent unauthorized access to data pertaining to our users, including credit card and debit card information and other personal data about our Users, business partners, and employees. Like all Internet services, our services, which are supported by our own systems and those of third parties that we work with, is vulnerable to software bugs, computer viruses, Internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service, or other attacks and similar disruptions from unauthorized use of our and third-party computer systems, any of which could lead to system interruptions, delays, or shutdowns, causing loss of critical data or the unauthorized access to personal data. Computer malware, viruses, and computer hacking and phishing attacks have become more prevalent in our industry, have occurred on our systems in the past, and may occur on our systems in the future. As our business and brand reputation grow, we may become a particularly attractive target for such attacks. Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security, and availability of our products and technical infrastructure to the satisfaction of our users may harm our reputation and our ability to retain existing users and attract new users. Although we have developed systems and processes that are designed to protect our data and user data, to prevent data loss, to disable undesirable accounts and activities on our platform, and to prevent or detect security breaches, we cannot assure you that such measures will provide absolute security, and we may incur significant costs in protecting against or remediating cyber-attacks.

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In addition, if an actual or perceived breach of security occurs to our systems or a third party's systems, we may face regulatory or civil liability and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract and retain Users, which in turn would harm our efforts to attract and retain advertisers, Content Providers and other business partners. We also would be required to expend significant resources to mitigate the breach of security and to address matters related to any such breach. We also may be required to notify regulators about any actual or perceived personal data breach (including the EU Lead Data Protection Authority) as well as the individuals who are affected by the incident within strict time periods.

Any failure, or perceived failure, by us to maintain the security of data relating to our users, to comply with our posted privacy policy, laws and regulations, rules of self-regulatory organizations, industry standards, and contractual provisions to which we may be bound, could result in the loss of confidence in us, or result in actions against us by governmental entities or others, all of which could result in litigation and financial losses, and could potentially cause us to lose Users, advertisers, and revenues. In Europe, European Data Protection Authorities could impose fines and penalties of up to 4% of annual global turnover or €20 million, whichever is higher, for a personal data breach.

***We are at risk of attempts at unauthorized access to our services, and failure to effectively prevent and remediate such attempts could have an adverse impact on our business, operating results, and financial condition. Unauthorized access to our services may cause us to misstate key performance indicators, which once discovered, corrected, and disclosed, could undermine investor confidence in the integrity of our key performance indicators and could cause our stock price to drop significantly.***

We have in the past been, and continue to be, impacted by attempts by third parties to manipulate and exploit our software for the purpose of gaining unauthorized access to our service. For example, we have detected instances of third parties seeking to provide mobile device users a means to suppress advertisements without payment and gain access to features only available to the ad-supported services. If in the future we fail to successfully detect and address such issues, it may have artificial effects on our key performance indicators, such as content hours, content hours per monthly active user ("MAU"), and MAUs, which underlie, among other things, our contractual obligations with advertisers, as well as harm our relationship with them. This may impact our results of operations, particularly with respect to margins on our ad-supported segment, by increasing our ad-supported cost of revenue without a corresponding increase to our ad-supported revenue, which could seriously harm our business. Additionally, unlike our ad-supported users, individuals using unauthorized versions of our application are unlikely to convert to paid members. Moreover, once we detect and correct such unauthorized access and any key performance indicators it affects, investor confidence in the integrity of our key performance indicators could be undermined. These could have a material adverse impact on our business, operating results and financial condition.

***We are at risk of artificial manipulation of stream counts and failure to effectively manage and remediate such fraudulent streams could have an adverse impact on our business, operating results and financial condition. Fraudulent streams and potentially associated fraudulent user accounts or artists may cause us to overstate key performance indicators, which once discovered, corrected and disclosed, could undermine investor confidence in the integrity of our key performance indicators and could cause our stock price to drop significantly.***

We have in the past been, and continue to be, impacted by attempts by third parties to artificially manipulate stream counts. Such attempts may, for example, be designed to influence placement of content on Slacker-created playlists or industry music charts. These potentially fraudulent streams also may involve the creation of non-bona fide user accounts or artists. For example, an individual might generate fake users to stream songs repeatedly, thereby generating revenue each time the song is streamed, or might utilize fake users to stream specific content to increase its visibility on our or third-party charts. We use a combination of algorithms and manual review by employees to detect fraudulent streams. However, we may not be successful in detecting, removing and addressing all fraudulent streams (and any related user accounts). If in the future we fail to successfully detect, remove and address fraudulent streams and associated user accounts, it may result in the manipulation of our data, including the key performance indicators which underlie, among other things, our contractual obligations with advertisers (which could expose us to the risk of litigation), as well as harm our relationships with advertisers and rights holders. In addition, once we detect, correct and disclose fraudulent streams and associated user accounts and the key performance indicators they affect, investor confidence in the integrity of our key performance indicators could be undermined. These could have a material adverse impact on our business, operating results and financial condition.

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***Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may seriously harm and negatively affect our reputation and our business.***

We regularly review key metrics related to the operation of our business, including, but not limited to, our ad-supported MAUs, content hours, content hours per MAU, MAUs and paid members, to evaluate growth trends, measure our performance and make strategic decisions. These metrics are calculated using internal company data and have not been validated by an independent third party. While these numbers are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring how our services are used across large populations globally. For example, we believe that there are individuals who have multiple Slacker accounts, which can result in an overstatement of ad-supported MAUs and MAUs.

Errors or inaccuracies in our metrics or data could result in incorrect business decisions and inefficiencies. For instance, if a significant understatement or overstatement of ad-supported MAUs and MAUs were to occur, we may expend resources to implement unnecessary business measures or fail to take required actions to attract a sufficient number of users to satisfy our growth strategies.

In addition, advertisers generally rely on third-party measurement services to calculate our metrics, and these third-party measurement services may not reflect our true audience. Some of our demographic data also may be incomplete or inaccurate because Users self-report their names and dates of birth. Consequently, the personal data we have may differ from our users' actual names and ages. If advertisers, partners, or investors do not perceive our user, geographic or other demographic metrics to be accurate representations of our user base, or if we discover material inaccuracies in our user, geographic or other demographic metrics, our reputation may be seriously harmed, which could have an adverse impact on our business, operating results, and financial condition.

***Our business is subject to a variety of laws around the world. Government regulation of the Internet is evolving and any changes in government regulations relating to the Internet or other areas of our business or other unfavorable developments may adversely affect our business, operating result, and financial condition.***

We are a U.S.-based company that is registered under the laws of the State of Delaware, and with operations in certain countries and territories around the world. As a result of the scope of our operations, we are subject to a variety of laws in different countries. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting. It also is likely that if our business grows and evolves and our solutions are used more globally, we will become subject to laws and regulations in additional jurisdictions. It is difficult to predict how existing laws will be applied to our business and the new laws to which we may become subject.

We are subject to general business regulations and laws, as well as regulations and laws specific to the Internet. Such laws and regulations include, but are not limited to, labor, advertising and marketing, real estate, taxation, user privacy, data collection and protection, intellectual property, anti-corruption, anti-money laundering, foreign exchange controls, antitrust and competition, electronic contracts, telecommunications, sales procedures, automatic membership renewals, credit card processing procedures, consumer protections, broadband Internet access and content restrictions. We cannot guarantee that we have been or will be fully compliant in every jurisdiction in which we are subject to regulation, as existing laws and regulations governing issues such as intellectual property, privacy, taxation, and consumer protection, among others, are constantly changing. The adoption or modification of laws or regulations relating to the Internet or other areas of our business could limit or otherwise adversely affect the manner in which we currently conduct our business. For example, certain jurisdictions have implemented or are contemplating implementing laws which may negatively impact our automatic renewal structure or our free or discounted trial incentives. Further, compliance with laws, regulations, and other requirements imposed upon our business may be onerous and expensive, and they may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and doing business.

Moreover, as Internet commerce continues to evolve, increasing regulation by U.S. federal and state agencies and other international regulators becomes more likely and may lead to more stringent consumer protection laws, which may impose additional burdens on us. The adoption of any laws or regulations that adversely affect the popularity or growth in use of the Internet, including laws limiting Internet neutrality, could decrease user demand for our services and increase our cost of doing business. Future regulations, or changes in laws and regulations or their existing interpretations or applications, also could hinder our operational flexibility, raise compliance costs, and result in additional historical or future liabilities for us, resulting in material adverse impacts on our business, operating results and financial condition.

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***We plan to expand into international markets in the future, which would subject us to risks associated with the legislative, judicial, accounting, regulatory, foreign exchange, political and economic risks and conditions specific to such markets, which could adversely affect our business, financial condition and results of operations.***

We intend to expand the international presence of our platform into various jurisdictions abroad by offering our platform directly to international users, as well as through joint ventures and partnerships. Accordingly, we expect to face additional risks in the case of our future international operations, including:

● political instability, adverse changes in diplomatic relations and unfavorable economic and business conditions in the markets in which we plan to have international operations or into which we may expand, particularly in the case of emerging markets;

● more restrictive or otherwise unfavorable government regulation of the live streaming entertainment industries, which could result in increased compliance costs and/or otherwise restrict the manner in which we provide services and the amount of related fees charged for such services;

● limitations on the enforcement of our intellectual property rights;

● limitations on the ability of our foreign subsidiaries to repatriate profits or otherwise remit earnings;

● foreign exchange risk;

● adverse tax consequences due both to the complexity of operating across multiple tax regimes as well as changes in, or new interpretations of, international tax treaties and structures;

● expropriations of property and risks of renegotiation or modification of existing agreements with governmental authorities;

● diminished ability to legally enforce our contractual rights in foreign countries;

● limitations on technology infrastructure, which could limit our ability to migrate international operations to a common platform;

● lower levels of internet usage, credit card usage and consumer spending in comparison to those in the United States; and

● difficulties in managing operations and adapting to consumer desires due to distance, language and cultural differences, including issues associated with (i) business practices and customs that are common in certain foreign countries but might be prohibited by United States law and our internal policies and procedures, and (ii) management and operational systems and infrastructures, including internal financial control and reporting systems and functions, staffing and managing of foreign operations, which we might not be able to do effectively or cost-efficiently.

As we hope to expand into new markets these risks will be intensified and will have the potential to impact a greater percentage of our business and operating results. Our ability to expand our operations into new international jurisdictions will depend, in significant part, on our ability to identify potential acquisition candidates, joint venture or other partners, and enter into arrangements with these parties on favorable terms, as well as our ability to make continued investments to maintain and grow existing international operations. If the revenue generated by international operations is insufficient to offset expenses incurred in connection with the maintenance and growth of these operations, our business, financial condition and results of operations could be materially and adversely affected. In addition, in an effort to make international operations in one or more given jurisdictions profitable over the long term, significant additional investments that are not profitable over the short term could be required over a prolonged period.

In foreign countries in which we operate, a risk exists that our employees, contractors or agents could, in contravention of our policies, engage in business practices prohibited by applicable United States laws and regulations, such as the United States Foreign Corrupt Practices Act, as well as the laws and regulations of other countries prohibiting corrupt payments to government officials such as the United Kingdom Bribery Act 2010. We maintain policies prohibiting such business practices. Nevertheless, the risk remains that one or more of our employees, contractors or agents, including those based in or from countries where practices that violate such United States laws and regulations or the laws and regulations of other countries may be customary, as well as those associated with newly-acquired businesses, will engage in business practices that are prohibited by our policies, circumvent our compliance programs and, by doing so, violate such laws and regulations. Any such violations, even if prohibited by our internal policies, could result in fines, criminal sanctions against us and/or our employees, prohibitions on the conduct of our business and damage to our reputation, which could adversely affect our business, financial condition and results of operations.

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***Taxing authorities may successfully assert that we should have collected, or in the future should collect sales and use or similar taxes, and we could be subject to liability with respect to past or future tax, which could adversely affect our business, financial condition and results of operations.***

In general, we have not historically collected state or local sales, use or other similar taxes in any jurisdictions in which we do not have a tax nexus, in reliance on court decisions or applicable exemptions that restrict or preclude the imposition of obligations to collect such taxes with respect to online sales of our products. In addition, we have not historically collected state or local sales, use or other similar taxes in certain jurisdictions in which we do have a physical presence, in reliance on applicable exemptions. On June 21, 2018, the U.S. Supreme Court decided, in *South Dakota v. Wayfair, Inc.*, that state and local jurisdictions may, at least in certain circumstances, enforce a sales and use tax collection obligation on remote vendors that have no physical presence in such jurisdiction. A number of states have already begun, or have positioned themselves to begin, requiring sales and use tax collection by remote vendors and/or by online marketplaces. The details and effective dates of these collection requirements vary from state to state. We are in the process of determining how and when our collection practices will need to change in the relevant jurisdictions. It is possible that one or more jurisdictions may assert that we have liability for periods for which we have not collected sales, use or other similar taxes, and if such an assertion or assertions were successful it could result in substantial tax liabilities, including for past sales taxes and penalties and interest, which could materially adversely affect our business, financial condition and operating results.

***Our success depends, in significant part, on discretionary consumer and corporate spending on entertainment and factors adversely affecting such spending could have a material adverse effect on our business, financial condition and results of operations.***

Our business depends on discretionary consumer and corporate spending. Many factors related to discretionary consumer and corporate spending, including economic conditions affecting disposable consumer income such as employment, interest and tax rates and inflation can significantly impact our operating results. Business conditions, as well as various industry conditions, including corporate marketing and promotional spending and interest levels, can also significantly impact our operating results. These factors can affect user membership sales, advertising sales, sponsorship and e-commerce spending, as well as the financial results of sponsors of our venues, events, festivals and other Content Providers and the industry as a whole. Negative factors such as challenging economic conditions, public concerns over terrorism and security incidents, particularly when combined, can impact corporate and consumer spending, and one negative factor can impact our results more than another. There can be no assurance that consumer and corporate spending will not be adversely impacted by current economic conditions, or by any further or future deterioration in economic conditions, thereby possibly impacting our operating results and growth.

During past economic slowdowns and recessions, many consumers reduced their discretionary spending and advertisers reduced their advertising expenditures. In addition, a decline in attendance at or reduction in the number of live entertainment and leisure events may have an adverse effect on our revenue and operating income. The impact of economic slowdowns on our business is difficult to predict, but they may result in reductions in sponsorship, advertising, ticketing and e-commerce opportunities and our ability to generate revenue. The risks associated with our businesses may become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in attendance at live entertainment and leisure events.

We are subject to governmental regulation, which may change from time to time, and our failure to comply with these regulations could adversely affect our business, financial condition and results of operations. Our operations are subject to federal, state and local laws, statutes, rules, regulations, policies and procedures, both domestically and internationally, which may change from time to time. Our failure to comply with these laws and regulations could result in fines and proceedings against us by governmental agencies and consumers, which if material, could adversely affect our business, financial condition and results of operations. In addition, the promulgation of new laws, rules and regulations could restrict or unfavorably impact our business, which could decrease demand for services, reduce revenue, increase costs and subject us to additional liabilities. From time to time, federal, state and local authorities and consumers commence investigations, inquiries or litigation with respect to our compliance with applicable consumer protection, advertising, unfair business practice, antitrust (and similar or related laws) and other laws. We may be required to incur significant legal expenses in connection with the defense of future governmental investigations and litigation.

Changes in laws or regulations that adversely affect the growth, popularity or use of the Internet, including regulations or decisions by the FCC impacting net neutrality, could decrease the demand for our service and increase our cost of doing business. See "— Changes in how network operators handle and charge for access to data that travel across their networks could adversely impact our business" below. Certain laws intended to prevent network operators from discriminating against the legal traffic that traverse their networks have been implemented in many countries, including the United States and the EU. In others, the laws may be nascent or non-existent. Given uncertainty around these rules, including changing interpretations, amendments or repeal, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.

***We may be subject to risks associated with artificial intelligence and machine learning technology***

Recent technological advances in artificial intelligence ("AI") and machine learning technology may pose risks to us. Our use of AI could give rise to legal or regulatory action, create liabilities, or materially harm our business. While we aim to develop and use AI and machine learning technology responsibly and attempt to mitigate ethical and legal issues presented by its use, we may ultimately be unsuccessful in identifying or resolving issues before they arise. Further, as the technology is rapidly evolving, costs and obligations could be imposed on us to comply with new regulations.

We also could be exposed to the risks of machine learning technology if third-party service providers or any counterparties, whether or not known to us, also use machine learning technology in their business activities. We will not be in a position to control the use of such technology in third-party products or services. Use by third-party service providers could give rise to issues pertaining to data privacy, data protection, and intellectual property considerations.

***Advancements in AI technology may adversely affect our business model and competitive position.***

The rapid development and adoption of AI technologies pose risks to our operations, user engagement, and revenue generation. AI tools may enable the creation of high-quality synthetic music that could compete with licensed content from our platform, reducing demand for traditional music streaming services. Additionally, the use of AI by competitors to enhance user personalization, recommend content, or improve discovery may surpass our technological capabilities, potentially diminishing our market share.

Further, our reliance on AI for functions such as recommendation algorithms, fraud detection, and content moderation introduces operational risks. Errors or biases in our AI systems could result in a poor user experience, reduced engagement, or potential reputational harm. If we fail to maintain or advance our AI capabilities or if we are perceived as lagging behind in AI innovation, our business, financial condition, and results of operations could be adversely affected.

Moreover, as regulators worldwide consider new policies regarding AI development, use, and intellectual property rights, our business may face increased compliance costs or limitations on our ability to use AI tools effectively. Such regulations could impact the availability or cost of AI technologies and hinder our ability to innovate, further exacerbating competitive pressures.

***Wildfires and other natural disasters in and around Los Angeles may disrupt our operations and adversely impact our business.***

Our headquarters and a significant portion of our operations are located in Los Angeles, a region prone to wildfires and other natural disasters such as earthquakes and power outages. Wildfires, in particular, pose a material risk to our physical infrastructure, employee safety, and overall business continuity.

In the event of a wildfire, our offices or facilities may suffer physical damage or experience operational interruptions due to evacuations, smoke contamination, or power grid failures. Such disruptions could impede our ability to maintain service availability, impacting user experience and leading to potential revenue loss. Additionally, prolonged wildfires may affect our employees' ability to work safely, either in-office or remotely, further affecting productivity and operations.

We may also incur significant costs related to disaster recovery efforts, relocation of personnel, or investments in infrastructure to mitigate future risks. While we maintain disaster recovery and business continuity plans, these measures may not fully protect against the adverse effects of natural disasters.

***Increased data protection regulation may result in increased complexities and risk in connection with the operation of our business and our products.***

Our business is highly dependent on information systems and technology. The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means. Cybersecurity has become a priority for regulators in the U.S. and around the world. Recently, the SEC adopted rules requiring public companies to disclose material cybersecurity incidents on Form 8-K and periodic disclosure of a registrant's cybersecurity risk management, strategy, and governance in annual reports. The rules became effective beginning with annual reports for fiscal years ending on or after December 15, 2023, and beginning with Form 8-Ks on December 18, 2023. The SEC has also particularly focused on cybersecurity, and we expect increased scrutiny of our policies and systems designed to manage our cybersecurity risks and our related disclosures as a result. We also expect to face increased costs to comply with the new SEC rules, including increased costs for cybersecurity training and management. The SEC has indicated in recent periods that one of its examination priorities for the Division of Examinations is to continue to examine cybersecurity procedures and controls, including testing the implementation of these procedures and controls.

There may be substantial financial penalties or fines for breach of privacy laws (which may include insufficient security for our personal or other sensitive information). Non-compliance with any applicable privacy or data security laws represents a serious risk to our business. Some jurisdictions have also enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal information. Breaches in security could potentially jeopardize our or our stockholders' or counterparties' confidential or other information processed and stored in, or transmitted through, our computer systems and networks (or those of our third-party vendors), or otherwise cause interruptions or malfunctions in our or our stockholders' or our counterparties' or third parties' operations, which could result in significant losses, increased costs, disruption of our business, liability to our stockholders and other counterparties, fines or penalties, litigation, regulatory intervention or reputational damage, which could also lead to loss of stockholders.

Finally, there has been significant evolution and developments in the use of AI technologies. We cannot fully determine the impact or cybersecurity risk of such evolving technology to our business at this time.

***If we do not respond to technological innovations or changes or upgrade our technology systems, our growth prospects and results of operations could be adversely affected.***

To remain competitive, we must continue to enhance and improve the functionality, features and security of our technology infrastructure. Infrastructure upgrades may require significant capital investment outside of the normal course of business. In the future, we will likely need to improve and upgrade our technology, database systems and network infrastructure to allow our business to grow in both size and scope. Without such improvements, our operations might suffer from unanticipated system disruptions, slow performance or unreliable service levels, any of which could negatively affect our ability to provide rapid customer service. We may face significant delays in introducing new services or developing new technologies. Moreover, if we do not keep pace with the rapid innovations and changes taking place in information technology in our industry, we could be at a competitive disadvantage. Further, the rapid dissemination and increasing transparency of information, particularly for public companies, increases the risks to our business that could result from negative media or announcements about ethics lapses, improper behavior or other operational problems, which could lead clients to terminate or reduce their relationships with us. If competitors introduce new products and services using new technologies, our proprietary technology and systems may become less competitive, and our business may be harmed. In addition, the expansion and improvement of our systems and infrastructure may require us to commit substantial financial, operational and technical resources, with no assurance that our business will improve.

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**Risks Related to Our Company**

***For the fiscal year ended March 31, 2024, our management concluded that our disclosure controls and procedures and our internal control over financial reporting were not effective due to the existence of material weaknesses in our internal control over financial reporting during such periods. If we are unable to establish and maintain effective disclosure controls and internal controls over financial reporting, our ability to produce accurate financial statements on a timely basis or prevent fraud could be impaired, and the market price of our securities may be negatively affected.***

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet LiveOne's reporting obligations. In addition, any testing by our Company conducted in connection with Section 404, or the subsequent testing by our independent registered public accounting firm, if and when required, may reveal additional deficiencies in its internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our consolidated financial statements or identify other areas for further attention or improvement. For our fiscal year ended March 31, 2024, our management conducted an assessment of its disclosure controls and procedures and our internal control over financial reporting and concluded that they were not effective for such period, due to the existence of certain material weaknesses in our internal control over financial reporting, which were subsequently remediated. See Item 9A. Controls and Procedures. In connection with the preparation of our consolidated financial statements for the year ended March 31, 2025, management did not identify any material weaknesses. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

In connection with the preparation of our consolidated financial statements for the fiscal years ended March 31, 2024, our management identified material weaknesses in the following: we did not maintain appropriately designed entity-level controls impacting the control environment, risk assessment procedures, and monitoring activities to prevent or detect material misstatements to the consolidated financial statements; and our controls relating to proper evaluation and accounting of certain features embedded in complex debt and equity instruments. Specifically, we did not have sufficient technical resources to appropriately identify and evaluate certain features that require instruments or features to be accounted for as liabilities remeasured at fair value. For the fiscal year ended March 31, 2024, we failed to remediate all of the material weaknesses identified during the fiscal year ended March 31, 2023 and 2022. Beyond fiscal year ended March 31, 2025, we may not be able to remediate any future material weaknesses.

If we are unable to establish and maintain proper and effective disclosure controls and procedures and internal control over financial reporting, we may not be able to produce timely and accurate financial statements. If in the future we identify new material weaknesses in our internal control over financial reporting, including at some of our acquired companies, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if and when applicable, our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are then listed, the SEC, or other regulatory authorities, which could require additional financial and management resources. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

***We may not have the ability to repay the amounts then due under our Debentures at maturity.***

On May 19, 2025 (the "Closing Date"), we and PodcastOne, our majority owned subsidiary, entered into a Securities Purchase Agreement (the "SPA") with certain institutional investors (each, a "Purchaser" and collectively, the "Purchasers"), pursuant to which (i) we sold to the Purchasers our Original Issue Discount Senior Secured Convertible Debentures (the "Initial Debentures") in an aggregate principal amount of $16,775,000 for an aggregate cash purchase price of $15,250,000, and (ii) if certain conditions are satisfied as set forth in the SPA, including at least one of the Conditions (as defined below), we may sell at our option to the Purchasers our additional Original Issue Discount Senior Secured Convertible Debentures in an aggregate principal amount of $11,000,000 on substantially the same terms as the Initial Debentures (the "Additional Debentures" and collectively with the Initial Debentures, the "Debentures"). The Debentures are convertible into shares of our common stock at the holder's option at a conversion price of $2.10 per share, subject to certain customary adjustments such as stock splits, stock dividends and stock combinations. We may sell to the Purchasers the Additional Debentures if within 15 months of the Closing Date either of the following conditions have been satisfied during such 15-month period (the "Conditions"): (x) the VWAP (as defined in the SPA) of our common stock has been equal to or greater than $4.20 per share (subject to certain customary adjustments such as stock splits, stock dividends and stock combinations) for 30 consecutive trading days, or (y) Free Cash Flow (as defined in the SPA) has been equal to or greater to $3,000,000 for three consecutive fiscal quarters, and has increased in each of the foregoing quarters from the immediately preceding fiscal quarter. The Initial Debentures mature on May 19, 2028 and accrue interest at 11.75% per year. Commencing with the calendar month of August 2025 (subject to the following sentence), the holders of the Initial Debentures will have the right, at their option, to require us to redeem an aggregate of up to $100,000 of the outstanding principal amount of the Debentures per month. Commencing from November 18, 2025, May 18, 2026 and May 18, 2027, the holders of the Initial Debentures will have the right, at their option, to require us to redeem an aggregate of up to $150,000, $250,000 and $300,000, respectively, of the outstanding principal amount of the Initial Debentures per month.

Over the term of the Debentures and at maturity, the outstanding principal amount of the Debentures and the Capchase Loan (as defined below), will become due and payable by us in installments. As of May 31, 2025, $0.7 million of the principal amount of the Capchase Loan is due and matures in fiscal 2026 and the principal amount of the Debentures is due and matures in fiscal 2029. The holders of the Debentures may also require us to redeem the Debentures up to $0.8 million due in fiscal 2026, $1.2 million due in fiscal 2027, $1.2 million due in fiscal 2028 and $13.6 million due in fiscal 2029.

Our failure to repay any outstanding amount under the Debentures would constitute a default under such financing agreement. A default would increase the interest rate to the default rate under the Debentures or the maximum rate permitted by applicable law until such amount is paid in full. A default under the Debentures could also lead to a default under agreements governing our future indebtedness, including the Capchase Loan. A default under the Capchase Loan could also lead to a default under agreements governing our future indebtedness, including the Debentures. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the Debentures loan and/or the Capchase Loan when due or make cash payments thereon as required prior to maturity. Furthermore, upon the occurrence and during the continuation of any event of default, the holders of the Debentures and Capchase shall have the right to, among other things, take possession of our and our subsidiaries' assets and property constituting the collateral thereunder (including, without limitation, any securities of PodcastOne that we own) and the right to assign, sell, lease or otherwise dispose of all or any part of the collateral.

***If we do not comply with the provisions of the Debentures financing agreements, the Capchase Loan and/or the SX Settlement, such parties may terminate their obligations to us, accelerate our debt and/or require us to repay all outstanding amounts owed thereunder.***

The Debentures financing agreements and the Capchase Loan contain provisions that limit our operating activities, including covenant relating to the requirement to maintain a certain amount cash (as provided in the Debentures financing agreements). If an event of default occurs and is continuing, the applicable lender may among other things, terminate its obligations thereunder, accelerate its debt and require us to repay all amounts thereunder. For example, on October 13, 2022, a judgement was ordered in favor of SoundExchange, Inc. ("SX") against us and Slacker in the United States District Court Central District of California in the amount of approximately $9.8 million. On October 13, 2022, the court entered a judgment against the defendants for the amount of $9,765,397. In February 2023, we settled the dispute (the "SX Settlement Agreement") to pay the outstanding amount in equal monthly payments subject to increase in the event we complete certain future financings, which agreement, as amended in January 2025, requires us and Slacker to pay SX the remaining sum on or before February 1, 2027, in 48 equal monthly payments. As of March 31, 2025, we owed $3.5 million to SX under the SX Settlement Agreement. If for any reason we and Slacker fail to comply with the terms of the SX Settlement Agreement, SX will have the right to declare a default under the SX Settlement Agreement and at its option require us to repay all outstanding amounts owed thereunder and/or enforce its consent judgment and/or pursue a new judgment against us and/or Slacker, which would materially adversely impact our business, operating results and financial condition. Our debt agreement with Capchase contains a covenant that if a material adverse change occurs in our financial condition, or if such senior secured lender reasonably believes the prospect of payment or performance of its loan is materially impaired, the lender at its option may immediately accelerate its debt and require us to repay all outstanding amounts owed thereunder. If for any reason we and Slacker fail to comply with the terms of the SX Settlement Agreement, our Debentures lenders, and which would then also allow Capchase to declare a default under their loan agreement with us, may declare an event of default and at its option may immediately accelerate their debt and require us to repay all outstanding amounts owed under the Debentures, which would materially adversely impact our business, operating results and financial condition. As of March 31, 2025, we were in compliance with covenants under the Debentures and the Capchase Loan.

***Our debt agreements contain restrictive and financial covenants that may limit our operating flexibility, and our substantial indebtedness may limit cash flow available to invest in the ongoing needs of our business.***

We have a significant amount of indebtedness. Our total outstanding consolidated indebtedness as of March 31, 2025, was $3.7 million, net of fees and discounts. In addition, in May 2025, we borrowed an additional $16.8 million as a result of the issuance of the Debentures. While we have certain restrictions and covenants with our current indebtedness, we could in the future incur additional indebtedness beyond such amount including by issuing the Additional Debentures subject to Conditions. Our existing debt agreements with the Debentures and the Capchase Loan lenders contain certain restrictive covenants that limit our ability to merge with other companies or consummate certain changes of control, make certain investments, pay dividends or repurchase shares of our common stock, transfer or dispose of assets, or enter into various specified transactions. We therefore may not be able to engage in any of the foregoing transactions unless we obtain the consent of our senior secured lenders, terminate our existing debt agreements and/or repay the amount owed to such lenders. Our debt agreements also contain certain covenants, including maintaining a minimum cash amount at all times and are secured by substantially all of our and our subsidiaries' assets. There is no guarantee that we will be able to generate sufficient cash flow or sales to pay the principal and interest owed under our debt agreements or to satisfy all of the covenants. We and/or our subsidiaries may also incur significant additional indebtedness in the future.

Our substantial debt combined with our other financial obligations and contractual commitments could have other significant adverse consequences, including:

● requiring us to dedicate a substantial portion of cash flow from operations to the payment of interest on, redemption and principal of, our debt, which will reduce the amounts available to fund working capital, capital expenditures, product development efforts and other general corporate purposes;

● increasing our vulnerability to adverse changes in general economic, industry and market conditions;

● obligating us to restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing;

● limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and

● placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.

We intend to satisfy our current and future debt service obligations with our existing cash and cash equivalents and funds from external sources, including equity and/or debt financings. However, we may not have sufficient funds or may be unable to arrange for additional financing to pay the amounts due under our existing debt. Funds from external sources may not be available on acceptable terms, if at all. In the event of an acceleration of amounts due under our debt instruments as a result of an event of default, including upon the occurrence of an event that would reasonably be expected to have a material adverse effect on our business, operations, properties, assets or condition or a failure to pay any amount due, we may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments.

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***We will continue to incur significant increased costs as a result of operating as a public company.***

As a public company, we will continue to incur significant legal, accounting and other expenses. Following the Public Offering, we will be subject to mandatory reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which require, among other things, that we continue to file with the SEC annual, quarterly and current reports with respect to our business and financial condition, that we were not required to file as a voluntary reporting company (though we did file such reports with the SEC on a voluntary basis). We have incurred and will continue to incur costs associated with the preparation and filing of these SEC reports. Furthermore, we are subject to additional corporate governance and other compliance requirements as a result of our shares of common stock being listed on The Nasdaq Capital Market ("Nasdaq"). In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act and Nasdaq have imposed various other requirements on public companies. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact (in ways we cannot currently anticipate) the manner in which we operate our business. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have and will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we will incur additional expense to increase our director and officer liability insurance.

We are required to furnish a report on internal control over financial reporting issued by management. Such report is provided as part of the consolidated financial statements included in this Annual Report. In addition, if and when we cease to be a smaller reporting company and become subject to Section 404(b) of the Sarbanes-Oxley Act, we will be required to furnish an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To remain in compliance with Section 404, we will continue to be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to dedicate substantially greater internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that our independent registered public accounting firm, when required, will not be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

***We heavily depend on relationships with our Content Providers and other Industry Stakeholders and adverse changes in these relationships, could adversely affect our business, financial condition and results of operations.***

Our business is particularly dependent upon personal relationships, as executives within entertainment companies such as ours leverage their network of relationships with Content Providers and other Industry Stakeholders to secure the rights to their content and develop other partnerships that are critical to our success. Due to the importance of those industry contacts, the loss of any of these relationships, and adverse changes in these relationships could adversely affect our business, financial condition and results of operations. We can give no assurance that all or any of these Content Providers or other Industry Stakeholders will retain their associations with us or our executives, directors, employees or other individual service providers. Additionally, to the extent the decision makers of our music partners are replaced with individuals with whom our executives, directors or other key personnel do not have relationships, our competitive position and financial condition could be harmed.

***We depend upon third-party licenses for sound recordings and musical compositions and other content and an adverse change to, loss of, or claim that we do not hold any necessary licenses may materially adversely affect our business, operating results and financial condition.***

To secure the rights to stream sound recordings and the musical compositions embodied therein, we enter into license agreements to obtain licenses from rights holders such as record labels, aggregators, artists, music publishers, performing rights organizations, collecting societies and other copyright owners or their agents, and pay substantial royalties or other consideration to such parties or their agents around the world. Though we work diligently in our efforts to obtain all necessary licenses to stream sound recordings and the musical compositions embodied therein, there is no guarantee that the licenses available to us now will continue to be available in the future at rates and on terms that are favorable or commercially reasonable or at all. The terms of these licenses, including the royalty rates that we are required to pay pursuant to them, may change as a result of changes in our bargaining power, changes in the industry, changes in the laws and regulations, or for other reasons. Increases in royalty rates or changes to other terms of these licenses may materially impact our business, operating results, and financial condition.

We enter into license agreements to obtain rights to stream sound recordings, including from the major record labels that hold the rights to stream a significant number of sound recordings, such as Universal Music Group, Sony Music Entertainment, Warner Music Group and SX, as well as others. If we fail to obtain these licenses or if any of such licenses are terminated or suspended, the size and quality of our catalog may be materially impacted and our business, operating results and financial condition could be materially harmed.

We generally obtain licenses for two types of rights with respect to musical compositions: mechanical rights and public performance rights. With respect to mechanical rights, for example, in the United States, the rates we pay are, to a significant degree, a function of a ratemaking proceeding conducted by an administrative agency called the Copyright Royalty Board. The rates that the Copyright Royalty Board set apply both to compositions that we license under the compulsory license in Section 115 of the Copyright Act of 1976 (the "Copyright Act"), and to a number of direct licenses that we have with music publishers for U.S. rights, in which the applicable rate is generally pegged to the statutory rate set by the Copyright Royalty Board. The most recent proceeding before the Copyright Royalty Board (the "Phonorecords III Proceedings") set the rates for the Section 115 compulsory license for calendar years 2018 to 2022. The Copyright Royalty Board issued its initial written determination on January 26, 2018. The rates set by the Copyright Royalty Board may still be modified if a party appeals the determination and are also subject to further change as part of future Copyright Royalty Board proceedings. If any such rate change increases, our sound recordings and musical compositions license costs may substantially increase and impact our ability to obtain content on pricing terms favorable to us, and it could negatively harm our business, operating results and financial condition and hinder our ability to provide interactive features in our services or cause one or more of our services not to be economically viable. Based on management's estimates and forecasts for the next two fiscal years, we currently believe that the proposed rates will not materially impact our business, operating results, and financial condition. However, the proposed rates are based on a variety of factors and inputs which are difficult to predict in the long-term. If Slacker's business does not perform as expected or if the rates are modified to be higher than the proposed rates, its content acquisition costs could increase and impact its ability to obtain content on pricing terms favorable to us, which could negatively harm Slacker's business, operating results and financial condition and hinder its ability to provide interactive features in its services, or cause one or more of Slacker's services not to be economically viable.

In the United States, public performance rights are generally obtained through intermediaries known as performing rights organizations ("PROs"), which negotiate blanket licenses with copyright users for the public performance of compositions in their repertory, collect royalties under such licenses, and distribute those royalties to copyright owners. The royalty rates available to Slacker today may not be available to it in the future. Licenses provided by two of these PROs, the American Society of Composers, Authors and Publishers ("ASCAP") and Broadcast Music, Inc. ("BMI"), cover the majority of the music we stream and are governed by consent decrees relating to decades old litigations. In 2019, the U.S. Department of Justice indicated that it was formally reviewing the relevance and need of these consent decrees. Changes to the terms of or interpretation of these consent decrees up to and including the dissolution of the consent decrees, could affect our ability to obtain licenses from these PROs on reasonable terms, which could harm its business, operating results, and financial condition. In addition, an increase in the number of compositions that must be licensed from PROs that are not subject to the consent decrees, or from copyright owners that have withdrawn public performance rights from the PROs, could likewise impede Slacker's ability to license public performance rights on favorable terms. As of March 31, 2025, we owed $17.5 million in aggregate royalty payments to such PROs.

In other parts of the world, including Europe, Asia, and Latin America, we obtain mechanical and performance licenses for musical compositions either through local collecting societies representing publishers or from publishers directly, or a combination thereof. We cannot guarantee that its licenses with collecting societies and its direct licenses with publishers provide full coverage for all of the musical compositions we make available to our users in such countries. In Asia and Latin America, we are seeing a trend of movement away from blanket licenses from copyright collectives, which is leading to a fragmented copyright licensing landscape. Publishers, songwriters, and other rights holders choosing not to be represented by collecting societies could adversely impact our ability to secure favorable licensing arrangements in connection with musical compositions that such rights holders own or control, including increasing the costs of licensing such musical compositions, or subjecting us to significant liability for copyright infringement.

With respect to podcasts and other non-music content, we produce or commission the content itself or obtain distribution rights directly from rights holders. In the former scenario, we employ various business models to create original content. In the latter scenario, we and/or PodcastOne negotiates licenses directly with individuals that enable creators to post content directly to our service after agreeing to comply with the applicable terms and conditions. We are dependent on those who provide content on our service complying with the terms and conditions of our license agreements as well as the PodcastOne Terms and Conditions of Use. However, we cannot guarantee that rights holders or content providers will comply with their obligations, and such failure to do so may materially impact our business, operating results, and financial condition.

There also is no guarantee that we have all of the licenses we need to stream content, as the process of obtaining such licenses involves many rights holders, some of whom are unknown, and myriad complex legal issues across many jurisdictions, including open questions of law as to when and whether particular licenses are needed. Additionally, there is a risk that rights holders, creators, performers, writers and their agents, or societies, unions, guilds, or legislative or regulatory bodies will create or attempt to create new rights that could require us to enter into license agreements with, and pay royalties to, newly defined groups of rights holders, some of which may be difficult or impossible to identify.

Even when we can enter into license agreements with rights holders, we cannot guarantee that such agreements will continue to be renewed indefinitely. For example, from time to time, our license agreements with certain rights holders and/or their agents may expire while we negotiate their renewals and, per industry custom and practice, we may enter into brief (for example, month-, week-, or even days-long) extensions of those agreements or provisional licenses and/or continue to operate on an at will basis as if the license agreement had been extended, including by our continuing to make music available. During these periods, we may not have assurance of long-term access to such rights holders' content, which could have a material adverse effect on its business and could lead to potential copyright infringement claims. Furthermore, if we fail to timely make any royalty or license payments to such rights holders, they may elect to terminate or suspend our license agreements with them.

It also is possible that such agreements will never be renewed at all. The lack of renewal, or suspension or termination, of one or more of our license agreements, or the renewal of a license agreement on less favorable terms, also could have a material adverse effect on its business, financial condition, and results of operations.

***We rely on key members of management, particularly our Chairman and Chief Executive Officer, Mr. Robert Ellin, and our Chief Financial Officer, Vice President, Treasurer and Secretary, Ryan Carhart, and the loss of their services or investor confidence in them could adversely affect our success, development and financial condition.***

Our success depends, to a large degree, upon certain key members of our management, particularly our Chairman and Chief Executive Officer, Robert Ellin, and our Chief Financial Officer, Vice President, Treasurer and Secretary, Ryan Carhart. Each of Messrs. Ellin and Carhart have extensive knowledge about our business and our operations, and the loss of either of them or any other key member of our senior management (including senior management of Slacker and PodcastOne) would likely have a material adverse effect on our business and operations. We do not currently maintain a key-person insurance policy for either of Messrs. Ellin or Carhart or any other member of our management. Our executive team's expertise and experience in acquiring, integrating and growing businesses, particularly those focused on live music and events, have been and will continue to be a significant factor in our growth and ability to execute our business strategy. The loss of any of our executive officers could slow the growth of our business or have a material adverse effect on our business, results of operations and financial condition.

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***Rising inflation may adversely affect us by increasing costs of labor, equipment and other costs beyond what we can recover through price increases.***

Inflation can adversely affect us by increasing the costs of labor, technology, equipment and other costs required to operate and grow our business. The United States is experiencing high levels of inflation, which may depress consumer demand for our services and reduce our profitability if we are unable to raise prices enough to keep up with increases in our costs. Inflationary pressures have resulted in increases in salaries and the cost of certain equipment and technology necessary for the production of our services, and such increases may continue to impact us in the future. Accordingly, we are exposed to risks associated with significant levels of cost inflation. If we are unable to increase our prices to offset the effects of inflation, our business, operating results, and financial condition could be materially and adversely affected.

***Unfavorable outcomes in legal proceedings may adversely affect our business, financial conditions and results of operations.***

Our results may be affected by the outcome of future litigation. Unfavorable rulings in our legal proceedings may have a negative impact on us that may be greater or smaller depending on the nature of the rulings. In addition, from time to time in the future we may be subject to various claims, investigations, legal and administrative cases and proceedings (whether civil or criminal) or lawsuits by governmental agencies or private parties, including as described in the immediately preceding risk factor. If the results of these investigations, proceedings or suits are unfavorable to us or if we are unable to successfully defend against third party lawsuits, we may be required to pay monetary damages or may be subject to fines, penalties, injunctions or other censure that could have a material adverse effect on our business, financial condition and results of operations. Even if we adequately address the issues raised by an investigation or proceeding or successfully defend a third-party lawsuit or counterclaim, we may have to devote significant financial and management resources to address these issues, which could harm our business, financial condition and results of operations.

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***We may incur substantially more debt or take other actions that would intensify the risks discussed above.***

In addition to our current outstanding debt and Debentures, we and our subsidiaries may incur substantial additional debt, subject to restrictions contained in our existing and future debt instruments, some or all of which may be secured debt. In May 2025, we entered issued the Debentures collateralized by all of the assets of our Company and our subsidiaries. Pursuant to the SPA, we have the ability to issue the Additional Debentures subject to the Conditions. In August 2023, we entered into a Loan and Security Agreement with Capchase Inc. ("Capchase") pursuant to which we borrowed $1.7 million (the "Capchase Loan"). The Capchase Loan is subordinated to the Debentures. We therefore may not be able to engage in any of the foregoing transactions unless we obtain the consent of the lender or terminate our existing debt agreements. The Debentures also contain certain restrictive covenants, including the requirement for us to maintain a minimum cash amount at all times and are secured by substantially all of our and our subsidiaries' assets.

***We may not have sufficient cash flow from our business operations to make payments on our indebtedness.***

Our ability to make scheduled payments of the principal of, to pay redemption payments or interest on or to refinance our indebtedness depends on our performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt and/or obtaining additional equity capital on terms that may be onerous or highly dilutive. In the event of an acceleration of amounts due under our debt instruments as a result of an event of default, including upon the occurrence of an event that would reasonably be expected to have a material adverse effect on our business, operations, properties, assets or condition or a failure to pay any amount due, we may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments. There is no guarantee that we will be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal, redemption payments and interest under our debt agreements or to satisfy all of the financial covenants. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. Capital markets have been volatile in the recent past; a downturn could negatively impact our ability to access capital should the need arise. As a result, the inability to meet our debt obligations could cause us to default on those obligations. Any such defaults could materially harm our financial condition and liquidity.

***We may not have the ability to pay the cash dividends or other amounts then due to the holders of our Series A Preferred Stock.***

Our Series A Preferred Stock bears a dividend of 12% per annum, is perpetual and has no maturity date and is convertible at any time at the option of a holder of Series A Preferred Stock (the "Holders") into shares of our common stock at a price of $2.10 per share of common stock. At our option, the dividend may be paid in-kind; 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.

Our failure to pay any amount due to the Holders of the Series A Preferred Stock would require us to issue an aggregate of 56,473 shares of our common stock in aggregate to the Holders for each five trading days (or pro rata thereof) that such breach or default is ongoing commencing on the date that such breach or default occurred (subject to any cure period); provided, that such number of shares shall be pro rata decreased for any conversion of such Holder's shares of Series A Preferred Stock into our common stock. In addition, a breach of any of the Protective Provisions (as defined in the Certificate of Designation) would also trigger the same shares issuance requirement. A default under the Series A Preferred Stock issuance agreements itself could also lead to a default under agreements governing our future indebtedness. We may not have sufficient funds to pay amounts due to the Holders of the Series A Preferred Stock. Our failure to pay such amount(s) may materially adversely impact our business, operating results and financial condition. If for any reason we fail to comply with the payment terms of our Series A Preferred Stock, the Debenture holders and/or Capchase may declare an event of default and at its option may immediately accelerate their debt and require us to repay all outstanding amounts owed under the applicable debt instruments, which would materially adversely impact our business, operating results and financial condition. We do not have the right to redeem the Series A Preferred Stock other than our optional right to purchase up to $5,000,000 in aggregate of the outstanding shares of Series A Preferred Stock held by the Harvest Funds, in whole or in part, at a cash redemption price per share of Series A Preferred Stock equal to the Stated Value (as defined in the Certificate of Designation) (the "Redemption Price").

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***Our quarterly operating results may be volatile and are difficult to predict in the future, and our stock price may decline if we fail to meet the expectations of securities analysts or investors.***

Our revenue, margins and other operating results could vary significantly in the future from quarter-to-quarter and year-to-year and may fail to match our past performance due to a variety of factors, including many factors that are outside of our control, including, as a result of our acquisition of PodcastOne in July 2020 and CPS in December 2020, and our entry into the podcasting and the merchandise personalization industry. Factors that may contribute to the variability of our operating results and cause the market price of our common stock to fluctuate include:

● the entrance of new competitors or competitive products in our market, whether by established or new companies;

● our ability to retain and grow the number of our active user base and increase engagement among new and existing users;

● our ability to maintain effective pricing practices, in response to the competitive markets in which we operate or other macroeconomic factors, such as inflation or increased product taxes;

● our revenue mix, which drives gross profit;

● seasonal or other shifts in festival, event, advertising and CPS revenue;

● the timing of the launch of our new or updated festivals, products, platforms, channels, podcasts or features;

● the addition or loss of popular content or talent;

● the popularity of EDM and EDM festivals, events, concerts and clubs;

● the popularity of podcasts and specifically our podcast content;

● an increase in costs associated with protecting our intellectual property, defending against third-party intellectual property infringement allegations or procuring rights to third-party intellectual property. 

Our gross margins are expected to vary across our offerings. Festival revenue has a lower gross margin compared to platform revenue derived through our arrangements with advertising, content distribution, billing and licensing activities. In addition, our gross margin and operating margin percentages, as well as overall profitability, may be adversely impacted as a result of a shift in music taste, geographic or sales mix, price competition, or the introduction of new technology and EDM festivals. We may in the future strategically reduce our Slacker gross margin in an effort to increase our active accounts and/or maintain our OEM relationships and agreements. As a result, our membership revenue may not increase as consistently as it has historically, or at all, and, unless we are able to adequately increase our other revenues, and grow our active user and member base, we may be unable to maintain or grow our margins and revenues and our business will be harmed. If a reduction in margins does not result in an increase in our active user base and revenues, our financial results may suffer, and our business may be harmed.

***We may not be able to attract qualified personnel.***

Our ability to expand operations to accommodate our anticipated growth will depend on our ability to attract and retain qualified personnel. However, competition for the types of employees we seek is intense. We face particular challenges in recruiting and retaining personnel who have experience in software engineering, mobile application development and other technical expertise, particularly those focused on live music and events, which is critical to our initiatives. Our ability to meet our business development objectives will depend in part on our ability to recruit, train and retain top quality personnel with advanced skills who understand our technology and business. We cannot provide any assurance that we will be able to attract qualified personnel to execute our business strategies or develop and expand our online properties. If we are unable to engage and retain the necessary personnel, our business may be materially and adversely affected.

Additionally, we expect to retain the existing managers and executives of certain companies we acquire to have them continue managing and operating the acquired business. We believe that these individuals will have the market expertise and network of personal relationships to best implement the growth strategies of the acquired businesses. If we are unable to retain the key personnel of the acquired businesses, we may not be able to achieve the anticipated benefits and synergies of an acquisition.

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***We engage certain consultants to work for us. If the consultants that we utilize are characterized as employees and if we are deemed to be delinquent in our payroll taxes or incur other employment-related liabilities with respect to those consultants, we and our management team could incur significant liabilities.***

We engage certain consultants to work for us in various aspects of our business. Although we believe that the consultants that we utilize in our business, as is customary to do so in our business, are properly characterized as independent contractors, tax or other regulatory authorities may in the future challenge our characterization of independent contractors. We are aware of a number of judicial decisions and legislative proposals that could bring about major reforms in worker classification, including the California legislature's passage of California Assembly Bill 5 ("AB 5"). AB 5 purports to codify a new test for determining worker classification that is widely viewed as expanding the scope of employee relationships and narrowing the scope of independent contractor relationships. Given AB 5's recent passage, there is no guidance from the regulatory authorities charged with its enforcement, and there is a significant degree of uncertainty regarding its application. In addition, AB 5 has been the subject of widespread national discussion and it is possible that other jurisdictions, including New York, may enact similar laws. If such regulatory authorities or state, federal or foreign courts were to determine that our recording artists and songwriters are employees, and not independent contractors, we would be required to withhold income taxes, to withhold and pay Social Security, Medicare and similar taxes and to pay unemployment and other related payroll taxes. We would also be liable for unpaid past taxes and subject to penalties. As a result, any determination that our consultants are our employees could have a material adverse effect on our business, financial condition and results of operations. In addition to the taxes that we would be required to pay if we were required to remit payroll taxes for our consultants, and the payments that we would be required to make for other employment-related obligations, our operations would be severely disrupted and individual officers or members of our board of directors could be personally liable for certain of any assessments made. A government entity could potentially shut down our operations until such time as the payroll taxes were brought current. Such a shutdown could effectively push us into bankruptcy and an investor could lose all his or her investment in us.

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***Difficulties in obtaining accurate and comprehensive information necessary to identify the compositions embodied in sound recordings on Slacker***'***s services and the ownership thereof may impact Slacker***'***s ability to perform its obligations under its licenses, affect the size of its catalog, impact its ability to control content acquisition costs, and lead to potential copyright infringement claims.***

Comprehensive and accurate ownership information for the musical compositions embodied in sound recordings is often unavailable to Slacker or difficult or, in some cases, impossible for Slacker to obtain, sometimes because it is withheld by the owners or administrators of such rights. Slacker currently relies on the assistance of third parties to determine this information. If the information provided to Slacker or obtained by such third parties does not comprehensively or accurately identify the ownership of musical compositions, or if Slacker is unable to determine which musical compositions correspond to specific sound recordings, it may be difficult or impossible to identify the appropriate rights holders to whom to pay royalties. This may make it difficult to comply with the obligations of any agreements with those rights holders.

In the United States, Slacker also relies on the assistance of third parties to issue notices of intent ("NOIs") to obtain a compulsory license under Section 115 of the Copyright Act to those copyright owners with whom we do not have a direct license agreement or, in the case of unknown copyright owners, to the United States Copyright Office. The lack of comprehensive and accurate ownership information or the inability to determine which musical compositions correspond to specific sound recordings can cause difficulties in issuing NOIs to the correct parties (including the United States Copyright Office) or serving NOIs in a timely manner and can otherwise cause difficulties in obtaining licenses. This could lead to a reduction of sound recordings available to be streamed on Slacker's services, adversely impacting its ability to retain and expand its user base, and could make it difficult to ensure that Slacker is fully licensed.

These challenges, and others concerning the licensing of musical compositions embodied in sound recordings on Slacker's services, may subject Slacker to significant liability for copyright infringement, breach of contract or other claims.

***We are subject to cybersecurity risks to our systems, infrastructure, and technology, and data processed by us or third-party vendors.***

Our business and operations involve the collection, storage, transmission, and other processing of personal data and certain other sensitive and proprietary data. Numerous organizations have disclosed breaches of their information security systems and other information security incidents, some of which have involved sophisticated and highly targeted attacks. We may in the future be a target for cybersecurity attacks designed to disrupt our operations or to attempt to gain access to our systems, data processed or maintained in our business, trade secrets, or other proprietary information or financial resources. Many of our personnel work remotely all or part of the time, which increases certain security risks. In addition, the risk of state-supported and geopolitical-related cybersecurity attacks is believed to be heightened in connection with the conflicts in Ukraine and the Middle East and any related political or economic responses and counter-responses.

We are at risk for interruptions, outages, and breaches of our operational systems, including business, financial, accounting, broadcast, data processing or production processes, as well as our security systems, in-product software and technology, and customer data. We use third parties to process some data on our behalf, and they face similar security risks. Because techniques used to obtain unauthorized access to or to sabotage information systems change frequently and may not be known until launched against a target, we and the third parties on which we rely may be unable to anticipate or prevent these attacks, react in a timely manner or implement adequate preventive measures, and we may face delays in our detection or remediation of, or other responses to, security breaches and other privacy-and security-related incidents. Such incidents could materially disrupt our systems, result in loss of intellectual property and misappropriation of trade secrets or other proprietary or competitively sensitive information, compromise the confidentiality, security, and integrity of our information, including employees' personal information, and information of customers or others, jeopardize the security of our facilities, or affect the performance of our products. The loss, corruption, or unavailability of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the impacted data. Certain efforts may be state-sponsored or supported by significant financial and technological resources, making them even more difficult to detect, remediate and otherwise respond to.

Although we have implemented and are in the process of implementing additional systems and processes that are designed to protect our data and systems within our control, prevent data loss, and prevent other security breaches and security incidents, these measures cannot guarantee security. The systems and infrastructure used in our business may be vulnerable to cyberattacks or security breaches or incidents, and third parties may be able to access data, including personal data and other sensitive and proprietary data or other sensitive and proprietary data, or such data otherwise may be subject to unauthorized use, disclosure, unavailability, modification, or other processing. Employee error, malfeasance or other errors in the storage, use or transmission of any of these types of data could result in an actual or perceived privacy or security breach or other security incident.

Any security breach or security incident impacting our systems or infrastructure, or data we or third parties on which we rely maintain or otherwise process, or any outages or other disruptions to systems used in our business, could interrupt our operations and result in the loss of or improper access to, or acquisition or disclosure of, data or a loss of intellectual property protection. Any such breach or incident, or the perception it has occurred, also may harm our reputation and competitive position, harm our product development and regulatory approval efforts, reduce demand for our products, damage our relationships with customers, partners, collaborators or others, and result in claims, demands, litigation, regulatory investigations and proceedings and significant legal, regulatory and financial exposure. Any such event may adversely affect our business, operating results, and financial condition. We expect to incur significant costs in an effort to detect and prevent privacy and security breaches and other privacy- and security-related incidents, and may face increased costs and requirements to expend substantial resources in the event of an actual or perceived privacy or security breach or other incident.

While we maintain insurance that may cover certain liabilities in connection with certain disruptions, security breaches, and incidents, our insurance policies may not be adequate to compensate us for the potential losses arising from any disruption in or, failure or security breach or incident of or impacting our systems or third-party systems where information important to our operations or product development is stored or processed. In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover all claims made against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly and divert management attention.

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***Costs associated with, and our ability to obtain adequate insurance, could adversely affect our financial condition and profitability.***

As a public company and due to our complex business operations, we face continuously increasing premiums, deductibles and challenges in connection with obtaining directors and officers, cyber security, errors and omissions insurance, employers' liability, transmission interruption, insurance property, casualty, liability, artist, business interruption and other insurance coverage for our Company and our subsidiaries. In addition, from time to time, we have been and may be in the future subject to legal proceedings and claims in the ordinary course of business. As a result, we may experience increased difficulty obtaining necessary insurance coverage and/or high policy limits of coverage at reasonable costs, including coverage for cyber security breaches, acts of terrorism and various litigation.

We cannot guarantee that our insurance policies coverage limits, including our directors and officers, cyber security, errors and omissions insurance, employers' liability, transmission interruption, insurance property, casualty, liability, artist, business interruption and other insurance policies, to the extent such are in place, would be adequate under the circumstances should one or multiple adverse events occur at or near any of our venues or events, or that our insurers would have adequate financial resources to pay our related claims. We cannot guarantee that adequate coverage limits will be available, offered at reasonable costs or offered by insurers with sufficient financial soundness. If adverse events that our insurance policies do not cover occur and result in a significant liability to us, our financial condition and results of operation could be adversely affected.

***Our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment.***

Challenging economic conditions worldwide have from time to time contributed, and may continue to contribute, to slowdowns in the communications industries at large. During the fiscal year ended March 31, 2024, we continued to see a more broad-based weakening in the global macroeconomic environment which impacted our commercial and enterprise markets. Additionally, instability in the global credit markets, the impact of uncertainty regarding global central bank monetary policy, the instability in the geopolitical environment in many parts of the world including as a result of Russia's hostile activities in Ukraine, the Israel Hamas war, the current economic challenges in China, including global economic ramifications of Chinese economic difficulties, and other disruptions may continue to put pressure on global economic conditions. If global economic and market conditions, or economic conditions in key markets, remain uncertain or deteriorate further, we may experience material impacts on our business, operating results, and financial condition.

**Risks Related to Our Acquisition Strategy**

***We can give no assurances as to when we will consummate any future acquisitions or whether we will consummate any of them at all.***

We intend to continue to build our business through strategic acquisitions, such as the recently completed acquisition of Drumify and Splitmind and pursue and consummate one or more additional acquisitions and to possibly use our remaining cash to fund any cash portion of the consideration we will pay in connection with those acquisitions. However, such additional acquisitions, may be subject to conditions and other impediments to closing, including some that are beyond our control, and we may not be able to close any of them successfully. In addition, our future acquisitions will be required to be closed within certain timeframes as negotiated between us and the acquisition target, and if we are unable to meet the closing deadlines for a given transaction, we may be required to forfeit payments we have made, if any, be forced to renegotiate the transaction on less advantageous terms and could fail to consummate the transaction at all.

If we are unable to close any future acquisition, it could significantly alter our business strategy and impede our prospects for growth. If we are unable to successfully consummate a particular acquisition, we may not be able to stream desired live music content on our network, produce and/or participate in the planned festivals or events or have ownership or licenses of the brands owned or licensed by that acquisition target. Further, we may not be able to identify suitable acquisition candidates to replace these acquisitions, and even if we were to do so, we may only be able to consummate them on less advantageous terms. In addition, some of the businesses we acquire may incur significant losses from operations, which, in turn, could have a material and adverse impact on our business, results of operations and financial condition.

As shown by our acquisitions of Slacker, PodcastOne, CPS, Drumify and Splitmind, acquisitions have been and will continue to be an important component of our growth strategy; however, we will need to integrate these acquired businesses successfully in order for our growth strategy to succeed and for us to become profitable. We expect that the management teams of the acquired businesses will adopt our policies, procedures and best practices, and cooperate with each other in scheduling events, booking talent and in other aspects of their operations. We may face difficulty in integrating the operations of any businesses we may acquire in the future, such as coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures, the diversion of management's attention from other business concerns, the inherent risks in entering markets or lines of business in which we have either limited or no direct experience; and the potential loss of key employees, individual service providers, customers and strategic partners of acquired companies.

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In addition, our growth strategy also includes further development of our online live streamed music network that we intend to integrate across all of our acquired businesses. This will require, among other things, the integration of the individual websites and databases of each business we currently operate or will acquire in the future. This will be a complex undertaking that may prove more difficult, expensive and time consuming than we currently expect. Even if we are able to achieve this integration, it may not achieve the benefits we anticipate. If we fail to do this properly and in a timely manner, it could harm our revenue and relationship with our fans.

Further, we expect that future target companies may have material weaknesses in internal controls relating to the proper application of accrual-based accounting under the accounting principles generally accepted in the United States of America ("GAAP") prior to our acquiring them. The Public Company Accounting Oversight Board (the "PCAOB") defines a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. We will be relying on the proper implementation of our policies and procedures to remedy any such material weaknesses, and prevent any potential material misstatements in our financial reporting. Any such misstatement could adversely affect the trading price of our common stock, cause investors to lose confidence in our reported financial information, and subject us to civil and criminal fines and penalties. If our acquired companies fail to integrate in these important ways, or we fail to adequately understand the business operations of our acquired companies, our growth and financial results could suffer.

***A number of other companies are seeking to make acquisitions in our industry, which may make our acquisition strategy more difficult or expensive to pursue.***

The emergence and growth of live streamed music, music events, festivals and concerts has brought increased media attention, and a number of companies and investors have begun making acquisitions of such businesses or announced their intention to do so. We compete with many of these companies, and certain of them have greater financial resources than we do for pursuing and consummating acquisitions and to further develop and integrate acquired businesses. Our strategy relies on our ability to consummate important future acquisitions to foster the growth of our core business and to establish ourselves as the key provider of streamed high-quality live music content. The increased focus on acquisitions of such companies may impede our ability to acquire these companies because they choose another acquirer. It could also increase the price that we must pay for these companies. Either of these outcomes could reduce our growth, harm our business and prevent us from achieving our strategic goals.

***We may enter into acquisitions and take actions in connection with such transactions that could adversely affect our business and results of operations.***

Our future growth rate depends in part on our selective acquisition of additional businesses and assets. We may be unable to identify suitable targets for acquisition or make further acquisitions at favorable prices. If we identify a suitable acquisition candidate, our ability to successfully complete the acquisition would depend on a variety of factors, and may include our ability to obtain financing on acceptable terms and requisite government approvals. In addition, any credit agreements or credit facilities that we may enter into in the future may restrict our ability to make certain acquisitions. In connection with future acquisitions, we could take certain actions that could adversely affect our business, including:

● using a significant portion of our available cash;

● issuing equity securities, which would dilute current stockholders' percentage ownership;

● incurring substantial debt;

● incurring or assuming contingent liabilities, known or unknown;

● incurring amortization expenses related to intangibles; and

● incurring large accounting write-offs or impairments.

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We may also enter into joint ventures, which involve certain unique risks, including, among others, risks relating to the lack of full control of the joint venture, potential disagreements with our joint venture partners about how to manage the joint venture, conflicting interests of the joint venture, requirement to fund the joint venture and its business not being profitable.

In addition, we cannot be certain that the due diligence investigation that we conduct with respect to any investment or acquisition opportunity will reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. For example, instances of fraud, accounting irregularities and other deceptive practices can be difficult to detect. Executive officers, directors and employees may be named as defendants in litigation involving a company we are acquiring or have acquired. Even if we conduct extensive due diligence on a particular investment or acquisition, we may fail to uncover all material issues relating to such investment, including regarding the controls and procedures of a particular target or the full scope of its contractual arrangements. We rely on our due diligence to identify potential liabilities in the businesses we acquire, including such things as potential or actual lawsuits, contractual obligations or liabilities imposed by government regulation. However, our due diligence process may not uncover these liabilities, and when we identify a potential liability, we may incorrectly believe that we can consummate the acquisition without subjecting ourselves to that liability. Therefore, it is possible that we could be subject to litigation in respect of these acquired businesses. If our due diligence fails to identify issues specific to an investment or acquisition, we may obtain a lower return from that transaction than the investment would return or otherwise subject ourselves to unexpected liabilities. We may also be forced to write-down or write-off assets, restructure our operations or incur impairment or other charges that could result in our reporting losses. Charges of this nature could contribute to negative market perceptions about us or our shares of common stock.

**Risks Related to Technology and Intellectual Property**

***We rely heavily on technology to stream content and manage other aspects of our operations and on our CMS. The failure of any of this technology to operate effectively could adversely affect our business.***

We utilize a combination of proprietary and third-party technology. Our business substantially depends on our Slacker Radio app, which offers a digital spin on the classic radio listening experience through free and membership-based access. Our business is also substantially dependent on our LiveOne App, which includes live video streaming, live digital events, PPV events, VOD, push notifications, festival-, venue- and original content-specific functionality, Google Ads capability, digital rights management (e.g., geo-blocking), and the capability to display time-shifted content and enhanced function, and our PodcastOne App which offers users access to our podcasts on their favorite device. PodcastOne relies heavily on its CMS. It utilizes a combination of its proprietary CMS technology and third-party technology. Its business substantially depends on its CMS which allows it to manage its podcasts and content offer listeners access to their favorite podcasts. We cannot be sure that the Slacker Radio app will continue to, or that the LiveOne App and/or the PodcastOne App or our CMS technology or any enhancements or other modifications we make in the future to such technology or accompanying third-party technology or integration of such third-party technology will perform as intended. Future enhancements and modifications to our technology could consume considerable resources. If we are unable to successfully develop, maintain and enhance our technology to manage the streaming of live events in a timely and efficient manner, our ability to attract and retain users may be impaired. In addition, if our technology or that of third parties we utilize in our operations fails or otherwise operates improperly, our ability to attract and retain users may be impaired. Also, any harm to our users' personal computers or mobile devices caused by software used in our operations could have an adverse effect on our business, results of operations and financial condition.

***We may be unable to adequately protect our intellectual property rights.***

We may be unable to detect unauthorized use of, or otherwise sufficiently protect, our intellectual property rights. We rely on a combination of laws and contractual restrictions with employees, individual service providers, users, artists, suppliers and others content licensors and Content Providers to establish and protect these proprietary rights. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use proprietary information, trademarks, or copyrighted material without authorization which, if discovered, might require legal action to correct. Furthermore, our recently acquired assets and the assets we may acquire in connection with any future acquisitions (including brand names and trademark rights), may have been improperly adopted or inadequately protected prior to our acquisitions of them. This could include failures to obtain assignments of ownership or confidentiality agreements from third parties, failures to clear use of trademarks, or other failures to protect trademarks and other proprietary rights. In addition, third parties may independently and lawfully develop similar intellectual property or duplicate our services.

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We will apply to register, or secure by contract when appropriate, our trademarks and service marks as they are developed and used and reserve and register domain names as we deem appropriate. While we intend to vigorously protect our trademarks, service marks and domain names as we deem appropriate, effective trademark protection may not be available or may not be sought in every country in which we operate, and contractual disputes may affect the use of marks governed by private contract. Similarly, not every variation of a domain name may be available or be registered, even if available. Our failure to protect our intellectual property rights in a meaningful manner or challenges to related contractual rights could result in the erosion of brand names or the loss of rights to our owned or licensed marks and limit our ability to control marketing on or through the Internet using our various domain names or otherwise, which could adversely affect our business, financial condition, and results of operations. In addition, the loss of, or inability to otherwise obtain, rights to use third party trademarks and service marks, including the loss of exclusive rights to use third party trademarks in territories where we present festivals, could adversely affect our business or otherwise result in competitive harm.

We currently own the www.liveone.com, www.livexlive.com, www.slacker.com, www.podcastone.com, www.personalizedplanet.com, www.limogesjewelry.com, www.drumify.com. www.splitmind.io, and various other domain names. Internet regulatory bodies generally regulate domain names. If we lose the ability to use a domain name in a particular country, we would be forced either to incur significant additional expenses to market our services within that country or, in extreme cases, to elect not to offer our services in that country. Either result could harm our business, operating results, and financial condition. The regulation of domain names in the United States and in foreign countries is subject to change. Regulatory bodies could establish additional top-level domains, appoint additional domain name registrars, or modify the requirements for holding domain names. As a result, we may not be able to acquire or maintain the domain names that utilize our brand names in the United States or other countries in which we may conduct business in the future.

Litigation or proceedings before governmental authorities and administrative bodies may be necessary in the future to enforce our intellectual property rights, to protect our patent rights, trademarks, trade secrets, and domain names and to determine the validity and scope of the proprietary rights of others. Our efforts to enforce or protect our proprietary rights may be ineffective and could result in substantial costs and diversion of resources and management time, each of which could substantially harm our operating results. Additionally, changes in law may be implemented, or changes in interpretation of such laws may occur, that may affect our ability to protect and enforce our patents and other intellectual property.

***We may be accused of infringing upon intellectual property rights of third parties.***

From time to time, we have been and may be in the future subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement and other violations of the trademarks, copyrights, patents and other intellectual property or proprietary rights of third parties. The legal proceedings and claims include notices provided to us by content owners of users' violation of the Digital Millennium Copyright Act, which obligate us to investigate and remove infringing user content from our website.

Music contained within content we distribute may require us to obtain licenses for such distribution. In this regard, we will engage with collection management organizations ("CMOs") that hold certain rights to music interests in connection with streaming content into various territories. If we are unable to reach mutually acceptable terms with these organizations, we could become involved in litigation and/or could be prevented from distributing certain content, which could adversely impact our business. Additionally, pending and ongoing litigation as well as negotiations between certain CMOs and other third parties in various territories could adversely impact our negotiations with CMOs, or result in music publishers represented by certain CMOs unilaterally withdrawing rights, and thereby adversely impact our ability to reach licensing agreements reasonably acceptable to us. Failure to reach such licensing agreements could expose us to potential liability for copyright infringement or otherwise increase our costs.

We also face a risk that content licensors may bring claims for copyright infringement or breach of contract if our users exceed the scope of the content licenses. Certain live performance content may involve remixing and sampling of others' music, and if our content license agreements do not grant us or our users sufficient use rights, or if we facilitate the performance of music for which we do not have a license, our distribution of such content could expose us to claims of copyright infringement. Due to the nature of our business, we could be accused of infringing on the copyrights of Content Providers or other rights holders, or such persons could attempt to prevent us from otherwise making certain content available to our users.

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We may not be able to successfully defend against such claims, which may result in a limitation on our ability to use the intellectual property subject to these claims and also might require us to enter into settlement or license agreements, pay costly damage awards or face an injunction prohibiting us from using the affected intellectual property in connection with our services. Defending ourselves against intellectual property claims, whether they are with or without merit or are determined in our favor, results in costly litigation and may divert the attention of our management and technical personnel from the rest of our business.

Our inability to obtain accurate and comprehensive information necessary to identify the musical works embodied in sound recordings used in our services and/or the rights holders of such musical works, may impact our ability to perform our obligations under our licenses from the rights holders, may require us to remove or decrease the number of recordings on our streaming music services, and/or may subject us to potential copyright infringement claims.

We currently rely on the assistance of third parties to determine comprehensive and accurate rights holder information for the musical works embodied in the sound recordings made available on our services. If the information provided to us or obtained by such third parties does not comprehensively or accurately identify which composers, songwriters or publishers own or administer musical works, or if we are unable to determine which musical works correspond to specific sound recordings, it may be difficult to identify the appropriate rights holders from whom a license is required, to identify the applicable rights holders to pay and/or to comply with other applicable terms and obligations of the licenses. Our failure to timely obtain licenses and/or comply with such terms or obligations may subject us to significant liability for copyright infringement (and/or result in termination of certain licenses). Further, our inability to accurately identify rights holders may prevent us from obtaining necessary licenses, which could lead to a reduction in the music available to stream on our services, adversely impacting our ability to retain and expand our listener base.

In addition, music, Internet, technology, and media companies are frequently subject to litigation based on allegations of infringement, misappropriation, or other violations of intellectual property rights. Many companies in these industries, including many of our competitors, have substantially larger patent and intellectual property portfolios than we do, which could make us a target for litigation as we may not be able to assert counterclaims against parties that sue us for patent, or other intellectual property infringement. In addition, various "non-practicing entities" that own patents and other intellectual property rights often attempt to aggressively assert claims in order to extract value from technology companies. Further, from time to time we may introduce new products and services, including in territories where we currently do not have an offering, which could increase our exposure to patent and other intellectual property claims from competitors and non-practicing entities. It is difficult to predict whether assertions of third-party intellectual property rights or any infringement or misappropriation claims arising from such assertions will substantially harm our business, operating results, and financial condition. If we are forced to defend against any infringement or misappropriation claims, whether they are with or without merit, are settled out of court, or are determined in our favor, we may be required to expend significant time and financial resources on the defense of such claims. Furthermore, an adverse outcome of a dispute may require us to pay significant damages, which may be even greater if we are found to have willfully infringed upon a party's intellectual property; cease exploiting copyrighted content that we have previously had the ability to exploit; cease using solutions that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to redesign our solutions; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies, content, or materials; indemnify our partners and other third parties; and/or take other actions that may have material effects on our business, operating results, and financial condition.

***Our live music streaming network uses open source software, and we license some of our software through open source projects, which may pose particular risks to our proprietary software, products, and services in a manner that could have a negative effect on our business.***

We use open source software in connection with our website and our live music streaming network and may use open source software in the future. The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services. Some open source software licenses require users who distribute open source software as part of their own software product to publicly disclose all or part of the source code to such software product or make available any derivative works of the open source code on unfavorable terms or at no cost. Additionally, we may from time to time face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that we developed using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to make our software source code freely available, purchase a costly license or cease offering the implicated products or services unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and development resources, and we may not be able to complete it successfully. In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of software. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a negative effect on our business, financial condition and results of operations. While we have assessed the use of open source software on our website to ensure that we have not used open source software in a manner that would require us to disclose the source code to the related technology, use requiring such disclosure could inadvertently occur and any requirement to disclose our proprietary source code could be harmful to us.

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***Changes in how network operators handle and charge for access to data that travel across their networks could adversely impact our business.***

We will rely upon the ability of consumers to access our service through the Internet. Changes in laws or regulations that adversely affect the growth, popularity or use of the Internet, including laws impacting net neutrality, could decrease the demand for our service and increase our cost of doing business. To the extent that network operators implement usage-based pricing, including meaningful bandwidth caps, or otherwise try to monetize access to their networks by data providers, we could incur greater operating expenses and our member acquisition and retention could be negatively impacted. For example, in late 2010, Comcast informed Level 3 Communications that it would require Level 3 to pay for the ability to access Comcast's network. Furthermore, to the extent network operators were to create tiers of Internet access service and either charge us for or prohibit us from being available through these tiers, our business could be negatively impacted.

Most network operators that provide consumers with access to the Internet also provide these consumers with multichannel video programming. As such, companies like Comcast, Charter Spectrum and Cablevision have an incentive to use their network infrastructure in a manner adverse to our continued growth and success. For example, Comcast exempted certain of its own Internet video traffic (e.g., Streampix videos to the Xbox 360) from a bandwidth cap that applies to all unaffiliated Internet video traffic (e.g., Netflix videos to the Xbox 360). While we believe that consumer demand, regulatory oversight and competition will help check these incentives, to the extent that network operators are able to provide preferential treatment to their data as opposed to ours or otherwise implement discriminatory network management practices, our business could be negatively impacted. In international markets, especially in Latin America, these same incentives apply; however, the consumer demand, regulatory oversight and competition may not be as strong as in our domestic market.

***The success of our business and operations depends, in part, on the integrity of our systems and infrastructures, as well as affiliate and third-party computer systems, Wi-Fi and other communication systems. System interruption and the lack of integration and redundancy in these systems and infrastructures may have an adverse impact on our business, financial condition and results of operations.***

System interruption and the lack of integration and redundancy in the information systems and infrastructures, both of our own systems and other computer systems and of affiliate and third-party software, Wi-Fi and other communications systems service providers on which we rely, may adversely affect our ability to operate websites, process and fulfill transactions, respond to listener inquiries and generally maintain cost-efficient operations. Such interruptions could occur by virtue of natural disaster, malicious actions such as hacking or acts of terrorism or war, or human error. In addition, the loss of some or all of certain key personnel could require us to expend additional resources to continue to maintain our software and systems and could subject us to systems interruptions.

Although we maintain up to date information technology systems and network infrastructures for the operation of our businesses, techniques used to gain unauthorized access to private networks are constantly evolving, and we may be unable to anticipate or prevent unauthorized access to our systems and data.

***Privacy concerns could limit our ability to leverage our member data and compliance with privacy regulations could result in significant expense.***

In the ordinary course of business and in particular in connection with merchandising our service to our users, we collect and utilize data supplied by our users. We currently face certain legal obligations regarding the manner in which we treat such information. Other businesses have been criticized by privacy groups and governmental bodies for attempts to link personal identities and other information to data collected on the Internet regarding users' browsing and other habits. Increased regulation of data utilization practices, including self-regulation or findings under existing laws, which limit our ability to use collected data, could have an adverse effect on our business. As our business evolves and as we expand internationally, we may become subject to additional and/or more stringent legal obligations concerning our treatment of user information, and to the extent that we need to alter our business model or practices to adapt to these obligations, we could incur significant expenses.

In addition, we cannot fully control the actions of third parties who may have access to the user data we collect and the user data collected by our third-party vendors. We may be unable to monitor or control such third parties and the third parties having access to our website in their compliance with the terms of our privacy policies, terms of use, and other applicable contracts, and we may be unable to prevent unauthorized access to, or use or disclosure of, user information. Any such misuse could hinder or prevent our efforts with respect to growth opportunities and could expose us to liability or otherwise adversely affect our business. In addition, these third parties may become the victim of security breaches or have practices that may result in a breach, and we could be responsible for those third-party acts or failures to act.

Any failure, or perceived failure, by us or the prior owners of acquired businesses to maintain the privacy of data relating to our users (including disclosing data in a manner that was objectionable to our users), to comply with our posted privacy policies, our predecessors' posted policies, laws and regulations, rules of self-regulatory organizations, industry standards and contractual provisions to which we or they may be bound, could result in the loss of confidence in us, or result in actions against us by governmental entities or others, all of which could result in litigation and financial losses, and could potentially cause us to lose users, advertisers, revenue and employees.

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***Our reputation and relationships with members would be harmed if our member data, particularly billing data, were to be accessed by unauthorized persons.***

We will maintain personal data regarding our users, including names and, in many cases, mailing addresses. With respect to billing data, such as credit card numbers, we expect to rely on licensed encryption and authentication technology to secure such information. If we or our payment processing services experience any unauthorized intrusion into our users' data, current and potential users may become unwilling to provide the information to us necessary for them to become members, we could face legal claims, and our business could be adversely affected. Similarly, if a well-publicized breach of the consumer data security of any other major consumer website were to occur, there could be a general public loss of confidence in the use of the Internet for commerce transactions which could adversely affect our business.

In addition, we do not plan to obtain signatures from members in connection with the use of credit and debit cards (together, "payment cards") by them. Under current payment card practices, to the extent we do not obtain cardholders' signatures, we will be liable for fraudulent payment card transactions, even when the associated financial institution approves payment of the orders. From time to time, fraudulent payment cards may be used on our website to obtain service. Typically, these payment cards will not have been registered as stolen and therefore will not be rejected by any automatic authorization safeguards. We do not currently carry insurance against the risk of fraudulent credit card transactions. A failure to adequately control fraudulent credit card transactions would harm our business and results of operations.

***Regulatory and business practice developments relating to personal information of our users and/or failure to adequately protect the personal information of our users may adversely affect our business.***

Due to the nature of such businesses, the businesses we have acquired or intend to acquire in the future maintain, or have arrangements with third parties who maintain, information on users who or may purchase in the future our services and products electronically through their individual websites or otherwise register on the website for access to our content provided. We are in the process of evaluating the information collected to understand if we can aggregate and reuse the contact information to inform these individuals of upcoming events, offerings and other services and products that we believe enhance the user experience. Data protection laws and regulation may impair our ability to use these data in such ways, as certain uses may be prohibited. The use of such user information is an important component of our growth strategy in the future. The collection, storage and use of user information is subject to regulation in many jurisdictions, including the United States and the EU, and this regulation is becoming more prevalent and stringent. Further, there is a risk that data protection regulators may seek jurisdiction over our activities even in locations in which we do not have an operating entity. This may arise in a number of ways, either because we are conducting direct marketing activities in a particular jurisdiction and the local laws apply to and are enforceable against us, or because one of our databases is controlling the processing of information within that jurisdiction. We intend to develop a comprehensive policy aimed at ensuring adequate protection of our users' personal information and compliance with applicable law. There is a risk that we will be unable to successfully adopt and implement this policy, which may give rise to liabilities or increased costs.

Although we intend to develop systems and processes that are designed to protect customer and employee information and to prevent security breaches or incidents (which could result in data loss or other harm or loss), such measures cannot provide absolute security or certainty. It is possible that advances in computer and hacker capabilities, new variants of malware, the development of new penetration methods and tools, inadvertent violations of company policies or procedures or other developments could result in a compromise of customer or employee information or a breach of the technology and security processes that are used to protect customer and employee information. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems may change frequently and as a result, may be difficult for our business to detect for long periods of time. In addition, despite our best efforts, we may be unable to anticipate these techniques or implement adequate preventative measures. We may need to expend in the future significant capital and other resources to protect against and remedy such potential security breaches, incidents and their consequences, including the establishment of a dedicated cybersecurity organization within our larger technology environment.

We also face risks associated with security breaches and incidents affecting third parties with which we are affiliated or with which we otherwise conduct business. Consumers are generally concerned with the security and privacy of the Internet, and any publicized security problems affecting our businesses and/or third parties may discourage consumers from doing business with us, which could have an adverse effect on our business, financial condition and results of operations.

In some countries, the use of cookies and other information placed on users' Internet browsers or users' computing devices is currently regulated, regardless of the information contained within or referred to by the cookie. Specifically, in the EU, this is now subject to national laws being introduced pursuant to the amended Directive 2002/58 on Privacy and Electronic Communications. The effect of these measures may require users to provide explicit consent to such a cookie being used. The laws being introduced pursuant to this measure are not finalized in every European Member State, and we have not determined what effect this could have on our business when we place the cookie on the user's computer or when a third party does so. The effect may be to limit the amount of information we receive in relation to each use of the service and/or to limit our ability to link this information to a unique identity, which could adversely affect our business and financial condition.

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In the United States, the Federal Trade Commission ("FTC") is starting to exercise greater authority over how online consumer data is collected and maintained by businesses. Prompted by the FTC's recommendation regarding online tracking, a number of federal legislative proposals have been introduced that would allow users to opt out of online monitoring. A number of states have passed similar legislation and some states are becoming more active in enforcing these laws to protect consumers.

The laws in this area are complex and developing rapidly. For instance, on April 14, 2016, the EU General Data Protection Regulation (the "GDPR") became effective within Europe on May 25, 2018. The primary objectives of the GDPR are to give citizens of the EU back the control of their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU. We have not yet assessed the full effect of the GDPR. Failure to comply with the GDPR may result in significant monetary penalties. As we expand our operations into new jurisdictions, the costs associated with compliance with applicable local data privacy laws and regulations increases. It is possible that government or industry regulation in these markets will require us to deviate from our standard processes and/or make changes to our products, services and operations, which will increase operational cost and risk. There is a risk that Internet browsers, operating systems, or other applications might be modified by their developers in response to this regulation to limit or block our ability to access information about our users. It is possible that existing or future regulations could make it difficult or impossible for us to collect or use our user information in the way we would like, which would impede our growth strategy and potentially reduce the revenue we hope to generate. It is also possible that we could be found to have violated regulations relating to user data, which could result in us being sanctioned, suffering fines or other punishment, being restricted in our activities and/or suffering reputational harm. Any of the foregoing could adversely affect our business and financial results.

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**Risks Related to Our PodcastOne Business**

***We generate a substantial portion of our revenues from PodcastOne***'***s podcast and advertising sales. If PodcastOne fails to maintain or grow podcasting and advertising revenue, our financial results may be adversely affected.***

We generate revenue primarily from PodcastOne's podcasting and advertising services. Our financial results could be adversely affected if we fail to maintain or grow PodcastOne's podcasting and advertising and e-commerce merchandise revenue in the future. In addition, if PodcastOne fails to collect its receivable balance from its key customers in its podcasting and advertising and e-commerce merchandise businesses, our financial results may be adversely affected.

***PodcastOne faces and will continue to face competition for listeners and their listening time.***

PodcastOne competes with providers of podcasts that offer an on-demand catalog of podcast content that is similar to ours. PodcastOne faces increasing competition from a growing variety of podcast providers that seek to differentiate their service by content offering and product features, and they may be more successful than PodcastOne in predicting listener preferences, providing popular content, and innovating new features.

PodcastOne's competitors include providers of internet radio, terrestrial radio, and satellite radio. Internet radio providers may offer more extensive content libraries than we offer and some may be offered internationally more broadly than PodcastOne's service. In addition, internet radio providers may leverage their existing infrastructure and content libraries, as well as their brand recognition and listener base, to augment their services by offering competing on-demand podcast features to provide listeners with more comprehensive podcast service delivery choices. Terrestrial radio providers often offer their content for free, are well-established and accessible to consumers, and offer media content that we currently do not offer. In addition, many terrestrial radio stations have begun broadcasting digital signals, which provide high-quality audio transmission. Satellite radio providers, such as SiriusXM and iHeartRadio, may offer extensive and exclusive news, comedy, sports and talk content, and national signal coverage.

We believe that companies with a combination of technical expertise, brand recognition, financial resources, and digital media experience also pose a significant threat of developing competing on-demand audio distribution technologies. In particular, if known incumbents in the digital media space such as Facebook choose to offer competing services, they may devote greater resources than we have available, have a more accelerated time frame for deployment, and leverage their existing listener base and proprietary technologies to provide services that our listeners and advertisers may view as superior. Furthermore, Amazon Music, Apple Music, Apple Podcasts, Spotify, iHeartMusic and others have competing podcast services, which may negatively impact our business, operating results, and financial condition. Our current and future competitors may have higher brand recognition, more established relationships with content licensors and mobile device manufacturers, greater financial, technical, and other resources, more sophisticated technologies, and/or more experience in the markets in which we compete. Our current and future competitors may also engage in mergers or acquisitions with each other, as SiriusXM and Pandora have done, or to acquire smaller podcasting services, such as Spotify has done, to combine and leverage their audiences. Our current and future competitors may innovate new features or introduce new ways of consuming or engaging with content that cause our listeners, especially the younger demographic, to switch to another product, which would negatively affect our listener retention, growth, and engagement. In addition, Apple and Google also own application store platforms and are charging in-application purchase fees, which are not being levied on their own applications, thus creating a competitive advantage for themselves against us. If other competitors that own application store platforms and competitive services adopt similar practices, we may be similarly impacted. As the market for on-demand audio on the internet and mobile and connected devices increases, new competitors, business models, and solutions are likely to emerge.

PodcastOne also competes for listeners based on its presence and visibility as compared with other businesses and platforms that deliver audio content through the internet and connected devices. PodcastOne faces significant competition for listeners from companies promoting their own digital audio content online or through application stores, including several large, well-funded, and seasoned participants in the digital media market. Device application stores often offer listeners the ability to browse applications by various criteria, such as the number of downloads in a given time period, the length of time since an application was released or updated, or the category in which the application is placed. The websites and applications of PodcastOne's competitors may rank higher than its website and our application, and our application may be difficult to locate in device application stores, which could draw potential listeners away from our service and toward those of our competitors. If we are unable to compete successfully for listeners against other digital media providers by maintaining and increasing our presence, ease of use, and visibility online, on devices, and in application stores, our number of paid members, free ad-supported users, and the amount of content streamed on our service may fail to increase or may decline and our membership fees and advertising sales may suffer.

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We compete for a share of advertisers' overall marketing budgets with other content providers on a variety of factors, including perceived return on investment, effectiveness and relevance of our advertising products, pricing structure, and ability to deliver large volumes or precise types of advertisements to targeted listener demographic pools. We also compete for advertisers with a range of internet companies, including major internet portals, search engine companies, social media sites, and mobile applications, as well as traditional advertising channels such as terrestrial radio and television.

Large internet companies with strong brand recognition, such as Facebook, Google, Amazon, and X (formerly Twitter), have significant numbers of sales personnel, substantial advertising inventory, proprietary advertising technology solutions, and traffic across web, mobile, and connected devices that provide a significant competitive advantage and have a significant impact on pricing for reaching these listener bases. Failure to compete successfully against our current or future competitors could result in the loss of current or potential advertisers, a reduced share of our advertisers' overall marketing budget, the loss of existing or potential listeners, or diminished brand strength, which could adversely affect our pricing and margins, lower our revenue, increase our research and development and marketing expenses, and prevent us from achieving or maintaining profitability.

***PodcastOne***'***s business is dependent upon the performance of its podcasts and their talent.***

PodcastOne independently contracts with podcasts and talent with significant loyal audiences in their respective markets. Although PodcastOne has entered into long-term agreements with some of its key podcast hosts to protect its interests in those relationships, we can give no assurance that all or any of these persons will remain with us, will be able to continue to provide podcasting services, will retain their audiences or will continue to be profitable. Competition for these podcasts and talent is intense and certain of these talent and podcasts are under no legal obligation to remain with us after the expiration of their podcast license agreements. PodcastOne's competitors may choose to extend offers to any of these podcasts and/or talent on terms which we may be unwilling to meet. Furthermore, the popularity and audience loyalty of its key podcasts is highly sensitive to rapidly changing public tastes. A loss of such popularity or audience loyalty is beyond our control and could have a material adverse effect on PodcastOne's ability to attract local and/or national advertisers and on our revenue and/or ratings, and could result in increased expenses.

***If PodcastOne fails to increase the number of listeners consuming its podcast content, our business, financial condition and results of operations may be adversely affected.***

The size of PodcastOne's listener base consuming its podcast content is critical to its success, and PodcastOne will need to develop and grow our listener base to be successful. We currently generate substantially all of our revenue from advertising and sponsorship, which is dependent on the number of listeners consuming its podcast content that we attract. For example, if PodcastOne is unable to retain and attract listeners consuming its podcast content, it may be unable to maintain or increase the frequency of listeners' engagement with its platform and its podcasts. In addition, if listeners do not perceive PodcastOne's content as original, entertaining or engaging, it may not be able to attract advertising and sponsorship opportunities and/or increase the resulting frequency of listeners' engagement with our platform and content. If PodcastOne is unable to retain and attract listeners, its network and services could also be less attractive to potential new advertisers, sponsors and listeners, as well as to podcasts and podcasting talent, which could have a material and adverse impact on our business, financial condition and results of operations.

***Significant up-front and/or minimum guarantees required under certain of PodcastOne***'***s podcast license agreements may limit its operating flexibility and may adversely affect our business, operating results, and financial condition.***

Certain of PodcastOne's podcast license agreements contain significant up-front and/or require that PodcastOne makes minimum guarantee payments ("MGs"). In addition, in order to secure top podcasts and/or renew top performing podcasts, PodcastOne may be required to fund significant MGs payment requirements. While some MGs are recoupable by PodcastOne as a direct cost before it shares any revenue with the underlying partners/talent, some MGs related to PodcastOne's content acquisition costs are not always tied to its revenue and/or audience growth forecasts (e.g., number of listeners, downloads, YouTube viewers, social media followers), or the number of podcasts distributed its service. PodcastOne may also be subject to MGs to rights holders with respect to certain strategic partnerships we enter into that may not produce all of the expected benefits. Accordingly, PodcastOne's ability to achieve and sustain profitability and operating leverage on its service in part depends on its ability to increase its revenue through increased advertising sales on terms that maintain an adequate gross margin. The duration of its license agreements for podcast content that contain MGs is frequently between one and two years. If its forecasts of user acquisition or retention do not meet its expectations or advertising sales decline significantly during the term of our license agreements, PodcastOne's margins may be materially and adversely affected. To the extent PodcastOne's advertising sales do not meet its expectations, our business, operating results, and financial condition could also be adversely affected as a result of such MGs. In addition, the fixed cost nature of these MGs may limit our flexibility in planning for, or reacting to, changes in our business and the market segments in which we operate.

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PodcastOne relies on estimates of the market share of streamed and/or downloaded content by the provider, as well as its own user growth and forecasted advertising revenue, to forecast whether such MGs could be recouped against its actual content acquisition costs incurred over the duration of the license agreement. To the extent that this revenue and/or market share estimates underperform relative to its expectations, leading to content acquisition costs that do not exceed such minimum guarantees, its margins may be materially and adversely affected.

***PodcastOne***'***s podcasting revenue and operating results are highly dependent on the overall demand for advertising. Factors that affect the amount of advertising spending, such as economic downturns, can make it difficult to predict our revenue and could adversely affect its business.***

PodcastOne's business depends on the overall demand for advertising and on the economic health of its current and prospective advertisers. If advertisers reduce their overall advertising spending, PodcastOne's revenue and results of operations are directly affected. Many advertisers devote a disproportionate amount of their advertising budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing, and buyers may spend more in the fourth quarter for budget reasons. As a result, if any events occur to reduce the amount of advertising spending during the fourth quarter, or reduce the amount of inventory available to advertisers during that period, it could have a disproportionate adverse effect on its podcasting revenue and our operating results for that fiscal year. Economic downturns or instability in political or market conditions generally may cause current or new advertisers to reduce their advertising budgets. Adverse economic conditions and general uncertainty about economic prospects in the future are likely to affect PodcastOne's business prospects. In particular, uncertainty regarding the general business conditions in the United States and globally and if such economies deteriorate or become volatile could cause advertisers to delay, decrease or cancel ad purchases. Moreover, any changes in the favorable tax treatment of advertising expenses and the deductibility thereof would likely cause a reduction in advertising demand. In addition, continued geopolitical turmoil in many parts of the world have and may continue to put pressure on global economic conditions, which could lead to reduced spending on advertising.

***Expansion of PodcastOne***'***s operations to deliver podcasts subjects it to increased business, legal, financial, reputational, and competitive risks.***

Expansion of PodcastOne's operations to deliver podcasts and other non-music content involves numerous risks and challenges, including increased capital requirements, new competitors, and the need to develop new strategic relationships. Growth in these areas may require additional changes to PodcastOne's existing business model and cost structure, modifications to is infrastructure, and exposure to new regulatory, legal and reputational risks, including infringement liability, any of which may require additional expertise that it currently does not have. There is no guarantee that PodcastOne will be able to generate sufficient revenue from podcasts or other non-music content to offset the costs of creating or acquiring this content. Further, we have initially established a reputation as a music streaming service and our ability to gain acceptance and listenership for podcasts or other non-music content, and thus our ability to attract users and advertisers to this content, is not certain. Failure to successfully monetize and generate revenues from such content, including failure to obtain or retain rights to podcasts or other non-music content on acceptable terms, or at all, or to effectively manage the numerous risks and challenges associated with such expansion could adversely affect our business, operating results, and financial condition.

In addition, we enter into multi-year commitments for original content that we produce or commission. Given the multiple-year duration and largely fixed cost nature of such commitments, if our user growth and retention do not meet our expectations, our margins may be adversely impacted. Payment terms for certain content that we produce or commission will typically require more upfront cash payments than other content licenses or arrangements whereby we do not pay for the production of such content. To the extent our user and/or revenue growth do not meet our expectations, our liquidity and results of operations could be adversely affected as a result of such content commitments. The long-term and fixed cost nature of certain content commitments may also limit our flexibility in planning for or reacting to changes in our business, as well as our ability to adjust our content offering if our users do not react favorably to the content we produce. Any such event could adversely impact our business, operating results, and financial condition.

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***Increases in the costs in relation to podcast content creators, such as higher hosts***' ***compensation and costs of discovering and cultivating a top podcast content creator, may have an adverse effect on our business, financial condition and results of operations.***

PodcastOne depends upon podcast content creators to continuously provide a large variety of high-quality content on its platform, which is a key factor of engaging and providing a satisfactory user experience that ensures long-term user stickiness. PodcastOne competes with other audio platforms for active, popular or celebrity content creators. To attract and retain top content creators and maintain the high level of content quality, PodcastOne enters into contracts with its podcast content creators under which such creators are usually paid a certain percentage of the ad sales and other revenue that it generates related to their podcast. The compensation to a top podcast content creator may increase as the competition intensifies. If PodcastOne's content creators become too costly, it will not be able to produce high quality content at commercially acceptable costs. If PodcastOne's competitors' platforms offer higher revenue sharing percentage with an intent to attract our popular podcast content creators, costs to retain such content creators may increase. Furthermore, as PodcastOne's business and user base further expand, it may have to devote more resources in encouraging its podcast content creators to produce content that meets the evolving interests of a diverse user base, which would increase the costs of content on PodcastOne's platform. If PodcastOne is unable to generate sufficient revenues that outpace its increased costs in relation to content creators, our business, financial condition and results of operations may be materially and adversely affected.

***PodcastOne uses third-party services and technologies in connection with is business, and any disruption to the provision of these services and technologies to PodcastOne could result in adverse publicity and a slowdown in the growth of is users, which could materially and adversely affect our business, financial condition and results of operations.***

Our PodcastOne business depends upon services provided by, and relationships with, third parties. PodcastOne currently engages third-party service providers in certain areas of its operations such as monitoring of its podcasts. If such third-party service providers fail to detect the illegal or inappropriate activities or content in our podcasts, we may be subject to regulator's disapproval or penalties as well as adverse media exposure which could materially and adversely affect our business, financial condition and results of operations. In addition, some third-party software we use in our operations is currently publicly available without charge. If the owner of any such software decides to make claims against us, charge users, or no longer makes the software publicly available, we may need to enter into settlement with such owners, incur significant cost to license the software, find replacement software or develop it on our own. If PodcastOne is unable to find or develop replacement software at a reasonable cost, or at all, our business and operations may be adversely affected.

PodcastOne's overall network relies on bandwidth connections provided by third-party operators and it expects this dependence on third parties to continue. The networks maintained and services provided by such third parties are vulnerable to damage or interruption, which could impact our business, financial condition and results of operations.

PodcastOne also depends on the third-party online payment systems for sales of its products and services. If any of these third-party online payment systems suffer from security breaches, users may lose confidence in such payment systems and refrain from purchasing our virtual gifts online, in which case our results of operations would be negatively impacted.

PodcastOne exercises no control over the third parties with whom it has business arrangements. For some of our services and technologies such as online payment systems, PodcastOne relies on a limited number of third-party providers with limited access to alternative networks or services in the event of disruptions, failures or other problems. If such third parties increase their prices, fail to provide their services effectively, terminate their service or agreements or discontinue their relationships with PodcastOne, it could suffer service interruptions, reduced revenues or increased costs, any of which may have a material adverse effect on our business, financial condition and results of operations.

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***Streaming depends on effectively working with third-party platforms, operating systems, online platforms, hardware, networks, regulations, and standards PodcastOne does not control. Changes in PodcastOne***'***s services or those operating systems, hardware, networks, regulations, or standards, and PodcastOne***'***s limitations on its ability to access those platforms, operating systems, hardware or networks may seriously harm its business.***

PodcastOne's services require high-bandwidth data capabilities. If the costs of data usage increase or access to data networks is limited, our business may be seriously harmed. Additionally, to deliver high-quality audio, video, and other content over networks, PodcastOne's services must work well with a range of technologies, systems, networks, regulations and standards that it does not control. In addition, the adoption of any laws or regulations that adversely affect the growth, popularity, or use of the Internet, including laws governing Internet neutrality, could decrease the demand for PodcastOne's services and increase is cost of doing business. Previously, Federal Communications Commission (the "FCC") "open Internet rules" prohibited mobile providers in the United States from impeding access to most content, or otherwise unfairly discriminating against Content Providers like LiveOne and PodcastOne. These rules also prohibited mobile providers from entering into arrangements with specific Content Providers for faster or better access over their data networks. However, on December 14, 2017, the FCC voted to repeal the "open Internet rules" and as a result, broadband services are now subject to less U.S. federal regulation. A number of parties have already stated they would appeal this order, and it is possible United States Congress may adopt legislation restoring some of the "open Internet rules." If, as a result of the repeal of "open Internet rules," broadband providers in the United States decrease access to certain content, start entering into arrangements with specific Content Providers for faster or better access over their data networks, or otherwise unfairly discriminate against Content Providers like LiveOne and PodcastOne, this could increase our cost of doing business and put us at a competitive disadvantage relative to larger competitors. Additionally, mobile providers may be able to limit our users' ability to access our platforms or make them a less attractive alternative to our competitors' applications. If that occurs, our business, operating results and financial condition would be seriously harmed.

The European Union (the "EU") currently requires equal access to Internet content. Additionally, as part of its Digital Single Market initiative, the EU may impose network security, disability access, or 911-like obligations on "over-the-top" services such as those provided by us, which could increase our costs. If the EU or the courts modify these open Internet rules, mobile providers may be able to limit our users' ability to access our platforms or make them a less attractive alternative to our competitors' applications. If that occurs, our business, operating results and financial condition would be seriously harmed.

PodcastOne relies on a variety of operating systems, online platforms, hardware, and networks to reach its customers. These platforms range from desktop and mobile operating systems and application stores to wearables and intelligent voice assistants. The owners or operators of these platforms may not share its interests and may restrict its access to them or place conditions on access that would materially affect its ability to access those platforms. In particular, where the owner of a platform also is PodcastOne's direct competitor, the platform may attempt to use this position to affect PodcastOne's access to customers and ability to compete. For example, an online platform might arbitrarily remove PodcastOne's services from its platform, deprive PodcastOne of access to business-critical data, or engage in other harmful practices. Online platforms also may unilaterally impose certain requirements that negatively affect our ability to convert users to the premium service, such as conditions that limit our freedom to communicate promotions and offers to our users. Similarly, online platforms may force us to use the platform's payment processing systems which may be inferior to and more costly than other payment processing services available in the market.

Online platforms frequently change the rules and requirements for services like PodcastOne to access the platform, and such changes may adversely affect the success or desirability of our services. Online platforms may limit PodcastOne's access to information about users, limiting our ability to convert and retain them. Online platforms also may deny access to application programming interfaces ("API") or documentation, limiting functionality of our services on the platform.

There can be no assurance that we will be able to comply with the requirements of those operating systems, online platforms, hardware, networks, regulations and standards on which our services depend, and failure to do so could result in serious harm to our business.

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***PodcastOne relies on integrations with advertising platforms, demand-side platforms (***"***DSPs***"***), proprietary platforms and ad servers, over which it exercises very little control.***

PodcastOne's business depends on its ability to integrate its content with a variety of third-party advertising platforms, DSPs, proprietary platforms and ad services. PodcastOne is able to make its podcasts available on other popular podcasting platforms such as Apple, Amazon, Spotify and wherever podcasts are heard, allowing our listeners to utilize such platforms to listen to our podcasts. PodcastOne has also formed partnerships with advertising platforms to integrate its podcasts with their software and product offerings, allowing PodcastOne's advertisers to utilize its solutions wherever they purchase or place an ad. For example, PodcastOne relies on integration with Apple and Spotify in order to provide its podcasts through their platforms. Apple or Spotify may determine to only host shows that are proprietary to them, which would have a significant effect on PodcastOne's ability to offer its podcasts to larger group of listeners and would materially adversely affect our business, results of operations and financial condition. Some of these integration partners have significant market share in the segment in which they operate. To date, PodcastOne has relied on written contracts and other arrangements to govern its relationships with these partners. However, these are subject to change by such providers from time to time and in many instances the provider may choose to terminate these contracts without cause and with short notice periods. Many of these agreements are short term with automatic renewal provisions, and there can be no assurances that such providers will agree to renew their agreements with PodcastOne. Moreover, such providers may choose to stop integrating with PodcastOne's podcasts and may unilaterally stop providing us with data necessary to its business if they acquire a competitor which provides podcasting services similar to ours or if they begin to deliver podcasts similar to PodcastOne's on their own. We cannot assure you that PodcastOne's existing podcast partners and integration partners will continue to, or that potential new podcast partners or integration partners will agree to, integrate PodcastOne's podcasts into their podcast offerings or services. Such integrations may not be replaceable, and so loss of any such integrations could materially impact our business and our results of operations and we and/or PodcastOne may lose listeners.

Our business and revenues could also be affected by social issues or disruptions. For example, if there is public disapproval or boycotting of a specific podcasting platform, such as Spotify or other podcasting platform, PodcastOne's ability to optimize ad placement or to forecast listener metrics may be impacted based on unforeseen trends or events.

***PodcastOne***'***s revenue model also depends in part on high impression volumes, the growth of which may not be sustained.***

PodcastOne generates revenue by charging a cost per thousand impressions ("CPM") based on the volume of purchased digital ads that we measure on behalf of these customers. If the volume of impressions it measures does not continue to grow or decreases for any reason, PodcastOne's business will suffer. For example, if digital ad spending remains constant and PodcastOne's advertiser customers transition to higher CPM ad inventory, overall impression volumes may decrease, which may result in fewer impressions for PodcastOne to verify and a corresponding decline in its revenues. We cannot assure you that growth in volume of impressions will be sustained. If PodcastOne's customers adjust their buying patterns or alter their preference to higher CPM ad inventory, our business, financial condition, and results of operations may be harmed.

***PodcastOne***'***s advertising sales depend on how its listener data is collected and how advertisers select their ad listener targeting in the future.***

PodcastOne's advertising sales depend on how its listener data is collected and how advertisers select their ad listener targeting in the future. Advertiser spending varies based on their desire to target certain categories of listeners and supporting listener data. If PodcastOne's advertisers determine to target different listeners or shift their ad spending towards different listener categories, our business, financial condition, and results of operations may be harmed.

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***The third-party services and software that PodcastOne uses are highly technical and may contain undetected software bugs or vulnerabilities, which could manifest in ways that could seriously harm its reputation and business.***

The third-party services and software that PodcastOne uses are highly technical and complex. The tech solutions that it uses or may introduce in the future, may contain undetected software bugs, hardware errors, and other vulnerabilities. These bugs and errors can manifest in any number of ways in PodcastOne's products, including through diminished performance, security vulnerabilities, malfunctions, or even permanently disabled products. PodcastOne's tech providers have a practice of updating their tech solutions and software and some errors in their technology and software may be discovered only after a product has been used by listeners, and may in some cases be detected only under certain circumstances or after extended use. Any errors, bugs or other vulnerabilities discovered in the underlying code or backend after release could damage our reputation, drive away listeners, allow third parties to manipulate or exploit our software, lower revenue and expose us to claims for damages, any of which could seriously harm PodcastOne's business. Additionally, errors, bugs, or other vulnerabilities may—either directly or if exploited by third parties—affect PodcastOne's ability to make accurate royalty payments.

PodcastOne also could face claims for infringement of intellectual property, among other things. Defending a lawsuit, regardless of its merit, is costly and may divert management's attention and seriously harm PodcastOne's reputation and business. In addition, if PodcastOne's liability insurance coverage proves inadequate or future coverage is unavailable on acceptable terms or at all, its business could be seriously harmed.

***PodcastOne is at risk of attempts at unauthorized access to its services, and failure to effectively prevent and remediate such attempts could have an adverse impact on its business, operating results and financial condition. Unauthorized access to PodcastOne***'***s services may cause it to misstate key performance indicators, which once discovered, corrected, and disclosed, could undermine investor confidence in the integrity of its key performance indicators and could cause our stock price to drop significantly.***

We and PodcastOne have in the past been, and continue to be, impacted by attempts by third parties to manipulate and exploit our software for the purpose of gaining unauthorized access to our services. For example, we have detected instances of third parties seeking to provide mobile device users a means to suppress advertisements without payment and gain access to features only available to the ad-supported services. If in the future we fail to successfully detect and address such issues, it may have artificial effects on our key performance indicators, such as content hours, content hours per listener, which underlie, among other things, our contractual obligations with advertisers, as well as harm our relationship with them. This may impact our results of operations, particularly with respect to margins on our ad-supported segment, by increasing our ad-supported cost of revenue without a corresponding increase to our ad-supported revenue, which could seriously harm our business.

***PodcastOne***'***s listener metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may seriously harm and negatively affect PodcastOne***'***s reputation and business.***

PodcastOne regularly reviews key metrics related to the operation of its business to evaluate growth trends, measure our performance and make strategic decisions. These metrics are calculated using internal company data and have not been validated by an independent third party. While these numbers are based on what it believes to be reasonable estimates of PodcastOne's listener base for the applicable period of measurement, there are inherent challenges in measuring how our services are used across large populations globally. Errors or inaccuracies in PodcastOne's metrics or data could result in incorrect business decisions and inefficiencies.

In addition, advertisers generally rely on third-party measurement services to calculate our metrics, and these third-party measurement services may not reflect our true audience. Some of our demographic data also may be incomplete or inaccurate because listeners self-report their names and dates of birth. Consequently, the personal data PodcastOne has may differ from its listeners' actual names and ages. If advertisers, partners, or investors do not perceive our listener, geographic or other demographic metrics to be accurate representations of our listener base, or if PodcastOne discovers material inaccuracies in its listener, geographic or other demographic metrics, our reputation may be seriously harmed, which could have an adverse impact on our business, operating results, and financial condition.

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***PodcastOne***'***s podcasting business is subject to a variety of laws around the world. Government regulation of the Internet is evolving and any changes in government regulations relating to the Internet or other areas of our business or other unfavorable developments may adversely affect our business, operating result, and financial condition.***

PodcastOne is a U.S.-based company that is registered under the laws of the State of Delaware, and with operations in certain countries and territories around the world. As a result of the scope of PodcastOne's operations, it is subject to a variety of laws in different countries. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting. It also is likely that if PodcastOne's business grows and evolves and our solutions are used more globally, it will become subject to laws and regulations in additional jurisdictions. It is difficult to predict how existing laws will be applied to PodcastOne's business and the new laws to which we may become subject.

PodcastOne is subject to general business regulations and laws, as well as regulations and laws specific to the Internet. Such laws and regulations include, but are not limited to, labor, advertising and marketing, real estate, taxation, user privacy, data collection and protection, intellectual property, anti-corruption, anti-money laundering, foreign exchange controls, antitrust and competition, electronic contracts, telecommunications, sales procedures, automatic membership renewals, credit card processing procedures, consumer protections, broadband Internet access and content restrictions. We cannot guarantee that PodcastOne's has been or will be fully compliant in every jurisdiction in which it is subject to regulation, as existing laws and regulations governing issues such as intellectual property, privacy, taxation, and consumer protection, among others, are constantly changing. The adoption or modification of laws or regulations relating to the Internet or other areas of PodcastOne's business could limit or otherwise adversely affect the manner in which we currently conduct our business. For example, certain jurisdictions have implemented or are contemplating implementing laws which may negatively impact our automatic renewal structure or our free or discounted trial incentives. Further, compliance with laws, regulations, and other requirements imposed upon our business may be onerous and expensive, and they may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and doing business.

Moreover, as Internet commerce continues to evolve, increasing regulation by U.S. federal and state agencies and other international regulators becomes more likely and may lead to more stringent consumer protection laws, which may impose additional burdens on us. The adoption of any laws or regulations that adversely affect the popularity or growth in use of the Internet, including laws limiting Internet neutrality, could decrease listener demand for our services and increase our cost of doing business. Future regulations, or changes in laws and regulations or their existing interpretations or applications, also could hinder our operational flexibility, raise compliance costs, and result in additional historical or future liabilities for us, resulting in material adverse impacts on our business, operating results and financial condition.

***PodcastOne***'***s corporate culture has contributed to its success, and if it cannot successfully maintain its culture as it assimilates new employees, it could lose the innovation, creativity and teamwork fostered by its culture.***

PodcastOne is undergoing growth in its business, including in its employee headcount. A significant portion of its management team has been with the company since inception. PodcastOne expects that significant additional hiring will be necessary to support its strategic plans. This rapid influx of new team members from different business backgrounds may make it difficult for it to maintain our corporate culture. PodcastOne believes its culture has contributed significantly to its ability to attract and retain talent, to acquire podcast content and to innovate and grow successfully. If its culture is negatively affected, its ability to support its growth and innovation may diminish.

**Risks Related to Our E-commerce Merchandising and Other E-commerce Business**

***We generate a portion of our revenues from our ecommerce merchandise sales. If we fail to maintain or grow our ecommerce merchandise sales revenue, our financial results may be adversely affected.***

We generate portion of our revenues primarily from our CPS ecommerce merchandise sales. Our financial results could be adversely affected if we fail to maintain or grow our CPS ecommerce merchandise revenue in the future. In addition, if we fail to collect our receivables balance from our customers in our CPS ecommerce merchandising business, our financial results may be adversely affected.

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***CPS' business is affected by seasonality, which could result in fluctuations in our operating results.***

CPS' merchandising business is affected by seasonality. Historically, CPS' generated higher sales revenues in the third fiscal quarter ending December 31. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal demand and change in preferences or popularity of certain of our merchandise. As a result, CPS' may not be able to accurately predict our quarterly sales. Accordingly, CPS' results of operations are likely to fluctuate materially from period to period. This seasonality, along with other factors that are beyond CPS' control, including general economic conditions, changes in consumer preferences, weather conditions, availability of inventory and transportation disruptions, could adversely affect our business and cause our results of operations to fluctuate. CPS' operating margins are also sensitive to a number of additional factors that are beyond our control, including manufacturing and transportation costs, shifts in product sales mix and geographic sales trends, all of which we expect to continue. Results of operations in any period should not be considered indicative of the results to be expected for any future period.

***Failure to accurately forecast consumer demand could lead to excess inventories or inventory shortages, which could result in decreased operating margins, reduced cash flows and harm to our CPS' business.***

To meet anticipated demand for CPS' products, CPS purchases certain materials, which it holds in inventory. There is a risk CPS may be unable to sell excess products ordered from manufacturers. Inventory levels in excess of customer demand may result in inventory write-downs, and the sale of excess inventory at discounted prices could significantly impair CPS' image and have an adverse effect on our operating results, financial condition and cash flows. Conversely, if CPS underestimates consumer demand for its products or if its manufacturers fail to supply products that CPS requires at the time it needs them, CPS may experience inventory shortages. Inventory shortages might delay shipments to customers, negatively impact retailer and consumer relationships and negatively impact its reputation. The difficulty in forecasting demand also makes it difficult to estimate CPS' future results of operations, financial condition and cash flows from period to period. A failure to accurately predict the level of demand for CPS' products could adversely affect its net revenues and net income, and we are unlikely to forecast such effects with any certainty in advance.

***CPS is subject to data security and privacy risks that could negatively affect our results, operations or reputation.***

In addition to our own sensitive and proprietary business information, we and CPS collects transactional and personal information about our customers, which includes online distribution channels. Hackers and data thieves are increasingly sophisticated and operate large-scale and complex automated attacks. Any breach of our network, or other vendor systems, may result in the loss of confidential business and financial data, misappropriation of our consumers' or employees' personal information or a disruption of our business. Any of these outcomes could have a material adverse effect on our business, including unwanted media attention, impairment of our consumer and customer relationships, damage to our reputation; resulting in lost sales and consumers, fines, lawsuits, or significant legal and remediation expenses. We also may need to expend significant resources to protect against, respond to and/or redress problems caused by any breach.

In addition, we must comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the U.S and elsewhere. Compliance with existing, proposed and recently enacted laws and regulations can be costly; any failure to comply with these regulatory standards could subject us to legal and reputational risks. Misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, damage to our reputation and credibility and could have a negative impact on our results of operations, financial condition and cash flows from period to period.

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***Our business may be adversely affected if we are unable to provide our customers a cost-effective shopping platform that is able to respond and adapt to rapid changes in technology.***

The number of people who access the Internet through devices other than personal computers, including mobile phones, smartphones, handheld computers such as notebooks and tablets, video game consoles, and television set-top devices, has increased dramatically in the past few years. We continually upgrade existing technologies and business applications to keep pace with these rapidly changing and continuously evolving technologies, and we may be required to implement new technologies or business applications in the future. The implementation of these upgrades and changes requires significant investments and as new devices and platforms are released, it is difficult to predict the problems we may encounter in developing applications for these alternative devices and platforms. Additionally, we may need to devote significant resources to the support and maintenance of such applications once created. Our results of operations may be affected by the timing, effectiveness and costs associated with the successful implementation of any upgrades or changes to our systems and infrastructure to accommodate such alternative devices and platforms. Further, in the event that it is more difficult or less compelling for our customers to buy products from us on their mobile or other devices, or if our customers choose not to buy products from us on such devices or to use mobile or other products that do not offer access to our sites, our customer growth could be harmed and our business, financial condition and operating results may be materially adversely affected.

***Significant merchandise returns could harm CPS' business.***

CPS allows our customers to return products, subject to its return policy. If merchandise returns are significant, our business, prospects, financial condition and results of operations could be harmed. Further, CPS modifies its policies relating to returns from time to time, which may result in customer dissatisfaction or an increase in the number of product returns. Some of its products require special handling and delivery. From time to time CPS' products are damaged in transit, which can increase return rates and harm its brand.

***Our business relies heavily on email and other messaging services, and any restrictions on the sending of emails or messages or an inability to timely deliver such communications could materially adversely affect our net revenue and business.***

Our business is highly dependent upon email and other messaging services for promoting our sites and products. Daily promotions offered through emails and other messages sent by us generate a significant portion of our net revenue. We provide daily emails and "push" communications to customers and other visitors informing them of what is available for purchase on our sites, and we believe these messages are an important part of our customer experience and help generate a substantial portion of our net revenue. If we are unable to successfully deliver emails or other messages to our email members, or if our email members decline to open our emails or other messages, our net revenue and profitability would be materially adversely affected. Changes in how webmail applications organize and prioritize email may also reduce the number of members opening our emails. For example, in 2013 Google Inc.'s Gmail service began offering a feature that organizes incoming emails into categories (for example, primary, social and promotions). Such categorization or similar inbox organizational features may result in our emails being delivered in a less prominent location in a member's inbox or viewed as "spam" by our members and may reduce the likelihood of that member opening our emails. Actions by third parties to block, impose restrictions on or charge for the delivery of emails or other messages could also adversely impact our business. From time to time, Internet service providers or other third parties may block bulk email transmissions or otherwise experience technical difficulties that result in our inability to successfully deliver emails or other messages to third parties. Changes in the laws or regulations that limit our ability to send such communications or impose additional requirements upon us in connection with sending such communications would also materially adversely impact our business. Our use of email and other messaging services to send communications about our products and site or other matters may also result in legal claims against us, which may cause us increased expenses, and if successful might result in fines and orders with costly reporting and compliance obligations or might limit or prohibit our ability to send emails or other messages. We also rely on social networking messaging services to send communications and to encourage customers to send communications. Changes to the terms of these social networking services to limit promotional communications, any restrictions that would limit our ability or our customers' ability to send communications through their services, disruptions or downtime experienced by these social networking services or decline in the use of or engagement with social networking services by customers and potential customers could materially adversely affect our business, financial condition and operating results.

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***We are subject to risks related to online payment methods.***

We accept payments using a variety of methods, including credit card, debit card, PayPal, credit accounts and gift cards. As we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements and fraud. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We are also subject to payment card association operating rules and certification requirements, including the Payment Card Industry Data Security Standard and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. As our business changes, we may also be subject to different rules under existing standards, which may require new assessments that involve costs above what we currently pay for compliance. If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card and debit card payments from consumers or to facilitate other types of online payments. If any of these events were to occur, our business, financial condition and operating results could be materially adversely affected. We occasionally receive orders placed with fraudulent credit card data. We may suffer losses as a result of orders placed with fraudulent credit card data even if the associated financial institution approved payment of the orders. Under current credit card practices, we may be liable for fraudulent credit card transactions. If we are unable to detect or control credit card fraud, our liability for these transactions could harm our business, financial condition and results of operations.

***Government regulation of the Internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.***

We are subject to general business regulations and laws as well as regulations and laws specifically governing the Internet and e-commerce. Existing and future regulations and laws could impede the growth of the Internet, e- commerce or mobile commerce. These regulations and laws may involve taxes, tariffs, privacy and data security, anti-spam, content protection, electronic contracts and communications, consumer protection, Internet neutrality and gift cards. It is not clear how existing laws governing issues such as property ownership, sales and other taxes and consumer privacy apply to the Internet as the vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet or e-commerce. It is possible that general business regulations and laws, or those specifically governing the Internet or e-commerce, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. We cannot be sure that our practices have complied, comply or will comply fully with all such laws and regulations. Any failure, or perceived failure, by us to comply with any of these laws or regulations could result in damage to our reputation, a loss in business and proceedings or actions against us by governmental entities or others. Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business, decrease the use of our sites by consumers and suppliers and may result in the imposition of monetary liability. We may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of non-compliance with any such laws or regulations. In addition, it is possible that governments of one or more countries may seek to censor content available on our sites or may even attempt to completely block access to our sites. Adverse legal or regulatory developments could substantially harm our business. In particular, in the event that we are restricted, in whole or in part, from operating in one or more countries, our ability to retain or increase our customer base may be adversely affected, and we may not be able to maintain or grow our net revenue and expand our business as anticipated. Further, as we enter into new market segments or geographical areas and expand the products and services we offer, we may be subject to additional laws and regulatory requirements or prohibited from conducting our business, or certain aspects of it, in certain jurisdictions. We will incur additional costs complying with these additional obligations and any failure or perceived failure to comply would adversely affect our business and reputation.

***Changes in tax treatment of companies engaged in e-commerce may adversely affect the commercial use of our sites and our financial results.***

Due to the global nature of the Internet, it is possible that various states might attempt to impose additional or new regulation on our business or levy additional or new sales, income or other taxes relating to our activities. Tax authorities at the federal, state and local levels are currently reviewing the appropriate treatment of companies engaged in e-commerce. New or revised international, federal, state or local tax regulations or court decisions may subject us or our customers to additional sales, income and other taxes. For example, on June 21, 2018, the U.S. Supreme Court rendered a 5-4 majority decision in *South Dakota v. Wayfair Inc.,* 17-494 where the Court held, among other things, that a state may require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to consumers in the state, overturning existing court precedent. While we do not expect the Court's decision to have a significant impact on our business, other new or revised taxes and, in particular, sales taxes and similar taxes could increase the cost of doing business online and decrease the attractiveness of selling products over the Internet. New taxes and rulings could also create significant increases in internal costs necessary to capture data and collect and remit taxes. Any of these events could have a material adverse effect on our business, financial condition and operating results.

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***CPS faces intense competition and may not be able to compete successfully against existing or future competitors.***

The e-commerce merchandise market is evolving rapidly and intensely competitive. Barriers to entry are minimal, and current and new competitors can launch new websites at a relatively low cost. CPS currently competes with numerous competitors, including:

● large merchandise retailers with or without discount departments, including Amazon.com, AliExpress (part of the Alibaba Group), eBay, Temu and Rakuten.com;

● online specialty retailers; and

● traditional general merchandise and specialty retailers.

We expect that existing and future traditional manufacturers and retailers will continue to add or improve their e-commerce offerings, and that CPS' existing and future e-commerce competitors, including Amazon, will continue to increase their offerings and the ways in which they enable shoppers to purchase merchandise, including their mobile technology and the voice-activated shopping services offered by Amazon. Further, large marketplace websites and sites which aggregate marketplace sellers with a large product selection are becoming increasingly popular, and CPS may not be able to place its products on these sites to take advantage of their internal search platforms and some shoppers may begin their searches at these websites rather than utilize traditional search engines at all. Many of CPS' competitors specialize in one or more of the areas in which we offer products. Competition from Amazon and from other competitors, many of whom have longer operating histories, larger customer bases, greater brand recognition, greater access to capital and significantly greater financial, marketing and other resources than CPS does, affect CPS and have had and could continue to have a material adverse effect on our financial results, business and prospects.

***CPS depends on its relationships with third parties, and changes in its relationships with these parties could adversely impact our net revenue and profits.***

CPS relies on third parties to operate certain elements of its business. For example, carriers such as FedEx, UPS, DHL and the U.S. Postal Service deliver many of its small parcel products, and third party national, regional and local transportation companies deliver a portion of our large parcel products. As a result, CPS may be subject to shipping delays or disruptions caused by war, inclement weather, natural disasters, system interruptions and technology failures, labor activism, health epidemics (including the COVID-19 outbreak) or bioterrorism. CPS is also subject to risks of breakage or other damage during delivery by any of these third parties. CPS also uses and relies on other services from third parties, such as cloud computing services, telecommunications services, customs, consolidation and shipping services, as well as warranty, installation, assembly and design services. CPS may be unable to maintain these relationships, and these services may also be subject to outages and interruptions that are not within our control. For example, failures by CPS' telecommunications providers have in the past and may in the future interrupt its ability to provide phone support to our customers. Third parties may in the future determine they no longer wish to do business with CPS or may decide to take other actions that could harm its business. CPS may also determine that it no longer wants to do business with them. If products are not delivered in a timely fashion or are damaged during the delivery process, or if CPS is not able to provide adequate customer support or other services or offerings, its customers could become dissatisfied and cease buying products through its sites, which would adversely affect our operating results.

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***We may be, accused of infringing intellectual property rights of third parties.***

The e-commerce industry is characterized by vigorous protection and pursuit of intellectual property rights, which has resulted in protracted and expensive litigation for many companies. We may become subject to claims and litigation by third parties that we infringe their intellectual property rights. The costs of supporting such litigation and disputes are considerable, and there can be no assurances that favorable outcomes will be obtained. As our business expands and the number of competitors in our market increases and overlaps occur, we expect that infringement claims may increase in number and significance. Any claims or proceedings against us, whether meritorious or not, could be time-consuming, result in considerable litigation costs, require significant amounts of management time or result in the diversion of significant operational resources, any of which could materially adversely affect our business, financial condition and operating results.

Legal claims regarding intellectual property rights are subject to inherent uncertainties due to the oftentimes complex issues involved, and we cannot be certain that we will be successful in defending ourselves against such claims. In addition, some of our larger competitors have extensive portfolios of issued patents. Many potential litigants, including patent holding companies, have the ability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. Furthermore, a successful claimant could secure a judgment that requires us to pay substantial damages or prevents us from conducting our business as we have historically done or may desire to do in the future. We might also be required to seek a license and pay royalties for the use of such intellectual property, which may not be available on commercially acceptable terms, or at all. Alternatively, we may be required to develop non-infringing technology or intellectual property, which could require significant effort and expense and may ultimately not be successful.

We may receive in the future communications alleging that certain items posted on or sold through our sites violate third-party copyrights, designs, marks and trade names or other intellectual property rights or other proprietary rights. Brand and content owners and other proprietary rights owners have actively asserted their purported rights against online companies. In addition to litigation from rights owners, we may be subject to regulatory, civil or criminal proceedings and penalties if governmental authorities believe we have aided and abetted in the sale of counterfeit or infringing products.

Such claims, whether or not meritorious, may result in the expenditure of significant financial, managerial and operational resources, injunctions against us or the payment of damages by us. We may need to obtain licenses from third parties who allege that we have violated their rights, but such licenses may not be available on terms acceptable to us, or at all. These risks have been amplified by the increase in third parties whose sole or primary business is to assert such claims.

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**Risks Related to the Ownership of Our Common Stock**

***Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plan and any acquisition or financing agreement, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.***

We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital by issuing equity and/or convertible securities, our stockholders may experience substantial dilution. We may sell or otherwise issue our common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell or issue our common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent issuances. These issuances may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders. We may pay for future acquisitions with additional issuances of shares of our common stock as well, which would result in further dilution for existing stockholders.

Pursuant to our 2016 Equity Incentive Plan (as amended, the "2016 Plan"), there are 17,600,000 shares of our common stock reserved for future issuance to our employees, directors and consultants. If our board of directors elects to issue additional shares of our common stock, stock options, restricted stock units and/or other equity-based awards under the 2016 Plan, as amended, our stockholders may experience additional dilution, which could cause our stock price to fall.

***Conversion of our Series A Preferred Stock and/or Debentures will dilute the ownership interest of our existing stockholders, including holders who had previously converted their convertible notes, and sales of any such converted shares may otherwise depress the price of our common stock.***

As of May 31, 2025, the shares of our outstanding Series A Preferred Stock are convertible into approximately 6.8 million shares of our common stock at a price of $2.10 per share of common stock, and our outstanding Debentures are convertible into approximately 7.86 million shares of our common stock at a price of $2.10 per share of common stock. The conversion of some or all of the shares of our outstanding Series A Preferred Stock and/or outstanding Debentures into shares of our common stock will dilute the ownership interests of our existing stockholders. In addition, any sales in the public market of the shares of our common stock issuable upon such conversion and/or any anticipated conversion of the Series A Preferred Stock and/or Debentures into shares of our common stock could adversely affect prevailing market prices of our common stock.

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***The market price of our common stock may be highly volatile.***

The trading price of our common stock may be volatile. Our stock price could be subject to wide fluctuations in response to a variety of factors, including the following:

● actual or anticipated fluctuations in our revenue and other operating results;

● actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

● issuance of our equity or debt securities, or disclosure or announcements relating thereto;

● the lack of a meaningful, consistent and liquid trading market for our common stock;

● additional shares of our common stock being sold into the market by us or our stockholders or the anticipation of such sales;

● our convertible debt securities being converted into equity or the anticipation of such conversion;

● announcements by us or our competitors of significant events or features, technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;

● changes in operating performance and stock market valuations of companies in our industry;

● price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

● expiration of the lock-up period, as more fully discussed below;

● lawsuits threatened or filed against us;

● regulatory developments in the United States and foreign countries; and

● other events or factors, including those resulting from impact of war or incidents of terrorism, other epidemics, or responses to these events.

In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.

***We cannot guarantee that our stock repurchase program will be consummated, fully or all, or that it will enhance long-term shareholder value. Stock repurchases could also increase the volatility of the trading price of our stock and could diminish our cash reserves.***

We have announced that our senior management and/or board of directors has authorized the repurchase up to approximately $12.0 million worth of shares of our outstanding common stock from time to time, subject to a portion of the repurchase program being approved by our board of directors and any other applicable approvals and consents, which LiveOne fully expects to obtain. 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.

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***Our Chairman and Chief Executive Officer and stockholders affiliated with him own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.***

Mr. Ellin, our Chief Executive Officer and Chairman, and his affiliates beneficially owned approximately 21% of shares of our common stock issued and outstanding as of May 31, 2025 (not including Mr. Ellin's options which have an exercise price substantially above the market price of our common stock as of the date of this Annual Report). Therefore, Mr. Ellin and stockholders affiliated with him may have the ability to influence us through their ownership positions. Mr. Ellin and these stockholders may be able to determine or significantly influence all matters requiring stockholder approval. For example, Mr. Ellin and these stockholders, acting together, may be able to control or significantly influence elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may believe are in your best interest as one of our stockholders.

***Sales of a substantial number of shares of our common stock in the public market by certain of our stockholders could cause our stock price to fall.***

Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our common stock. Furthermore, the holders of Series A Preferred Stock may elect to convert their shares of Series A Preferred Stock into shares of our common stock, in addition to any dividends thereunder. Sales of stock by these stockholders and/or holders could have a material adverse effect on the trading price of our common stock.

***FINRA sales practice requirements may limit a stockholder***'***s ability to buy and sell our stock.***

The Financial Industry Regulatory Authority ("FINRA"), has adopted rules requiring that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a high probability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect on the market for and price of our common stock.

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***If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.***

The trading market for our shares of common stock will be influenced by the research and reports that securities or industry analysts publish about us. Securities and industry analysts currently provide publish limited research focused on our Company. If the current securities or industry analysts do not provide extensive coverage or commence coverage of our Company, the price and trading volume of our shares of common stock could be negatively impacted. If other securities or industry analysts initiate coverage and one or more of the analysts who cover us downgrade our shares of common stock or publish inaccurate or unfavorable research about our Company, the price of our shares of common stock would likely decline. Furthermore, if one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our shares of common stock could decrease, which might cause the price of our shares of common stock and trading volume to decline.

***As a smaller reporting company, we are subject to scaled disclosure requirements that may make it more challenging for investors to analyze our results of operations and financial prospects***

Because the market value of our common stock held by non-affiliates was less than $250 million as of the last business day of our fiscal quarter ended September 30, 2024, we continue to be a "smaller reporting company" as defined by the SEC's revised rules. As a "smaller reporting company," we (i) are able to provide simplified executive compensation disclosures in our filings, (ii) are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting, and (iii) have certain other decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of audited financial statements in our annual reports. Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects. We will remain a smaller reporting company if we have either (i) a public float of less than $250 million held by non-affiliates as of the last business day of the second quarter of our then current fiscal year or (ii) annual revenues of less than $100 million during such recently completed fiscal year with less than $700 million in public float as of the last business day of the second quarter of such fiscal year.

***If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price could decline.***

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline.

***Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.***

Section 382 and 383 ("Section 382 and 383") of the Internal Revenue Code of 1986, as amended (the "Code"), contains rules that limit the ability of a company that undergoes an ownership change to utilize its net operating losses ("NOLs") and tax credits existing as of the date of such ownership change. Under the rules, such an ownership change is generally any change in ownership of more than 50% of a company's stock within a rolling three-year period. The rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning, directly or indirectly, 5% or more of the stock of a company and any change in ownership arising from new issuances of stock by the company. As a result of these Section 382 and 383 limitations, any ownership changes as defined by Section 382 and 383 may limit the amount of NOL carryforwards that could be utilized annually to offset future taxable income.

***We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.***

We have never declared or paid any cash dividend on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Additionally, any credit and security agreement that we may enter into in the future will likely contain covenants that will restrict our ability to pay dividends. Any return to stockholders will therefore be limited to the appreciation of their stock.

***Provisions in our Certificate of Incorporation and Bylaws and provisions under Delaware law could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, and may prevent or frustrate attempts by our stockholders to replace or remove our current management.***

Some provisions of our charter documents may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management. These provisions include: authorizing the issuance of "blank check" preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval; and establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

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In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law ("Section 203") regulating corporate takeovers. In general, Section 203 prohibits publicly held Delaware corporation from engaging in a business combination with an interested stockholder (generally, any entity, person or group beneficially owning 15% or more of the outstanding voting stock of the company) for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:

● prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

● upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

● at or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders.

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*The risks above do not necessarily comprise of all those associated with an investment in our Company. This Annual Report contains forward looking statements that involve unknown risks, uncertainties and other factors that may cause our actual results, financial condition, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Factors that might cause such a difference include, but are not limited to, those set out above.*

**Item 1B. Unresolved Staff Comments**

None.

**Item 1C. Cybersecurity**

*Risk Management and Strategy*

We perform a formal risk assessment each year. As part of our risk assessment, we consider the potential for cybersecurity threats, including but not limited to interruptions, outages and breaches to its operational and financial systems. We have policies, processes, internal controls and tools to assess, identify, and manage material risks from potential cybersecurity threats. We utilize a combination of cybersecurity awareness training, manual processes, specialized software and automated tools, and third-party assessments to build our cybersecurity program. We engage third-party service providers, with significant information technology and cybersecurity experience, to assist with designing, implementing and managing our information technology infrastructure and cybersecurity program. We are also currently developing a cybersecurity incident response plan that establishes a formal framework for responding to cybersecurity incidents, including defining what constitutes a reportable cybersecurity incident; establishing specific escalation and communication channels; identifying parties responsible for managing and responding to each incident; and other preparedness and response activities.

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*Governance*

The Audit Committee of our board of directors provides oversight over our internal control program, including the adequacy and effectiveness of our information technology infrastructure and cybersecurity program. Each quarter, our management provides updates to the Audit Committee regarding our internal control program, including any significant changes to its information technology infrastructure or cybersecurity program. Our management also reports any material risks from cybersecurity threats to the Audit Committee. Our management periodically provides the Audit Committee with updates on cybersecurity risks and/or trends.

Our management team, specifically our Chief Executive Officer and Chief Financial Officer, are responsible for the day-to-day administration of our business operations, including our risk management of cybersecurity risks. Our management is responsible for the design and implementation of policies, processes and internal controls to manage our cybersecurity risks. Our management team regularly meets with their information technology resources, including our third-party service providers, to ensure that we are appropriately positioned to manage our cybersecurity risks. Our management team also sponsors periodic cybersecurity awareness training for employees.

As of the date of this Annual Report, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. For further discussion of the cybersecurity risks, see "Part I — Item 1A. Risk Factors," specifically the risk titled "We are subject to cybersecurity risks to our systems, infrastructure, and technology, and data processed by us or third-party vendors." No matter how well designed or implemented our internal controls are, we will not be able to anticipate all cybersecurity threats, and we may not be able to implement effective preventive or detective measures against such security breaches in a timely manner. While we maintain insurance that may cover certain liabilities in connection with certain disruptions, security breaches, and incidents, there can be no guarantee that our insurance coverage will be adequate to compensate us for the potential losses.

**Item 2. Properties**

Effective January 1, 2021, our principal executive offices are located at 269 S. Beverly Drive, Suite #1450, Beverly Hills, CA 90212. We intend to eventually combine all of our Los Angeles-based operations under one address. PodcastOne leases its Los Angeles premises located at 345 North Maple Drive, Suite 295, Beverly Hills, CA 90210, under an operating lease which is currently month to month. CPS leases its facilities in Addison, Illinois under an operating lease which was entered into in September 2024 and expires in September 2026 for 1,500 of rentable square feet. In July 2024, CPS also entered into a lease which expires in October 2027 for 3,281 rentable square feet in Palatine, Illinois. We believe that each of these properties are in good condition and suitable for the conduct of our business. We do not own any real property.

**Item 3. Legal Proceedings**

We are from time to time, party to various legal proceedings arising out of our business. Certain legal proceedings in which we are involved are discussed in Note 13 - Commitments and Contingencies, to the consolidated financial statements included in Item 8. Financial Statement and Supplementary Data, and are incorporated herein by reference. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

**Item 4. Mine Safety Disclosures**

Not applicable.

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**PART II**

**Item 5. Market for Registrant**'**s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**

**Market Information**

Shares of our common stock have been trading publicly on The NASDAQ Capital Market ("Nasdaq") under the symbol "LVO" since October 6, 2021.

**Number of Holders**

As of July 1, 2025, there were 397 stockholders of record of our common stock. This figure does not include an estimate of the indeterminate number of beneficial holders whose shares may be held of record by brokerage firms and clearing agencies. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

**Dividends**

We have not paid any cash dividends on our common stock to date and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain earnings, if any, for the future operation and expansion of our business. Any determination to pay cash dividends in the future will be at the discretion of our board of directors and will depend upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by applicable laws and other factors that our board of directors may deem relevant.

**Securities Authorized for Issuance Under Equity Compensation Plans**

See Item 12, "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" of this Annual Report for information regarding securities authorized for issuance under equity compensation plans.

**Recent Sales of Unregistered Securities**

Other than as set forth below and as reported in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, there have been no other sales or issuances of unregistered securities since April 1, 2020 were not registered under the Securities Act of 1933, as amended (the "Securities Act").

*Issuances of Shares, Options and Restricted Stock Units to Consultants, Employees, and Vendors*

*Fiscal Year 2025*

During the fiscal year ended March 31, 2025, we issued an aggregate of 3,114,085 shares of our common stock to our consultants, employees, and vendors.

*Fiscal Year 2024*

During the fiscal year ended March 31, 2024, we issued an aggregate of 2,855,298 shares of our common stock to our consultants, employees, and vendors.

*Fiscal Year 2023*

During the fiscal year ended March 31, 2023, we issued an aggregate of 2,676,611 shares of our common stock to our consultants, employees, and vendors.

*Issuance of Securities in Private Offerings for Cash*

*Fiscal Years 2025, 2024 and 2023*

None.

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Except as otherwise noted, the securities in the transactions describe above were sold in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D as offers and sales of securities not involving any public offering. Each of the persons acquiring the foregoing securities pursuant to Rule 506 of Regulation D was an accredited investor (as defined in Rule 501(a) of Regulation D) and confirmed the foregoing and acknowledged, in writing, that the securities must be acquired and held for investment. All certificates evidencing the shares sold bore a restrictive legend. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith. The proceeds from these sales were used for general corporate purposes.

**Purchases of Equity Securities by the Issuer and Affiliated Purchasers**

As of May 31, 2025, our board of directors and/or management has authorized the repurchase up to an aggregate of $12.0 million worth of shares of our and/or PodcastOne's outstanding common stock 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 following table summarizes our purchases of securities for each month during the period of January 1, 2025 to March 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  |  |  | **(d)** |
|  |  |  | **(c)** | **Maximum number** |
|  |  |  | **Total** | **(or approximate** |
|  |  |  | **number of shares** | **(dollar value) of** |
|  |  |  | **(or units)** | **shares** |
|  |  | **(b)** | **purchased as** | **(or units)** |
|  | **(a)** | **Average** | **part of publicly** | **that may yet** |
|  | **Total** | **price paid** | **announced** | **be purchased** |
|  | **number of shares** | **per share** | **plans** | **under the plans** |
| **Period** | **(or units) purchased** | **(or unit)** | **or programs** | **or programs** |
| January 1, 2025 – January 31, 2025 |  | $- | 4418286 | $6500000 |
| February 1, 2025 – February 28, 2025 |  | $- | 4418286 | $6500000 |
| March 1, 2025 – March 31, 2025 |  | $- | 4418286 | $6500000 |
| Total (January 1, 2025 – March 31, 2025) |  | $- | 4418286 | $6500000 |

---

**Securities Authorized for Issuance Under Equity Compensation Plans**

See "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters — Securities Authorized for Issuance Under Equity Compensation Plans" of this Annual Report.

**Item 6. [Reserved]**

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**Item 7. Management**'**s Discussion and Analysis of Financial Condition and Results of Operations**

**Forward-Looking Statements**

We make forward-looking statements in this Annual Report and the documents incorporated by reference herein within the meaning of the Securities Litigation Reform Act of 1995. 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," "will likely result," "should," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "continue," "target" or similar expressions. These forward-looking statements are based on information available to us as of the date of this Annual 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 its revenue; our ability to consummate any proposed financing, acquisition, spin-out, special dividend, merger, distribution or transaction, the timing of the consummation of any such proposed event, including the risks that a condition to the consummation of any such event would not be satisfied within the expected timeframe or at all, or that the consummation of any proposed financing, acquisition, spin-out, merger, special dividend, distribution or transaction will not occur or whether any such event will enhance shareholder value; our ability to continue as a going concern; our ability to attract, maintain and increase the number of its users and paid members; our ability to identify, acquire, secure and develop content; our intent to repurchase shares of its 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; our ability to maintain compliance with certain financial and other debt covenants; our ability to successfully implement our growth strategy, including relating to our technology platforms and applications; management's relationships with industry stakeholders; our ability to repay our indebtedness when due; our ability to satisfy the conditions for closing on our announced additional convertible debentures financing; uncertain and unfavorable outcomes in legal proceedings and/or our ability to pay any amounts due in connection with any such legal proceedings; changes in economic conditions; competition; risks and uncertainties applicable to the businesses of our subsidiaries; and other risks, uncertainties and factors and other risks, uncertainties and factors set forth in "Item 1A. Risk Factors" of this Annual Report. 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.

The following discussion and analysis of our business and results of operations for the fiscal year ended March 31, 2025, and our financial conditions at that date, should be read in conjunction with the financial statements and the notes thereto included elsewhere in this Annual Report. As used herein, "LiveOne," the "Company," "we," "our" or "us" and similar terms refer collectively to LiveOne, Inc. and its subsidiaries, unless the context indicates otherwise.

**Overview of the Company**

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

For the fiscal years ended March 31, 2025 and 2024, we reported revenue of $114.4 million and $118.4 million, respectively. For the years ended March 31, 2025 and 2024, one customer accounted for 45% and 51% of our consolidated revenues, respectively.

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**Fiscal 2025 Significant Transactions**

In January 2025, our total paid and monthly active ad-supported users exceeded 860k. Our Direct-billed Premium subscribers have increased by 78% and overall direct-billed subscribers have increased by 130% since October 2024, when we announced a new conversion program with Tesla, our largest OEM customer.

On October 1, 2024, we announced an amended relationship with our largest OEM customer. Effective December 1, 2024, the OEM customer no longer subsidizes our products to some of its customers, however, we offer all OEM customer vehicles in North America the opportunity to convert to become direct subscribers of our LiveOne music app. The direct subscription to our LiveOne app allows such users for the first time to access their LiveOne music and LiveOne's other service offerings directly across all of their devices. Our LiveOne music streaming button/icon, which allows users to directly connect their subscription to LiveOne, is expected to remain in the OEM customer's music streaming services dashboard in perpetuity. The OEM customer will continue to pay us monthly for qualifying grandfathered vehicles for the term of the OEM license agreement.

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 the PodcastOne's vast library of popular podcasts. Pursuant to the Agreement, ART19 is required to pay the Company a minimum guarantee of $15.0 million plus 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 the Company and ART19 based on gross sales revenue achieved by PodcastOne under the Agreement.

On January 28, 2025, we entered into the 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 our repayment of $3,250,000 of the principal amount of the Promissory Note as of such date, and to extend the maturity date of the Promissory Note to November 20, 2025. In connection with the issuance of the Debentures (as defined below), we paid off all obligations owing under, and terminated, the Business Loan Agreement and all related loan agreements.

**Basis of Presentation**

Our consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements for the fiscal year ended March 31, 2024, and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of our consolidated financial statements for the year ended March 31, 2025.

**Opportunities, Challenges and Risks**

For our fiscal year ended March 31, 2025, we derived 50% of our revenue from paid memberships and the remainder from advertising, ticketing, sponsorship, merchandising and licensing. During fiscal year ended March 31, 2025, we (i) delivered live events digitally live streamed across our platform, (ii) increased our sponsorship revenue from online events when compared to prior fiscal years and (iii) had revenue from our PPV platform for an entire year, allowing us to charge customers directly to access and watch certain live events digitally on our music platform. As a result of these actions, our revenue for the fiscal year ended March 31, 2025 was comprised of 50% from paid members, 46% from advertising and 4% from merchandise.

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 2025, 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 ("vodcasts"), 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, CPS, Drumify and Splitmind 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, 2025, we will continue to invest in product and engineering to further develop our future music apps and services, and we expect to continue making significant product development investments to our existing technology solutions over the next 12 to 24 months to address these opportunities.

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

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

Growth in our music services is also dependent upon our ability to convert as many of the OEM drivers as possible to become direct subscribers of our LiveOne app, the number of customers that use and pay for our services, the attractiveness of our music platform to sponsors and advertisers and our ability to negotiate favorable economic terms with music labels, publishers, artists and/or festival owners, and the number of consumers who use our services. Growth in our margins is heavily dependent on our ability to convert as many of the OEM drivers as possible to become direct subscribers of our LiveOne app and to otherwise grow our membership base in a cost-efficient manner, coupled with the managing the costs associated with implementing and operating our services, including the costs of licensing music with the music labels, producing, streaming and distributing video and audio content and sourcing and distributing personalized products and gifts. Our ability to attract and retain new and existing customers will be highly dependent on our ability to convert as many of the OEM drivers as possible to become direct subscribers of our LiveOne app 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 years ended March 31, 2025 and 2024, all material amounts of our revenue were derived from customers located in the United States and moreover, one of our customers accounted for 45% and 51% 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 March 31, 2025 could cause our revenue to fluctuate significantly.

Moreover, and 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.

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**Consolidated Results of Operations** 

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):

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| **Revenue:** | $114405 | $118440 |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp; Cost of sales | 85241 | 86391 |
| &nbsp;&nbsp;&nbsp; Sales and marketing | 6396 | 7838 |
| &nbsp;&nbsp;&nbsp; Product development | 4475 | 4681 |
| &nbsp;&nbsp;&nbsp; General and administrative | 22746 | 22268 |
| &nbsp;&nbsp;&nbsp; Impairment of fixed assets, intangible assets and goodwill | 11657 | 115 |
| &nbsp;&nbsp;&nbsp; Amortization of intangible assets | 1947 | 1815 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 132462 | 123108 |
| **Loss from operations** | (18057) | (4668) |
| **Other income (expense):** |  |  |
| &nbsp;&nbsp;&nbsp; Interest expense, net | (2712) | (4366) |
| &nbsp;&nbsp;&nbsp; Other income (expense) | 214 | (4159) |
| Total other expense, net | (2498) | (8525) |
| Loss before income taxes | (20555) | (13193) |
| Income tax (benefit) provision | (185) | 118 |
| Net loss | $(20370) | $(13311) |
| **Net loss per share – basic and diluted** | $(0.20) | $(0.14) |
| **Weighted average common shares – basic and diluted** | 95041241 | 87617392 |

---

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

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **% Change** |
|  | **Year Ended March 31,** | **Year Ended March 31,** | **2025 vs.** |
|  | **2025** | **2024** | **2024** |
| Depreciation expense |  |  |  |
| &nbsp;&nbsp;&nbsp; Cost of sales | $146 | $144 | 1% |
| &nbsp;&nbsp;&nbsp; Sales and marketing | 266 | 209 | 27% |
| &nbsp;&nbsp;&nbsp; Product development | 1970 | 1764 | 12% |
| &nbsp;&nbsp;&nbsp; General and administrative | 996 | 1175 | -15% |
| Total depreciation expense | $3378 | $3292 | 3% |

---

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

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **% Change** |
|  | **Year Ended March 31,** | **Year Ended March 31,** | **2025 vs.** |
|  | **2025** | **2024** | **2024** |
| Stock-based compensation expense: |  |  |  |
| &nbsp;&nbsp;&nbsp; Cost of sales | $1042 | $1664 | -37% |
| &nbsp;&nbsp;&nbsp; Sales and marketing | 797 | 968 | -18% |
| &nbsp;&nbsp;&nbsp; Product development | 375 | 734 | -49% |
| &nbsp;&nbsp;&nbsp; General and administrative | 5429 | 4599 | 18% |
| Total stock-based compensation expense | $7643 | $7965 | -4% |

---

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

---

| | | |
|:---|:---|:---|
|  | **Year Ended March 31,** | **Year Ended March 31,** |
|  | **2025** | **2024** |
| Revenue | 100% | 100% |
| Operating expenses |  |  |
| &nbsp;&nbsp;&nbsp; Cost of sales | 75% | 73% |
| &nbsp;&nbsp;&nbsp; Sales and marketing | 6% | 7% |
| &nbsp;&nbsp;&nbsp; Product development | 4% | 4% |
| &nbsp;&nbsp;&nbsp; General and administrative | 20% | 19% |
| &nbsp;&nbsp;&nbsp; Impairment of fixed assets, intangible assets and goodwill | 10% | 0% |
| &nbsp;&nbsp;&nbsp; Amortization of intangible assets | 2% | 3% |
| Total operating expenses | 116% | 104% |
| Loss from operations | -16% | -4% |
| Other expense | -2% | -7% |
| Loss before income taxes | -18% | -11% |
| Income tax provision (benefit) | -% | -% |
| Net loss | -18% | -11% |

---

***Revenue***

Revenue was as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **% Change** |
|  | **Year Ended March 31,** | **Year Ended March 31,** | **2025 vs.** |
|  | **2025** | **2024** | **2024** |
| &nbsp;&nbsp;&nbsp; Membership services | $56939 | $66182 | -14% |
| &nbsp;&nbsp;&nbsp; Advertising | 52285 | 43729 | 20% |
| &nbsp;&nbsp;&nbsp; Merchandising | 5181 | 8271 | -37% |
| &nbsp;&nbsp;&nbsp; Sponsorship and licensing |  | 126 | -100% |
| &nbsp;&nbsp;&nbsp; Ticket/Event |  | 132 | -100% |
| Total Revenue | $114405 | $118440 | -3% |

---

*Membership Services*

Membership revenue decreased by $9.2 million, or 14%, to $56.9 million for the year ended March 31, 2025, as compared to $66.2 million for the year ended March 31, 2024. The decrease was primarily as a result of a decrease in membership growth with our largest OEM customer due to our amended arrangement which was effective October 1, 2024.

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*Advertising Revenue*

Advertising revenue increased by $8.6 million, or 20%, to $52.3 million during the year ended March 31, 2025, as compared to $43.7 million the year ended March 31, 2024, which is primarily due to growth in advertising at PodcastOne year-over-year.

*Merchandising*

Merchandising revenue decreased by $3.1 million, or 37%, to $5.2 million for the year ended March 31, 2025, as compared to $8.3 million for the year ended March 31, 2024 due to a reduction in demand from both retail partners and our direct to consumer merchandising business.

*Sponsorship and Licensing*

Sponsorship and licensing revenue decreased by $0.1 million, or 100%, from none for the year ended March 31, 2025 as compared to $0.1 million for the year ended March 31, 2024. The decrease was primarily driven by the decrease in events held by us during the fiscal year ended March 31, 2024, with no comparable event held during the year ended March 31, 2025.

*Ticket/Event*

Ticket/Event revenue decreased by $0.1 million, or 100%, to none for the year ended March 31, 2025, as compared to $0.1 million for the year ended March 31, 2024. The decrease was driven by the lack of in-person events during the current year.

***Cost of Sales***

Cost of sales was as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **% Change** |
|  | **Year Ended March 31,** | **Year Ended March 31,** | **2025 vs.** |
|  | **2025** | **2024** | **2024** |
| &nbsp;&nbsp;&nbsp; Membership services | $32089 | $42121 | -24% |
| &nbsp;&nbsp;&nbsp; Advertising | 48300 | 38065 | 27% |
| &nbsp;&nbsp;&nbsp; Production | 322 | (288) | 212% |
| &nbsp;&nbsp;&nbsp; Merchandising | 4530 | 6493 | -30% |
| Total Cost of Sales | $85241 | $86391 | -1% |

---

*Membership Services*

Membership services cost of sales decreased by $10.0 million, or 24%, to $32.1 million for the year ended March 31, 2025, as compared to $42.1 million for the year ended March 31, 2024. The decrease was in line with the lower membership revenues noted above.

*Advertising*

Advertising cost of sales increased by $10.2 million, or 27%, to $48.3 million for the year ended March 31, 2025, as compared to $38.1 million for the year ended March 31, 2024. The increase was primarily due to an increase in revenue share expense compared to the prior year period and is line with the increase in revenue for the period.

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*Production*

Production cost of sales increased by $0.6 million, or 212%, to $0.3 million for the year ended March 31, 2025, as compared to a credit of $0.3 million for the year ended March 31, 2024. The increase was primarily due to us settling past amounts owed for vendors, therefore credits were recorded during the prior period.

*Merchandising*

Merchandising cost of sales decreased by $2.0 million, or 30%, to $4.5 million for the year ended March 31, 2025, as compared to $6.5 million for the year ended March 31, 2024. The decrease was due to the corresponding decrease in revenue noted above along with less events taking place in the year ended March 31, 2025.

***Other Operating Expenses***

*Other operating expenses were as follows (in thousands):*

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **% Change** |
|  | **Year Ended March 31,** | **Year Ended March 31,** | **2025 vs.** |
|  | **2025** | **2024** | **2024** |
| Sales and marketing expenses | $6396 | $7838 | -18% |
| Product development | 4475 | 4681 | -4% |
| General and administrative | 22746 | 22268 | 2% |
| Amortization of intangible assets | 1947 | 1815 | 7% |
| Impairment of fixed assets, intangible assets and goodwill | 11657 | 115 | 10037% |
| Total Other Operating Expenses | $47221 | $36717 | 29% |

---

*Sales and Marketing Expenses*

Sales and marketing expenses decreased by $1.4 million, or 18%, to $6.4 million for the year ended March 31, 2025, as compared to $7.8 million for the year ended March 31, 2024. The decrease was largely due to lower salaries and wages and stock compensation of $0.9 million along with a decrease of $0.5 million in merchandising marketing spend due to a reduction in trade shows and other marketing spend.

*Product Development*

Product development expenses decreased by $0.2 million, or 4%, to $4.5 million for the year ended March 31, 2025, as compared to $4.7 million for the year ended March 31, 2024. The decrease was primarily due to headcount reductions in the year ended March 31, 2025.

*General and Administrative*

General and administrative expenses increased by $0.4 million, or 2%, to $22.7 million for the year ended March 31, 2025, as compared to $22.3 million for the year ended March 31, 2024. The increase was largely due to an increase in share-based compensation of $0.8 million, offset by a decrease of professional services as a result of completing the Spin-Out of PodcastOne in September 2023.

*Amortization of Intangible Assets*

Amortization of intangible assets increased by $0.1 million, or 7%, to $1.9 million for the year ended March 31, 2025, as compared to $1.8 million for the year ended March 31, 2024. The increase was primarily due to the increase in intangibles capitalized at PodcastOne.

*Impairment of Fixed Assets, Intangible Assets and Goodwill*

Impairment of intangible assets increased $11.5 million, to $11.5 million for the year ended March 31, 2025, as compared to $0.1 million for the year ended March 31, 2024, which is attributed to the impairments within our Media Group, PodcastOne and Slacker reporting units for the year ended March 31, 2025 and React Presents acquisition for the year ended March 31, 2024 (see Note 4 – Property and Equipment and Note 5 – Goodwill and Intangible Assets).

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***Total Other Expense, Net***

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **% Change** |
|  | **Year Ended March 31,** | **Year Ended March 31,** | **2025 vs.** |
|  | **2025** | **2024** | **2024** |
| Total other expense, net | $(2498) | $(8525) | -71% |

---

Total other expense, net decreased by $6.0 million, or 71%, to $2.5 million for the year ended March 31, 2025, as compared to $8.5 million for the year ended March 31, 2024. The decrease can be attributed to $4.5 million change in the fair value of derivatives in the prior year and a decrease in interest expense of $1.7 million due to the pay down of our debt.

**Business Segment Results**

***Year Ended March 31, 2025***,*** as compared to Year Ended March 31, 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):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended March 31,** | **Year Ended March 31,** |  |
|  | **2025** | **2024** | **% Change** |
| Revenue | $52119 | $43302 | 20% |
| Cost of Sales | 47394 | 37326 | 27% |
| Sales & Marketing, Product Development and G&A | 9736 | 9500 | 2% |
| Intangible Asset Amortization and Impairment | 1423 | 897 | 59% |
| Operating Income (Loss) | $(6434) | $(4421) | 46% |
| Operating Margin | (12)% | -10% | -2% |
| Adjusted EBITDA\* | $(501) | $501 | -200% |
| Adjusted EBITDA Margin\* | (1)% | 1% | -2% |

---

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

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*Revenue*

Revenue increased $8.8 million, or 20%, during the year ended March 31, 2025, primarily due to increased advertising.

*Operating Loss*

Operating loss increased by $2.0 million or 46%, for the year ended March 31, 2025, as the increase in revenue was lower than the increase in our operating expenses due to growing our business.

*Adjusted EBITDA*

Adjusted EBITDA\* decreased by $1.0 million, or 200%, to a loss of $(0.5) million for the year ended March 31, 2025, as compared to $0.5 million for the year ended March 31, 2024. This was largely due to an increase in our cost of sales to support sales.

**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):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended March 31,** | **Year Ended March 31,** |  |
|  | **2025** | **2024** | **% Change** |
| Revenue | $56787 | $65959 | -14% |
| Cost of Sales | 32997 | 42867 | -23% |
| Sales & Marketing, Product Development and G&A | 8844 | 8393 | 5% |
| Intangible Asset Amortization and Impairment | 9070 | 358 | 2434% |
| Operating Income (Loss) | $5876 | $14341 | -59% |
| Operating Margin | 10% | 22% | -11% |
| Adjusted EBITDA\* | $18679 | $20553 | -9% |
| Adjusted EBITDA Margin\* | 33% | 31% | 2% |

---

*Revenue*

Revenue decreased $9.2 million, or 14%, during the year ended March 31, 2025, primarily due to our decreased membership revenue as a result of the change in the terms of the agreement with our largest OEM customer.

*Operating Income*

Operating income decreased by $8.5 million, or 59%, for the year ended March 31, 2025, as the decrease in our revenue noted above was higher than the decrease in our operating expenses as the decrease in revenue resulted in our lower operating income in addition to impairments recorded against goodwill, intangibles and fixed assets as a result of the new terms with our largest OEM.

*Adjusted EBITDA*

Adjusted EBITDA\* decreased by $1.9 million, or 9%, to $18.7 million for the year ended March 31, 2025, as compared to $20.6 million for the year ended March 31, 2024. This was largely due to the decrease in our revenue compared to the prior year.

**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):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended March 31,** | **Year Ended March 31,** |  |
|  | **2025** | **2024** | **% Change** |
| Revenue | $5499 | $9179 | -40% |
| Cost of Sales | 4850 | 6197 | -22% |
| Sales & Marketing, Product Development and G&A | 4589 | 8574 | -46% |
| Intangible Asset Amortization and Impairment | 3110 | 676 | 360% |
| Operating Income (Loss) | $(7050) | $(6268) | 12% |
| Operating Margin | -128% | -68% | -60% |
| Adjusted EBITDA\* | $(3085) | $(3888) | -21% |
| Adjusted EBITDA Margin\* | -56% | -42% | -14% |

---

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

*Revenue*

Revenue decreased $3.7 million, or 40%, to $5.5 million during the year ended March 31, 2025, as compared to $9.2 million for the year ended March 31, 2024, primarily due to a decrease in our merchandising revenue due to a reduction in demand from both our retail partners and our direct to consumer business.

*Operating Loss*

Operating loss increased by $0.8 million, or 12%, to $7.1 million for the year ended March 31, 2025 from $6.3 million for the year ended March 31, 2024, as a result of a decrease in our contribution margin coupled with the increase in our expenses due to an increase in our general and administrative expenses.

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*Adjusted EBITDA*

Adjusted EBITDA\* loss decreased by $0.8 million, or 21%, to $3.1 million loss for the year ended March 31, 2025, as compared to a $3.9 million loss for the year ended March 31, 2024. This was largely due to the decrease in our revenue compared to the prior year offset by a decrease in our expenses.

**Corporate expense**

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

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | **% Change** |
|  | **Year Ended March 31,** | **Year Ended March 31,** | **2025 vs.** |
|  | **2025** | **2024** | **2024** |
| Sales & Marketing, Product Development, and G&A | $10448 | $8321 | 26% |
| Operating Loss | $(10448) | $(8321) | 26% |
| Operating Margin | N/A | N/A | -% |
| Adjusted EBITDA\* | $(6709) | $(6189) | -8% |

---

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

*Operating Loss* 

Operating loss increased by $2.1 million, or 26%, to $10.4 million for the year ended March 31, 2025, as compared to $8.3 million for the year ended March 31, 2024, largely due to an increase in our legal and accounting costs.

*Adjusted EBITDA*

Corporate Adjusted EBITDA\* loss increased $0.5 million, or 8%, to a $6.7 million loss for the year ended March 31, 2025 as compared to $6.2 million loss for the year ended March 31, 2024. The increase was largely due to the slight increase of our employee and employee-related expenses.

**Non-GAAP Measures**

*Contribution margin*

Contribution Margin is a non-GAAP financial measure that we define as Revenue less Cost of Sales.

*Adjusted EBITDA*

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

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*Adjusted EBITDA Margin*

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

The following table sets forth the reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure for the year ended March 31 (in thousands):

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | **Non-** |  |  |  |
|  |  |  |  | **Recurring** |  |  |  |
|  | **Net** | **Depreciation** |  | **Acquisition and** | **Other** |  |  |
|  | **Income** | **Impairment and** | **Stock-Based** | **Realignment** | **(Income)** | **Provision** | **Adjusted** |
|  | **(Loss)** | **Amortization** | **Compensation** | **Costs** | **Expense** | **for Taxes** | **EBITDA** |
| &nbsp;&nbsp;&nbsp; **Year Ended March 31, 2025** |  |  |  |  |  |  |  |
| Operations – PodcastOne | $(6458) | $1671 | $4215 | $47 | $- | $24 | $(501) |
| &nbsp;&nbsp;&nbsp; Operations – Slacker | 3570 | 11875 | 1283 | 244 | 1707 |  | 18679 |
| &nbsp;&nbsp;&nbsp; Operations – Media | (8166) | 3430 | 887 | 640 | 123 | 1 | (3085) |
| &nbsp;&nbsp;&nbsp; Corporate | (9316) | 5 | 1258 | 886 | 668 | (210) | (6709) |
| &nbsp;&nbsp;&nbsp; Total | $(20370) | $16981 | $7643 | $1817 | $2498 | $(185) | $8384 |
| &nbsp;&nbsp;&nbsp; **Year Ended March 31, 2024** |  |  |  |  |  |  |  |
| Operations – PodcastOne | $(14732) | $1148 | $3483 | $881 | $9666 | $55 | $501 |
| &nbsp;&nbsp;&nbsp; Operations – Slacker | 13382 | 2926 | 1684 | 1026 | 1535 |  | 20553 |
| &nbsp;&nbsp;&nbsp; Operations – Media | (1397) | 1134 | 672 | 457 | (4754) |  | (3888) |
| &nbsp;&nbsp;&nbsp; Corporate | (10564) | 14 | 2126 | 94 | 2078 | 63 | (6189) |
| &nbsp;&nbsp;&nbsp; Total | $(13311) | $5222 | $7965 | $2458 | $8525 | $118 | $10977 |

---

The following table sets forth the reconciliation of gross profit, the most comparable GAAP financial measure to Contribution Margin for the years ended March 31, 2025 and 2024 (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| **Revenue:** | $114405 | $118440 |
| Less: |  |  |
| Cost of sales | (85241) | (86391) |
| Amortization of developed technology | (3087) | (3009) |
| &nbsp;&nbsp;&nbsp; **Gross Profit** | **26077** | **29040** |
| **Add back amortization of developed technology:** | 3087 | 3009 |
| &nbsp;&nbsp;&nbsp; **Contribution Margin** | $**29164** | $**32049** |

---

**Critical Accounting Policies and Estimates**

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates. We believe that the assumptions and estimates associated with our revenue recognition, allowance for doubtful accounts, the assigned value of acquired tangible and intangible assets and assumed and contingent liabilities associated with business combinations, provision for legal settlements, useful lives and impairment of property and equipment, intangible assets, goodwill and other assets, the fair value of our equity-based compensation awards and convertible debt instruments, and valuation of deferred income tax assets and liabilities, have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.

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***Revenue Recognition***

We account 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 we satisfy our obligation by transferring control of the goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. We use 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 we are entitled to and relate specifically to our efforts to satisfy our performance obligations. 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.

We report revenue on a gross or net basis based on management's assessment of whether we act as a principal or agent in the transaction and is evaluated on a transaction by transaction basis. To the extent we act as the principal, revenue is reported on a gross basis net of any sales tax from customers, when applicable. The determination of whether we act as a principal or an agent in a transaction is based on an evaluation of whether we control the good or service prior to transfer to the customer. Where applicable, we have determined that we act as the principal in all of our subscription service, sponsorship, and merchandising streams and *may* act as principal or agent for our ticketing/live events, advertising and licensing revenue streams.

Our revenue is principally derived from the following services:

*Memberships 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. We defer the portion of monthly to annual recurring membership fees collected in advance and recognize them in the period earned. Membership revenue is recognized in the period of services rendered. Our 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, we have concluded that the best measure of progress toward the complete satisfaction of the performance obligation over time is a time-based measure. We recognize membership revenue straight-line through the membership period.

Membership Services consist of:

<u>Direct members, mobile service provider and mobile app services</u>

We generate 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. We report 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. Our 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.

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<u>Third-Party Original Equipment Manufacturers</u>

We generate revenue for membership services through memberships sold through a third-party 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 the Slacker application installed. The number of customers, or the variable consideration, is reported by OEMs and resolved on a monthly basis. Our payment terms with OEM are up to 30 days. The OEM does not charge the car owners a fee for the Slacker service.

*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 on a monthly basis which represents our efforts to satisfy the performance obligation. We earn 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 we enter 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.

*Merchandise Revenue* 

Revenue is recognized upon the transfer of control to the customer. We recognize revenue and measure the transaction price net of taxes collected from customers and remitted to governmental authorities. Sales commissions are expensed as incurred and are recorded in sales and marketing expenses in the consolidated statements of operations. Our 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 30-60 days. Wholesale revenue is generally recognized when products are shipped, depending on the applicable contract terms. We record 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 March 31, 2025 and 2024, was less than $0.1 million, respectively.

*Licensing Revenue*

Licensing revenue primarily consists of sales of licensing rights to digitally stream our live music services in certain geographies (e.g. China). Licensing revenue is recognized when we satisfy our performance obligation by transferring control of the goods or services to our customers in an amount that reflects the consideration to which we expect 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.

*Ticket/Event Revenue*

Ticket/Event revenue is primarily from the sale of tickets and promoter fees earned from venues or other co-promoters under one of several formulas, including a fixed guaranteed amount and/or a percentage of ticket sales or event profits.

Revenue from the promotion or production of an event is recognized when the show occurs. Revenue collected in advance of the event is recorded as deferred revenue until the event occurs. Revenue collected from sponsorship agreements, which is not related to a single event, is classified as deferred revenue and recognized over the term of the agreement or operating season as the benefits are provided to the sponsor.

Revenue from our ticketing operations primarily consists of service fees charged at the time a ticket for an event is sold. For tickets sold to our festival events the revenue for the tickets and associated ticket service charges collected in advance of the event is recorded as deferred revenue until the event occurs. For PPV arrangements that include multiple performance obligations, i.e. delivery of the online stream, sponsorships, digital meet and greet, or physical merchandise, we allocate the total contract consideration to each performance obligation using the standalone selling price. If the standalone selling price is not readily determinable, it is estimated using observable inputs including an adjusted market based approach, expected cost plus margin, or the residual approach.

***Stock-Based Compensation***

Stock-based compensation cost is measured 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 a straight-line basis. We use the Black-Scholes-Merton option pricing model to determine the grant date fair value of stock options. This model requires us 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. We use a predicted volatility of our stock price during the expected life of the options that is based on the historical performance of our stock price as well as including an estimate using guideline companies. Expected term is computed using the simplified method as the Company's best estimate given our lack of actual exercise history. We have 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 stock. Stock-based awards are comprised principally of stock options, restricted stock and restricted stock units ("RSUs"). Forfeitures are recognized as incurred.

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Stock option awards issued to non-employees are accounted for at the grant date fair value determined using the Black-Scholes-Merton option pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. We record the fair value of these equity-based awards as an expense over the related vesting period of the option awarded to the non-employee.

***Business Combinations***

We account for business combinations using the purchase method of accounting where the cost is allocated to the underlying net tangible and intangible assets acquired, based on their respective fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Additionally, any contingent consideration is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interests requires management's judgment and often involves the use of significant estimates and assumptions, including, but not limited to, the selection of appropriate valuation methodology, projected revenue, expenses and cash flows, weighted average cost of capital, discount rates, estimates of customer turnover rates and estimates of terminal values.

***Debt with Warrants***

In accordance with ASC Topic 470-20-25, when the Company issues debt with warrants, the Company treats the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as interest expense in the consolidated statements of operations. The offset to the contra-liability is recorded as either a liability or within equity in the Company's consolidated balance sheets depending on the accounting treatment of the warrants. The Company determines the value of the warrants using an appropriate valuation method, including a Black-Scholes or Monte-Carlo Simulation. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the consolidated statements of operations. The debt is treated as conventional debt.

***Convertible Debt* – *Derivative Treatment***

When we issue debt with a conversion feature, we must first assess whether the conversion feature meets the requirements to be treated as a derivative, as follows: (a) one or more underlyings, typically the price of our common stock; (b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; (c) no initial net investment, which typically excludes the amount borrowed; and (d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets the definition of a derivative does not have to be separated from the host instrument if the component qualifies for the scope exception for certain contracts involving an issuer's own equity. The scope exception applies if the contract is both (a) indexed to its own stock; and (b) classified in stockholders' equity in its balance sheet.

If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using the appropriate valuation model upon the date of issuance. If the fair value of the convertible debt derivative is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the convertible debt derivative is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The convertible debt derivative is revalued at the end of each reporting period and any change in fair value is recorded as a gain or loss in the statement of operations. The debt discount is amortized through interest expense over the life of the debt.

***Debt Modifications and Extinguishments***

When the Company modifies or extinguishes debt, it first evaluates whether the modification qualifies as a troubled debt restructuring (TDR) under ASC Topic 470-60, which requires debt modifications to be evaluated if (1) the borrower is experiencing financial difficulty, and (2) the lender grants the borrower a concession. If a TDR is determined not to have occurred, the Company evaluates the modification in accordance with ASC Topic 470-50-40, which requires modification to debt instruments to be evaluated to assess whether the modifications are considered "substantial modifications". A substantial modification of terms is accounted for like an extinguishment.

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If there is a conversion feature within the debt instrument, the Company evaluates whether the conversion feature should be bifurcated under ASC 815 as a derivative. If the Company believes the embedded conversion feature has no fair value on the date of issuance (measurement date) and the embedded conversion feature has no beneficial conversion feature, the embedded conversion feature does not meet the criteria in ASC 470-50-40-10 or 470-20-25 and the issuance of the convertible debt is considered a modification, and not an extinguishment that would require the recognition of a gain or loss. If the Company determines the change in fair value of the derivative meets the criteria for substantial modification under ASC 470 it will treat the modification as extinguishment and recognize a loss from debt extinguishment.

***Commitments and Contingencies***

From time to time, we are involved in legal proceedings and other matters arising in connection with the conduct of our business activities. Many of these proceedings may be at preliminary stages and/or seek an indeterminate amount of damages. We regularly evaluate the status of our commitments and contingencies in which we are involved to (i) assess whether a material loss is probable or there is at least a reasonable possibility that a material loss or an additional material loss in excess of a recorded accrual may have been incurred and (ii) determine if financial accruals are required when appropriate. We record an expense accrual for any commitments and loss contingency when we determine that a loss is probable and the amount of the loss can be reasonably estimated. If an expense accrual is not appropriate, we further evaluate each matter to assess whether an estimate of possible loss or range of loss can be made and whether or not any such matter requires additional disclosure. There can be no assurance that any proceeding against us will be resolved in amounts that will not differ from the amounts of estimated exposures. Legal fees and other costs of defending litigation are expensed as incurred.

***Non-Income Tax Contingencies***

We do not collect and remit sales and use or similar taxes in all jurisdictions in which we have sales, based on our belief that such taxes are not applicable or legally required.

The June 2018 U.S. Supreme Court ruling in *South Dakota v. Wayfair, Inc., No. 17-494*, along with the application of existing, new or future rulings and laws, could have adverse effects on our business, prospects and operating results.

***Long-lived Assets, Goodwill and Intangible Assets with Finite Lives***

We perform valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination, and allocate the purchase price of each acquired business to its respective net tangible and intangible assets. Acquired intangible assets principally comprise of customer relationships and technology. We determine the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the majority of the economic benefits is expected to be consumed.

Goodwill represents the excess of the purchase consideration of an acquired entity over the fair value of the acquired net assets. Goodwill is tested for impairment annually or when events or circumstances change that would indicate that goodwill might be impaired. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends or significant under-performance relative to expected historical or projected future results of operations.

We evaluate the recoverability of our intangible assets, and other long-lived assets with finite useful lives for impairment when events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. These trigger events or changes in circumstances include, but are not limited to a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse changes in legal factors, including changes that could result from our inability to renew or replace material agreements with certain of our partners such as Tesla Motors on favorable terms, significant adverse changes in the business climate including changes which may result from adverse shifts in technology in our industry and the impact of competition, a significant adverse deterioration in the amount of revenue or cash flows we expect to generate from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of our long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. We perform impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. In making this determination, we consider the specific operating characteristics of the relevant long-lived assets, including (i) the nature of the direct and any indirect revenues generated by the assets; (ii) the interdependency of the revenues generated by the assets; and (iii) the nature and extent of any shared costs necessary to operate the assets in their intended use. An impairment test would be performed when the estimated undiscounted future cash flows expected to result from the use of the asset group is less than its carrying amount. Impairment is measured by assessing the usefulness of an asset by comparing its carrying value to its fair value. If an asset is considered impaired, the impairment loss is measured as the amount by which the carrying value of the asset group exceeds its estimated fair value. Fair value is determined based upon estimated discounted future cash flows. The key estimates applied when preparing cash flow projections relate to revenue, operating margins, economic lives of assets, overheads, taxation and discount rates.

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Goodwill is tested for impairment at the reporting unit level, which is the same or one level below an operating segment. In any year we may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is in excess of its carrying value. If we cannot determine qualitatively that the fair value is in excess of the carrying value, or we decide to bypass the qualitative assessment, we perform a quantitative analysis. The quantitative analysis is used to identify both the existence of impairment and the amount of the impairment loss by comparing the estimated fair value of a reporting unit with its carrying value, including goodwill. The estimated fair value is based on internal projections of expected future cash flows and operating plans, as well as market conditions relative to the operations of our reporting units. If the estimated fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not impaired; otherwise, an impairment loss is recognized within our consolidated statements of operations in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

**Liquidity and Capital Resources**

**Current Financial Condition**

As of March 31, 2025, our principal sources of liquidity were our cash and cash equivalents, including restricted cash balances in the amount of $4.1 million, which primarily are invested in cash in banking institutions in the U.S. The vast majority of our cash proceeds were received as a result of operations, the issuance of convertible notes, public offerings of our common shares, SBA loan, line of credit and our Capchase loan. As of March 31, 2025, we have a senior secured line of credit of $3.0 million and a notes payables balance of $0.8 million, net of discounts.

As reflected in our consolidated financial statements included elsewhere in this Annual Report, we have a history of losses and incurred a net loss of $20.4 million and had a working capital deficiency of $21.3 million as of March 31, 2025. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year from the date that the financial statements are issued. Our consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to execute our strategy and on our ability to raise additional funds through the sale of equity and/or debt securities via public and/or private offerings.

On October 1, 2024, we announced an amended relationship with our largest OEM customer. Effective December 1, 2024, the OEM customer no longer subsidizes our products to some of its customers, however, we offer all OEM customer vehicles in North America the opportunity to convert to become direct subscribers of our LiveOne music app. The direct subscription to our LiveOne app allows such users for the first time to access their LiveOne music and LiveOne's other service offerings directly across all of their devices. Our LiveOne music streaming button/icon, which allows users to directly connect their subscription to LiveOne, is expected to remain in the OEM customer's music streaming services dashboard in perpetuity. The OEM customer will continue to pay us monthly for grandfathered vehicles for the term of the OEM license agreement. Accordingly, the change in our relationship with the OEM customer in October 2024 is likely to cause our liquidity and cash flows to fluctuate significantly beyond March 31, 2025. Our liquidity will depend upon our ability to convert as many of the OEM drivers as possible to become direct subscribers of our LiveOne app and the OEM customer continuing to pay for any grandfather users, as well as our ability to enter into new B2B agreements to provide our services that could materially contribute to our liquidity and cash flows. In addition, our liquidity will depend on our ability to negotiate with our music labels, publishers and other partners to achieve flexibility in the terms of our license agreements to match our OEM driver conversions. Furthermore, our liquidity will be dependent on our ability to extend and/or refinance the terms of our senior secured line of credit and/or our ability to pay any amounts that we have agreed to pay under the SX Settlement Agreement.

On May 19, 2025, we and PodcastOne entered into the SPA (as defined below) with the Purchasers (as defined below), pursuant to which (i) we sold to the Purchasers the Initial Debentures (as defined below) in an aggregate principal amount of $16,775,000 for an aggregate cash purchase price of $15,250,000, in a private placement transaction. In connection with the issuance of the Debentures, we paid off all obligations owing under, and terminated, the 2025 Business Loan Agreement (as defined below) and all related loan agreements.

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

**Sources of Liquidity**

On September 8 2023 and effective as of August 22, 2023, we entered into a new Business Loan Agreement (the "New Business Loan Agreement") with the Senior Lender, to convert our then existing revolving credit facility with our current senior lender into an assets backed loan credit facility, which is continued to be collateralized by a first lien on all of the assets of our Company and our subsidiaries (the "ABL Credit Facility"). The New Business Loan Agreement provides us with borrowing capacity of up to the Borrowing Base (as defined in the Business Loan Agreement). On May 31, 2024, we extended the maturity date of the ABL Credit Facility to September 2, 2024. On January 28, 2025, we entered into a new Business Loan Agreement (the "2025 Business Loan Agreement") with 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 our repayment of $3,250,000 of the principal amount of the Promissory Note as of such date, and to extend the maturity date of the Promissory Note to November 20, 2025.

In July 2022, PodcastOne completed a private placement offering (the "PC1 Bridge Loan") of its unsecured convertible notes with an original issue discount of 10% (the "OID") in the aggregate principal amount of $8.8 million (the "PC1 Notes") to certain accredited investors and institutional investors (collectively, the "Purchasers"), for gross proceeds of $8,035,000 pursuant to the Subscription Agreements entered into with the Purchasers. In connection with the sale of the PC1 Notes, the Purchasers received warrants (the "PC1 Warrants") to purchase a number of shares of PodcastOne's common stock, par value $0.00001 per share (See Note 8 – PodcastOne Bridge Loan). As part of the PC1 Bridge Loan, we purchased $3,000,000 (excluding the OID) worth of PC1 Notes.

In August 2023, we entered into the Capchase Loan pursuant to which we borrowed $1.7 million to further develop and acquire certain podcasts acquired by PodcastOne and for general working capital. The Capchase Loan is subordinated to the ABL Credit Facility and bears an interest rate of 9%, which is included in the monthly amortization payments of approximately $73,100, with the final amortization payment due on February 4, 2026. (See Note 7 – Notes Payable).

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

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

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

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

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

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

**Credit Agreement and Other Debt**

For additional information regarding our credit agreement, Debentures and other debt, see "Contractual Obligations" in Notes 8, 9,10 and 19 to our consolidated financial statements included elsewhere in this Annual Report.

**Sources and Uses of Cash**

The following table provides information regarding our cash flows for the fiscal years ended March 31, 2025 and 2024 (in thousands):

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| | | |
|:---|:---|:---|
|  | **Year Ended March 31,** | **Year Ended March 31,** |
|  | **2025** | **2024** |
| Net cash provided by operating activities | $6368 | $6848 |
| Net cash used in investing activities | (3123) | (4046) |
| Net cash used in financing activities | (6238) | (4309) |
| Net change in cash and cash equivalents and restricted cash | $(2993) | $(1507) |

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***Cash Provided By Operating Activities***

Net cash provided by our operating activities for the year ended March 31, 2025 of $6.4 million primarily resulted from our net loss during such period of $20.4 million, which included non-cash charges of $22.3 million largely comprised of depreciation and amortization, stock-based compensation and impairment of goodwill, fixed assets and intangibles. The remainder of our sources of cash used in operating activities of $4.4 million was from changes in our working capital, including $6.1 million from timing of accounts payable, accrued expenses and royalty liabilities offset by a change in accounts receivables and other assets of $5.8 million.

Net cash provided by our operating activities for the year ended March 31, 2024 of $6.8 million primarily resulted from our net loss during the period of $13.3 million, which included non-cash charges of $18.2 million largely comprised of depreciation and amortization, stock-based compensation, amortization of debt discount and changes in the fair value of embedded derivatives. The remainder of our sources of cash used in operating activities of $2.0 million was from changes in our working capital, including $1.3 million from timing of accounts payable, accrued expenses and other liabilities.

***Cash Flows Used In Investing Activities***

Net cash used in investing activities for the year ended March 31, 2025 of $3.1 million was principally due to the $3.1 million cash used for the purchase of our property and equipment and $0.1 million for the purchase of our intangible assets during such period.

Net cash used in investing activities for the year ended March 31, 2024 of $4.0 million was principally due to the $3.0 million cash used for the purchase of our property and equipment and $1.0 million for the purchase of our intangible assets during such period.

***Cash Flows Used In Financing Activities***

Net cash used in financing activities for the year ended March 31, 2025 of $6.2 million was primarily due to payment of $4.1 million on our line of credit, $1.0 million for the purchase of treasury stock, payment of our Capchase loan of $0.7 million and payment of $0.5 million of dividends.

Net cash used in financing activities for the year ended March 31, 2024 of $4.3 million was primarily due to payment of $3.0 million on the PC1 Bridge Loan, $2.6 million for the purchase of treasury stock and $0.4 million of payment of our notes payable, offset by proceeds from the Capchase loan of $1.7 million.

**Item 7A. Quantitative and Qualitative Disclosures About Market Risk**

Not applicable to smaller reporting companies.

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&nbsp;&nbsp;&nbsp;&nbsp;

**Item 8. Financial Statements and Supplementary Data**

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| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm (Macias Gini & O'Connell LLP; Los Angeles, California; PCAOB ID#324)](#audit1) | [F-2](#audit1) |
| [Consolidated Balance Sheets as of March 31, 2025 and 2024](#bal) | [F-4](#bal) |
| [Consolidated Statements of Operations for the years ended March 31, 2025 and 2024](#ops) | [F-5](#ops) |
| [Consolidated Statements of Stockholders' Deficit for the years ended March 31, 2025 and 2024](#equity) | [F-6](#equity) |
| [Consolidated Statements of Cash Flows for the years ended March 31, 2025 and 2024](#cashflow) | [F-7](#cashflow) |
| [Notes to the Consolidated Financial Statements](#notes) | [F-8](#notes) |

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**<u>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u>**

To the Stockholders and Board of Directors of LiveOne, Inc.

**Opinion on the Financial Statements** 

We have audited the accompanying consolidated balance sheets of LiveOne, Inc. and its subsidiaries (the "Company") as of March 31, 2025 and 2024, the related consolidated statement of operations, stockholders' equity and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

**Going Concern Uncertainty**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations, negative cash flows from operating activities and has a net capital deficiency. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters** 

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

*Goodwill Impairment Assessment - Media Group*

As described in Notes 2 and 5 to the consolidated financial statements, management tests goodwill for impairment on the annual basis in the fourth quarter, or more frequently if events or changes in circumstances indicate that it might be impaired. For the annual test, management performed a quantitative goodwill impairment test for the Media Group reporting unit. To estimate the fair value of the reporting unit, management applied the income approach using discounted future cash flows and key assumptions related to revenue and gross margin projections and the discount rate. As of March 31, 2025, the Company's goodwill balance was $21.7 million, and the goodwill associated with the Media Group reporting unit was zero after management recorded an impairment charge of $1.7 million during the fourth quarter.

We identified the impairment assessment of goodwill as a critical audit matter because of certain significant assumptions management makes in determining the estimate, including revenue and gross margin projections and the discount rate. Auditing management's assumptions of revenue and gross margin projections and the discount rate involved a high degree of auditor judgement and increased audit effort as changes in these assumptions could have a significant impact on the fair value and potential impairment charges.

The primary procedures we performed to address this critical audit matter included:

● Obtained an understanding of management's process for assessing goodwill impairment and performing the quantitative goodwill impairment test, including management's process for developing the assumptions used in the income approach to estimate the fair value of the reporting unit.

● Evaluated management's revenue growth rates, margins, and cash flows against current industry and economic trends, while also considering the current and future business, customer base, and product mix.

● Assessed revenue growth and margins by comparing past projections to actual performance.

● Performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in these assumptions.

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*Indefinite-lived Asset Impairment Assessment - Slacker*

As described in Notes 2 and 5 to the consolidated financial statements, management tests indefinite-lived assets for impairment on the annual basis in the fourth quarter, or more frequently if events or changes in circumstances indicate that it might be impaired. During the third quarter of 2025, the Company experienced a decline in revenue as a result of changes in the terms of the agreement with the Company's largest OEM customer. Management viewed this as a triggering event and performed a quantitative analysis of the fair value of the indefinite-lived asset within the Slacker reporting unit as of December 31, 2024. During the fourth quarter of 2025, the Company experienced an additional decline in revenue as a result of additional changes in the terms of the agreement with the same customer. Management viewed this as another triggering event and performed a quantitative analysis of the fair value of the indefinite-lived asset within the Slacker reporting unit as of March 31, 2025. To estimate the fair value of the indefinite-lived asset, management applied the income approach using discounted future cash flows and key assumptions related to revenue and gross margin projections and the discount rate. As of March 31, 2025, the Company's indefinite-lived asset balance was $0.77 million, after management recorded impairment charges of $3.8 million and $0.1 million during the third and fourth quarters, respectively.

We identified the impairment assessment of indefinite-lived assets as a critical audit matter because of certain significant assumptions management makes in determining the estimate, including revenue and gross margin projections and the discount rate. Auditing management's assumptions of revenue and gross margin projections and the discount rate involved a high degree of auditor judgement and increased audit effort as changes in these assumptions could have a significant impact on the fair value and potential impairment charges.

The primary procedures we performed to address this critical audit matter included:

● Obtained an understanding of management's process for assessing indefinite-lived asset impairment and performing the quantitative indefinite-lived asset impairment test, including management's process for the developing assumptions used in the income approach to estimate the fair value of the indefinite-lived asset.

● Evaluated management's revenue growth rates, margins, and cash flows against current industry and economic trends, while also considering the current and future business, customer base, and product mix.

● Assessed revenue growth and margins by comparing past projections to actual performance.

● Performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the indefinite-lived asset that would result from changes in these assumptions.

● Involved our valuation specialist to assist in reviewing the valuation methodology and evaluating the Company's discount rate.

*Long-Lived Asset Impairment Assessment* – *Slacker and Media Asset Groups*

As described in Notes 2, 4 and 5 to the consolidated financial statements, management tests property and equipment and long-lived intangible assets for potential impairment whenever events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable. The carrying value of an asset group is considered impaired when its carrying value exceeds its estimated undiscounted future cash flows. The amount of any impairment loss recorded is calculated as the excess of the asset group's carrying value over its fair value. During the fourth quarter, management considered changes in the actual and forecasted financial performance of the Slacker and Media asset groups and determined that a triggering event occurred for those asset groups. Management assessed the recoverability of the Slacker and Media asset groups through the use of an undiscounted cash flow model, which involved significant judgment in a number of assumptions, including revenue and operating income projections. Management assessed the fair value of the Slacker and Media asset groups through the use of a discounted cash flow model, which involved significant judgment in a number of assumptions, including revenue and gross margin projections and the discount rate. As of March 31, 2025 the Company's property and equipment and long-lived asset balances were $0.9 million and $1.8 million, respectively after management recorded impairment charges related to property and equipment and long-lived intangible assets of $2.8 million and $2.8 million, respectively, in the fourth quarter.

We identified the impairment assessment of long-lived assets for the Slacker and Media asset groups as a critical audit matter because of significant assumptions management makes in determining the estimate, including developing the undiscounted future cash flows attributable to those asset groups and developing the fair value estimates of the Slacker and Media asset groups for impairment and the significant assumptions related to revenue and operating income projections when developing the undiscounted future cash flows and revenue and gross margin projections and the discount rate when developing the fair value estimates. Auditing management's assumptions of revenue and operating income and revenue and gross margin projections and the discount rate involved a high degree of auditor judgement and increased audit effort as changes in these assumptions could have a significant impact on the fair value and potential impairment charges.

The primary procedures we performed to address this critical audit matter included:

● Obtained an understanding of management's process for assessing property and equipment and long-lived asset group impairment and performing the recoverability test and the quantitative impairment test of certain asset groups, including management's process for developing the assumptions used in the recoverability test and in the income approach to estimate the fair value of the property and equipment and long-lived asset groups.

● Evaluated management's revenue growth rates, margins, and cash flows against current industry and economic trends, while also considering the current and future business, customer base, and product mix.

● Assessed revenue growth and margins by comparing past projections to actual performance.

● Performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the property and equipment and long-lived asset groups that would result from changes in these assumptions.

/s/ Macias Gini & O'Connell LLP

We have served as the Company's auditor since 2022.

Los Angeles, CA

July 15, 2025

PCAOB ID No. 324

&nbsp;&nbsp;&nbsp;&nbsp; F-3

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**LiveOne, Inc.**

**Consolidated Balance Sheets**

***(In thousands, except share and per share amounts)***

---

| | | |
|:---|:---|:---|
|  | ***March 31,*** | ***March 31,*** |
|  | ***2025*** | ***2024*** |
| **<u>Assets</u>** |  |  |
| **Current Assets** |  |  |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents | $4119 | $6987 |
| &nbsp;&nbsp;&nbsp; Restricted cash | 30 | 155 |
| &nbsp;&nbsp;&nbsp; Accounts receivable, net | 8299 | 13205 |
| &nbsp;&nbsp;&nbsp; Inventories | 1586 | 1801 |
| &nbsp;&nbsp;&nbsp; Prepaid expense and other current assets | 1212 | 2187 |
| **Total Current Assets** | 15246 | 24335 |
| &nbsp;&nbsp;&nbsp; Property and equipment, net | 893 | 3646 |
| &nbsp;&nbsp;&nbsp; Goodwill | 21712 | 23379 |
| &nbsp;&nbsp;&nbsp; Intangible assets, net | 2569 | 12415 |
| &nbsp;&nbsp;&nbsp; Other assets | 97 | 88 |
| **Total Assets** | $40517 | $63863 |
| **<u>Liabilities, Mezzanine Equity and Stockholders' Deficit</u>** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities | $25180 | $26953 |
| &nbsp;&nbsp;&nbsp; Accrued royalties | 5490 | 10862 |
| &nbsp;&nbsp;&nbsp; Notes payable, current portion | 623 | 692 |
| &nbsp;&nbsp;&nbsp; Senior secured revolving line of credit, net | 2950 | 7000 |
| &nbsp;&nbsp;&nbsp; Deferred revenue | 2141 | 728 |
| Derivative liabilities |  | 607 |
| **Total Current Liabilities** | 36384 | 46842 |
| &nbsp;&nbsp;&nbsp; Notes payable, net | 150 | 771 |
| &nbsp;&nbsp;&nbsp; Lease liabilities, noncurrent | 99 |  |
| &nbsp;&nbsp;&nbsp; Other long-term liabilities | 12236 | 9354 |
| &nbsp;&nbsp;&nbsp; Deferred income taxes | 60 | 339 |
| **Total Liabilities** | 48929 | 57306 |
| Commitments and Contingencies |  |  |
| **Mezzanine Equity** |  |  |
| &nbsp;&nbsp;&nbsp; Redeemable convertible preferred stock, $0.001 par value; 100,000 shares authorized; None and 5,000 shares issued and outstanding as of March 31, 2025 and 2024, respectively |  | 4962 |
| **Stockholders' Equity (Deficit)** |  |  |
| &nbsp;&nbsp;&nbsp; Preferred stock, $0.001 par value; 10,000,000 shares authorized; 14,002 and 18,814 shares issued and outstanding as of March 31, 2025 and 2024, respectively | 14002 | 18814 |
| &nbsp;&nbsp;&nbsp; Common stock, $0.001 par value; 500,000,000 shares authorized; 96,765,145 issued and outstanding as of March 31, 2025; 92,487,459 shares issued and outstanding as of March 31, 2024 | 97 | 92 |
| &nbsp;&nbsp;&nbsp; Additional paid in capital | 233495 | 216116 |
| &nbsp;&nbsp;&nbsp; Treasury stock | (250) | (4782) |
| &nbsp;&nbsp;&nbsp; Accumulated deficit | (265119) | (238984) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total LiveOne's Stockholders' Deficit | (17775) | (8744) |
| Non-controlling interest | 9363 | 10339 |
| Total equity (deficit) | (8412) | 1595 |
| **Total Liabilities, Mezzanine Equity and Stockholders' Equity (Deficit)** | $40517 | $63863 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F-4

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**LiveOne, Inc.**

**Consolidated Statements of Operations**

***(In thousands, except share and per share amounts)***

---

| | | |
|:---|:---|:---|
|  | ***Year Ended*** | ***Year Ended*** |
|  | ***March 31, 2025*** | ***March 31, 2024*** |
| **Revenue:** | $114405 | $118440 |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp; Cost of sales | 85241 | 86391 |
| &nbsp;&nbsp;&nbsp; Sales and marketing | 6396 | 7838 |
| &nbsp;&nbsp;&nbsp; Product development | 4475 | 4681 |
| &nbsp;&nbsp;&nbsp; General and administrative | 22746 | 22268 |
| &nbsp;&nbsp;&nbsp; Amortization of intangible assets | 1947 | 1815 |
| &nbsp;&nbsp;&nbsp; Impairment of fixed assets, intangible assets and goodwill | 11657 | 115 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 132462 | 123108 |
| **Loss from operations** | (18057) | (4668) |
| **Other income (expense):** |  |  |
| &nbsp;&nbsp;&nbsp; Interest expense, net | (2712) | (4366) |
| &nbsp;&nbsp;&nbsp; Other income (expense) | 214 | (4159) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other expense, net | (2498) | (8525) |
| **Loss before income taxes** | (20555) | (13193) |
| Income tax (benefit) provision | (185) | 118 |
| Net loss | (20370) | (13311) |
| Net loss attributable to non-controlling interest | (1661) | (1345) |
| **Net loss attributable to LiveOne** | $(18709) | $(11966) |
| **Net loss per share attributed to LiveOne – basic and diluted** | $(0.20) | $(0.14) |
| **Weighted average common shares – basic and diluted** | 95041241 | 87617392 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F-5

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**LiveOne, Inc.**

**Consolidated Statements of Stockholders**' **Equity (Deficit)**

**For the Years Ended March 31, 2025 and 2024**

***(In thousands, except share and per share amounts)***

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | ***Redeemable*** | ***Redeemable*** |  |  |  |  |  |  |  |  |  | ***Total*** |
|  | ***Convertible*** | ***Convertible*** |  |  |  |  | ***Additional Paid*** |  |  |  |  | ***Stockholders'*** |
|  | ***Preferred Stock*** | ***Preferred Stock*** | ***Preferred stock*** | ***Preferred stock*** | ***Common stock*** | ***Common stock*** | ***in*** | ***Accumulated*** | ***Non-controlling*** | ***Common stock in treasury*** | ***Common stock in treasury*** | ***Equity*** |
|  | ***Shares*** | ***Amount*** | ***Shares*** | ***Amount*** | ***Shares*** | ***Amount*** | ***Capital*** | ***Deficit*** | ***Interest*** | ***Shares*** | ***Amount*** | ***(Deficit)*** |
| **Balance as of April 1, 2023** | **5000** | $**4827** | **16177** | $**16177** | **89632161** | $**90** | $**209151** | $**(224269)** | **-** | **(2220914**) | $**(2162**) | $**(1013)** |
| Stock-based compensation | *-* |  | *-* |  | *-* |  | 5496 |  |  | *-* |  | **5496** |
| Vested employee restricted stock units |  |  |  |  | 1855576 | 2 |  |  |  |  |  | **2** |
| Exercise of common stock options |  |  |  |  | 10000 |  | 8 |  |  |  |  | 8 |
| Common stock issued for purchase of intangible assets | *-* |  | *-* |  | *-* |  | 1079 |  |  | *-* |  | 1079 |
| Conversion of Series A Preferred Stock into common stock and common stock warrants |  |  |  |  |  |  |  |  |  |  |  |  |
| Conversion of PC1 bridge loan | *-* |  | *-* |  | *-* |  | 4752 |  |  | *-* |  | 4752 |
| Dividends from spin-off of PodcastOne | *-* |  | *-* |  | *-* |  | (1513) |  | 1513 | *-* |  |  |
| Reclassification of common stock warrants | *-* |  | *-* |  | *-* |  |  |  | 5896 |  |  | 5896 |
| Issuance of PodcastOne common stock | *-* |  | *-* |  | *-* |  | (4275) |  | 4275 | *-* |  | **-** |
| Accrued dividends converted to preferred stock |  |  | 2637 | 2637 |  |  |  |  |  |  |  | 2637 |
| Preferred stock accretion | *-* | 135 | *-* |  | *-* |  |  |  |  | *-* |  |  |
| Dividends on Series A preferred stock | *-* |  | *-* |  | *-* |  |  | (2749) |  | *-* |  | **(2749)** |
| Common stock issued for services |  |  |  |  | 989722 |  | 1418 |  |  |  |  | **1418** |
| Treasury stock purchases |  |  |  |  |  |  |  |  |  | (1639125) | (2620) | **(2620)** |
| Net loss | *-* |  | *-* |  | *-* |  |  | (11966) | (1345) | *-* |  | **(13311)** |
| **Balance as of March 31, 2024** | **5000** | $**4962** | **18814** | $**18814** | **92487459** | $**92** | $**216116** | $**(238984)** | $**10339** | **(3860039)** | $**(4782)** | $**1595** |
| Stock-based compensation | *-* |  | *-* |  | *-* |  | 3993 |  |  | *-* |  | 3993 |
| Vested employee restricted stock units |  |  |  |  | 1978545 | 3 |  |  |  |  |  | 3 |
| Retirement of treasury stock |  |  |  |  | (4262632) | (4) |  | (5527) |  | 4262632 | 5531 | **-** |
| Conversion of Series A Preferred Stock into common stock and common stock warrants | (5000) | (4962) | (6395) | (6395) | 5426233 | 5 | 11668 | (316) |  |  |  | **4962** |
| Issuance of PodcastOne common stock | *-* |  | *-* |  | *-* |  | (685) |  | 685 | *-* |  |  |
| Dividends on Series A preferred stock | *-* |  | *1583* | 1583 | *-* |  |  | (1583) |  | *-* |  |  |
| Common stock issued for services |  |  |  |  | 1135540 | 1 | 2403 |  |  |  |  | 2404 |
| Treasury stock purchases |  |  |  |  |  |  |  |  |  | (558247) | (999) | (999) |
| Net loss | *-* |  | *-* |  | *-* |  |  | (18709) | (1661) | *-* |  | (20370) |
| **Balance as of March 31, 2025** | **-** | $**-** | **14002** | $**14002** | **96765145** | $**97** | $**233495** | $**(265119)** | $**9363** | **(155654)** | $**(250)** | $**(8412**) |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F-6

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**LiveOne, Inc.**

**Consolidated Statements of Cash Flows**

***(In thousands)***

---

| | | |
|:---|:---|:---|
|  | ***Year Ended*** | ***Year Ended*** |
|  | ***March 31, 2025*** | ***March 31, 2024*** |
| **Cash Flows from Operating Activities:** |  |  |
| Net loss | $(20370) | $(13311) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |
| Depreciation and amortization | 5325 | 5107 |
| Interest paid in kind |  | 269 |
| Stock-based compensation | 6160 | 6336 |
| Change in fair value of bifurcated embedded derivatives | (607) | 4460 |
| Amortization of debt discount |  | 1110 |
| Deferred income taxes | (279) | 7 |
| Change in fair value of contingent consideration liability |  | 174 |
| Accretion of preferred stock |  | 135 |
| Impairment of fixed asset | 2787 | 2 |
| Impairment of goodwill | 1667 |  |
| Impairment of intangibles | 7203 | 115 |
| Provision for credit losses | 35 | 485 |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivable | 4871 | (32) |
| Prepaid expenses and other current assets | 975 | 682 |
| Inventories | 215 | 795 |
| Other assets | (9) | 289 |
| Deferred revenue | 1414 | (264) |
| Accounts payable and accrued liabilities | (563) | 2849 |
| Accrued royalties | (5488) | 1756 |
| Other liabilities | 3032 | (4116) |
| Net cash provided by operating activities | 6368 | 6848 |
| **Cash Flows from Investing Activities:** |  |  |
| Purchases of property and equipment | (3053) | (3036) |
| Purchase of intangible assets | (70) | (1010) |
| Net cash used in investing activities | (3123) | (4046) |
| **Cash Flows from Financing Activities:** |  |  |
| Payment of dividends | (509) |  |
| Payments on Capchase loan | (680) |  |
| Repayment on line of credit | (4050) |  |
| Proceeds from notes payable |  | 1700 |
| Repayments of notes payable |  | (397) |
| Repayment of Bridge Loan |  | (3000) |
| Proceeds from exercise of stock options |  | 8 |
| Purchases of treasury stock | (999) | (2620) |
| Net cash used in financing activities | (6238) | (4309) |
| Net change in cash, cash equivalents and restricted cash | (2993) | (1507) |
| Cash, cash equivalents and restricted cash, beginning of year | 7142 | 8649 |
| **Cash, cash equivalents and restricted cash, end of year** | $4149 | $7142 |
| **Supplemental disclosure of cash flow information:** |  |  |
| Cash paid for income taxes | $- | $37 |
| Cash paid for interest | $873 | $1113 |
| **Supplemental disclosure of non-cash investing and financing activities:** |  |  |
| Conversion of the Bridge Loan into PodcastOne common stock | $- | $4752 |
| Accrued interest on Bridge Loan converted to common stock | $- | $142 |
| Accrual of dividends | $1583 | $2749 |
| PodcastOne warrants reclassed from liabilities to non-controlling interest | $- | $5896 |
| Conversion of Series A preferred stock into common stock | $11357 | $- |
| Fair value of common stock options and restricted stock issued to employees, capitalized as internally-developed software | $240 | $578 |
| Accrued dividends converted to Series A Preferred Stock | $- | $2637 |
| Accrued expenses written off associated with intangible asset impairment | $695 | $- |
| Additions of ROU Assets | $119 | $- |
| Purchase of intangible assets accrued for at period end | $- | $1221 |
| Purchase of intangible assets with common stock | $- | $1079 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F-7

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**LiveOne, Inc.**

**Notes to the Consolidated Financial Statements**

**For the Years Ended March 31, 2025 and 2024**

**Note *1*** — **Organization and Basis of Presentation**

*<u>Organization</u>*

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 *October 17, 2021,* the Company through its wholly owned subsidiary LiveXLive PR, Inc., acquired Gramophone Media, Inc. ("Gramophone"). On *February 28, 2023,* the Company acquired a majority interest in Splitmind LLC and Drumify LLC. On *September 8, 2023,* PodcastOne completed a Qualified Event (as defined below) (its spin out from the Company to become a standalone publicly trading company) as a result of its direct listing on The NASDAQ Capital Market on such date. As of the date of this Annual Report, PodcastOne continues to be a majority owned subsidiary of the Company.

*<u>Basis of Presentation</u>*

The accompanying consolidated financial statements include the Company's results of operations and those of its wholly-owned and majority-owned subsidiaries. The Company's accounting and financial reporting policies conform to generally accepted accounting principles in the United States of America ("U.S. GAAP").

*<u>Principles of Consolidation</u>*

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Acquisitions are included in the Company's 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. See the Company's accounting policy "*Business Combinations*" within Note *2* – Summary of Significant Accounting Policies. All intercompany balances and transactions have been eliminated in consolidation.

*<u>Going Concern and Liquidity</u>*

The Company's 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 $4.1 million as of *March 31, 2025*). As reflected in its consolidated financial statements included elsewhere herein, the Company has a history of losses, incurred a net loss of $20.4 million and had a working capital deficiency of $21.1 million as of *March 31, 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *8*

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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 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 Annual 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.

**Note *2*** — **Summary of Significant Accounting Policies** 

*<u>Use of Estimates</u>*

The preparation of the Company's consolidated financial statements in conformity with the United States of America ("US") 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *9*

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*<u>Revenue Recognition Policy</u>*

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.

*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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *10*

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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:

*<u>Direct member, mobile service provider and mobile app services</u>*

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.

*<u>Third-Party Original Equipment Manufacturers</u>*

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. The OEM does *not* charge the car owners a fee for the Slacker service.

*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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *11*

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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. Total revenues related to barter transactions were $25.0 million and $16.7 million for the years ended *March 31, 2025* and *March 31, 2024*, respectively. The Company's barter revenue is attributed to one customer and comprised of 22% and 14% of its revenue for the years ended *March 31, 2025* and *2024,* respectively.

*Licensing Revenue*

Licensing revenue primarily consists of sales of licensing rights to digitally stream its 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. 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 our 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.

*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 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 *March 31, 2025* and *2024* was less than $0.1 million, respectively.

*Ticket/Event Revenue*

Ticket/Event revenue is primarily from the sale of tickets and promoter fees earned from venues or other co-promoters under *one* of several formulas, including a fixed guaranteed amount and/or a percentage of ticket sales or event profits.

Revenue from the promotion or production of an event is recognized at a point in time when the show occurs. Revenue collected in advance of the event is recorded as deferred revenue until the event occurs. Revenue collected from sponsorship agreements, which is *not* related to a single event, is classified as deferred revenue and recognized over the term of the agreement or operating season as the benefits are provided to the sponsor.

Revenue from our ticketing operations primarily consists of service fees charged at the time a ticket for an event is sold in either the primary or secondary markets, including both online pay-per-view ("PPV") tickets as well as ticket physically purchased through a ticket sale vendor. For primary tickets sold to the Company's PPV and festival events the revenue for the associated ticket service charges collected in advance of the event is recorded as deferred revenue until the event occurs. For PPV arrangements that include multiple performance obligations, i.e. delivery of the online stream, sponsorships, digital meet and greet, or physical merchandise, we allocate the total contract consideration to each performance obligation using the standalone selling price. If the standalone selling price is *not* readily determinable, it is estimated using observable inputs including an adjusted market based approach, expected cost plus margin, or the residual approach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *12*

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*<u>Cost of Sales</u>*

Cost of Sales principally consist of royalties paid for the right to stream video, music and non-music content to the Company's customers and the cost of securing the rights to produce and stream live events from venues and promoters. Royalties are calculated using negotiated and regulatory rates documented in content license agreements and are based on usage measures or revenue earned. Music royalties to record labels, professional rights organizations and music publishers relate to the consumption of music listened to on Slacker's radio services. As of *March 31, 2025* and *2024*, the Company accrued $12.9 million and $18.4 million of royalties, respectively, due to artists from use of Slacker's radio services.

Cost of sales for the Company's advertising revenue primarily includes PodcastOne direct costs comprised of revenue sharing and commissions. Cost of sales for the Company's merchandising revenue includes purchase costs and related direct costs. Direct costs include all costs for personalization, production, planning, quality control, fulfillment and inbound freight.

*<u>Sales and Marketing</u>*

Sales and Marketing include the direct and indirect costs related to the Company's product and 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 $0.2 million for the years ended *March 31, 2025* and *2024*, respectively.

*<u>Product Development</u>*

Product development costs primarily are 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.

*<u>Stock-Based Compensation</u>*

Stock-based compensation cost is measured 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. The Company accounts for awards with graded vesting as if each vesting tranche is valued as a separate award. The Company uses the Black-Scholes-Merton option pricing model to determine the grant date fair value of stock options. This model requires 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. 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 the Company's stock price as well as including an estimate using guideline companies. The expected term is computed using the simplified method as the Company's best estimate given its lack of actual exercise history. 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 stock. 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.

Stock option awards issued to non-employees are accounted for at grant date fair value determined using the Black-Scholes-Merton option pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. The Company records the fair value of these equity-based awards and expense at their cost ratably over related vesting periods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *13*

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*<u>Income Taxes</u>*

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.

*<u>Net Income (Loss) Per Share</u>*

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, 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 *March 31, 2025* and *2024*, the Company had 2,201,667 and 2,266,667 options outstanding, respectively, and 493,946 and 1,846,245 restricted stock units outstanding, respectively.

The following table is a reconciling basic and diluted earnings per share under the *two*-class method:

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| | | |
|:---|:---|:---|
|  | ***Year Ended*** | ***Year Ended*** |
| In thousands, except per share amounts | ***March 31, 2025*** | ***March 31, 2024*** |
| Net loss attributed to LiveOne | $(18709) | $(11966) |
| Dividends on Series A Preferred Stock | (1583) | (2749) |
| Net loss attributed to LiveOne | $(20292) | $(14715) |
| Basic and diluted weighted average number of shares of common stock outstanding | 95041241 | 87617392 |
| Basic and diluted earnings per share | $(0.21) | $(0.17) |

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*<u>Business Combinations</u>*

The Company accounts for its business combinations using the acquisition method of accounting where the purchase consideration is allocated to the underlying net tangible and intangible assets acquired, based on their respective fair values. The excess of the purchase consideration over the estimated fair values of the net assets acquired is recorded as goodwill. Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Additionally, any contingent consideration is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interests requires management's judgment and often involves the use of significant estimates and assumptions, including, but *not* limited to, the selection of appropriate valuation methodology, projected revenue, expenses and cash flows, weighted average cost of capital, discount rates, estimates of customer turnover rates, estimates of terminal values, and royalty rates.

<u>*Segment Reporting*</u>

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 three segments. The Company determined the CODM is its Chief Executive Officer. The CODM reviews financial information and allocates resources across its *three* operating segments. See Note *17* — Business Segments and Geographic Reporting for further disclosure.

*<u>Cash and Cash Equivalents</u>*

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *14*

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The following table provides amounts included in cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows for the fiscal years ended *March 31 (*in thousands):

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| | | |
|:---|:---|:---|
|  | ***2025*** | ***2024*** |
| Cash and cash equivalents | $4119 | $6987 |
| Restricted cash | 30 | 155 |
| Total cash and cash equivalents and restricted cash | $4149 | $7142 |

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*<u>Restricted Cash and Cash Equivalents</u>*

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 *March 31, 2025* and *2024*, the Company had restricted cash of $30,000 and $0.2 million, respectively.

*<u>Allowance for Credit Losses</u>*

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 short-term nature of its membership receivables. At *March 31, 2025* and *2024*, the Company had one customer that made up 10% and 42% of the total accounts receivable balance, respectively.

The following table provides amounts included in accounts receivable, net for the fiscal years ended *March 31 (*in thousands):

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| | | |
|:---|:---|:---|
|  | ***2025*** | ***2024*** |
| Accounts receivable | $9390 | $14260 |
| Less: Allowance for credit losses | 1091 | 1055 |
| Accounts receivable, net | $8299 | $13205 |

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*<u>Inventories</u>*

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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *15*

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*<u>Property and Equipment</u>*

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.

Depreciation is recorded using the straight-line method over the assets' estimated useful lives, which are generally as follows: buildings and improvements (5 years), furniture and equipment (2 to 5 years) and computer equipment and software (3 to 5 years). Leasehold improvements are depreciated over the shorter of the estimated useful life, based on the estimates above, or the lease term.

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.

*<u>Capitalized Internal-Use Software</u>*

The Company capitalizes certain costs incurred to develop software for internal use. Costs incurred in the preliminary stages of development are expensed as incurred. Once software has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized costs are recorded as part of property and equipment. Costs related to minor enhancements, maintenance and training are expensed as incurred.

Capitalized internal-use software costs are amortized on a straight-line basis over their two- to five-year estimated useful lives. The Company evaluates the useful lives of these assets and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. During the years ended *March 31, 2025* and *2024*, the Company capitalized $3.3 million and $3.4 million of internal use software, respectively.

*<u>Goodwill and Indefinite-Lived Assets</u>*

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. Acquired trademarks and trade names are assessed as indefinite lived assets if there are *no* foreseeable limits on the periods of time over which they are expected to contribute cash flows. Goodwill and indefinite-lived assets are *not* amortized, but are 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. We perform our annual impairment testing at *January 1* of each year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *16*

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Our annual goodwill impairment test is performed at the reporting unit level. As of *March 31, 2025* and *2024*, our reporting unit is the same as our three operating segments. We generally test 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, we determine the fair value of the related reporting unit and compare this value to the recorded net assets of the reporting unit, including goodwill. The fair value of our 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. Based on our annual impairment assessment, an impairment of goodwill was identified in the fiscal years ended *March 31, 2025* and *2024*in the amount of $1.7 million and none, 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.

We test our acquired trademarks and trade names for possible impairment by applying the same process as for goodwill. In the instance when a qualitative test is *not* performed or is inconclusive, a quantitative test is performed by using a discounted cash flow model to estimate fair value of our acquired trademarks and trade names. Based on our annual impairment assessment, an impairment of $3.9 million and none on acquired trademarks and trade names was identified in the fiscal years ended *March 31, 2025* and *2024*

*<u>Intangible Assets with Finite Useful Lives</u>*

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, Customer Relationships, Content Creator Relationships, Wholesale Relationships, Domain Names, Customer List, Capitalized Software Development Costs, and Non-compete Agreements 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: Intellectual Property (15 years), Customer, Content Creator and Wholesale Relationships (1-6 years), Domain Names, Customer Lists, and Software (5 years), Patents (15 years), and Non-Compete Agreements (3 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. In our assessment for potential impairment we identified triggering events due to the events resulting from the change in terms with our largest OEM customer. We performed a quantitative assessment using the guidance in ASC *360* and we concluded that there was an impairment of none and $0.1 million for the *three* months ended *December 31, 2024* and *2023,* respectively, based on an evaluation, on the basis of the weight of the evidence, of the significance of all identified events and circumstances that could indicate that the carrying value of the long-lived assets is *not* recoverable and that could affect the significant inputs used to determine the fair value of the long-lived assets. We prepared our estimate of the fair value of the long-lived assets using certain inputs and information that is available to us at this time. Such inputs and information include the percentage and timing at which users of our OEM customer convert to our service and the service plan selected by such converting users. There can be *no* assurance that such inputs will *not* be revised as more information is obtained. Additionally, there can be *no* assurance that such revised inputs, if any, will *not* result in management's determination that an impairment has occurred at that time. We will continue to assess the long-lived assets for potential impairment in future periods as more information on the inputs becomes available. The Company recorded impairment losses of $8.1 million and $0.1 million in the fiscal years ended *March 31, 2025* and *2024,* respectively.

*<u>Deferred Revenue and Costs</u>*

Deferred revenue consists substantially of amounts received from customers in advance of the Company's performance service period. Deferred revenue is recognized as revenue on a systematic basis that is proportionate to the period that the underlying services are rendered, which in certain arrangements is straight line over the remaining contractual term or estimated customer life of an agreement.

In the event the Company receives cash in advance of providing its music services, the Company will also defer an amount of such future royalty and costs to *3rd* party music labels, publishers and other providers on its balance sheets. Deferred costs are amortized to expense concurrent with the recognition of the related revenue and the expense is included in cost of sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *17*

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*<u>Fair Value Measurements - Valuation Hierarchy</u>*

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:

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| | |
|:---|:---|
| 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. |

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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. The derivative liabilities are recognized at fair value on a recurring basis at *March 31, 2025* and *2024*, respectively, and are Level *3* measurements. There have been *no* transfers between levels.

*<u>Debt with Warrants</u>*

In accordance with ASC Topic *470*-*20*-*25,* when the Company issues debt with warrants, the Company treats the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as interest expense in the consolidated statements of operations. The offset to the contra-liability is recorded as either a liability or within equity in the Company's consolidated balance sheets depending on the accounting treatment of the warrants. The Company determines the value of the warrants using an appropriate valuation method, including a Black-Scholes or Monte-Carlo Simulation. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the consolidated statements of operations. The debt is treated as conventional debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *18*

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*<u>Convertible Debt</u>* <u>–</u>*<u>Derivative Treatment</u>*

When the Company issues debt with a conversion feature, we must *first* assess whether the conversion feature meets the requirements to be treated as a derivative, as follows: (a) *one* or more underlyings, typically the price of our common stock; (b) *one* or more notional amounts or payment provisions or both, generally the number of shares upon conversion; (c) *no* initial net investment, which typically excludes the amount borrowed; and (d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets the definition of a derivative does *not* have to be separated from the host instrument if the component qualifies for the scope exception for certain contracts involving an issuer's own equity. The scope exception applies if the contract is both (a) indexed to its own stock; and (b) classified in stockholders' equity in its balance sheet.

If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using the appropriate valuation model upon the date of issuance. If the fair value of the convertible debt derivative is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the convertible debt derivative is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The convertible debt derivative is revalued at the end of each reporting period and any change in fair value is recorded as a gain or loss in the statement of operations. The debt discount is amortized through interest expense over the life of the debt.

*<u>Debt Modifications and Extinguishments</u>*

When the Company modifies or extinguishes debt, it *first* evaluates whether the modification qualifies as a troubled debt restructuring (TDR) under ASC Topic *470*-*60,* which requires debt modifications to be evaluated if (*1*) the borrower is experiencing financial difficulty, and (*2*) the lender grants the borrower a concession. If a TDR is determined *not* to have occurred, the Company evaluates the modification in accordance with ASC Topic *470*-*50*-*40,* which requires modification to debt instruments to be evaluated to assess whether the modifications are considered "substantial modifications". A substantial modification of terms is accounted for like an extinguishment.

If there is a conversion feature within the debt instrument, the Company evaluates whether the conversion feature should be bifurcated under ASC *815* as a derivative. If the Company believes the embedded conversion feature has *no* fair value on the date of issuance (measurement date) and the embedded conversion feature has *no* beneficial conversion feature, the embedded conversion feature does *not* meet the criteria in ASC *470*-*50*-*40*-*10* or *470*-*20*-*25* and the issuance of the convertible debt is considered a modification, and *not* an extinguishment that would require the recognition of a gain or loss. If the Company determines the change in fair value of the derivative meets the criteria for substantial modification under ASC *470* it will treat the modification as extinguishment and recognize a loss from debt extinguishment.

*<u>Concentration of Credit Risk</u>*

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.

*<u>Seasonality</u>*

Our CPS merchandising business is affected by seasonality, which typically results in higher sales volume during our *third* quarter, which ends *December 31.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *19*

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*<u>Recently Adopted Accounting Pronouncements</u>*

In *November 2023,* the FASB issued ASU *2023*-*07,* Segment Reporting (Topic *280*): Improvements to Reportable Segment Disclosures to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective beginning with the Company's *2025* fiscal year annual reporting period, with early adoption permitted. The Company adopted ASU *2023*-*07* on *April 1, 2024* on a prospective basis. The adoption of this standard did *not* have an impact on the Company's consolidated financial statements.

*<u>Recently Issued Accounting Pronouncements</u>*

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 will adopt ASU *2023*-*09* beginning in the *first* quarter of *2026.* ASU *2023*-*09* allows for adoption using either a prospective or retrospective transition method. The Company is currently assessing the impact this standard will have on the Company's consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *20*

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Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the U.S. Securities and Exchange Commission (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 years ended *March 31, 2025* and *2024* (in thousands):

---

| | | |
|:---|:---|:---|
|  | ***Year Ended March 31,*** | ***Year Ended March 31,*** |
|  | ***2025*** | ***2024*** |
| Revenue |  |  |
| &nbsp;&nbsp;&nbsp; Membership services | $56939 | $66182 |
| &nbsp;&nbsp;&nbsp; Advertising | 52285 | 43729 |
| &nbsp;&nbsp;&nbsp; Merchandising | 5181 | 8271 |
| &nbsp;&nbsp;&nbsp; Sponsorship and Licensing |  | 126 |
| &nbsp;&nbsp;&nbsp; Ticket/Event |  | 132 |
| Total Revenue | $114405 | $118440 |

---

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 years ended *March 31, 2025* and *2024*, one customer accounted for 45% and 51% of our consolidated revenues, respectively.

The following table summarizes the significant changes in contract liabilities (deferred revenue) balances during the years ended *March 31, 2025* and *2024* (in thousands):

---

| | |
|:---|:---|
|  | ***Contract Liabilities*** |
| Balance as of April 1, 2023 | $992 |
| &nbsp;&nbsp;&nbsp; Revenue recognized that was included in the contract liability at beginning of the year | (389) |
| &nbsp;&nbsp;&nbsp; Increase due to cash received, excluding amounts recognized as revenue during the year | 125 |
| Balance as of March 31, 2024 | 728 |
| &nbsp;&nbsp;&nbsp; Revenue recognized that was included in the contract liability at beginning of the year | (302) |
| &nbsp;&nbsp;&nbsp; Increase due to cash received, excluding amounts recognized as revenue during the year | 1715 |
| Balance as of March 31, 2025 | $2141 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *21*

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**Note *4*** — **Property and Equipment**

The Company's property and equipment at *March 31, 2025* and *2024* was as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | ***As of March 31,*** | ***As of March 31,*** |
|  | ***2025*** | ***2024*** |
| Property and equipment, net |  |  |
| &nbsp;&nbsp;&nbsp; Computer, machinery, and software equipment | $2597 | $6564 |
| &nbsp;&nbsp;&nbsp; Furniture and fixtures | 564 | 556 |
| &nbsp;&nbsp;&nbsp; Leasehold improvements | 597 | 597 |
| &nbsp;&nbsp;&nbsp; Capitalized internally developed software | 18669 | 18109 |
| Total property and equipment | 22427 | 25826 |
| &nbsp;&nbsp;&nbsp; Less accumulated depreciation and amortization | (21534) | (22180) |
| Total property and equipment, net | $893 | $3646 |

---

Depreciation and amortization expense was $3.4 million and $3.3 million for the years ended *March 31, 2025* and *2024*, respectively.

As a result of the *ART19* agreement and the change in terms with our largest OEM, the Company revaluated the lives of certain fixed assets and recorded and impairment of $2.8 million attributed to property and equipment for the year ended *March 31, 2025* attributed to our Slacker and PodcastOne reporting units. No impairment was recorded for the year ended *March 31, 2024.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *22*

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**Note *5*** — **Goodwill and Intangible Assets**

*<u>Goodwill</u>*

The Company currently has three reporting units. The following table presents the changes in the carrying amount of goodwill for the years ended *March 31, 2025* and *2024* (in thousands):

---

| | |
|:---|:---|
|  | ***Goodwill*** |
| Balance as of April 1, 2023 | $23379 |
| Acquisitions |  |
| Balance as of March 31, 2024 | $23379 |
| Impairment | (1667) |
| Balance as of March 31, 2025 | $21712 |

---

The Company recorded an impairment on the goodwill balance of $1.7 million for the year ended *March 31, 2025.* During the year ended *March 31, 2025* the Company performed an quantitative assessment of our Media Group reporting unit. The results of the Company's quantitative goodwill impairment analysis performed indicated an impairment of goodwill within our Media Group reporting unit, and the Company recorded a non-cash impairment charge of $1.7 million. The impairment was driven by the company's most recent cash flow projections as revised in the *fourth* quarter of Fiscal *2025* which reflected current market conditions and current trends in business performance, including slower than anticipated actualization of bookings.

*<u>Indefinite-Lived Intangible Assets</u>*

The following table presents the changes in the carrying amount of indefinite-lived intangible assets in the Company's reportable segment for the year ended *March 31, 2025* (in thousands):

---

| | |
|:---|:---|
|  | ***Tradenames*** |
| Balance as of April 1, 2023 | $4637 |
| Acquisitions |  |
| Impairment losses |  |
| Balance as of March 31, 2024 | $4637 |
| Acquisitions |  |
| Impairment losses | (3863) |
| Balance as of March 31, 2025 | $774 |

---

As a result of the change in terms of the agreement with our largest OEM, the Company determined that an impairment of $3.9 million should be recorded as a result of the decrease in forecasted revenues. *No* impairment was recorded for the year ended *March 31, 2024.*

*<u>Finite-Lived Intangible Assets</u>*

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 | $19281 | $19281 | $- |
| Intellectual property (patents) | 3146 | 2593 | 553 |
| Customer relationships | 6570 | 6570 |  |
| Content creator relationships | 3228 | 2574 | 654 |
| Domain names | 123 | 66 | 57 |
| Brand and trade names | 1071 | 540 | 531 |
| Customer list | 2673 | 2673 |  |
| &nbsp;&nbsp;&nbsp; Total | $36092 | $34297 | $1795 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *23*

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The Company's finite-lived intangible assets were as follows as of *March 31, 2024* (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | ***Gross*** |  | ***Net*** |
|  | ***Carrying*** | ***Accumulated*** | ***Carrying*** |
|  | ***Value*** | ***Amortization*** | ***Value*** |
| Software | $19281 | $19281 | $- |
| Intellectual property (patents) | 5366 | 2236 | 3130 |
| Customer relationships | 6570 | 6570 |  |
| Content creator relationships | 4082 | 1568 | 2514 |
| Domain names | 523 | 190 | 333 |
| Brand and trade names | 1071 | 439 | 632 |
| Customer list | 2673 | 1504 | 1169 |
| &nbsp;&nbsp;&nbsp; Total | $39566 | $31788 | $7778 |

---

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, content creator relationships, domain names, 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 $1.9 million and $1.8 million for the years ended *March 31, 2025* and *2024*, respectively. The Company recorded an impairment charge of $3.3 million and $0.1 million for the year ended *March 31, 2025* and *2024,* respectively.

The $2.2 million impairment recorded within our intellectual property (patents) for the year ended *March 31, 2025* was the result of the impairment of certain assets within the Company's Slacker reporting unit as a result of the change in terms with our largest OEM. In addition, the Company recorded an an impairment of $0.9 million within our customer relationships intangibles within our Media reporting unit attributed to the decrease in expected future revenues.

The Company recorded an impairment charge of $0.2 million and none within content creator relationships for the year ended *March 31, 2025* and *2024,* respectively. The impairment for the year ended *March 31, 2025* was the result of the winding down of a podcast show acquired by PodcastOne.

*<u>Finder's</u> <u>Agreement</u>*

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 *March 31, 2025* and *2024* the Company has capitalized $3.1 million and $2.6 million, respectively, of payments made to such *third* party. $2.6 million of the $3.1 million capitalized of payments made to such *third* party was paid with PodcastOne common stock at an agreed upon price of $8.00 per share. During the year ended *March 31, 2025,* the Company made an adjustment of $0.5 million to accrued common stock and content creator relationships to account for the settlement of the finder's fee agreement attributed to multiple *third* party platforms.

The Company estimated future amortization expense on its finite-lived intangible assets as of *March 31, 2025* to be as follows (in thousands):

---

| | |
|:---|:---|
| **For Years Ended March 31,** |  |
| 2026 | $653.0 |
| 2027 | 366.0 |
| 2028 | 182.0 |
| 2029 | 182.0 |
| 2030 | 182.0 |
| Thereafter | 230.0 |
|  | $1795.0 |

---

**Note *6*** — **Accounts Payable and Accrued Liabilities**

Accounts payable and accrued liabilities at *March 31, 2025* and *2024* were as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | ***March 31,*** | ***March 31,*** |
|  | ***2025*** | ***2024*** |
| Accounts payable | $15269 | $15154 |
| Accrued liabilities | 9911 | 11708 |
| Lease liabilities, current |  | 91 |
| Total | $25180 | $26953 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *24*

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**Note *7*** — **Notes Payable**

The Company's notes payable at *March 31, 2025* and *2024* were as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | ***March 31,*** | ***March 31,*** |
|  | ***2025*** | ***2024*** |
| &nbsp;&nbsp;&nbsp; SBA loan | $150 | $160 |
| Capchase loan | 623 | 1303 |
| Total | 773 | 1463 |
| &nbsp;&nbsp;&nbsp; Less: Current portion of Notes payable | (623) | (692) |
| &nbsp;&nbsp;&nbsp; Notes payable - long term | $150 | $771 |

---

*<u>SBA Loan</u>*

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. The Company recorded interest expense of less than $10,000 of interest expense associated with the SBA loan for both the years ended *March 31, 2025* and *2024,* respectively. The are *no* covenants associated with the SBA loan.

*<u>Loan and Security Agreement</u>*

In *August 2023,* the Company entered into a Loan and Security Agreement with Capchase Inc. ("Capchase") pursuant to which the Company borrowed $1.7 million to further develop and acquire certain podcasts acquired by PodcastOne and for general working capital. The debt is subordinated to the ABL Credit Facility (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.* The Company recorded interest expense of $0.2 million and $0.4 million of interest expense associated with the Capchase loan for the years ended *March 31, 2025* and *2024,* respectively.

Maturities of notes payables as of *March 31, 2024* were as follows (in thousands):

---

| | |
|:---|:---|
| **For Years Ending March 31,** |  |
| 2026 | $627.0 |
| 2027 | 4.0 |
| 2028 | 4.0 |
| 2029 | 4.0 |
| 2030 | 4.0 |
| Thereafter | 130.0 |
| Total | $773.0 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *25*

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**Note *8*** — **PodcastOne Bridge Loan**

*<u>PodcastOne</u>*<u>'</u>*<u>s Private Placement</u>*

On *July 15, 2022 (*the "Closing Date"), PodcastOne completed a private placement offering (the *"PC1* Bridge Loan") of PodcastOne's unsecured convertible notes with an original issue discount of 10% (the "OID") in the aggregate principal amount of $8.8 million (the *"PC1* Notes") to certain accredited investors and institutional investors (collectively, the "Purchasers"), for gross proceeds of $8.0 million pursuant to the Subscription Agreements entered into with the Purchasers (the "Subscription Agreements"). In connection with the sale of the *PC1* Notes, the Purchasers received warrants (the *"PC1* Warrants") to purchase a number of shares (the *"PC1* Warrant Shares") of PodcastOne's common stock, par value $0.00001 per share. The *PC1* Notes were due to mature one year from the Closing Date, subject to a *one*-time *three*-month extension at PodcastOne's election (the "Maturity Date"). The *PC1* Notes bear interest at a rate of 10% per annum payable on maturity. The *PC1* Notes would automatically convert into the securities of PodcastOne sold in a Qualified Financing (an initial public offering of PodcastOne's securities from which PodcastOne's trading market at the closing of such offering is a national securities exchange) or Qualified Event (a direct listing of PodcastOne's securities on a national securities exchange), as applicable, upon the closing of a Qualified Financing or Qualified Event, as applicable, at a price per share equal to the lesser of (i) the price equal to $60.0 million divided by the aggregate number of shares of PodcastOne's common stock outstanding immediately prior to the closing of a Qualified Financing or Qualified Event, as applicable (assuming full conversion or exercise of all convertible and exercisable securities of PodcastOne then outstanding, subject to certain exceptions), and (ii) 70% of the offering price of the shares (or whole units, as applicable) in the Qualified Financing or 70% of the initial listing price of the shares on a national securities exchange in the Qualified Event, as applicable. Each holder of the *PC1* Notes (other than the Company) could have at such holder's option required PodcastOne to redeem up to 45% of the principal amount of such holder's *PC1* Notes (together with accrued interest thereon, but excluding the OID), in aggregate up to $3,000,000 for all of the *PC1* Notes (other than those held by the Company), immediately prior to the completion of a Qualified Financing or a Qualified Event, as applicable, with such redemption to have been made pro rata to the redeeming holders of the *PC1* Notes (the "Optional Redemption").

The Company also agreed (i) *not* to effect a Qualified Financing or a Qualified Event, as applicable, unless immediately following such event the Company owns *no* less than 66% of PodcastOne's equity, unless in either case otherwise permitted by the written consent of the holders of the majority of the *PC1* Notes (excluding the Company) (the "Majority Noteholders") and the senior lender, as applicable, (ii) that until a Qualified Financing or a Qualified Event, as applicable, is consummated, the Company guaranteed the repayment of the *PC1* Notes when due (other than the Bridge Notes issued to LiveOne) and any interest or other fees due thereunder, and (iii) that if PodcastOne had *not* consummated a Qualified Financing or a Qualified Event, as applicable, by *February 15, 2023, March 15, 2023* or *April 15, 2023,* unless in either case permitted by the written consent of the Majority Noteholders, PodcastOne was required to redeem $1,000,000 of the then outstanding *PC1* Notes (other than the *PC1* Notes issued to the Company) by the *tenth* calendar day of each month immediately following such respective date, up to an aggregate redemption of $3,000,000 over the course of such *three* months, each of which was to be distributed to the holders of the Bridge Notes (other than the Company) on a prorated basis (the "Early Redemption").

PodcastOne further agreed to register the shares of its common stock issuable upon conversion of the *PC1* Notes and exercise of the *PC1* Warrants in connection with a Qualified Financing or a Qualified Event. If PodcastOne did *not* file such registration statement on or prior to *April 15, 2023,* PodcastOne was required to prepay $1,000,000 of the *PC1* Notes pro rata to the *PC1* Notes holders (other than the Company), and if PodcastOne did *not* file such registration statement on or prior to *July 15, 2023,* PodcastOne was required to prepay $2,000,000 of the *PC1* Notes pro rata to the *PC1* Notes holders (other than the Company) (the "Reg St Redemption"). PodcastOne was *not* required to redeem or repay more than a total of $3,000,000 of the principal amount of the *PC1* Notes as a result of the Optional Redemption, the Early Redemption and/or the Reg St Redemption. As a result of *not* completing the Qualified Event, as of *April 15, 2023,* PodcastOne purchased $3.0 million (excluding the OID) worth of *PC1* Notes which have been eliminated in the consolidation presentation, but otherwise remain issued and outstanding.

On *September 8, 2023,* PodcastOne completed a Qualified Event (its spin out from the Company to become a standard publicly trading company (the "Spin-Out")) as a result of its direct listing on The NASDAQ Capital Market on such date (the "Direct Listing"). In connection with such completed Qualified Event, all of the remaining *PC1* Notes (including interest thereunder) in the aggregate amount of approximately $7.02 million converted into approximately 2,341,000 shares of PodcastOne's common stock.

***Warrants***

The *PC1* Warrants were classified as liabilities as they represent an obligation to deliver a variable number of shares of common stock in the future and are therefore required to be initially and subsequently measured at fair value each reporting period. The Company recorded a warrant liability in the amount of $1.7 million (and reduced the proceeds allocated to the *PC1* Notes accordingly). The fair value of the *PC1* Warrant liability is remeasured each reporting period using a Black Scholes model, and the change in fair value is recorded as an adjustment to the *PC1* Warrant liability with the unrealized gains or losses reflected in other income (expense). On *September 8, 2023,* as a result of the Direct Listing and PodcastOne's shares of common stock becoming publicly traded, the warrant liability was reclassified to equity as the number and the exercise price of the warrants was settled at 3,114,001 warrants with an exercise price of $3.00 per warrant per the warrant agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *26*

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The fair value of the *PC1* Warrants is measured in accordance with ASC *820* "Fair Value Measurement", using "Monte Carlo simulation" modeling, incorporating the following inputs:

---

| | | |
|:---|:---|:---|
|  | ***September 8,*** | ***March 31,*** |
|  | ***2023*** | ***2023*** |
| Expected dividend yield | -% | -% |
| Expected stock-price volatility | 71.10% | 71.50% |
| Risk-free interest rate | 4.43% | 4.86% |
| Simulated share price | $4.39 | $2.54 |
| Exercise price | $3.00 | $2.64 |

---

Total loss of $4.0 million for warrant liabilities accounted for as derivatives have been recorded in other expense for the year ended *March 31, 2024.* The fair value of the warrants as of *September 8, 2023* was $5.9 million and was classified as equity as the warrants were exercisable for a fixed price of $3.00. As of *March 31, 2025,* 3,114,001 warrants of PodcastOne remain outstanding and *none* have been exercised.

***Redemption Features***

The Company determined that the redemption features associated with the *PC1* Bridge Loan meet the accounting definition of an embedded derivative that must be separated from the *PC1* Bridge Loan and initially and subsequently be reported as a liability ("the Redemption Liability") and measured at fair value. The fair value of the Redemption Liability was determined using a Monte Carlo simulation model using *three* scenarios (*1*) redemption prior to the initial maturity date (65% weighted), (*2*) redemption at the initial maturity date (25% weighted) and (*3*) redemption after the initial maturity date (10% weighted).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *27*

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The fair value of the redemption features are measured in accordance with ASC *820* "Fair Value Measurement", using "Monte Carlo simulation" modeling, incorporating the following inputs:

---

| | |
|:---|:---|
|  | ***March 31,*** |
|  | ***2023*** |
| Simulations | 100000 |
| Expected stock-price volatility | 71.50% |
| Risk-free interest rate | 4.86% |
| Conversion price | $2.54 |
| Stock price | $2.64 |

---

The fair value of the Redemption Liability was none at *March 31, 2024* and was eliminated as the *PC1* Notes were converted into PodcastOne's common stock, and therefore the derivative component was cancelled. The $0.2 million change in the fair value of the Redemption Liability derivative as of *September 8, 2023* was recorded as an unrealized loss and included in other income for the year ended *March 31, 2024.*

The resulting discount from the OID, underwriting fees, *PC1* Warrants, and embedded Redemption Liability derivative of $2.8 million is being amortized to interest expense through *July 15, 2023,* the expected term of the Bridge Loan, using the effective interest method. Interest expense resulting from the amortization of the discount for the year ended *March 31, 2025* and *2024* was none and $1.1 million, respectively.

Interest expense with respect to the *PC1* Notes for the year ended *March 31, 2025* and *2024* was none and $0.2 million, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *28*

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**Note *9*** — **Senior Secured Revolving Line of Credit**

On *June 2, 2021,* the Company entered into a Business Loan Agreement with East West Bank (the "Senior Lender"), which provided for a revolving credit facility collateralized by all the assets of the Company and its subsidiaries. In connection with the Business Loan Agreement, the Company entered into a Promissory Note with the Senior Lender and established the revolving line of credit in the amount of $7.0 million (the "Revolving Credit Facility"), 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 *March 31, 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 "New 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 shall continue to be collateralized by a *first* lien on all of the assets of the Company and its subsidiaries (the "ABL Credit Facility"). The New Business Loan Agreement provides the Company with borrowing capacity of up to the Borrowing Base (as defined in the Business Loan Agreement). Pursuant to the New 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 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 includes customary events of default and various financial and other covenants with which the Company has 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 result 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 include, but are *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.

The principal balance under the ABL Credit Facility as of *March 31, 2025* and *2024* was $3.0 million and $7.0 million, respectively. The Company recorded interest expense of $0.7 million and $0.6 million for the year ended *March 31, 2025* and *2024*, respectively. The Company was in compliance with all debt covenants associated with the ABL Credit Facility as of *March 31, 2025*.

In connection with the issuance of the Debentures (as defined below), on *May 19, 2025,* the Company paid off all obligations owing under, and terminated, the Business Loan Agreement and all related loan agreements.

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**Note *10*** — **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 1,616,709 shares of the Company's common stock and received 535,399 three-year warrants to purchase the Company's common stock exercisable at a price of $2.10 per share. For the fiscal years ended *March 31, 2025* and *2024,* the Company issued 802.20 and 471.67 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 *March 31, 2025,* Trinad Capital owned 4,171.78 shares of Series A Preferred Stock.

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 warrants to purchase shares of PodcastOne's common stock with an exercise price of $3.00 per share, which remain outstanding as of *March 31, 2025.* Also, on this date, PodcastOne issued 147,044 shares of PodcastOne common stock to the Company's CEO as a result of his ownership of the Company's preferred stock.

During the years ended *March 31, 2025* and *2024,* the Company issue or reserved 123,425 and 150,593 shares of common stock with a value of $0.1 million and $0.1 million to relatives of the CEO for services performed, respectively.

During the year ended *March 31, 2025* and *2024,* the Company received 1,315,880 and 159,333 shares of PodcastOne Common stock with a fair value of $2.5 million and $0.3 million, respectively, in exchange for services provided by the Company to PodcastOne and for amounts owed under a cost sharing agreement between PodcastOne and the Company.

**Note *11*** — **Leases**

On *December 22, 2020,* the Company acquired CPS which included the assumption of an operating lease for a 55,120 square foot light manufacturing facility located in Addison Illinois, which expired *June 30, 2024.* During the year ended *March 31, 2025,* CPS entered into a *three* year lease for office space in Palatine, Illinois.

The Company leases office locations with lease terms that are less than *12* months or are on month to month terms. Rent expense is recognized over the term of the lease on a straight-line basis. Rent expense for these leases totaled $0.5 million and $0.5 million for the year ended *March 31, 2025* and *2024,* respectively. 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 consolidated balance sheet. Rent expense for these operating leases totaled $0.4 million and $0.4 million the years ended *March 31, 2025* and *2024*, respectively, which is included in general and administrative expenses in the consolidated statement of operations.

Operating lease costs for the years ended *March 31, 2025* and *2024* consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | ***Year Ended March 31,*** | ***Year Ended March 31,*** |
|  | ***2025*** | ***2024*** |
| Fixed rent cost | $456 | $324 |
| Short term lease cost | 88 | 596 |
| Total operating lease cost | $544 | $920 |

---

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

---

| | | |
|:---|:---|:---|
|  | ***March 31,*** | ***March 31,*** |
| **Operating leases** | ***2025*** | ***2024*** |
| Operating lease right-of-use assets | $97 | $88 |
| Operating lease liability, current | $- | $91 |
| Operating lease liability, noncurrent | 99 |  |
| Total operating lease liabilities | $99 | $91 |

---

The operating lease right-of-use assets are included in other assets in the *March 31, 2025* and *2024* consolidated balance sheets, and operating lease liabilities are included in accounts payable and accrued liabilities and lease liabilities non-current in the *March 31, 2025* and *2024* consolidated balance sheets.

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Future maturities of operating lease liabilities as of *March 31, 2025* were as follows (in thousands):

---

| | |
|:---|:---|
| **For Years Ending March 31,** |  |
| 2026 | $38 |
| 2027 | $37 |
| 2028 | $37 |
| Total lease payments | 112 |
| Less: imputed interest | (13) |
| Present value of operating lease liabilities | $99 |

---

*Significant determinations*

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.

*<u>PodcastOne arrangement</u>*

PodcastOne leases certain premises under a month-to-month operating lease. Rent expense for the operating lease totaled $0.3 million and $0.3 million for the year ended *March 31, 2025* and *March 31, 2024*, respectively.

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**Note *12*** — **Other Long-Term Liabilities**

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

---

| | | |
|:---|:---|:---|
|  | ***March 31,*** | ***March 31,*** |
|  | ***2025*** | ***2024*** |
| Accrued royalties | $7392 | $7508 |
| Accrued legal | 1606 |  |
| Accrued sales tax | 2375 | 1706 |
| Other | 863 | 140 |
| Total other long-term liabilities | $12236 | $9354 |

---

The Company classified $7.4 million and $7.5 million of accrued royalties into long term based on contractual arrangements with the royalty holders for the year ended *March 31, 2025* and *2024,* respectively. In addition, the Company accrued $1.6 million and none into long term liabilities as a result of the Sound Exchange settlement as of *March 31, 2025* and *2024,* respectively.

**Note *13*** — **Commitments and Contingencies**

*<u>Contractual Obligations</u>*

As of *March 31, 2025*, the Company is obligated under agreements with Content Providers and other contractual obligations to make guaranteed payments as follows: $11.4 million, $4.5 million, $0.5 million, $0.4 million and $0.4 million for the fiscal year ending *March 31, 2026, 2027, 2028, 2029* and thereafter, 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.

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 *March 31, 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 *August 4, 2022,* the Company entered into a settlement agreement with a certain music partner attributed to past royalties owed. The Company issued 800,000 shares of its common stock to the music partner and settled $0.4 million of accounts payable with the remaining value of the shares attributed to prepayment for future royalties. The fair value of the shares was determined to be $1.0 million based on the Company's share price at the date the shares were issued. As of *March 31, 2025, no* amount was recorded as a prepaid asset related to this transaction in order to fund future amounts owed for royalties. As the agreement was *not* terminated by the music partner after *one* year, the Company issued to the music partner an additional 200,000 shares of its common stock as prepayment of future royalties during the fiscal year ended *March 31, 2024 (*"Fiscal *2024"*).

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.

On *October 23, 2024,* the Company entered into an investor relations consulting agreement with MZHCI, LLC. The contract called for a *three* month commitment at $9,000 per month then on a month to month basis after *January 1, 2025* and terminated effective as of *April 2025.* The consulting agreement also provided for 7,500 shares of the Company's common stock to be issued monthly as long as the Company was a customer of MZHCI, LLC.

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*<u>Employment Arrangements</u>*

As of *March 31, 2025*, the Company has an employment agreement and employment arrangement with *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 and employment arrangement contains a severance clause that could require severance payments in the aggregate amount of $0.3 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).

On *August 28, 2023,* the Company's subsidiary, PodcastOne, Inc., entered into a new *two*-year employment contract with its President for $0.4 million per year effective *January 1, 2023.*

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 *March 31, 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.

*<u>Legal Proceedings</u>*

During each of the years ended *March 31, 2025* and *2024*, the Company recorded legal settlement expenses relating to potential claims arising in connection with litigation brought against the Company by certain *third* parties that were *not* material and were included in general and administrative expenses in the accompanying consolidated statements of operations.

On *June 6, 2025,* Sony Music Entertainment ("Sony") filed a complaint in the U.S. District Court for the Southern District of New York against Slacker and the Company alleging breach of contract and claiming that Slacker owes $2.6 million in unpaid licensing fees to Sony. As a result of LiveOne's guarantee of up to $250,000 of Slacker's payments to Sony, Sony's claim against the Company is in the amount of $250,000. The Company and Slacker are evaluating this claim, have engaged counsel and intend to vigorously defend themselves in this matter.

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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, 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.

**Note *14*** — **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 provided a contribution of $0.2 million and $0.2 million, to its employees for the years ended *March 31, 2025* and *2024*, respectively.

**Note *15*** — **Stockholders**' **Equity**

*<u>Authorized Common Stock and Authority to Create Preferred Stock</u>*

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.

*<u>Stock Repurchase Program</u>*

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 558,247 and 1,639,125 shares of its common stock under the stock repurchase program for the year ended *March 31, 2025* and *2024*, for a total of $1.0 million and $2.6 million, respectively. As of *March 31, 2025,* the Company has up to $6.5 million remaining to repurchase shares of its and/or PodcastOne's outstanding common stock under the stock repurchase program.

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*<u>Series A Preferred Stock</u>*

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 until *February 3, 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 or as otherwise required by law.

The Company *may,* at its option (the "Optional Redemption Right"), on or before the Redemption Date (as defined herein), 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 is required on or before *August 3, 2024 (*the "Redemption Date"), and in any event if prior to the 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 is exercised up to the full $5,000,000 amount, the Mandatory Redemption requirement was to be terminated; provided, that if the Optional Redemption Right is exercised in any amount less than $5,000,000, the Mandatory Redemption Amount was to 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 the 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.

In accordance with ASC *480,* the Company classified $5.0 million of its Series A Preferred Stock as temporary equity due to the Company's obligation to redeem $5.0 million of the Series A Preferred Stock on or before *18* months after issuance for cash, which also contains a substantive conversion feature. The redemption feature was *not* deemed to be closely and clearly related to the equity-type host instrument. Accordingly, it was accounted for as a liability at inception based on its fair value of $0.2 million with subsequent changes in fair value included in earnings. The change in fair value of the embedded derivative included in the statement of earnings was *none* and a loss of $0.2 million for the year ended *March 31, 2025* and *2024,* respectively.

In accordance with ASC *480,* the Company classified $16.2 million of the Series A Preferred Stock as permanent equity in the financial statements as it was *not* subject to mandatory redemption at the option of the holder. The Company concluded that the Series A Preferred Stock is more akin to an equity-type instrument than a debt-type instrument, therefore the conversion features associated with the Series A preferred stock classified as permanent equity were deemed to be clearly and closely related to the host instrument and *not* a derivative under ASC *815.* Accordingly, the Series A Preferred Stock was *not* accreted to the redemption amount in effect on the balance sheet date.

On the Effective Date, 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"). The Company accounted for the redemption of the Series A Preferred Stock as a Redemption and extinguished $5.0 million of mezzanine equity and $6.4 million of permanent equity. In addition, the Company recorded the fair value of the common stock issued in the amount of $10.0 million and the fair value of the common stock warrants of $1.6 million to equity in accordance with ASC *260,* Earnings Per Share. The derivative associated with the mezzanine equity was extinguished and a gain was recognized for the year ended *March 31, 2025* in the amount of $0.6 million. The difference between the carrying value of the Series A Preferred Stock extinguished, and the fair value of the common stock and common stock warrants issued was recorded as a deemed dividend in the amount of $0.3 million. In addition, pursuant to the Agreements, 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 remove the Mandatory Redemption.

In accordance with ASC *480,* the Company classified $16.2 million of the Series A Preferred Stock as permanent equity in the financial statements as it was *not* subject to mandatory redemption at the option of the holder. The Company concluded that the Series A Preferred Stock is more akin to an equity-type instrument than a debt-type instrument, therefore the conversion features associated with the Series A preferred stock classified as permanent equity were deemed to be clearly and closely related to the host instrument and *not* a derivative under ASC *815.* Accordingly, the Series A Preferred Stock was *not* accreted to the redemption amount in effect on the balance sheet date.

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 year ended *March 31, 2025* and *2024,* the Company issued 1,583 and 2,637 shares of its Series A Preferred Stock as a dividend in accordance with terms of the Certificate of Designation. As of *March 31, 2025,* there were 14,002 shares of Series A Preferred Stock issued and outstanding, and 6,667,583 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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*<u>Issuance of Restricted Shares of Common Stock for Services to Consultants and Vendors</u>*

During the year ended *March 31, 2025* and *2024,* the Company incurred $0.1 million and $0.9 million, respectively, in accounts payable and accrued liabilities for stock earned by its consultants, but *not* yet issued.

*<u>*2016* Equity Incentive Plan</u>*

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 12,600,000 shares of the Company's common stock for issuance. On *September 17, 2020,* the Company's stockholders approved the amendment to the *2016* Plan to increase the number of shares available for issuance under the plan by 5,000,000 shares increasing the total up to 17,600,000 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 $7.6 million and $7.9 million during the years ended *March 31, 2025* and *2024*, respectively. As of *March 31, 2025,* unrecognized compensation cost for unvested awards was $0.4 million, which is expected to be recognized over a weighted-average service period of 1.89 years. The total tax benefit recognized related to share-based compensation expense was none for the years ended *March 31, 2025* and *2024*.

Share-based compensation expense during the year ended *March 31, 2025* and *2024* includes the impact from differences in the timing of expense recognized in the statement of operations and the share issuances recorded in additional paid in capital, capitalization of internally developed software costs, and the benefit from the reversal of a previously accrued discretionary share-based award bonus of $1.1 million during the year ended *March 31, 2022.*

The maximum contractual term for awards is 10 years. As of *March 31, 2025*, there were 2,329,285 shares of common stock available for future issuance under the *2016* Plan.

*<u>PodcastOne *2022* Equity Plan</u>*

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.

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| | |
|:---|:---|
|  | ***Number of*** |
|  | ***Shares*** |
| Vested |  |
| Granted | 879060 |
| Vested | (287500) |
| Forfeited or expired |  |
| Vested | 591560 |
| Granted | 485967 |
| Vested | (795927) |
| Forfeited or expired | (49250) |
| Nonvested as of March 31, 2025 | 232350 |

---

As of *March 31, 2025,* PodcastOne has granted incentive awards underlying 1,365,027 shares of PodcastOne's common stock under the *2022* Plan with a fair value of $3.14 per share. 1,132,677 of the awards had vested or have been forfeited as of *March 31, 2025.* As of *March 31, 2025,* PodcastOne recognized $2.2 million of stock compensation for vested restricted stock units. Unrecognized compensation costs for unvested PodcastOne restricted stock units issued to employees was $0.3 million, which is expected to be recognized over a weighted-average service period of 1.29 years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *36*

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*<u>Non-Controlling</u> <u>Interest</u>*

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 the 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 29.18% as of *March 31, 2025.*

*<u>Options Grants to Employees</u>*

Stock option awards are granted with an exercise price equal to the fair market value of the Company'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 four years and are exercisable any time after vesting. The stock options expire ten years after the date of grant.

As of *March 31, 2025*, unrecognized compensation costs for unvested awards to employees was less than $0.1 million, which is expected to be recognized over a weighted-average service period of 0.87 years.

The following table provides information about our option grants made to employees during the last *two* fiscal years under the Company's *2016* Equity Plan:

---

| | | |
|:---|:---|:---|
|  | ***Year Ended March 31,*** | ***Year Ended March 31,*** |
|  | ***2025*** | ***2024*** |
| Number of options granted |  | 25000 |
| Weighted-average exercise price per share | $- | $1.75 |
| Weighted-average grant date fair value per share | $- | $1.75 |

---

The grant date fair value of each of these option grants to employees was determined using the Black-Sholes-Merton option-pricing model with the following assumptions:

---

| | | |
|:---|:---|:---|
|  | ***Year Ended March 31,*** | ***Year Ended March 31,*** |
|  | ***2025*** | ***2024*** |
| Expected volatility | 0.00% | 88.57% |
| Dividend yield | -% | -% |
| Risk-free rate | 0.00% | 4.12% |
| Expected term (in years) |  | 5.18 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *37*

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The following table summarizes the activity of our options issued under the *2016* Equity Plan to employees during the years ended *March 31, 2025* and *2024*

---

| | | |
|:---|:---|:---|
|  |  | ***Weighted-Average*** |
|  |  | ***Exercise Price per*** |
|  | ***Number of Shares*** | ***Share*** |
| Outstanding as of April 1, 2023 | 2416667 | $3.75 |
| Granted | 25000 | 1.75 |
| Exercised | (10000) | 0.81 |
| Forfeited or expired | (165000) | 3.88 |
| Outstanding as of March 31, 2024 | 2266667 | 3.73 |
| Granted |  |  |
| Exercised |  |  |
| Forfeited or expired | (65000) | 3.88 |
| Outstanding as of March 31, 2025 | 2201667 | $3.72 |
| Exercisable as of March 31, 2025 | 2191667 | $3.72 |

---

The weighted-average remaining contractual term for options to employees outstanding and options to employees exercisable as of *March 31, 2025* was 3.09 years and 3.07 years, respectively. The intrinsic value of options to employees outstanding and options to employees exercisable was none and none, respectively, at *March 31, 2025*. The intrinsic value of options exercised was none and none, respectively, at *March 31, 2025* and *2024*.

The fair value of stock options that were exercised during the year ended *March 31, 2025* and *2024* was immaterial. The fair value of stock options that were forfeited during the year ended *March 31, 2025* and *2024* was $0.3 million and $0.6 million, respectively. The fair value of stock options outstanding and exercisable at *March 31, 2025* was $8.2 million and $8.2 million, respectively. The fair value of stock options outstanding and exercisable at *March 31, 2024* was $8.3 million and $8.5 million, respectively.

*<u>Options Grants to Non-Employees</u>*

As of *March 31, 2025*, there were *no* unrecognized compensation costs for unvested awards to non-employees. There were *no* option grants to non-employees for the last *two* fiscal years.

The following table summarizes the activity of our options issued to non-employees under the *2016* Equity Plan during the years ended *March 31, 2025* and *2024*:

---

| | | |
|:---|:---|:---|
|  |  | ***Weighted-Average*** |
|  |  | ***Exercise Price per*** |
|  | ***Number of Shares*** | ***Share*** |
| Outstanding as of April 1, 2023 | 25000 | $4.00 |
| Granted |  |  |
| Exercised |  |  |
| Forfeited or expired |  |  |
| Outstanding as of March 31, 2024 | 25000 | 4.00 |
| Granted |  |  |
| Exercised |  |  |
| Forfeited or expired |  |  |
| Outstanding as of March 31, 2025 | 25000 | $4.00 |
| Exercisable as of March 31, 2025 | 25000 | $4.00 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *38*

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The weighted average remaining contractual term for options to non-employees outstanding as of *March 31, 2025* was 2.9 years. The intrinsic value of options to non-employees outstanding and options to non-employees exercisable was none at *March 31, 2025*.

*<u>Restricted Stock Units Grants</u>*

As of *March 31, 2025*, unrecognized compensation costs for unvested awards to employees was $0.4 million, which is expected to be recognized over a weighted-average service period of 1.89 years.

The following table provides information about our restricted stock units grants made to employees during the last *two* fiscal years:

---

| | | |
|:---|:---|:---|
|  | ***Year Ended March 31,*** | ***Year Ended March 31,*** |
|  | ***2025*** | ***2024*** |
| Number of units granted | 954638 | 2075756 |
| Weighted-average grant date fair value per share | $1.37 | $1.71 |

---

The following table summarizes the activity of our restricted stock units under the *2016* Equity Plan issued to employees during the years ended *March 31, 2025* and *2024*:

---

| | |
|:---|:---|
|  | ***Number of Shares*** |
| Outstanding as of April 1, 2023 | 1670975 |
| Granted | 2075756 |
| Vested | (1850576) |
| Cancelled | (50000) |
| Outstanding as of March 31, 2024 | 1846155 |
| Granted | 1206386 |
| Vested | (2332939) |
| Cancelled | (225656) |
| Outstanding as of March 31, 2025 | 493946 |

---

The fair value of restricted stock units that vested during the year ended *March 31, 2025* and *2024* was $2.3 million and $4.0 million, respectively. The fair value of restricted stock units that were forfeited during the year ended *March 31, 2025* and *2024* was $0.3 million and $0.1 million, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *39*

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**Note *16*** — **Income Tax Provision**

The Company's income tax provision can be affected by many factors, including the overall level of pre-tax income, the mix of pre-tax income generated across the various jurisdictions in which the Company operates, changes in tax laws and regulations in those jurisdictions, changes in valuation allowances on its deferred tax assets, tax planning strategies available to the Company, and other discrete items.

The components of pretax loss and income tax (benefit) expense are as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | ***Year Ended March 31,*** | ***Year Ended March 31,*** |
|  | ***2025*** | ***2024*** |
| Loss before income taxes: |  |  |
| &nbsp;&nbsp;&nbsp; Domestic | $(20555) | $(13193) |
| &nbsp;&nbsp;&nbsp; Foreign |  |  |
| Total loss before income taxes | $(20555) | $(13193) |
| The provision for income taxes consisted of the following: |  |  |
| Current |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Federal | $- | $- |
| &nbsp;&nbsp;&nbsp; State | 95 | 111 |
| &nbsp;&nbsp;&nbsp; Foreign |  |  |
| Total Current | 95 | 111 |
| Deferred: |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Federal | (68) | (2) |
| &nbsp;&nbsp;&nbsp; State | (212) | 9 |
| &nbsp;&nbsp;&nbsp; Foreign |  |  |
| Total Deferred | (280) | 7 |
| Total provision for income taxes | $(185) | $118 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *40*

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The differences between income taxes expected at U.S. statutory income tax rates and the income tax provision are as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | ***Year Ended March 31,*** | ***Year Ended March 31,*** |
|  | ***2025*** | ***2024*** |
| Income taxes computed at Federal statutory rate | $(4316) | $(2777) |
| &nbsp;&nbsp;&nbsp; State tax — net of federal benefit | (778) | 156 |
| &nbsp;&nbsp;&nbsp; Nondeductible expenses | 364 | 1021 |
| PodcastOne distribution |  | 2601 |
| Federal NOL true-up |  | (3166) |
| &nbsp;&nbsp;&nbsp; Change in tax rates | 136 | 107 |
| &nbsp;&nbsp;&nbsp; Change in valuation allowance | 4058 | 1764 |
| &nbsp;&nbsp;&nbsp; Stock compensation | 374 | 328 |
| &nbsp;&nbsp;&nbsp; Other | (23) | 84 |
| Total provision for income taxes | $(185) | $118 |

---

At *March 31, 2025*, the Company had available federal and state net operating loss carryforwards to reduce future taxable income of approximately $148.7 million and $85.8 million, respectively. The federal and state net operating loss carryforwards begin to expire on various dates beginning in *2028.* Of the $148.7 million of federal net operating loss carryforwards, $51.6 million was generated in tax years beginning before *March 31, 2018* and is subject to the *20*-year carryforward period ("pre-Tax Act losses"), the remaining $97.2 million ("post-Tax Act losses") can be carried forward indefinitely but is subject to the *80%* taxable income limitation.

During the fiscal year ended *March 31, 2024,* LiveOne completed the Spin-Out. As a result of the Spin-Out, PodcastOne ceased to be a member of the LiveOne's federal consolidated tax group and now files a separate federal income tax return.

Of the $148.7 million of federal net operating losses as of *March 31, 2025,* $13.0 million is attributable to Podcast One and *may* only be used to offset future taxable income of Podcast One on its separate federal tax return.

The Company obtained $133.9 million and $1.5 million of federal net operating loss and credit carryforwards, respectively, and $104.2 million and $1.7 million of state net operating loss and credit carryforwards, respectively, through the acquisition of Slacker, Inc. in *December 2017.* Utilization of these losses is limited by Section *382* and *383* of the Code in fiscal year end *March 31, 2018* and each taxable year thereafter. The Company updated its *382* study during the year ended *March 31, 2024* to determine the applicable limitations. Upon the attainment of taxable income by the Company, management will assess the likelihood of realizing the tax benefit associated with the use of the carryforwards and will recognize the appropriate deferred tax asset at that time. The Company has estimated a limitation of the federal and state NOL of $96.8 million and $80.6 million, respectively. It is possible that the utilization of these NOL carryforwards and tax credits *may* be further limited.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by the federal and state jurisdictions where applicable. There are currently *no* pending income tax examinations. The Company's tax years for *2018* and forward are subject to examination by the federal tax authorities and tax years for *2017* and forward are subject to examination by California tax authorities due to the carryforward of unutilized net operating losses.

The Company's policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of *March 31, 2025* and *2024*, the Company has *not* accrued interest or penalties related to uncertain tax positions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *41*

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Significant components of the Company's deferred income tax assets and (liabilities) are as follows as of (in thousands):

---

| | | |
|:---|:---|:---|
|  | ***Year Ended March 31,*** | ***Year Ended March 31,*** |
|  | ***2025*** | ***2024*** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp; Net operating loss carryforwards | $37055 | $36781 |
| &nbsp;&nbsp;&nbsp; Research and development | 1519 | 1195 |
| &nbsp;&nbsp;&nbsp; Accruals and reserves | 2551 | 1821 |
| &nbsp;&nbsp;&nbsp; Stock compensation | 3448 | 3520 |
| &nbsp;&nbsp;&nbsp; 163 (j) interest expense carryforwards | 795 | 784 |
| &nbsp;&nbsp;&nbsp; Charitable contribution carryforward |  | 8 |
| Other | 13 |  |
| Gross deferred tax assets | 45381 | 44109 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp; Right of use asset | (26) | (151) |
| Property and equipment | 68 | (575) |
| &nbsp;&nbsp;&nbsp; Intangible assets | 359 | (1938) |
| &nbsp;&nbsp;&nbsp; Net deferred tax assets | 45782 | 41445 |
| Valuation allowance | (45842) | (41784) |
| Net deferred tax liability | $(60) | $(339) |

---

As the ultimate realization of the potential benefits of a portion of the Company's deferred tax assets is considered unlikely by management, the Company has offset the deferred tax assets attributable to those potential benefits through valuation allowances. Accordingly, the Company did *not* recognize any benefit from income taxes in the accompanying consolidated statements of operations to offset its pre-tax losses. The valuation allowance against deferred tax assets is $45.8 million and $41.8 million for the years ended *March 31, 2025* and *2024*, respectively. The valuation allowance increased by $4.1 million for the year ended *March 31, 2025*.

**Note *17*** — **Business Segments and Geographic Reporting**

The Company determined its operating segments in accordance with ASC *280,* "Segment Reporting" ("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 consist of the Company's PodcastOne and Slacker subsidiaries and the Media Group consist of the Company's remaining subsidiaries. As a result of the Spin-Out of PodcastOne, the Company's CODM began to make decisions and allocate resources based on *three* operating segments of the business (PodcastOne, Slacker and Media group). The Company's reporting 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.

*<u>Customers</u>*

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 $51.6 million and $59.9 million for the years ended *March 31, 2025* and *2024*, respectively. Total receivables from the OEM were 10% and 42% of total accounts receivable as of *March 31, 2025* and *2024*, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *42*

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*<u>Segment and Geographic Information</u>*

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, $0.7 million in Slacker and $0.1 million is attributed to our Media Group.

The Company manages its 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 table presents the results of operations for the Company's reportable segments for the years ended *March 31, 2025* and *2024*:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | ***Year Ended*** | ***Year Ended*** | ***Year Ended*** | ***Year Ended*** | ***Year Ended*** |
|  | ***March 31, 2025*** | ***March 31, 2025*** | ***March 31, 2025*** | ***March 31, 2025*** | ***March 31, 2025*** |
|  | ***PodcastOne*** | ***Slacker*** | ***Media*** | ***Corporate expenses*** | ***Total*** |
| Revenue | $52119 | $56787 | $5499 | $- | $114405 |
| Net income (loss) | $(6458) | $3570 | $(8166) | $(9316) | $(20370) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | ***Year Ended*** | ***Year Ended*** | ***Year Ended*** | ***Year Ended*** | ***Year Ended*** |
|  | ***March 31, 2024*** | ***March 31, 2024*** | ***March 31, 2024*** | ***March 31, 2024*** | ***March 31, 2024*** |
|  | ***PodcastOne*** | ***Slacker*** | ***Media*** | ***Corporate expenses*** | ***Total*** |
| Revenue | $43302 | $65959 | $9179 | $- | $118440 |
| Net income (loss) | $(14732) | $13382 | $(1397) | $(10564) | $(13311) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *43*

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**Note *18*** — **Fair Value Measurements**

The following table presents the fair value of the Company's financial liabilities that are measured at fair value on a recurring basis (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***March 31, 2024*** | ***March 31, 2024*** | ***March 31, 2024*** | ***March 31, 2024*** |
|  | ***Fair*** | ***Hierarchy Level*** | ***Hierarchy Level*** | ***Hierarchy Level*** |
|  | ***Value*** | ***Level 1*** | ***Level 2*** | ***Level 3*** |
| &nbsp;&nbsp;&nbsp; Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Prepaid expenses - common stock issued subject to market adjustment at settlement | $- | $- | $- | $- |
| &nbsp;&nbsp;&nbsp; Total | $- | $- | $- | $- |
| &nbsp;&nbsp;&nbsp; Liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bifurcated embedded derivative on Series A Preferred Stock | $607 | $- | $- | $607 |
|  | $607 | $- | $- | $607 |

---

The following table presents a reconciliation of the Company's financial liabilities that are measured at Level *3* within the fair value hierarchy (in thousands):

---

| | |
|:---|:---|
|  | ***Amount*** |
| Balance as of April 1, 2023 | $3698 |
| Change in fair value of bifurcated embedded derivatives, reported in earnings | 4460 |
| Conversion of embedded derivatives to equity | (1481) |
| Conversion of warrant liability to non-controlling interest | (5896) |
| Change in fair value of contingent consideration liabilities, reported in earnings | (174) |
| Balance as of March 31, 2024 | $607 |
| Change in fair value of bifurcated embedded derivatives, reported in earnings | (607) |
| Balance as of March 31, 2025 | $- |

---

The fair values of financial instruments *not* included in these tables are estimated to be equal to their carrying values as of *March 31, 2025* and *March 31, 2024*. The Company's estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *44*

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Cash equivalents and restricted cash equivalents primarily consisted of short-term interest-bearing money market funds with maturities of less than *90* days and time deposits. The estimated fair values were based on available market pricing information of similar financial instruments.

Due to their short maturity, the carrying amounts of the Company's accounts receivable, accounts payable and accrued expenses approximated their fair values as of *March 31, 2025* and *March 31, 2024*.

The Company's notes payable and senior secured line of credit are *not* publicly traded and fair value is estimated to equal carrying value.

**Note *19*** — **Subsequent Events**

*Securities Purchase Agreement*

On *May 19, 2025 (*the "Closing Date"), the Company, and PodcastOne, Inc., the Company's majority owned subsidiary, 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, $0.001 par value per share (the "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.

The Company'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 the Company's obligations, the Company would be required to pay the applicable prepayment amount described above.

The Company's obligations under the Debentures have been guaranteed under a Subsidiary Guarantee, dated as of the Closing Date (the "Subsidiary Guarantee"), by certain of its wholly owned subsidiaries, including PodcastOne, Slacker, Inc. and LiveXLive, Corp. (collectively, the "Guarantors"). The Company'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 the Company, the Guarantors, certain Purchasers and JGB Collateral, LLC (the "Agent") as agent for the Purchasers (the "Security Agreement"), by a lien on all of the Company, PodcastOne and the other Guarantors' assets, subject to certain exceptions. In addition, pursuant to the Security Agreement, the Company, PodcastOne 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. The Company must also maintain a specified minimum cash balance (as set forth in the Debentures) and maintain minimum amounts of liquidity.

The Company agreed to file a registration statement on Form S-*3* (or such other form that the Company is then eligible for) (the "Registration Statement") to register the resale of the shares of its common stock underlying the Initial Debentures within *60* days of the Closing Date (and within *30* days of the sale, if any, of the Additional Debentures) and to obtain effectiveness of the Registration Statement within *150* days following the Closing Date (and within *90* days of the sale, if any, of the Additional Debentures).

In connection with the issuance of the Debentures, the Company paid off all obligations owing under, and terminated, the Business Loan Agreement and all related loan agreements.

*Employment Agreements*

On *June 27, 2025* and effective as of *June 1, 2025 (*the "Effective Date"), PodcastOne entered into a new employment agreement with Kit Gray, PodcastOne'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 PodcastOne in accordance with PodcastOne's annual bonus plan applicable to PodcastOne'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 700,000 restricted stock units of PodcastOne, and 150,000 restricted stock units of the Company.

On *June 27, 2025* and effective as of the Effective Date, PodcastOne entered into a new employment agreement with Sue McNamara, PodcastOne'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 PodcastOne in accordance with the PodcastOne's annual bonus plan applicable to the PodcastOne'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 150,000 restricted stock units of PodcastOne and 25,000 restricted stock units of the Company.

*Legal Proceedings*

On *June 6, 2025,* Sony Music Entertainment ("Sony") filed a complaint in the U.S. District Court for the Southern District of New York against Slacker and the Company alleging breach of contract and claiming that Slacker owes $2.6 million in unpaid licensing fees to Sony. As a result of LiveOne's guarantee of up to $250,000 of Slacker's payments to Sony, Sony's claim against the Company is in the amount of $250,000. The Company and Slacker are evaluating this claim, have engaged counsel and intend to vigorously defend themselves in this matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; F- *45*

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**Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure**

None.

**Item 9A. Controls and Procedures**

**Evaluation of Disclosure Controls and Procedures**

As of March 31, 2025, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of our disclosure controls and procedures. Based upon that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective as of March 31, 2025 as described in Management's Annual Report on Internal Control Over Financial Reporting below.

**Limitations of Disclosure Controls and Procedures**

It should be noted that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment and makes assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Management believes that the financial statements included in this Annual Report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

**Management**'**s Annual Report on Internal Control Over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of our Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of our Company are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of the effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, with the participation of our CEO and CFO, assessed the effectiveness of our internal control over financial reporting as of March 31, 2025, the end of our fiscal year. Our management based its assessment on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our management's assessment included evaluation and testing of the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment.

Based on our management's assessment, our management has concluded that our internal control over financial reporting was effective as of March 31, 2025. Our management communicated the results of its assessment to the Audit Committee of our Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 95

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**Attestation Report of the Independent Registered Public Accounting Firm**

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Because we are a smaller reporting company and a non-accelerated filer, our independent registered public accounting firm is not required to attest to or issue a report on the effectiveness of our internal control over financial reporting.

**Changes in Internal Control over Financial Reporting**

During the fourth quarter of the fiscal year ended March 31, 2025, we continued the processes of evaluating the design and operating effectiveness of controls in place around new transaction cycles and will implement any remediations if necessary. Other than this, there have been no changes in our internal control over financial reporting, during the fourth quarter of the fiscal year ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**CEO and CFO Certifications**

Exhibits 31.1 and 31.2 to this Annual Report are the Certifications of our CEO and CFO, respectively. These certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act (the "Section 302 Certifications"). This Item 9A. of this Annual Report, which you are currently reading, is the information concerning the Evaluation referred to above and in the Section 302 Certifications, and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

**Item *9B.* Other Information**

During the *three*-month period ended *March 31, 2025,* no officer or director of our Company adopted any Rule *10b5*-*1* trading arrangement or any non-Rule *10b5*-*1* trading arrangement within the meaning of Item *408* of Regulation S-K promulgated under the Securities Act of *1933,* as amended.

**Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection**

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 96

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**PART III**

**Item *10.* Directors, Executive Officers and Corporate Governance**

The information required by this Item is incorporated by reference to our definitive proxy statement for our *2025* Annual Meeting of Stockholders (our "*2025* Proxy Statement") to be filed with the SEC within *120* days of our fiscal year end.

**Item 11. Executive Compensation**

The information required by this Item is incorporated by reference to our 2025 Proxy Statement.

**Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

The information required by this Item is incorporated by reference to our 2025 Proxy Statement.

**Item 13. Certain Relationships and Related Transactions, and Director Independence**

The information required by this Item is incorporated by reference to our 2025 Proxy Statement.

**Item 14. Principal Accounting Fees and Services**

The information required by this Item is incorporated by reference to our 2025 Proxy Statement.

**PART IV**

**Item 15. Exhibits, Financial Statement Schedules**

**(a)** **List of Documents Filed.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(1) Financial Statements (Included in Item 8 of this Annual Report)*

The consolidated financial statements of LiveOne, Inc included in this Annual Report include:

● Consolidated Balance Sheets as of March 31, 2025 and 2024

● Consolidated Statements of Operations for the years ended March 31, 2025 and 2024

● Consolidated Statement of Changes in Stockholders' (Deficit) Equity for the years ended March 31, 2025 and 2024

● Consolidated Statements of Cash Flows for the years ended March 31, 2025 and 2024

● Notes to the Consolidated Financial Statements

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(2) Financial Statement Schedules*

All schedules have been omitted since they are either not applicable or the information is contained elsewhere in this Annual Report.

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**(b)** **Exhibits.**

---

| | |
|:---|:---|
| **Exhibit**<br> **Number** | **Description** |
| 3.1 | [<u>Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company'</u><u>s Current Report on Form 8-K, filed with the SEC on August 8, 2017).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390017008330/f8k080217ex3i_livexlivemed.htm) |
| 3.2 | [<u>Certificate of Amendment to the Certificate of Incorporation of the Company, dated as of September 30, 2017 (Incorporated by reference to Exhibit 3.2 to the Company</u><u>'</u><u>s</u> <u>Registration Statement on Form S-1, Amendment No. 3, filed with the SEC on October 6, 2017).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390017010383/fs12017a3ex3-2_livexlivemed.htm) |
| 3.3 | [<u>Bylaws of the Company (Incorporated by reference to Exhibit 3.2 to the Company'</u><u>s Current Report on Form 8-K, filed with the SEC on August 8, 2017).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390017008330/f8k080217ex3ii_livexlivemed.htm) |
| 3.4 | [<u>Amendment No. 1 to the Bylaws of the Company (Incorporated by reference to Exhibit 3.1 to the Company</u><u>'</u><u>s Current Report on Form 8-K, filed with the SEC on January 14, 2021).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390021002268/ea133247ex3-1_livexlivemedia.htm) |
| 3.5 | [<u>Certificate of Merger, dated as of September 30, 2021, between the Company and LiveOne, Inc. (Incorporated by reference to Exhibit 3.1 to the Company'</u><u>s Current Report on Form 8-K, filed with the SEC on October 12, 2021).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390021052422/ea148634ex3-1_liveoneinc.htm) |
| 4.1 | [<u>Form of Warrants, dated July 15, 2022, issued by PodcastOne to the purchasers of PodcastOne'</u><u>s 10% Original Issue Discount Convertible Promissory Notes, dated July 15, 2022 (Incorporated by reference to Exhibit 4.2 to the Company</u><u>'</u><u>s Current Report on Form 8-K, filed with the SEC on July 20, 2022).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390022040403/ea163077ex4-2_liveone.htm) |
| 4.2 | [<u>Certificate of Designation of Preferences, Rights and Limitations of Series A Perpetual Convertible Preferred Stock of the Company, dated as of February 2, 2023 (Incorporated by reference to Exhibit 4.1 to the Company</u><u>'</u><u>s Current Report on Form 8-K, filed with the SEC February 7, 2023).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390023008720/ea172780ex4-1_liveoneinc.htm) |
| 4.3 | [<u>Warrant to Purchase Common Stock, dated as of April 1, 2024, issued by the Company to Harvest Small Cap Partners, L.P. (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed with the SEC April 5, 2024).</u>](http://www.sec.gov/Archives/edgar/data/0001491419/000121390024030849/ea020335801ex4-1_live.htm) |
| 4.4 | [<u>Warrant to Purchase Common Stock, dated as of April 1, 2024, issued by the Company to Harvest Small Cap Partners, Ltd. (Incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K, filed with the SEC April 5, 2024).</u>](http://www.sec.gov/Archives/edgar/data/0001491419/000121390024030849/ea020335801ex4-2_live.htm) |
| 4.5 | [<u>Warrant to Purchase Common Stock, dated as of April 1, 2024, issued by the Company to Trinad Capital Master Fund Ltd. (Incorporated by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K, filed with the SEC April 5, 2024).</u>](http://www.sec.gov/Archives/edgar/data/0001491419/000121390024030849/ea020335801ex4-3_live.htm) |
| 4.6 | [Form of 11.75% Original Issue Discount Senior Secured Convertible Debentures (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed with the SEC on May 23, 2025).](http://www.sec.gov/Archives/edgar/data/1491419/000121390025047412/ea024297201ex4-1_liveone.htm) |
| 4.7\* | [Description of Securities](ex_838319.htm) |
| 10.1† | [<u>Form of Director/Officer Indemnification Agreement (Incorporated by reference to Exhibit 10.14 to the Company'</u><u>s Current Report on Form 8-K, filed with the SEC on April 30, 2014).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000114420414026474/v375930_ex10-14.htm) |

---

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| | |
|:---|:---|
| 10.2† | [<u>The Company'</u><u>s 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 10.23 to the Company</u><u>'</u><u>s Quarterly Report on Form 10-Q, filed with the SEC on November 14, 2016).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000161577416008266/s104586_ex10-23.htm) |
| 10.3† | [<u>Amendment No. 1 to the Company'</u><u>s 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 10.23 to the Company</u><u>'</u><u>s Quarterly Report on Form 10-Q, filed with the SEC on February 13, 2019).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390019002273/f10q1218ex10-23_livexlive.htm) |
| 10.4† | [<u>Amendment No. 2 to the Company</u><u>'</u><u>s 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company</u><u>'</u><u>s Current Report on Form 8-K, filed with the SEC on July 6, 2021).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390021035791/ea143593ex10-1_livexlive.htm) |
| 10.5† | [<u>Form of Director Option Agreement under 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 10.24 to the Company'</u><u>s Quarterly Report on Form 10-Q, filed with the SEC on November 14, 2016).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000161577416008266/s104586_ex10-24.htm) |
| 10.6† | [<u>Form of Employee Option Agreement under 2016 Equity Incentive Plan (Incorporated by reference to Exhibit 10.25 to the Company</u><u>'</u><u>s Quarterly Report on Form 10-Q, filed with the SEC on November 14, 2016).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000161577416008266/s104586_ex10-25.htm) |
| 10.7† | [<u>Employment Agreement, dated as of September 7, 2017, between the Company and Robert S. Ellin (Incorporated by reference to Exhibit 10.3 to the Company</u><u>'</u><u>s Current Report on Form 8-K, filed with the SEC on September 8, 2017).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390017009529/f8k090117bex10-3_livexlive.htm) |
| 10.8† | [<u>Amendment No. 1 to Employment Agreement, dated as of December 15, 2017, between the Company and Robert Ellin (Incorporated by reference to Exhibit 10.1 to the Company'</u><u>s Current Report on Form 8-K, filed with the SEC on December 15, 2017).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390017013306/f8k121417ex10-1_livexlive.htm) |
| 10.9† | [<u>Amendment No. 2 to Employment Agreement, dated as of December 14, 2017, between the Company and Robert Ellin. (Incorporated by reference to Exhibit 10.9 to the Company</u><u>'</u><u>s Quarterly Report on Form 10-Q, filed with the SEC on February 14, 2023).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390023011502/f10q1222ex10-9_liveoneinc.htm) |
| 10.10†\* | [<u>Employment</u> <u>Offer Letter,</u> <u>dated as of August 29, 2023, between LiveXLive, Corp. and Ryan Carhart.</u>](ex_838513.htm) |
| 10.11† | [The Company's 2023 Annual Bonus Plan (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on January 30, 2024).](http://www.sec.gov/Archives/edgar/data/1491419/000121390024007979/ea192440ex10-2_liveone.htm) |

---

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---

| | |
|:---|:---|
| 10.12 | [<u>Exchange Agreement, dated as of February 3, 2023, between the Company and Harvest Small Cap Partners, L.P. (Incorporated by reference to Exhibit 10.1 to the Company'</u><u>s Current Report on Form 8-K, filed with the SEC February 7, 2023).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390023008720/ea172780ex10-1_liveoneinc.htm) |
| 10.13 | [<u>Exchange Agreement, dated as of February 3, 2023, between the Company and Harvest Small Cap Partners, Ltd. (Incorporated by reference to Exhibit 10.2 to the Company'</u><u>s Current Report on Form 8-K, filed with the SEC February 7, 2023).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390023008720/ea172780ex10-2_liveoneinc.htm) |
| 10.14 | [<u>Exchange Agreement, dated as of February 3, 2023, between the Company and Trinad Capital Master Fund Ltd. (Incorporated by reference to Exhibit 10.3 to the Company'</u><u>s Current Report on Form 8-K, filed with the SEC February 7, 2023).</u>](http://www.sec.gov/Archives/edgar/data/1491419/000121390023008720/ea172780ex10-3_liveoneinc.htm) |
| 10.15 | [Loan and Security Agreement, dated as of August 2, 2023, between the Company and Capchase Inc. (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on August 8, 2023).](http://www.sec.gov/Archives/edgar/data/1491419/000121390023064619/ea183093ex10-1_liveoneinc.htm) |

---

---

| | |
|:---|:---|
| 10.16 | [Securities Purchase Agreement, dated as of May 19, 2025, between the Company and the Purchasers (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the SEC on May 23, 2025).](http://www.sec.gov/Archives/edgar/data/1491419/000121390025047412/ea024297201ex10-1_liveone.htm) |
| 10.17 | [Subsidiary Guarantee, dated as of May 19, 2025, made by the Guarantors, in favor of the Secured Parties (as defined therein) (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed with the SEC on May 23, 2025).](http://www.sec.gov/Archives/edgar/data/1491419/000121390025047412/ea024297201ex10-2_liveone.htm) |
| 10.18 | [Security Agreement, dated as of May 19, 2025, among the Company, the Guarantors, Purchasers and JGB Collateral, LLC (Incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed with the SEC on May 23, 2025).](http://www.sec.gov/Archives/edgar/data/1491419/000121390025047412/ea024297201ex10-3_liveone.htm) |
| 19.1\* | [Insider Trading Policy.](ex_838318.htm) |
| 21.1\* | [List of subsidiaries of the Company.](ex_774803.htm) |
| 23.1\* | [Consent of Macias Gini & O'Connell LLP, independent registered public accounting firm.](ex_774804.htm) |
| 24.1\* | [Power of Attorney (included on signature page of this report).](#poa) |
| 31.1\* | [Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.](ex_774805.htm) |
| 31.2\* | [Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.](ex_774806.htm) |
| 32.1\*\* | [Certification of Principal Executive Officer pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex_774807.htm) |
| 32.2\*\* | [Certification of Principal Financial Officer pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex_774808.htm) |
| 97.1\* | [LiveOne Compensation Recovery Policy.](ex_774809.htm) |
| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

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| | |
|:---|:---|
| † | Management contract or compensatory plan or arrangement. |

---

\* Filed herewith.

\*\* Furnished herewith.

**Item 16. Form 10-K Summary**

We have elected not to include summary information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 99

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**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **LIVEONE, INC.** | **LIVEONE, INC.** |
| Date: July 15, 2025 | By: | /s/ *Robert S. Ellin* |
|  | Name:  | Robert S. Ellin |
|  | Title: | Chief Executive Officer and Chairman |
|  |  | (Principal Executive Officer) |
| Date: July 15, 2025 | By: | /s/ *Ryan Carhart* |
|  | Name: | Ryan Carhart |
|  | Title: | Chief Financial Officer and<br> Executive Vice President<br> (Principal Financial Officer and<br> Principal Accounting Officer) |

---

**POWERS OF ATTORNEY**

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and Robert S. Ellin and Ryan Carhart, and each of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /*s*/ *Robert S. Ellin* | Chief Executive Officer, Chairman and | July 15, 2025 |
| Robert S. Ellin | Director |  |
| */s/ Jay Krigsman* | Director | July 15, 2025 |
| Jay Krigsman |  |  |
| */s/ Ramin Arani* | Director | July 15, 2025 |
| Ramin Arani |  |  |
| */s/ Patrick Wachsberger* | Director | July 15, 2025 |
| Patrick Wachsberger |  |  |
| */s/ Kenneth Solomon* | Director | July 15, 2025 |
| Kenneth Solomon |  |  |
| */s/ Bridget Baker* | Director | July 15, 2025 |
| Bridget Baker |  |  |
| */s/ Kristopher Wright* | Director | July 15, 2025 |
| Kristopher Wright |  |  |

---

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## Exhibit 4.7

**Exhibit 4.7**

**DESCRIPTION OF CAPITAL STOCK**

*As of the end of the period covered by the most recent Annual Report on Form 10-K of LiveOne, Inc., its common stock, $0.001 par value per share (the* "*common stock*"*), was registered under Section 12 of the Securities Exchange Act of 1934, as amended. Unless the context otherwise requires, all references herein to* "*we*"*,* "*our*" *and* "*us*" *refer to LiveOne, Inc.*

*The following description of the common stock is a summary and does not purport to be complete. A copy of our Certificate of Incorporation (as amended, the* "*Certificate of Incorporation*"*), our Bylaws (as amended, the* "*Bylaws*"*), and our 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*"*), have been filed as Exhibits 3.1, 3.3 and 4.2, respectively, to our Annual Report on Form 10-K for the year ended March 31, 2025 (the* "*Annual Report*"*). Our common stock and the rights of the holders of our common stock are subject to the applicable provisions of the General Corporation Law of the State of Delaware (the* "*DGCL*"*), the Certificate of Incorporation, the Bylaws and the Certificate of Designation, as well as some of the terms of our outstanding indebtedness. The description below of our common stock and provisions of the Certificate of Incorporation, the Bylaws and the Certificate of Designation are summaries and are qualified by reference to the Certificate of Incorporation, the Bylaws and the Certificate of Designation, and by the applicable provisions of the DGCL. We encourage you to read that law and those documents carefully.*

**General**

Our Certificate of Incorporation authorizes us to issue up to 10,000,000 shares of preferred stock, $0.001 par value per share, and 500,000,000 shares of our common stock, $0.001 par value per share.

As of June 30, 2025, there were 14,428.27 and 97,093,164 shares of our preferred stock (including accrued dividends as of such date) and common stock outstanding, respectively.

As of June 30, 2025, we had 397 holders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers. The actual number of common stockholders is greater than the number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

**Common Stock**

***Voting***

Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, including the election of directors, and do not have cumulative voting rights. Accordingly, the holders of a majority of the shares of our common stock entitled to vote in any election of directors can elect all of the directors standing for election.

***Dividends***

Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds.

***Liquidation***

In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.

***Rights and Preferences***

Holders of our common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

***Fully Paid and Nonassessable***

All of our outstanding shares of common stock are, and the shares of common stock to be issued in this offering will be, fully paid and nonassessable.

**Preferred Stock**

Our board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.

Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control that may otherwise benefit holders of our common stock and may adversely affect the market price of the common stock and the voting and other rights of the holders of common stock. As of June 30, 2025, there were 14,428.27 shares of our preferred stock (including accrued dividends as of such date), and except for the dividends payable in kind on our Series A Preferred Stock (as defined below), we have no current plans to issue any other shares of our preferred stock.

***Series A Perpetual Convertible Preferred Stock***

*General*

On February 2, 2023, we filed the Certificate of Designation with the Secretary of State of the State of Delaware designating 100,000 shares of our preferred stock as "Series A Perpetual Convertible Preferred Stock" (the "Series A Preferred Stock"). As of June 30, 2025, there were 14,428.27 shares of our Series A Preferred Stock outstanding (including accrued dividends as of such date) that, as of such date, were convertible into approximately 6,870,606 shares of our common stock.

The Series A Preferred Stock was issued effective as of February 3, 2023, and is subsequently issued as quarterly dividends as required by its terms, to Harvest Small Cap Partners Master, Ltd. ("HSCPM"), Harvest Small Cap Partners, L.P. ("HSCP") and Trinad Capital Master Fund Ltd. ("Trinad Capital"), a fund controlled by Robert Ellin, our Chief Executive Officer, Chairman, director and principal stockholder, in exchange for certain indebtedness exchanged for such Series A Preferred Stock. An amendment to, or waiver of rights of, the Series A Preferred Stock requires the approval 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.

*Voting and Dividends*

The holders of the shares of the Series A Preferred Stock have certain voting rights as described in the Certificate of Designation equal to 1,000 votes per share of Series A Preferred Stock. The holders of Series A Preferred Stock are not entitled to vote separately as a class or series on any amendment, modification or restatement of the Certificate of Incorporation, except as would be unlawful under the laws of the State of Delaware or except as required by Section 4 of the Certificate of Designation.

The holders of the Series A Preferred Stock are entitled to receive, and we shall pay, by issuing shares of Series A Preferred Stock or paying in cash to such holders, subject to and as provided in Section 3 of the Certificate of Designation, dividends on each share of Series A Preferred Stock, based on a stated value per share equal to $1,000 (the "Stated Value"), at a rate of 12% per annum (the "Interest"), commencing on February 3, 2023 (the "Original Issue Date") until the date that such share of Series A Preferred Stock is converted to our common stock (the "Interest Termination Date"). So long as a holder's shares of Series A Preferred Stock are outstanding, Interest payments shall accrue and be compounded daily on the basis of a 360-day day year and twelve 30-day months and shall be paid in arrears to such holder on the earlier of the following dates (i) the Interest Termination Date and (ii) quarterly on April 1st, July 1st, October 1st and January 1st of each year (each such date, an "Interest Payment Date"). At our option, the Interest payments may be made in shares of Series A Preferred Stock valued at a price per share equal to the Stated Value (the "Interest Shares"); provided, that Trinad Capital shall receive Interest payments solely in Interest Shares. In addition, in the event we declare any distribution or dividend of any of our assets or any shares of capital stock of any of our subsidiaries pro rata to the record holders of any class of shares of common stock, we shall calculate and distribute to each holder its pro rata portion of any such distribution (calculated on an as-converted basis with respect to the shares of Series A Preferred Stock then outstanding as of the record date set by us for such distribution or dividend) concurrently with the distribution to the then record holders of any class of common stock. Except as provided in this Section 3, Section 5 and Section 7 of the Certificate of Designation, no other dividends shall be paid on shares of the Series A Preferred Stock.

As provided in the Certificate of Designation, Interest in Interest Shares was paid effective as of April 1, 2023, and subsequently as quarterly dividends, on the terms summarized above.

*Liquidation*

In the event of any liquidation, dissolution or winding up of our Company, either voluntarily or involuntarily, the holders of the Series A Preferred Stock are entitled to receive, prior and in preference to the holders of the Common Stock, a per share amount equal to the Stated Value plus any accrued but unpaid Interest thereon, or the amount the holder would be entitled to receive if the Series A Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to common stock which amounts shall be paid pari passu with all holders of common stock.

If upon the liquidation, dissolution or winding up of the Company, the assets of our Company that are legally available for distribution to the holders of the Series A Preferred Stock are insufficient to permit the payment to such holders of the full amounts above, then the entire assets of our Company that are legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series A Preferred Stock in proportion to what they would otherwise be entitled to receive.

*Rights and Preferences*

During the period any shares of Series A Preferred Stock remain outstanding, unless we have received the approval 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 (voting together as a single class), either at a meeting of holders of Series A Preferred Stock or by written consent, we shall not, either directly or indirectly by amendment, merger, consolidation, recapitalization, reclassification, or otherwise, do any of the following without (in addition to any other vote required by law), and any such act or transaction entered into without such consent or vote shall be null and void *ab initio*, and of no force or effect:

(i) increase the number of authorized shares of Series A Preferred Stock;

(ii) issue or obligate itself to issue additional shares Series A Preferred Stock other than Interest Shares;

(iii) amend, alter or repeal any provision of the Certificate of Designation;

(iv) amend, alter or repeal any provision of the Certificate of Incorporation or other charter documents in a manner that adversely affects the powers, preferences or rights of the Series A Preferred Stock or in any manner that adversely affects any rights of the Holders; or

(v) enter into any agreement with respect to the foregoing.

For purposes of the foregoing voting requirements, the increase in the amount of the authorized preferred stock (other than Series A Preferred Stock) or common stock, or the creation or issuance of any other series of Preferred Stock or common stock that we may issue, or any increase in the amount of authorized shares of such series, shall not in itself be deemed to materially and adversely affect the rights, preferences or voting powers of the Series A Preferred Stock.

We may, at our option, on or before July 3, 2024, purchase up to $5,000,000 in aggregate of the then outstanding shares of Series A Preferred Stock held by HSCPM and HSCP at a cash redemption price per share of Series A Preferred Stock equal to the Stated Value.

*Conversion*

Each share of Series A Preferred Stock is convertible, at the option of the holder, at any time after the date of issuance of such share, into such number of fully paid and non-assessable shares of common stock determined by multiply the number of Series A Preferred Stock by the Stated Value and dividing the product thereof by the conversion price for such series in effect at the time of conversion for the Series A Preferred Stock. The conversion price for the Series A Preferred Stock is subject to adjustment in accordance with conversion provisions contained in the Certificate of Designations. As of June 30, 2025, the conversion price of the Series A Preferred Stock is $2.10 per share.

We will not effect the conversion of any portion of the shares of Series A Preferred Stock, and the holder will not have the right to convert any shares of Series A Preferred Stock, and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the holder together with its affiliates collectively would own beneficially in excess of 4.99% (or, upon election by a holder prior to the issuance of any shares of Series A Preferred Stock, such beneficial ownership limitation may increase or decrease) of the shares of common stock outstanding immediately after giving effect to such exercise. This limitation is not applicable to any shares of Series A Preferred Stock held by Trinad Capital.

**Authorized and Unissued Capital Stock**

The DGCL does not require stockholder approval for any issuance of authorized shares. These additional shares may be used for a variety of corporate purposes, including future public offerings, to raise additional capital or to facilitate acquisitions.

One of the effects of the existence of unissued and unreserved common stock or preferred stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares at prices higher than prevailing market prices.

**Warrants**

As of June 30, 2025, there were 1,835,399 warrants outstanding.

**Options**

As of June 30, 2025, we had entered into agreements to grant options to our employees to purchase 5,683,001 shares of common stock under the 2016 Equity Incentive Plan, as amended (the "Plan"), at a weighted average exercise price of $3.80 per share. As of June 30, 2025, we had entered into agreements to grant options to our non-employees to purchase 25,000 shares of common stock under the Plan at a weighted average exercise price of $4.00 per share.

For a description of our other equity grants and awards, see Note 15 – Stockholders' Equity to our consolidated financial statements included in the Annual Report.

**Delaware Anti-Takeover Law and Certain Charter and Bylaw Provisions**

***Delaware Anti-Takeover Statute***

We are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. In general, Section 203 prohibits a publicly held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder unless:

● prior to the date of the transaction, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

● upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

● at or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation's outstanding voting stock. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may discourage attempts that might result in a premium over the market price for the shares of common stock held by stockholders.

The provisions of Delaware law and the provisions of our Certificate of Incorporation and Bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they might also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions might also have the effect of preventing changes in our management. It is also possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests.

***Bylaws***

Provisions of our Bylaws may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our Bylaws:

● permit our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change in our control);

● provide that the authorized number of directors may be changed only by resolution of the board of directors;

● provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; and

● do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose).

The amendment of any of these provisions, with the exception of the ability of our board of directors to issue shares of preferred stock and designate any rights, preferences and privileges thereto, would require approval by the holders of a majority of our then outstanding common stock.

**Special Meetings**

Our Certificate of Incorporation and Bylaws provide that, except as otherwise required by law, special meetings of the stockholders may only be called by the chairperson of our board of directors, our Chief Executive Officer or our President (in the absence of a Chief Executive Officer), or by our board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the whole board. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders.

**Requirements for Notice of Stockholder Director Nominations and Stockholder Business**

If a stockholder wishes to bring any business before an annual or special meeting or nominate a person for election to our board of directors, our Bylaws contain certain procedures that must be followed for the advance timing required for delivery of stockholder notice of such nomination or other business and the information that such notice must contain.

**Listing**

Our common stock is listed on The NASDAQ Capital Market under the symbol "LVO." Our warrants are not listed on Nasdaq, any national securities exchange or any other nationally recognized trading system.

**Transfer Agent and Registrar**

The transfer agent and registrar for our common stock is VStock Transfer, LLC. We serve as the registrar for our warrants. The transfer agent and registrar's address is 18 Lafayette Place, Woodmere, NY 11598.

## Exhibit 10.10

**Exhibit 10.10**

![ex_838513img001.jpg](ex_838513img001.jpg)

269 South Beverly Drive, Suite 1450

Beverly Hills, CA 90212

August 29, 2023

Ryan Carhart

[email]

**Re: Offer of Employment with LiveXLive, Corp.** 

Dear Ryan,

On behalf of LiveXLive, Corp., a Delaware corporation (the "Company"), I am pleased to invite you to join the Company as VP, Corporate Controller of the Company, supporting LiveOne, Inc.'s, the Company's parent ("LiveOne"), Finance team. In this role, you will report directly to Aaron Sullivan, Interim Chief Financial Officer of the Company and LiveOne, with the Company retaining rights to adjust the reporting structure in its sole discretion. The effective date of your employment will be September 18, 2023 (the "Effective Date").

The terms of this offer of employment are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Compensation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Salary.</u> The Company will pay you a base salary at the rate of $200,000 per year, payable in accordance with the Company's standard payroll policies, including compliance with applicable withholding. The first and last payment by the Company to you will be adjusted, if necessary, to reflect a commencement or termination date other than the first or last working day of a pay period. Your employment with the Company is on a full-time basis, and you agree to devote all of your business time to the performance of your duties under this offer letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Office; Additional Titles</u>. (i) Your principal place of business will be in Los Angeles, California, though you may be permitted to work remotely unless otherwise required by the Company, and you may be required to travel to other offices as the Company or LiveOne shall maintain, from time to time as required to perform your services hereunder or as reasonably required by the Company, at the Company's expense (economy travel and accommodations) and in accordance with the generally applicable policies and procedures of the Company, if such are established at such time, or LiveOne if such have not been established, subject to presentation of reasonably detailed expense statements or vouchers and such other information as the Company or LiveOne may reasonably require.

&nbsp;&nbsp;&nbsp;&nbsp;(ii) Subject to your appointment thereto, and without additional compensation, during your employment with the Company, you shall hold such other or additional titles and serve in such other or additional capacities to which you may be appointed from time to time with the Company and/or any of its subsidiaries, with your mutual reasonable agreement and provided such titles and additional capacities are consistent with your above-stated position and duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Bonus</u>. In addition to the base salary, you shall be eligible to earn an annual fiscal year discretionary bonus, based on you meeting certain Company performance goals and your individual targets set by the senior management of the Company (a "Performance Bonus"), for each whole or partial fiscal year of your employment in accordance with the Company's annual bonus plan, if any, applicable to employees of LiveOne (other than senior executives) (the "Annual Plan"), all as determined by the LiveOne Board (as defined below) or its Compensation Committee in its sole and absolute discretion (the fiscal year, as of the Effective Date, is April 1 to March 31). Your target Performance Bonus shall be up to thirty-five percent (35%) of your average annualized base salary during the fiscal year for which the Performance Bonus is earned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Depending on your performance in any particular whole or partial fiscal year, the award of any Performance Bonus shall be subject to the determination of the actual amount of the Performance Bonus amount (not to exceed the maximum target bonus) by LiveOne's senior management and approval of the Performance Bonus amount by the LiveOne Board in their sole and absolute discretion; (ii) any Performance Bonus may be paid in cash and/or in shares of LiveOne Common Stock and/or PC1 Common Stock (each as defined below); (ii) the Company shall pay any cash Performance Bonus to you at the same time that annual cash bonuses are paid, if any, to the other employees of the Company (other than senior executives), but in no event later than the fifteenth (15th) day of the third month following the end of the applicable fiscal year for which the Performance Bonus is earned, if any; and (iv) you shall not be entitled to receive any Performance Bonus if you are not employed on the date on which annual bonuses for the applicable fiscal year are paid or payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Equity Grant.</u> (i) Subject to approval by LiveOne's board of directors (the "LiveOne Board") and your execution of the LiveOne RSUs Award Agreement (as defined below), the Company shall cause LiveOne to grant to you one hundred fifty thousand (150,000) restricted stock units of LiveOne (the "LiveOne RSUs"), under LiveOne's 2016 Equity Incentive Plan (as amended, modified or restated from time to time, the "LiveOne Plan"), after the date the Board approves the grant of the LiveOne RSUs ("LiveOne Grant"), subject to the following vesting requirements: one-third (1/3) of the LiveOne RSUs shall cliff vest on the first anniversary of the Effective Date (the "Initial Vesting Date"), and the remaining two-thirds (2/3) of the LiveOne RSUs shall vest in equal amounts on the second and third anniversary, respectively, of the Effective Date (each a "Subsequent Vesting Date" and collectively with the Initial Vesting Date, each a "Vesting Date"), subject to your continued fulltime employment and good standing with the Company through, and this offer letter being in effect on, each applicable Vesting Date. The LiveOne Grant will be evidenced by LiveOne's standard RSUs Award Agreement to be entered into between you and LiveOne (the "LiveOne RSUs Award Agreement") and shall be subject to the terms of the LiveOne Plan. Each vested LiveOne RSU shall be settled by delivery to you of one share of LiveOne's common stock, $0.001 par value per share (the "LiveOne Common Stock"), per vested LiveOne RSU after the applicable Vesting Date. Upon and after each settlement date, LiveOne may in its sole discretion (but shall not be required to do so), and to the extent permissible under applicable law and LiveOne's Insider Trading Policy, allow you to satisfy your tax obligations arising in connection with the settlement of your vested LiveOne RSUs through the sale by you in the open market of a number of shares of LiveOne Common Stock underlying the vested and settled LiveOne RSUs up to the maximum amount that would be sufficient to pay the amount of those tax obligations. By signing this offer letter, you acknowledge receipt and agree to the terms of LiveOne's Insider Trading Policy and the LiveOne Plan.

&nbsp;&nbsp;&nbsp;&nbsp;(ii) Subject to approval by the board of directors (the "PC1 Board") of Courtside Group, Inc. ("PC1"), a subsidiary of LiveOne, and your execution of the PC1 RSUs Award Agreement (as defined below), the Company shall cause PC1 to grant to you thirty thousand (30,000) restricted stock units of PC1 (the "PC1 RSUs"), under PC1's 2022 Equity Incentive Plan (as amended, modified or restated from time to time, the "PC1 Plan"), after the date the Board approves the grant of the PC1 RSUs ("PC1 Grant"), subject to the following vesting requirements: one-third (1/3) of the PC1 RSUs shall cliff vest on the Initial Vesting Date, and the remaining two-thirds (2/3) of the PC1 RSUs shall vest in equal amounts on the second and third anniversary, respectively, of the Effective Date, subject to your continued fulltime employment and good standing with the Company through, and this offer letter being in effect on, each applicable Vesting Date. The PC1 Grant will be evidenced by PC1's standard RSUs Award Agreement to be entered into between you and PC1 (the "PC1 RSUs Award Agreement") and shall be subject to the terms of the PC1 Plan. Each vested PC1 RSU shall be settled by delivery to you of one share of PC1's common stock, $0.001 par value per share (the "PC1 Common Stock"), per vested PC1 RSU after the applicable Vesting Date. Upon and after each settlement date, PC1 may in its sole discretion (but shall not be required to do so), and to the extent permissible under applicable law and PC1's Insider Trading Policy, allow you to satisfy your tax obligations arising in connection with the settlement of your vested PC1 RSUs through the sale by you in the open market of a number of shares of PC1 Common Stock underlying the vested and settled PC1 RSUs up to the maximum amount that would be sufficient to pay the amount of those tax obligations. By signing this offer letter, you acknowledge receipt and agree to the terms of PC1's Insider Trading Policy and the PC1 Plan.

&nbsp;&nbsp;&nbsp;&nbsp;(iii) If you remain employed by the Company through the date of a Change of Control (as defined below), 50% of your then-unvested LVO RSUs and PC1 RSUs shall vest in full effective immediately prior to such Change of Control. "Change of Control" shall have the meaning of "Change of Control" provided in the LiveOne Plan, except that (i) for purposes of determining whether a Change of Control has occurred under this offer letter, the acquisition of additional shares of LiveOne Common Stock and/or convertible or voting securities by Robert Ellin and/or his Affiliates (as defined below) resulting in him and/or his Affiliates having Beneficial Ownership (as such term is defined in the Exchange Act) of more (or less) than 50% of the total voting power of the stock of LiveOne will not be considered a Change of Control, and (ii) for purposes of the LVO RSUs and the PC1 RSUs (and any other amounts payable on a Change of Control that constitute "nonqualified deferred compensation" within the meaning of Section 409A), a Change of Control shall only be deemed to occur if such transaction also constitutes a "change of control event" within the meaning of Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Tax Withholding</u>. The Company may withhold from any amounts payable hereunder, including any amounts payable pursuant to this Section 1, any applicable federal, state, and local taxes that the Company is required to withhold pursuant to any applicable laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Benefits</u>. During the term of your employment, you shall be afforded the opportunity to participate in any Company employee benefit plans (i.e., medical, dental, vacation) covering employees at your level, as such may be in effect from time to time, along with 15 days of paid time off ("PTO") per year. The Company reserves the right to change such benefits on a Company-wide basis as necessary from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>At-Will Employment</u>. You should be aware that your employment with the Company is for no specified period and constitutes "at-will" employment. As a result, you are free to terminate your employment at any time, for any reason or for no reason. Similarly, the Company is free to terminate your employment at any time, for any reason or for no reason. We request that, in the event of a resignation, you give the Company at least two weeks' notice. In the event of your termination by the Company without Cause (as defined below), you shall be entitled to a payment of an amount equal to two (2) months of your then effective base salary. Any amounts payable pursuant to this section of the Agreement shall not be paid until the first scheduled payroll date following, and as a condition of, your execution of a standard and customary general release in favor of the Company and its affiliates. Notwithstanding this provision, the Company may at any time terminate you immediately without notice or severance for each of the following reasons as determined by the Company in its sole discretion (each, a "Cause"): (i) deceit or wrongful appropriation for personal use or benefit of the Company's and/or any of its affiliates' property or money; (ii) excessive unexcused absences from work; (iii) breach of this offer letter; (iv) breach of your duties or obligations as defined in this offer letter; (v) assault or battery; (vi) conduct that materially violates the Company's or LiveOne's code of conduct or other policies; (vii) any act or omission that materially injures or could reasonably be expected to materially injure the Company and/or any of its affiliates and/or any of their respective businesses, financial condition, business reputation or operations; (viii) continued refusal or failure to follow lawful and reasonable directions of the Company or the appropriate individual to whom you report after official written notice; (ix) engaging in material misconduct or material neglect (including without limitation fraud, dishonesty, misappropriation, embezzlement, sexual harassment or gross neglect); (x) violation of any contract or agreement between you and the Company and/or its affiliates or of any statutory duty owed to the Company; or (xi) conduct involving moral turpitude, including an arrest or your conviction of a no-contest plea by you for a crime of moral turpitude or a felony, or a guilty plea to a lesser-included offense or crime in exchange for withdrawal of a felony indictment, felony charge by information, whether the charge arises under the laws of the United States or any other state within the United States, or any crime that reflects adversely upon your character.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Immigration Laws</u>. For purposes of federal immigration laws, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided within 3 business days of the effective date of your employment, or your employment relationship with the Company may be terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Employee Proprietary Information Agreement</u>. As a condition of this offer of employment, you will be required to complete, sign and return the Company's standard form of Employee Confidential Information and Inventions Assignment Agreement (the "<u>CIIA</u>"), attached hereto as <u>Exhibit A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. You understand and agree that the Company is not hiring you in order to obtain confidential information of any other person or entity, including but not limited to any of your former employers ("Former Employers"), and that your employment with the Company is contingent on you continuing to comply with any obligations to your Former Employers, including those that survive termination of employment. This includes any confidentiality or non-solicitation obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Company requires, prior to beginning employment with the Company, that you return all confidential, proprietary, and trade secret information of any Former Employer to that employer. If you have a notebook computer, PC, or any other computer or device that contains any confidential, proprietary or trade secret information of any Former Employer, you should honor any agreement with, or follow any instructions from, your Former Employer with regard to returning or deleting such data. If there is any information to be returned, you should do so promptly, retaining for your files your cover letter transmitting the material to your Former Employer. You should not retain a copy of the material being returned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. If, at any time while you are an employee of the Company, anyone acting on behalf of the Company asks you to do anything that you believe might lead you to use or disclose the confidential, proprietary or trade secret information of any Former Employer or of any other entity or person, you should not disclose or use the information. Instead, you should immediately contact the Company's Chief Legal Counsel. You should also contact the Chief Legal Counsel if you have any questions concerning what is a trade secret or what is confidential or proprietary information of any other entity or person or of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>General</u>. This offer letter, the CIIA, the LiveOne RSUs Award Agreement (if approved by the LiveOne Board) and the PC1 RSUs Award Agreement (if approved by the PC1 Board) covering the grants described in Section 1, when signed by you, set forth the terms of your employment with the Company and supersede any and all prior representations and agreements, whether written or oral. In the event of a conflict between the terms and provisions of this offer letter, the CIIA, the LiveOne RSUs Award Agreement and the PC1 RSUs Award Agreement, the terms and provisions of the CIIA and the LiveOne RSUs Award Agreement and the PC1 RSUs Award Agreement will control. Any amendment of this offer letter or any waiver of a right under this offer letter must be in a writing signed by you and an officer of the Company. This offer letter shall be deemed to be made in, and in all respects, shall be interpreted, construed, and governed by and in accordance with, the laws of the State of Delaware, without regard to its conflicts of laws rules or provisions. To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with the Company, you and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising in connection with or relating to the enforcement, breach, performance, or interpretation of this offer letter, your employment with the Company, or the termination of your employment, shall be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration conducted by JAMS (Los Angeles office) or its successor, under JAMS' then applicable rules and procedures for employment disputes (available upon request and also currently available at http://www.jamsadr.com/rules-employment-arbitration), in front of one arbitrator. **You acknowledge that by agreeing to this arbitration procedure, both you and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding.** In addition, all claims, disputes, or causes of action under this Section 7, whether by you or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration. You will have the right to be represented by legal counsel at any arbitration proceeding. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written statement signed by the arbitrator regarding the disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator's essential findings and conclusions on which the award is based. The arbitrator shall be authorized to award all relief that you or the Company would be entitled to seek in a court of law. Nothing in this offer letter is intended to prevent either you or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.

You hereby expressly consent to the personal jurisdiction and venue of any state or federal court located in the City of Los Angeles, State of California, to compel arbitration in accordance with this offer letter, to enforce any arbitration award granted pursuant to this offer letter, including, any award granting equitable or injunctive relief, and to otherwise enforce this offer letter and carry out the intentions of the parties hereto to resolve all disputes arising under, in connection with or related to this offer letter or your employment with the Company through arbitration.

The illegality, invalidity or unenforceability of any term or provision of this offer letter will not affect the legality, validity or enforceability of the other terms or provisions of this offer letter, which will remain in full force and effect. Each of the parties agrees that in the event of any such determination the parties will negotiate to modify this offer letter so as to effect the original intent of the parties as close as possible to the fullest extent permitted by applicable law. Moreover, if any provision is found to be excessively broad in duration, scope or covered activity, the provision will be construed, and to the extent necessary will be deemed to be amended, so as to be enforceable to the maximum extent compatible with applicable law.

Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this offer letter. This offer letter is binding on and personal to you and you may not assign or delegate this letter without the prior written consent of the Company.

If any ambiguity or question of interpretation or of construction arises in connection with or relating to this offer letter, each of the parties agrees that this offer letter is to be interpreted and construed as if jointly drafted by both the parties and that no presumption or burden of proof is to arise favoring or disfavoring the Company or you by virtue of the authorship of any provision of this offer letter. All share numbers contained in this offer letter are subject to proportionate adjustment for stock splits, stock combinations and other similar recapitalizations applicable to you.

This offer letter may be executed in multiple counterparts, each of which constitutes an original and all of which together constitute one and the same instrument. A manually executed counterpart of this letter delivered by means of e-mail as a Portable Document Format file (".pdf") (or in any present or future file format intended to preserve the original graphic and pictorial appearance of a document), or by means of facsimile transmission, constitutes the valid and effective execution and delivery of this letter for all purposes and has the same force and effect for all purposes as the personal delivery of a manually executed counterpart bearing an original ink signature.

[*Signature page follows*]

------

We look forward to you joining the Company. If the foregoing terms are agreeable, please indicate your acceptance by signing this offer letter in the space provided below and returning it to me along with your completed and signed CIIA.

Sincerely,

**LiveXLive, Corp.** 

By: <u>/s/</u> *<u>Aaron Sullivan</u>*<u> </u>

Name: Aaron Sullivan

Title: Interim CFO

**AGREED TO AND ACCEPTED**

**this 29<sup>th</sup> of August 2023:**

<u>/s/</u> *<u>Ryan Carhart</u>*<u> </u>

Name: Ryan Carhart

------

**EXHIBIT A**

**<u>Employee Confidential Information and Inventions Assignment Agreement</u>**

[*see attached*]

## Exhibit 19.1

**Exhibit 19.1**

**LIVEONE, INC.**

**INSIDER TRADING COMPLIANCE POLICY**

**CONTENTS**

**Page**

I. SUMMARY 1

II. STATEMENT OF POLICIES PROHIBITING INSIDER TRADING 1

III. EXPLANATION OF INSIDER TRADING 2

IV. STATEMENT OF PROCEDURES PREVENTING INSIDER TRADING 5

V. ADDITIONAL PROHIBITED TRANSACTIONS 8

VI. RULE 10b5-1 TRADING PLANS, SECTION 16 AND RULE 144 9

VII. EXECUTION AND RETURN OF CERTIFICATION OF COMPLIANCE 14

<u>ATTACHMENT A</u> SHORT-SWING PROFIT RULE SECTION 16(B) CHECKLIST 15

<u>ATTACHMENT B</u> CERTIFICATION OF COMPLIANCE 16

**LIVEONE, INC.**<br> **INSIDER TRADING COMPLIANCE POLICY**

I. <u>&NBSP;&NBSP;&NBSP;&NBSP;SUMMARY</u>

Preventing insider trading is necessary to comply with securities laws and to preserve the reputation and integrity of LiveOne, Inc. (together with its subsidiaries, the "Company") as well as that of all persons affiliated with the Company. "Insider trading" occurs when any person purchases or sells a security while in possession of inside information relating to the security. As explained in Section III below, "inside information" is information that is both "material" and "non-public." Insider trading is a crime. The penalties for violating insider trading laws include imprisonment, disgorgement of profits, civil fines, and criminal fines of up to $5 million for individuals and $25 million for corporations. Insider trading is also prohibited by this Insider Trading Compliance Policy (this "Policy"), and violation of this Policy may result in Company-imposed sanctions, including removal or dismissal for cause.

This Policy applies to all officers, directors, employees, temporary employees and consultants of the Company. Individuals subject to this Policy are responsible for ensuring that members of their households also comply with this Policy. This Policy also applies to any entities controlled by individuals subject to the Policy, including any corporations, partnerships or trusts, and transactions by these entities should be treated for the purposes of this Policy and applicable securities laws as if they were for the individual's own account. This Policy extends to all activities within and outside an individual's Company duties. Every officer, director, employee, temporary employees and consultants must review this Policy. Questions regarding the Policy should be directed to the Company's General Counsel or Chief Financial Officer.

II. <u>&NBSP;&NBSP;&NBSP;&NBSP;STATEMENT OF POLICIES PROHIBITING INSIDER TRADING</u>

No officer, director or employee shall purchase or sell any type of security while in possession of material, non-public information relating to the security, whether the issuer of such security is the Company or any other company.

**Additionally, no officer, director or employee shall purchase or sell any security of the Company during the period beginning on the 14<sup>th</sup> calendar day before the end of any fiscal quarter of the Company and ending upon completion of the second full trading day after the public release of earnings data for such fiscal quarter or during any other trading suspension period declared by the Company.**

These prohibitions do not apply to:

● purchases of the Company's securities from the Company or sales of the Company's securities to the Company;

● exercises of stock options or other equity awards or the surrender of shares to the Company in payment of the exercise price or in satisfaction of any tax withholding obligations in a manner permitted by the applicable equity award agreement, or vesting of equity-based awards, that in each case do not involve a market sale of the Company's securities (the "cashless exercise" of a Company stock option through a broker <u>does</u> involve a market sale of the Company's securities, and therefore would not qualify under this exception);

● *bona fide* gifts of the Company's securities; or

● purchases or sales of the Company's securities made pursuant to any binding contract, specific instruction or written plan entered into while the purchaser or seller, as applicable, was unaware of any material, non-public information and which contract, instruction or plan (i) meets all requirements of the affirmative defense provided by Rule 10b5-1 ("Rule 10b5-1") promulgated under the Securities Exchange Act of 1934, as amended (the "1934 Act"), (ii) was pre-cleared in advance pursuant to this Policy and (iii) has not been amended or modified in any respect after such initial pre-clearance without such amendment or modification being pre-cleared in advance pursuant to this Policy. For more information about Rule 10b5-1 trading plans, see Section VI below.

No officers, directors, employees, temporary employees or consultants shall directly or indirectly communicate (or "tip") material, non-public information to anyone outside the Company (except in accordance with the Company's policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company other than on a need-to-know basis.

III. <u>&NBSP;&NBSP;&NBSP;&NBSP;EXPLANATION OF INSIDER TRADING</u>

*"Insider trading*" refers to the purchase or sale of a security while in possession of "material," "non-public" information relating to the security.

*"Securities*" includes stocks, bonds, notes, debentures, options, warrants and other convertible securities, as well as derivative instruments.

*"Purchase*" and "*sale*" are defined broadly under the federal securities law. "*Purchase*" includes not only the actual purchase of a security, but any contract to purchase or otherwise acquire a security. "*Sale*" includes not only the actual sale of a security, but any contract to sell or otherwise dispose of a security. These definitions extend to a broad range of transactions, including conventional cash-for-stock transactions, conversions, the exercise of stock options, and acquisitions and exercises of warrants or puts, calls or other derivative securities.

It is generally understood that insider trading includes the following:

● Trading by insiders while in possession of material, non-public information;

● Trading by persons other than insiders while in possession of material, non-public information, if the information either was given in breach of an insider's fiduciary duty to keep it confidential or was misappropriated; and

● Communicating or tipping material, non-public information to others, including recommending the purchase or sale of a security while in possession of such information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>What Facts are Material?</u>

The materiality of a fact depends upon the circumstances. A fact is considered "material" if there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell or hold a security, or if the fact is likely to have a significant effect on the market price of the security. Material information can be positive or negative and can relate to virtually any aspect of a company's business or to any type of security, debt or equity.

Examples of material information include (but are not limited to) information about dividends; corporate earnings or earnings forecasts; possible mergers, acquisitions, tender offers or dispositions; major new products or product developments; important business developments such as major contract awards or cancellations, developments regarding strategic collaborators; management or control changes; significant borrowing or financing developments including pending public sales or offerings of debt or equity securities; defaults on borrowings; bankruptcies; and significant litigation or regulatory actions. Moreover, material information does not have to be related to a company's business. For example, the contents of a forthcoming newspaper column that is expected to affect the market price of a security can be material.

A good general rule of thumb: **When in doubt, do not trade.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>What is Non-public?</u>

Information is "non-public" if it is not available to the general public. In order for information to be considered public, it must be widely disseminated in a manner making it generally available to investors through such media as <u>Dow Jones</u>, <u>Business Wire</u>, <u>Reuters</u>, <u>The Wall Street Journal</u>, <u>Associated Press</u>, or <u>United Press International</u>, a broadcast on widely available radio or television programs, publication in a widely available newspaper, magazine or news web site, a Regulation FD-compliant conference call, or public disclosure documents filed with the SEC that are available on the SEC's web site.

The circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination. In addition, even after a public announcement, a reasonable period of time must lapse in order for the market to react to the information. Generally, one should allow two full trading days following publication as a reasonable waiting period before such information is deemed to be public.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Who is an Insider?</u>

"Insiders" include officers, directors, employees, temporary employees and consultants of a company and anyone else who has material inside information about a company. Insiders have independent fiduciary duties to their company and its stockholders not to trade on material, non-public information relating to the company's securities. All officers, directors, employees, temporary employees and consultants of the Company should consider themselves insiders with respect to material, non-public information about the Company's business, activities and securities. Officers, directors, employees, temporary employees and consultants may not trade in the Company's securities while in possession of material, non-public information relating to the Company, nor may they tip such information to anyone outside the Company (except in accordance with the Company's policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company other than on a need-to-know basis.

Individuals subject to this Policy are responsible for ensuring that members of their households also comply with this Policy. This Policy also applies to any entities controlled by individuals subject to the Policy, including any corporations, partnerships or trusts, and transactions by these entities should be treated for the purposes of this Policy and applicable securities laws as if they were for the individual's own account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Trading by Persons Other than Insiders</u>

Insiders may be liable for communicating or tipping material, non-public information to a third party ("tippee"), and insider trading violations are not limited to trading or tipping by insiders. Persons other than insiders also can be liable for insider trading, including tippees who trade on material, non-public information tipped to them or individuals who trade on material, non-public information that has been misappropriated.

Tippees inherit an insider's duties and are liable for trading on material, non-public information illegally tipped to them by an insider. Similarly, just as insiders are liable for the insider trading of their tippees, so are tippees who pass the information along to others who trade. In other words, a tippee's liability for insider trading is no different from that of an insider. Tippees can obtain material, non-public information by receiving overt tips from others or through, among other things, conversations at social, business, or other gatherings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Penalties for Engaging in Insider Trading</u>

Penalties for trading on or tipping material, non-public information can extend significantly beyond any profits made or losses avoided, both for individuals engaging in such unlawful conduct and their employers. The Securities and Exchange Commission ("SEC") and Department of Justice have made the civil and criminal prosecution of insider trading violations a top priority. Enforcement remedies available to the government or private plaintiffs under the federal securities laws include:

● SEC administrative sanctions;

● Securities industry self-regulatory organization sanctions;

● Civil injunctions;

● Damage awards to private plaintiffs;

● Disgorgement of all profits;

● Civil fines for the violator of up to three times the amount of profit gained or loss avoided;

● Civil fines for the employer or other controlling person of a violator (i.e., where the violator is an employee or other controlled person) of up to the greater of $1,425,000 or three times the amount of profit gained or loss avoided by the violator;

● Criminal fines for individual violators of up to $5,000,000 ($25,000,000 for an entity); and

● Jail sentences of up to 20 years.

In addition, insider trading could result in serious sanctions by the Company, including dismissal. Insider trading violations are not limited to violations of the federal securities laws. Other federal and state civil or criminal laws, such as the laws prohibiting mail and wire fraud and the Racketeer Influenced and Corrupt Organizations Act (RICO), also may be violated in connection with insider trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. <u>Size of Transaction and Reason for Transaction Do Not Matter</u>

The size of the transaction or the amount of profit received does not have to be significant to result in prosecution. The SEC has the ability to monitor even the smallest trades, and the SEC performs routine market surveillance. Brokers or dealers are required by law to inform the SEC of any possible violations by people who may have material, non-public information. The SEC aggressively investigates even small insider trading violations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. <u>Examples of Insider Trading</u>

Examples of insider trading cases include actions brought against corporate officers, directors, and employees who traded in a company's securities after learning of significant confidential corporate developments; friends, business associates, family members and other tippees of such officers, directors, and employees who traded in the securities after receiving such information; government employees who learned of such information in the course of their employment; and other persons who misappropriated, and took advantage of, confidential information from their employers.

The following are illustrations of insider trading violations. These illustrations are hypothetical and, consequently, not intended to reflect on the actual activities or business of the Company or any other entity.

<u>Trading by Insider</u>

An officer of X Corporation learns that earnings to be reported by X Corporation will increase dramatically. Prior to the public announcement of such earnings, the officer purchases X Corporation's stock. The officer, an insider, is liable for all profits as well as penalties of up to three times the amount of all profits. The officer also is subject to, among other things, criminal prosecution, including up to $5,000,000 in additional fines and 20 years in jail. Depending upon the circumstances, X Corporation and the individual to whom the officer reports also could be liable as controlling persons.

<u>Trading by Tippee</u>

An officer of X Corporation tells a friend that X Corporation is about to publicly announce that it has concluded an agreement for a major acquisition. This tip causes the friend to purchase X Corporation's stock in advance of the announcement. The officer is jointly liable with his friend for all of the friend's profits, and each is liable for all civil penalties of up to three times the amount of the friend's profits. The officer and his friend are also subject to criminal prosecution and other remedies and sanctions, as described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. <u>Prohibition of Records Falsification and False Statements</u>

Section 13(b)(2) of the 1934 Act requires companies subject to the Act to maintain proper internal books and records and to devise and maintain an adequate system of internal accounting controls. The SEC has supplemented the statutory requirements by adopting rules that prohibit (1) any person from falsifying records or accounts subject to the above requirements and (2) officers or directors from making any materially false, misleading, or incomplete statement to any accountant in connection with any audit or filing with the SEC. These provisions reflect the SEC's intent to discourage officers, directors and other persons with access to the Company's books and records from taking action that might result in the communication of materially misleading financial information to the investing public.

IV. <u>&NBSP;&NBSP;&NBSP;&NBSP;STATEMENT OF PROCEDURES PREVENTING INSIDER TRADING</u>

The following procedures have been established, and will be maintained and enforced, by the Company to prevent insider trading. Every officer, director and employee is required to follow these procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Pre-Clearance of All Trades by All Officers, Directors, Employees, Temporary Employees and Consultants</u>

To provide assistance in preventing inadvertent violations of applicable securities laws and to avoid the appearance of impropriety in connection with the purchase and sale of the Company's securities, **all transactions in the Company**'**s securities (including without limitation, acquisitions and dispositions of Company stock, the exercise of stock options and the sale of Company stock issued upon exercise of stock options) by officers, directors, employees, temporary employees and consultants(each, a** "**Pre-Clearance Person**"**) must be pre-cleared** by the Company's General Counsel or Chief Financial Officer. Pre-clearance does not relieve anyone of his or her responsibility under SEC rules.

A request for pre-clearance may be oral or in writing (including by e-mail), should be made at least two business days in advance of the proposed transaction and should include the identity of the Pre-Clearance Person, the type of proposed transaction (for example, an open market purchase, a privately negotiated sale, an option exercise, etc.), the proposed date of the transaction and the number of shares or other securities to be involved. In addition, the Pre-Clearance Person must execute a certification (in the form approved by the General Counsel or Chief Financial Officer) that he or she is not aware of material nonpublic information about the Company. The General Counsel or Chief Financial Officer shall have sole discretion to decide whether to clear any contemplated transaction. All trades that are pre-cleared must be effected within five business days of receipt of the pre-clearance unless a specific exception has been granted by the General Counsel or Chief Financial Officer. A pre-cleared trade (or any portion of a pre-cleared trade) that has not been effected during the five business day period must be pre-cleared again prior to execution. Notwithstanding receipt of pre-clearance, if the Pre-Clearance Person becomes aware of material non-public information or becomes subject to a black-out period before the transaction is effected, the transaction may not be completed.

None of the Company, the General Counsel or Chief Financial Officer or the Company's other employees will have any liability for any delay in reviewing, or refusal of, a request for pre-clearance submitted pursuant to this Section IV.A. Notwithstanding any pre-clearance of a transaction pursuant to this Section IV.A, none of the Company, the General Counsel or Chief Financial Officer or the Company's other employees assumes any liability for the legality or consequences of such transaction to the person engaging in such transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Black-Out Periods</u>

**Additionally, no officers, directors, employees, temporary employees or consultants shall purchase or sell any security of the Company during the period beginning on the 14<sup>th</sup> calendar day before the end of any fiscal quarter of the Company and ending upon completion of the second full trading day after the public release of earnings data for such fiscal quarter or during any other trading suspension period declared by the Company,** except for:

● purchases of the Company's securities from the Company or sales of the Company's securities to the Company;

● exercises of stock options or other equity awards the surrender of shares to the Company in payment of the exercise price or in satisfaction of any tax withholding obligations in a manner permitted by the applicable equity award agreement, or vesting of equity-based awards that do not involve a market sale of the Company's securities (the "cashless exercise" of a Company stock option through a broker <u>does</u> involve a market sale of the Company's securities, and therefore would not qualify under this exception);

● *bona fide* gifts of the Company's securities; and

● purchases or sales of the Company's securities made pursuant to any binding contract, specific instruction or written plan entered into while the purchaser or seller, as applicable, was unaware of any material, non-public information and which contract, instruction or plan (i) meets all requirements of the affirmative defense provided by Rule 10b5-1, (ii) was pre-cleared in advance pursuant to this Policy and (iii) has not been amended or modified in any respect after such initial pre-clearance without such amendment or modification being pre-cleared in advance pursuant to this Policy.

Exceptions to the black-out period policy may be approved only by the Company's General Counsel or Chief Financial Officer or, in the case of exceptions for directors, the Board of Directors or Audit Committee of the Board of Directors.

From time to time, the Company, through the Board of Directors, the Company's disclosure committee or the General Counsel or Chief Financial Officer, may recommend that officers, directors, employees, temporary employees, consultants or others suspend trading in the Company's securities because of developments that have not yet been disclosed to the public. Subject to the exceptions noted above, all those affected should not trade in our securities while the suspension is in effect, and should not disclose to others that we have suspended trading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Post-Termination Transactions</u>

With the exception of the pre-clearance requirement, this Policy continues to apply to transactions in the Company's securities even after termination of service to the Company. If an individual is in possession of material, non-public information when his or her service terminates, that individual may not trade in the Company's securities until that information has become public or is no longer material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Information Relating to the Company</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Access to Information</u>

Access to material, non-public information about the Company, including the Company's business, earnings or prospects, should be limited to officers, directors, employees, temporary employees and consultants of the Company on a need-to-know basis. In addition, such information should not be communicated to anyone outside the Company under any circumstances (except in accordance with the Company's policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company on an other than need-to-know basis.

In communicating material, non-public information to employees of the Company, all officers, directors, employees, temporary employees and consultants must take care to emphasize the need for confidential treatment of such information and adherence to the Company's policies with regard to confidential information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Inquiries From Third Parties</u>

Inquiries from third parties, such as industry analysts or members of the media, about the Company should be directed to the General Counsel of Chief Financial Officer at (310) 601-2500.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Limitations on Access to Company Information</u>

The following procedures are designed to maintain confidentiality with respect to the Company's business operations and activities.

All officers, directors, employees, temporary employees and consultants should take all steps and precautions necessary to restrict access to, and secure, material, non-public information by, among other things:

● Maintaining the confidentiality of Company-related transactions;

● Conducting their business and social activities so as not to risk inadvertent disclosure of confidential information. Review of confidential documents in public places should be conducted so as to prevent access by unauthorized persons;

● Restricting access to documents and files (including computer files) containing material, non-public information to individuals on a need-to-know basis (including maintaining control over the distribution of documents and drafts of documents);

● Promptly removing and cleaning up all confidential documents and other materials from conference rooms following the conclusion of any meetings;

● Disposing of all confidential documents and other papers, after there is no longer any business or other legally required need, through shredders when appropriate;

● Restricting access to areas likely to contain confidential documents or material, non-public information;

● Safeguarding laptop computers, tablets, memory sticks, CDs and other items that contain confidential information; and

● Avoiding the discussion of material, non-public information in places where the information could be overheard by others such as in elevators, restrooms, hallways, restaurants, airplanes or taxicabs.

Personnel involved with material, non-public information, to the extent feasible, should conduct their business and activities in areas separate from other Company activities.

V. <u>&NBSP;&NBSP;&NBSP;&NBSP;ADDITIONAL PROHIBITED TRANSACTIONS</u>

The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. Therefore, officers, directors, employees, temporary employees and consultants shall comply with the following policies with respect to certain transactions in the Company securities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Short Sales</u>

Short sales of the Company's securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition, short sales may reduce the seller's incentive to improve the Company's performance. For these reasons, short sales of the Company's securities are prohibited by this Policy. In addition, as noted below, Section 16(c) of the 1934 Act absolutely prohibits Section 16 reporting persons from making short sales of the Company's equity securities, *i.e.*, sales of shares that the insider does not own at the time of sale, or sales of shares against which the insider does not deliver the shares within 20 days after the sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Publicly Traded Options</u>

A transaction in options is, in effect, a bet on the short-term movement of the Company's stock and therefore creates the appearance that an officer, director or employee is trading based on inside information. Transactions in options also may focus an officer's, director's, employee's, temporary employee's or consultant's attention on short-term performance at the expense of the Company's long-term objectives. Accordingly, transactions in puts, calls or other derivative securities involving the Company's equity securities, on an exchange or in any other organized market, are prohibited by this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Hedging Transactions</u>

Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an officers, directors, employees, temporary employees or consultants to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the officer, director or employee to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the officer, director or employee may no longer have the same objectives as the Company's other stockholders. Therefore, such transactions involving the Company's equity securities are prohibited by this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. <u>Purchases of the Company</u><u>'</u><u>s Securities on Margin; Pledging the Company</u><u>'</u><u>s Securities to Secure Margin or Other Loans</u>

Purchasing on margin means borrowing from a brokerage firm, bank or other entity in order to purchase the Company's securities (other than in connection with a cashless exercise of stock options under the Company's equity plans). Margin purchases of the Company's securities are prohibited by this Policy. Pledging the Company's securities as collateral to secure loans is also prohibited. This prohibition means, among other things, that you cannot hold the Company's securities in a "margin account" (which would allow you to borrow against your holdings to buy securities).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. <u>Director and Executive Officer Cashless Exercises</u>

The Company will not arrange with brokers to administer cashless exercises on behalf of directors and executive officers of the Company. Directors and executive officers of the Company may use the cashless exercise feature of their equity awards only if (i) the director or officer retains a broker independently of the Company, (ii) the Company's involvement is limited to confirming that it will deliver the stock promptly upon payment of the exercise price and (iii) the director or officer uses a "T+3" cashless exercise arrangement, in which the Company agrees to deliver stock against the payment of the purchase price on the same day the sale of the stock underlying the equity award settles. Under a T+3 cashless exercise, a broker, the issuer, and the issuer's transfer agent work together to make all transactions settle simultaneously. This approach is to avoid any inference that the Company has "extended credit" in the form of a personal loan to the director or executive officer. Questions about cashless exercises should be directed to the General Counsel or Chief Financial Officer.

VI. <u>RULE 10b5-1 TRADING PLANS, SECTION 16 AND RULE 144</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. <u>Rule 10b5-1 Trading Plans</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Overview</u>

Rule 10b5-1 will protect officers, directors, employees, temporary employees and consultants from insider trading liability under Rule 10b5-1 for transactions under a previously established contract, plan or instruction to trade in the Company's stock (a "Trading Plan") entered into in good faith and in accordance with the terms of Rule 10b5-1 and all applicable state laws and will be exempt from the trading restrictions set forth in this Policy. The initiation of, and any modification to, any such Trading Plan will be deemed to be a transaction in the Company's securities, and such initiation or modification is subject to all limitations and prohibitions relating to transactions in the Company's securities. Each such Trading Plan, and any modification thereof, must be submitted to and pre-approved by the Company's General Counsel or Chief Financial Officer, or such other person as the Board of Directors may designate from time to time (the "Authorizing Officer"), who may impose such conditions on the implementation and operation of the Trading Plan as the Authorizing Officer deems necessary or advisable. However, compliance of the Trading Plan to the terms of Rule 10b5-1 and the execution of transactions pursuant to the Trading Plan are the sole responsibility of the person initiating the Trading Plan, not the Company or the Authorizing Officer.

**Trading Plans do not exempt individuals from complying with Section 16 short-swing profit rules or liability.**

Rule 10b5-1 presents an opportunity for insiders to establish arrangements to sell (or purchase) Company stock without the restrictions of trading windows and black-out periods, even when there is undisclosed material information. A Trading Plan may also help reduce negative publicity that may result when key executives sell the Company's stock. Rule 10b5-1 only provides an "affirmative defense" in the event there is an insider trading lawsuit. It does not prevent someone from bringing a lawsuit.

A officers, directors, employees, temporary employees or consultants may enter into a Trading Plan only when he or she is not in possession of material, non-public information, and only during a trading window period outside of the trading black-out period. Although transactions effected under a Trading Plan will not require further pre-clearance at the time of the trade, any transaction (including the quantity and price) made pursuant to a Trading Plan of a Section 16 reporting person must be reported to the Company promptly on the day of each trade to permit the Company's filing coordinator to assist in the preparation and filing of a required Form 4.

The Company reserves the right from time to time to suspend, discontinue or otherwise prohibit any transaction in the Company's securities, even pursuant to a previously approved Trading Plan, if the Authorizing Officer or the Board of Directors, in its discretion, determines that such suspension, discontinuation or other prohibition is in the best interests of the Company. Any Trading Plan submitted for approval hereunder should explicitly acknowledge the Company's right to prohibit transactions in the Company's securities. Failure to discontinue purchases and sales as directed shall constitute a violation of the terms of this Section VI and result in a loss of the exemption set forth herein.

Officers, directors, employees, temporary employees and consultants may adopt Trading Plans with brokers that outline a pre-set plan for trading of the Company's stock, including the exercise of options. Trades pursuant to a Trading Plan generally may occur at any time. However, the Company requires a cooling-off period of 15 days between the establishment of a Trading Plan and commencement of any transactions under such plan. An individual may adopt more than one Trading Plan. Please review the following description of how a Trading Plan works.

Pursuant to Rule 10b5-1, an individual's purchase or sale of securities will not be "on the basis of" material, non-public information if:

● First, before becoming aware of the information, the individual enters into a binding contract to purchase or sell the securities, provides instructions to another person to sell the securities or adopts a written plan for trading the securities (i.e., the Trading Plan).

● Second, the Trading Plan must either:

● specify the amount of securities to be purchased or sold, the price at which the securities are to be purchased or sold and the date on which the securities are to be purchased or sold;

● include a written formula or computer program for determining the amount, price and date of the transactions; or

● prohibit the individual from exercising any subsequent influence over the purchase or sale of the Company's stock under the Trading Plan in question.

● Third, the purchase or sale must occur pursuant to the Trading Plan and the individual must not enter into a corresponding hedging transaction or alter or deviate from the Trading Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Revocation of and Amendments to Trading Plans</u>

Revocation of Trading Plans should occur only in unusual circumstances. Effectiveness of any revocation or amendment of a Trading Plan will be subject to the prior review and approval of the Authorizing Officer. Once a Trading Plan has been revoked, the participant should wait at least 15 days before trading outside of a Trading Plan and 180 days before establishing a new Trading Plan. You should note that revocation of a Trading Plan can result in the loss of an affirmative defense for past or future transactions under a Trading Plan. You should consult with your own legal counsel before deciding to revoke a Trading Plan. In any event, you should not assume that compliance with the 180-day bar will protect you from possible adverse legal consequences of a Trading Plan revocation.

A person acting in good faith may amend a prior Trading Plan so long as such amendments are made outside of a quarterly trading black-out period and at a time when the Trading Plan participant does not possess material, non-public information. Plan amendments must not take effect for at least 15 days after the plan amendments are made.

Under certain circumstances, a Trading Plan *must* be revoked. This may include circumstances such as the announcement of a merger or the occurrence of an event that would cause the transaction either to violate the law or to have an adverse effect on the Company. The Authorizing Officer or administrator of the Company's stock plans is authorized to notify the broker in such circumstances, thereby insulating the insider in the event of revocation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Discretionary Plans</u>

Although non-discretionary Trading Plans are preferred, discretionary Trading Plans, where the discretion or control over trading is transferred to a broker, are permitted if pre-approved by the Authorizing Officer.

The Authorizing Officer must pre-approve any Trading Plan, arrangement or trading instructions, etc., involving potential sales or purchases of the Company's stock or option exercises, including but not limited to, blind trusts, discretionary accounts with banks or brokers, or limit orders. The actual transactions effected pursuant to a pre-approved Trading Plan will not be subject to further pre-clearance for transactions in the Company's stock once the Trading Plan or other arrangement has been pre-approved.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Reporting (if Required)</u>

If required, an SEC Form 144 will be filled out and filed by the individual/brokerage firm in accordance with the existing rules regarding Form 144 filings. A footnote at the bottom of the Form 144 should indicate that the trades "are in accordance with a Trading Plan that complies with Rule 10b5-1 and expires ____." For Section 16 reporting persons, Form 4s should be filed before the end of the second business day following the date that the broker, dealer or plan administrator informs the individual that a transaction was executed, provided that the date of such notification is not later than the third business day following the trade date. A similar footnote should be placed at the bottom of the Form 4 as outlined above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Options</u>

Exercises of options for cash may be executed at any time. "Cashless exercise" option exercises are subject to trading windows. However, the Company will permit same day sales under Trading Plans. If a broker is required to execute a cashless exercise in accordance with a Trading Plan, then the Company must have exercise forms attached to the Trading Plan that are signed, undated and with the number of shares to be exercised left blank. Once a broker determines that the time is right to exercise the option and dispose of the shares in accordance with the Trading Plan, the broker will notify the Company in writing and the administrator of the Company's stock plans will fill in the number of shares and the date of exercise on the previously signed exercise form. The insider should not be involved with this part of the exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Public Announcements</u>

The Company may make a public announcement that Trading Plans are being implemented in accordance with Rule 10b5-1. It will consider in each case whether a public announcement of a particular Trading Plan should be made. It may also make public announcements or respond to inquiries from the media as transactions are made under a Trading Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Prohibited Transactions</u>

The transactions prohibited under Section V of this Policy, including among others short sales and hedging transactions, may not be carried out through a Trading Plan or other arrangement or trading instruction involving potential sales or purchases of the Company's securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>No Section 16 Protection</u>

The use of Trading Plans does not exempt participants from complying with the Section 16 reporting rules or liability for short-swing trades.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Limitation on Liability</u>

None of the Company, the Authorizing Officer or the Company's other employees will have any liability for any delay in reviewing, or refusal of, a Trading Plan submitted pursuant to this Section VI.A. Notwithstanding any review of a Trading Plan pursuant to this Section VI.A, none of the Company, the Authorizing Officer or the Company's other employees assumes any liability for the legality or consequences relating to such Trading Plan to the person adopting such Trading Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. <u>Section 16: Insider Reporting Requirements, Short-Swing Profits and Short Sales (Applicable to Officers, Directors and 10% Stockholders)</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Reporting Obligations Under Section 16(a): SEC Forms 3, 4 and 5</u>

Section 16(a) of the 1934 Act generally requires all officers, directors and 10% stockholders ("insiders"), within 10 days after the insider becomes an officer, director, or 10% stockholder, to file with the SEC an "Initial Statement of Beneficial Ownership of Securities" on SEC Form 3 listing the amount of the Company's stock, options and warrants which the insider beneficially owns. Following the initial filing on SEC Form 3, changes in beneficial ownership of the Company's stock, options and warrants must be reported on SEC Form 4, generally within two days after the date on which such change occurs, or in certain cases on Form 5, within 45 days after fiscal year end. The two-day Form 4 deadline begins to run from the trade date rather than the settlement date. A Form 4 must be filed even if, as a result of balancing transactions, there has been no net change in holdings. In certain situations, purchases or sales of Company stock made within six months *prior* to the filing of a Form 3 must be reported on Form 4. Similarly, certain purchases or sales of Company stock made within six months *after* an officer or director ceases to be an insider must be reported on Form 4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Recovery of Profits Under Section 16(b)</u>

For the purpose of preventing the unfair use of information which may have been obtained by an insider, any profits realized by any officer, director or 10% stockholder from any "purchase" and "sale" of Company stock during a six-month period, so called "short-swing profits," may be recovered by the Company. When such a purchase and sale occurs, good faith is no defense. The insider is liable even if compelled to sell for personal reasons, and even if the sale takes place after full disclosure and without the use of any inside information.

The liability of an insider under Section 16(b) of the 1934 Act is only to the Company itself. The Company, however, cannot waive its right to short swing profits, and any Company stockholder can bring suit in the name of the Company. Reports of ownership filed with the SEC on Form 3, Form 4 or Form 5 pursuant to Section 16(a) (discussed above) are readily available to the public, and certain attorneys carefully monitor these reports for potential Section 16(b) violations. In addition, liabilities under Section 16(b) may require separate disclosure in the Company's annual report to the SEC on Form 10-K or its proxy statement for its annual meeting of stockholders. No suit may be brought more than two years after the date the profit was realized. However, if the insider fails to file a report of the transaction under Section 16(a), as required, the two-year limitation period does not begin to run until after the transactions giving rise to the profit have been disclosed. Failure to report transactions and late filing of reports require separate disclosure in the Company's proxy statement.

Officers and directors should consult the attached "Short-Swing Profit Rule Section 16(b) Checklist" attached hereto as "Attachment A" in addition to consulting the General Counsel or Chief Financial Officer prior to engaging in any transactions involving the Company's securities, including without limitation, the Company's stock, options or warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Short Sales Prohibited Under Section 16(c)</u>

Section 16(c) of the 1934 Act prohibits insiders absolutely from making short sales of the Company's equity securities. Short sales include sales of stock which the insider does not own at the time of sale, or sales of stock against which the insider does not deliver the shares within 20 days after the sale. Under certain circumstances, the purchase or sale of put or call options, or the writing of such options, can result in a violation of Section 16(c). Insiders violating Section 16(c) face criminal liability.

The General Counsel and Chief Financial Officer should be consulted if you have any questions regarding reporting obligations, short-swing profits or short sales under Section 16.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. <u>Rule 144 (Applicable to Officers, Directors and 10% Stockholders)</u>

Rule 144 provides a safe harbor exemption to the registration requirements of the Securities Act of 1933, as amended, for certain resales of "restricted securities" and "control securities." "Restricted securities" are securities acquired from an issuer, or an affiliate of an issuer, in a transaction or chain of transactions not involving a public offering. "Control securities" are *any* securities owned by directors, executive officers or other "affiliates" of the issuer, including stock purchased in the open market and stock received upon exercise of stock options. Sales of Company securities by affiliates (generally, directors, officers and 10% stockholders of the Company) must comply with the requirements of Rule 144, which are summarized below:

●  ***Current Public Information.*** The Company must have filed all SEC-required reports during the last 12 months.

●  ***Volume Limitations.*** Total sales of Company common stock by a covered individual for any three-month period may not exceed the *greater* of: (i) 1% of the total number of outstanding shares of Company common stock, as reflected in the most recent report or statement published by the Company, or (ii) the average weekly reported volume of such shares traded during the four calendar weeks preceding the filing of the requisite Form 144.

●  ***Method of Sale.*** The shares must be sold either in a "broker's transaction" or in a transaction directly with a "market maker." A "broker's transaction" is one in which the broker does no more than execute the sale order and receive the usual and customary commission. Neither the broker nor the selling person can solicit or arrange for the sale order. In addition, the selling person or Board member must not pay any fee or commission other than to the broker. A "market maker" includes a specialist permitted to act as a dealer, a dealer acting in the position of a block positioner, and a dealer who holds himself out as being willing to buy and sell Company common stock for his own account on a regular and continuous basis.

●  ***Notice of Proposed Sale.*** A notice of the sale (a Form 144) must be filed with the SEC at the time of the sale. Brokers generally have internal procedures for executing sales under Rule 144 and will assist you in completing the Form 144 and in complying with the other requirements of Rule 144.

If you are subject to Rule 144, you must instruct your broker who handles trades in Company securities to follow the brokerage firm's Rule 144 compliance procedures in connection with all trades.

VII. <u>EXECUTION AND RETURN OF CERTIFICATION OF COMPLIANCE</u>

After reading this Policy, all officers, directors, employees, temporary employees and consultants should execute and return to the Company's General Counsel the Certification of Compliance form attached hereto as "Attachment B."

**<u>ATTACHMENT A</u>**<br>**SHORT-SWING PROFIT RULE SECTION 16(B) CHECKLIST**

Note: ANY combination of PURCHASE AND SALE or SALE AND PURCHASE within six months of each other by an officer, director or 10% stockholder (or any family member living in the same household or certain affiliated entities) results in a violation of Section 16(b), and the "profit" must be recovered by LiveOne, Inc. (the "Company"). It makes no difference how long the shares being sold have been held or, for officers and directors, that you were an insider for only one of the two matching transactions. The highest priced sale will be matched with the lowest priced purchase within the six-month period.

**Sales**

If a sale is to be made by an officer, director or 10% stockholder (or any family member living in the same household or certain affiliated entities):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Have there been any purchases by the insider (or family members living in the same household or certain affiliated entities) within the past six months?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Have there been any option grants or exercises not exempt under Rule 16b-3 within the past six months?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Are any purchases (or non-exempt option exercises) anticipated or required within the next six months?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Has a Form 4 been prepared?

Note: If a sale is to be made by an affiliate of the Company, has a Form 144 been prepared and has the broker been reminded to sell pursuant to Rule 144?

**Purchases And Option Exercises**

If a purchase or option exercise for Company stock is to be made:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Have there been any sales by the insider (or family members living in the same household or certain affiliated entities) within the past six months?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Are any sales anticipated or required within the next six months (such as tax-related or year-end transactions)?

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Has a Form 4 been prepared?

**Before proceeding with a purchase or sale, consider whether you are aware of material inside information which could affect the price of the Company stock. All transactions in the Company**'**s securities by officers and directors must be <u>pre-cleared</u> by contacting the Company**'**s General Counsel or Chief Financial Officer.**

------

**<u>ATTACHMENT B</u>**<br>**CERTIFICATION OF COMPLIANCE**

RETURN BY [_________] *[insert return deadline]*

TO: General Counsel and Chief Financial Officer

FROM: __________________________

RE: INSIDER TRADING COMPLIANCE POLICY OF LIVEONE, INC.

I have received, reviewed and understand the above-referenced Insider Trading Compliance Policy and undertake, as a condition to my present and continued employment (or, if I am not an employee, affiliation with) LiveOne, Inc., to comply fully with the policies and procedures contained therein.

I hereby certify, to the best of my knowledge, that during the fiscal year ending March 31, 20[__], I have complied fully with all policies and procedures set forth in the above-referenced Insider Trading Compliance Policy.

___________________________ _______________<br> SIGNATURE DATE

___________________________<br> TITLE

------

**AMENDMENT NO. 1 TO THE**

**INSIDER TRADING COMPLIANCE POLICY** 

**OF**

**LIVEONE, INC.**

**(a Delaware corporation)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The second paragraph of Section II (Statement of Policies Prohibiting Insider Trading) of the Insider Trading Compliance Policy of LiveOne, Inc., a Delaware corporation (the "Corporation"), is hereby amended and restated in its entirety to read as follows:

"Additionally, no officer, director or employee shall purchase or sell any security of the Company during the period beginning on the 1st calendar day before the end of any fiscal quarter of the Company and ending upon completion of the second full trading day after the public release of earnings data for such fiscal quarter or during any other trading suspension period declared by the Company."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The first paragraph of Section IV B. (Black-Out Periods) of the Insider Trading Compliance Policy of the Corporation is hereby amended and restated in its entirety to read as follows:

"Additionally, no officers, directors, employees, temporary employees or consultants shall purchase or sell any security of the Company during the period beginning on the 1<sup>st</sup> calendar day before the end of any fiscal quarter of the Company and ending upon completion of the second full trading day after the public release of earnings data for such fiscal quarter or during any other trading suspension period declared by the Company, except for:"

*Approved by the Board of Directors of the Corporation and effective as of March 16, 2021.*

## Exhibit 21.1

**Exhibit 21.1**

**LIST OF SUBSIDIARIES**

**LiveOne, Inc.,**<br> **a Delaware corporation**

---

| | |
|:---|:---|
| **Subsidiaries** | **Jurisdiction** |
| LiveXLive, Corp. | Delaware |
| Slacker, Inc. | Delaware |
| LiveXLive PodcastOne, Inc. | Delaware |
| PodcastOne, Inc. | Delaware |
| Courtside, LLC | Delaware |
| PodcastOne Sales, LLC | California |
| PPVOne, Inc. | Delaware |
| LiveXLive Merchandising, Inc. | Delaware |
| Custom Personalization Solutions, Inc. | Delaware |
| DayOne Music Publishing, Inc. | Delaware |
| Drumify LLC | California |
| Splitmind LLC | California |

---

## Exhibit 23.1

**Exhibit 23.1**

<u>Consent of Independent Registered Public Accounting Firm</u>

LiveOne, Inc.

Beverly Hills, CA

We consent to the incorporation by reference in the Registration Statements on Form S-3 (333-249481, 333-280645 and 333-284916) and Form S-8 (No. 333-234619 and 333-259026) of LiveOne, Inc. of our report dated July 15, 2025, relating to the consolidated financial statements of LiveOne, Inc. appearing in this Annual Report on Form 10-K for the year ended March 31, 2025. Our report on the consolidated financial statements contains an explanatory paragraph regarding the Company's ability to continue as a going concern.

/s/ Macias Gini & O'Connell, LLP

Los Angeles, California

July 15, 2025

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF CEO PURSUANT TO RULE 13a-14(a) OR 15d-14(a)**

**OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302**

**OF THE SARBANES-OXLEY ACT OF 2002**

I, Robert S. Ellin, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Annual Report on Form 10-K of LiveOne, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 15, 2025

---

| |
|:---|
| /s/ *Robert S. Ellin* |
| Robert S. Ellin |
| Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF CFO PURSUANT TO RULE 13a-14(a) OR 15d-14(a)**

**OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302**

**OF THE SARBANES-OXLEY ACT OF 2002**

I, Ryan Carhart, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Annual Report on Form 10-K of LiveOne, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 15, 2025

---

| |
|:---|
| /s/ *Ryan Carhart* |
| Ryan Carhart |
| Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of LiveOne, Inc. (the "Company") on Form 10-K for the year ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert S. Ellin, as the Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| |
|:---|
| /s/ *Robert S. Ellin* |
| Robert S. Ellin |
| Chief Executive Officer |

---

July 15, 2025

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION OF CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of LiveOne, Inc. (the "Company") on Form 10-K for the year ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ryan Carhart, as the Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| |
|:---|
| /s/ *Ryan Carhart* |
| Ryan Carhart |
| Chief Financial Officer |

---

July 15, 2025

This Certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

## Exhibit 97.1

**Exhibit 97.1**

**LIVEONE, INC.**

**Compensation Recovery Policy**

As adopted effective as of December 1, 2023

LiveOne, Inc. (the "**Company**") is committed to strong corporate governance. As part of this commitment, the Company's Board of Directors (the "**Board**") has adopted this clawback policy called the Compensation Recovery Policy (the "**Policy**"). The Policy is intended to further the Company's pay-for-performance philosophy and to comply with applicable law by providing for the reasonably prompt recovery of certain executive compensation in the event of an Accounting Restatement. Capitalized terms used in the Policy are defined below, and the definitions have substantive impact on its application so reviewing them carefully is important to your understanding.

The Policy, which was approved as set forth above, is intended to comply with Section 10D of the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"), with Exchange Act Rule 10D-1 and with the listing standard of the national securities exchange (the "**Exchange**") on which the securities of the Company are listed. The Policy will be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act, Exchange Act Rule 10D-1 and with the listing standards of the Exchange, including any interpretive guidance provided by the Exchange.

In summary, the Policy provides rules related to the reasonably prompt recovery of certain incentive-based compensation received by Covered Executives. The application of the Policy to Covered Executives is not discretionary, except to the limited extent provided below, and applies without regard to whether Covered Executive was at fault.

**Persons Covered by the Policy** 

The Policy is binding and enforceable against all "**Covered Executives**," which means each individual who is or was ever designated as an "executive officer" by the Board in accordance with Exchange Act Rule 3b-7. Each Covered Executive will be required to sign and return to the Company an acknowledgement that such Covered Executive will be bound by the terms and comply with the Policy. The failure to obtain such acknowledgement will have no impact on the applicability or enforceability of the Policy.

**Administration of the Policy** 

The Compensation Committee (the "**Committee**") of the Board has full delegated authority to administer the Policy. The Committee is authorized to interpret and construe the Policy and to make all determinations necessary, appropriate, or advisable for the administration of the Policy. In addition, if determined in the discretion of the Board, the Policy may be administered by the independent members of the Board or another committee of the Board made up of independent members of the Board, in which case all references to the Committee will be deemed to refer to the independent members of the Board or the other Board committee. All determinations of the Committee will be final and binding and will be given the maximum deference permitted by law.

**Events Requiring Application of the Policy** 

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (an "**Accounting Restatement**"), then the Committee must determine what compensation, if any, must be recovered.

**Compensation Covered by the Policy** 

The Policy applies to certain **Incentive-Based Compensation** (certain terms used in this Section are defined below) that is **Received** on or after October 2, 2023 (the "**Effective Date**"), during the **Covered Period** while the Company has a class of securities listed on a national securities exchange. Such Incentive-Based Compensation is considered "**Clawback Eligible Incentive-Based Compensation**" if the Incentive-Based Compensation is Received by a person after such person became a Covered Executive and the person served as a Covered Executive at any time during the performance period for the Incentive-Based Compensation. The Incentive-Based Compensation that must be recovered is the amount of Clawback Eligible Incentive-Based Compensation that exceeds the amount of Clawback Eligible Incentive-Based Compensation that otherwise would have been Received had such Clawback Eligible Incentive-Based Compensation been determined based on the restated amounts (such compensation, as computed without regard to any taxes paid, the "**Excess Compensation**," is referred to in the listings standards as "erroneously awarded incentive-based compensation").

To determine the amount of Excess Compensation for Incentive-Based Compensation based on stock price or total shareholder return, where it is not subject to mathematical recalculation directly from the information in an Accounting Restatement, the amount must be based on a reasonable estimate of the effect of the Accounting Restatement on the stock price or total shareholder return upon which the Incentive-Based Compensation was Received and the Company must maintain documentation of the determination of that reasonable estimate and provide such documentation to the Exchange.

**"Incentive-Based Compensation**" means any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure. Incentive-Based Compensation is deemed received, earned or vested when the Financial Reporting Measure is attained, not when the actual payment, grant or vesting occurs. The following items of compensation are not Incentive-Based Compensation under the Policy: salaries, bonuses paid solely at the discretion of the Committee or Board that are not paid from a bonus pool that is determined by satisfying a Financial Reporting Measure, bonuses paid solely upon satisfying one or more subjective standards and/or completion of a specified employment period, non-equity incentive plan awards earned solely upon satisfying one or more strategic measures or operational measures, and equity awards for which the grant is not contingent upon achieving any Financial Reporting Measure performance goal and vesting is contingent solely upon completion of a specified employment period (e.g., time-based vesting equity awards) and/or attaining one or more non-Financial Reporting Measures.

**"Financial Reporting Measures**" are measures that are determined and presented in accordance with the accounting principles used in preparing the Company's financial statements, and any measures that are derived wholly or in part from such measures. Stock price and total shareholder return are also Financial Reporting Measures. A Financial Reporting Measure need not be presented within the financial statements or included in a filing with the U.S. Securities and Exchange Commission.

Incentive-Based Compensation is "**Received**" under the Policy in the Company's fiscal period during which the Financial Reporting Measure specified in the Incentive-Based Compensation award is attained, even if the payment, vesting, settlement or grant of the Incentive-Based Compensation occurs after the end of that period. For the avoidance of doubt, the Policy does not apply to Incentive-Based Compensation for which the Financial Reporting Measure is attained prior to the Effective Date.

**"Covered Period**" means the three completed fiscal years immediately preceding the Accounting Restatement Determination Date. In addition, Covered Period can include certain transition periods resulting from a change in the Company's fiscal year. The Company's obligation to recover Excess Compensation is not dependent on if or when the restated financial statements are filed.

**"Accounting Restatement Determination Date**" means the earliest to occur of: (a) the date the Board, a committee of the Board, or one or more of the officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement; and (b) the date a court, regulator, or other legally authorized body directs the Company to prepare an Accounting Restatement.

**Repayment of Excess Compensation** 

The Company must recover such Excess Compensation reasonably promptly and Covered Executives are required to repay Excess Compensation to the Company. Subject to applicable law, the Company may recover such Excess Compensation by requiring the Covered Executive to repay such amount to the Company by direct payment to the Company or such other means or combination of means as the Committee determines to be appropriate (these determinations do not need to be identical as to each Covered Executive). These means may include:

● requiring reimbursement of cash Incentive-Based Compensation previously paid;

● seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;

● offsetting the amount to be recovered from any unpaid or future compensation to be paid by the Company or any affiliate of the Company to the Covered Executive;

● cancelling outstanding vested or unvested equity awards; and/or

● taking any other remedial and recovery action permitted by law, as determined by the Committee.

The repayment of Excess Compensation must be made by a Covered Executive notwithstanding any Covered Executive's belief (whether legitimate or non-legitimate) that the Excess Compensation had been previously earned under applicable law and therefore is not subject to clawback.

In addition to its rights to recovery under the Policy, the Company or any affiliate of the Company may take any legal actions it determines appropriate to enforce a Covered Executive's obligations to the Company or to discipline a Covered Executive, including (without limitation) termination of employment, institution of civil proceedings, reporting of misconduct to appropriate governmental authorities, reduction of future compensation opportunities or change in role. The decision to take any actions described in the preceding sentence will not be subject to the approval of the Committee and can be made by the Board, any committee of the Board, or any duly authorized officer of the Company or of any applicable affiliate of the Company.

**Limited Exceptions to the Policy** 

The Company must recover the Excess Compensation in accordance with the Policy except to the limited extent that the conditions set forth below are met, and the Committee determines that recovery of the Excess Compensation would be impracticable: (i) the direct expense paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered. Before reaching this conclusion, the Company must make a reasonable attempt to recover such Excess Compensation, document such reasonable attempt(s) to recover, and provide that documentation to the Exchange; or (ii) Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the legal requirements as such.

**Other Important Information in the Policy** 

The Policy is in addition to the requirements of Section 304 of the Sarbanes-Oxley Act of 2002, as amended, that are applicable to the Company's Chief Executive Officer and Chief Financial Officer, as well as any other applicable laws, regulatory requirements, rules, but the Policy supersedes in full all of the clawback policies of the Company that were in effect prior to the Effective Date to the extent such policies were applicable with respect to Covered Executives and the operative portions of such policies shall have no further force or effect on or after the Effective Date.

Notwithstanding the terms of any of the Company's organizational documents (including, but not limited to, the Company's bylaws), any corporate policy or any contract (including, but not limited to, any indemnification agreement), neither the Company nor any affiliate of the Company will indemnify or provide advancement for any Covered Executive against any loss of Excess Compensation. Neither the Company nor any affiliate of the Company will pay for or reimburse insurance premiums for an insurance policy that covers potential recovery obligations. In the event the Company is required to recover Excess Compensation from a Covered Executive who is no longer an employee pursuant to the Policy, the Company will be entitled to seek such recovery in order to comply with applicable law, regardless of the terms of any release of claims or separation agreement such individual may have signed.

The Committee or Board may review and modify the Policy from time to time.

If any provision of the Policy or the application of any such provision to any Covered Executive is adjudicated to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provisions of the Policy or the application of such provision to another Covered Executive, and the invalid, illegal or unenforceable provisions will be deemed amended to the minimum extent necessary to render any such provision or application enforceable.

The Policy will terminate and no longer be enforceable when the Company ceases to be listed issuer within the meaning of Section 10D of the Exchange Act.

------

**ACKNOWLEDGEMENT**

● I acknowledge that I have received and read the Compensation Recovery Policy (the "**Policy**") of LiveOne, Inc. (the "**Company** ").

● I understand and acknowledge that the Policy applies to me, and all of my beneficiaries, heirs, executors, administrators or other legal representatives and that the Company's right to recovery in order to comply with applicable law will apply, regardless of the terms of any release of claims or separation agreement I have signed or will sign in the future.

● I agree to be bound by and to comply with the Policy and understand that determinations of the Committee (as such term is used in the Policy) will be final and binding and will be given the maximum deference permitted by law.

● I understand and agree that my current indemnification rights, whether in an individual agreement or the Company's organizational documents, exclude the right to be indemnified for amounts required to be recovered under the Policy.

● I understand that my failure to comply in all respects with the Policy is a basis for termination of my employment with the Company and any affiliate of the Company as well as any other appropriate discipline.

● I understand that neither the Policy, nor the application of the Policy to me, gives rise to a resignation for good reason (or similar concept) by me under any applicable employment agreement or arrangement.

● I acknowledge that if I have questions concerning the meaning or application of the Policy, it is my responsibility to seek guidance from the Company's Chief Financial Officer, Chief Legal Officer (if any) or my own personal advisers.

● I acknowledge that neither this Acknowledgement nor the Policy is meant to constitute an employment contract.

Please review, sign and return this form to the Company's Chief Financial Officer.

**Executive** 

(*print name*)

(*signature*)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(date)*