GAIA INC

Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Gaia, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Gaia, Inc. (the “Company”) as of December 31, 2023, and the related consolidated statements of operations, changes in equity, and cash flows, for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows as of and for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. 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 the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated 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 audit, 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 audit included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

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

Restatement of Previously Issued Consolidated Financial Statements - Refer to Note 3 in the Consolidated Financial Statements

During the audit of the year ended December 31, 2023 consolidated financial statements, we identified material misstatements that impacted the prior year consolidated financial statements, which caused the need for them to be restated by the Company. These misstatements also impacted the current year consolidated financial statements to ensure that the consolidated financial statements were presented fairly in all material respects. The material misstatements identified that were corrected through the restatement of the consolidated financial statements are discussed within Note 3 of the consolidated financial statements.

We identified the Restatement of Previously Issued Consolidated Financial Statements as a critical audit matter because of the complexity of the items that are being restated, as well as the judgment used in determining the misstatements are quantitatively and qualitatively material to the users of the consolidated financial statements.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the misstatements identified resulting in the restatement of the prior year consolidated financial statements, as well as the impact to account balances, class of transactions, and disclosures impacting the current year consolidated financial statements, which include the following, among others:

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We evaluated the internal control environment and determined whether there were internal control deficiencies, as well as the magnitude of those deficiencies, that related to the material misstatements identified.

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We assessed the accounting implications of each of the misstatements and the impact that each of them had in regards to the current year and prior year consolidated financial statements.

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We examined the prior year restated consolidated financial statements to determine if the misstatements that were identified had been appropriately accounted for within the restated prior year consolidated financial statements.

/s/Frank, Rimerman + Co. LLP

We have served as the Company’s auditor since 2023.

San Francisco, California

March 29, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Gaia, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Gaia, Inc. (“the Company”) as of December 31, 2022, and the related consolidated statements of operations, changes in equity, and cash flows for the year then ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of their operations and their cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Restatement of Previously Issued Financial Statements

As discussed in Note 3 to the consolidated financial statements, the Company has restated its consolidated financial statements as of and for the year ended December 31, 2022 to correct certain misstatements.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. 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 the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/Armanino LLP

Dallas, Texas

March 6, 2023, except for the effects of the restatement discussed in Note 3 to the consolidated financial statements, as to which the date is March 29, 2024

We began serving as the Company’s auditors in 2021. In 2023, we became the predecessor auditor.