GAIA INC
For the period ended Jun 30, 2024. Filed Aug 5, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 5, 2024
GAIA$1.30+1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-06.
0000950170-24-053529
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-05.
0000950170-24-090814
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 32 previous paragraphs and 38 current paragraphs.
22 unchanged; 9 reworded; 6 added; 1 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Six months ended June 30, 2024 compared to six months ended June 30, 2023
Current report
Revenues, net. Revenues increased $4.3 million, or 10.9%, to $43.8 million during the six months ended June 30, 2024, compared to $39.5 million during the six months ended June 30, 2023. This was primarily driven by an increase in member count.
Current report
Selling and operating expenses. Selling and operating expenses increased $3.3 million, or 9.9%, to $36.5 million during the six months ended June 30, 2024, compared to $33.2 million for the six months ended June 30, 2023, driven primarily by an increase in marketing expense and people related expenses. As a percentage of net revenues, selling and operating expenses decreased to 83.3% for the six months ended June 30, 2024 compared to 84.1% for the six months ended June 30, 2023.
Current report
Corporate, general and administration expenses. Corporate, general and administration expenses increased $0.3 million, or 9.1% to $3.6 million for six months ended June 30, 2024 from $3.3 million for six months ended June 30, 2023, driven primarily by increases in public company expenses. As a percentage of net revenues, these expenses were 8.3% for both the six months ended June 30, 2024 and 2023.
Current report
As described in Note 10, in April 2024, the Company entered into a series of transactions with its subsidiary, Igniton, and a third-party entity to purchase a perpetual license for a total of $16.2 million of consideration comprised of $10.2 million of cash and $5.0 million of common stock of Igniton and $1.0 million of the Company’s equity security investment in Telomeron (the “License Purchase”).
Current report
The license allows the Company to utilize the technology developed by the third party. This license is being recorded within the Technology license, net line item on the condensed consolidated balance sheets. The License Purchase was primarily funded through an equity financing through Igniton which raised $6.8 million of cash from third-party investors.
Removed paragraphs (1)
Previous report
As described in Note 10, during April of 2024, a majority owned subsidiary of the Company raised approximately $10.8 million of equity financing, including $4.0 million from Gaia, with a majority of the proceeds being used to acquire a technology license. The shares associated with this $10.8 million were issued in April 2024. The Company is still evaluating the transaction from an accounting perspective.
Reworded paragraphs (9)
Previous wording
This report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward looking statements that involve risks and uncertainties. When used in this discussion, we intend the words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “hope,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “strive,” “target,” “will,” “would” and similar expressions as they relate to us to identify such forward-looking statements. Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of certain factors set forth under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q and under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. Risks and uncertainties that could cause actual results to differ include, without limitation: our ability to attract new members and retain existing members; our ability to compete effectively, including for customer engagement with different modes of entertainment; maintenance and expansion of device platforms for streaming; fluctuation in customer usage of our service; fluctuations in quarterly operating results; service disruptions; production risks; general economic conditions; future losses; loss of key personnel; price changes; brand reputation; acquisitions; new initiatives we undertake; security and information systems; legal liability for website content; failure of third parties to provide adequate service; future internet-related taxes; our founder’s control of us; litigation; consumer trends; the effect of government regulation and programs; the impact of public health threats; our ability to remediate the material weaknesses in our internal control over financial reporting; and other risks and uncertainties included in our filings with the SEC. We caution you that no forward-looking statement is a guarantee of future performance, and you should not place undue reliance on these forward-looking statements which reflect our views only as of the date of this report. We undertake no obligation to update any forward-looking information.
Current wording
This report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward looking statements that involve risks and uncertainties. When used in this discussion, we intend the words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “hope,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “strive,” “target,” “will,” “would” and similar expressions as they relate to us to identify such forward-looking statements. Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of certain factors set forth under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q and under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. Risks and uncertainties that could cause actual results to differ include, without limitation: our ability to attract new members and retain existing members; our ability to compete effectively, including for customer engagement with different modes of entertainment; maintenance and expansion of device platforms for streaming; fluctuation in customer usage of our service; fluctuations in quarterly operating results; service disruptions; production risks; general economic conditions; future losses; loss of key personnel; price changes; brand reputation; acquisitions; new initiatives we undertake; security and information systems; legal liability for website content; failure of third parties to provide adequate service; future internet-related taxes; our founder’s control of us; litigation; consumer trends; the effect of government regulation and programs; the impact of public health threats; our ability to remediate the material weaknesses in our internal control over financial reporting and technical accounting; and other risks and uncertainties included in our filings with the SEC. We caution you that no forward-looking statement is a guarantee of future performance, and you should not place undue reliance on these forward-looking statements which reflect our views only as of the date of this report. We undertake no obligation to update any forward-looking information.
Previous wording
Our available content is currently focused on yoga, transformation, alternative healing, seeking truth and conscious films. This content is specifically targeted to a unique member base that is interested in alternatives and supplements to the content provided by mainstream media. We have grown these content options both organically through our own productions and through strategic acquisitions. In addition, through our investments in our streaming video technology and our user interface, we have expanded the many ways our subscription member base can access our unique library of media titles.
Current wording
Our available content is currently focused on yoga, transformation, alternative healing, seeking truth and conscious films. This content is specifically targeted to a unique member base that is interested in alternative content provided by mainstream media. We have grown these content options both organically through our own productions and through strategic acquisitions or licensing. In addition, through our investments in our streaming video technology and our user interface, we have expanded the many ways our subscription member base can access our unique library of media titles.
Previous wording
Revenues, net. Revenues increased $2.1 million, or 10.7%, to $21.7 million during the three months ended March 31, 2024, compared to $19.6 million during the three months ended March 31, 2023. This was primarily driven by an increase in member count.
Current wording
Revenues, net. Revenues increased $2.242 million, or 11%, to $22.081 million during the three months ended June 30, 2024, compared to $19.839 million during the three months ended June 30, 2023. This was primarily driven by an increase in member count.
Previous wording
Cost of revenues. Cost of revenues increased $0.4 million or 14.3% to $3.2 million during the three months ended March 31, 2024, compared to $2.8 million during the three months ended March 31, 2023 related to the increase in revenues and increased content amortization. Gross profit margin decreased during the three months ended March 31, 2024 to 85.4% from 85.9% for the three months ended March 31, 2023 primarily due to increased content amortization related to an overall increase in our investment of our original content offerings.
Current wording
Cost of revenues. Cost of revenues increased $0.6 million or 21.4% to $3.4 million during the three months ended June 30, 2024, compared to $2.8 million during the three months ended June 30, 2023 related to the increase in revenues and revenue mix. Gross profit margin decreased during the three months ended June 30, 2024 to 84.5% from 85.7% for the three months ended June 30, 2023 primarily due to increased content amortization related to an overall increase in our investment of our original content offerings and other costs.
Previous wording
Selling and operating expenses. Selling and operating expenses increased $1.7 million, or 10.6%, to $17.8 million during the three months ended March 31, 2024, compared to $16.1 million for the three months ended March 31, 2023, driven primarily by an increase in people related expenses and marketing expense. As a percentage of net revenues, selling and operating expenses decreased to 81.9% for the three months ended March 31, 2024 compared to 82.1% for the three months ended March 31, 2023.
Current wording
Selling and operating expenses. Selling and operating expenses increased $1.6 million, or 9.4%, to $18.7 million during the three months ended June 30, 2024, compared to $17.1 million for the three months ended June 30, 2023, driven primarily by an increase in marketing expense and people related expenses. As a percentage of net revenues, selling and operating expenses decreased to 84.7% for the three months ended June 30, 2024 compared to 86.1% for the three months ended June 30, 2023.
Previous wording
Corporate, general and administration expenses. Corporate, general and administration expenses decreased $0.2 million, or 11.1% to $1.6 million for three months ended March 31, 2024 from $1.8 million for three months ended March 31, 2023, driven primarily by decreases in salary and payroll related expenses. As a percentage of net revenues, these expenses decreased to 7.5% for the three months ended March 31, 2024 from 9.0% for the three months ended March 31, 2023.
Current wording
Corporate, general and administration expenses. Corporate, general and administration expenses increased $0.5 million, or 33.3% to $2.0 million for three months ended June 30, 2024 from $1.5 million for three months ended June 30, 2023, driven primarily by increases in public company expenses. As a percentage of net revenues, these expenses increased to 9.0% for the three months ended June 30, 2024 from 7.7% for the three months ended June 30, 2023.
Previous wording
Our budgeted content and capital expenditures for the remainder of 2024 are expected to be between $10.0 to $12.0 million which we intend to fund with cash flows generated from operations. These planned expenditures will be predominately utilized to expand our content library and build out the capabilities of our digital platforms. The planned expenditures are discretionary and, with our in-house production capabilities, we have the ability to scale expenditures based on the available cash flows from operations. We began to generate positive cash flows from operations since 2020 and have continued to generate cash flows from operations since. We expect to continue generating positive cash flows from operations during the remainder of 2024. We generated approximately $5.9 million in cash flows from operations during the three months ended March 31, 2024. As of March 31, 2024, our cash balance was $8.6 million.
Current wording
Our budgeted content and capital expenditures for the remainder of 2024 are expected to be between $6.0 to $8.0 million which we intend to fund with cash flows generated from operations. These planned expenditures will be predominately utilized to expand our content library and build out the capabilities of our digital platforms. The planned expenditures are discretionary and, with our in-house production capabilities, we have the ability to scale expenditures based on the available cash flows from operations. We began to generate positive cash flows from operations since 2020 and have continued to generate cash flows from operations since. We expect to continue generating positive cash flows from operations during the remainder of 2024. We generated approximately $3.9 million in cash flows from operations during the six months ended June 30, 2024. As of June 30, 2024, our cash balance was $5.5 million.
Previous wording
Operating activities. Cash flows provided by operations increased approximately $5.3 million during the first three months of 2024 compared to the same period in 2023. The increase was primarily driven by changes in earnings, timing of working capital, primarily accrued liabilities and deferred revenues.
Current wording
Operating activities. Cash flows provided by operations increased approximately $2.6 million during the first six months of 2024 compared to the same period in 2023. The increase was primarily driven by changes in earnings, timing of working capital, primarily accrued liabilities and deferred revenues.
Previous wording
Investing activities. Cash flows used in investing activities decreased $0.3 million during the first three months of 2024 compared to the same period in 2023 due primarily to lower budgeted capital expenditures.
Current wording
Investing activities. Cash flows used, including the investing activities within our 71% owned subsidiary, decreased $10.6 million during the first six months of 2024 compared to the same period in 2023 due primarily to a technology license acquired during the quarter. Excluding this subsidiary license purchase, the cash flow would be a decrease of $0.6 million.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Cost of revenues. Cost of revenues increased $1.0 million or 17.9% to $6.6 million during the six months ended June 30, 2024, compared to $5.6 million during the six months ended June 30, 2023 related to the increase in revenues and increased content amortization. Gross profit margin decreased during the six months ended June 30, 2024 to 85.0% from 85.8% for the six months ended June 30, 2023 primarily due to increased content amortization related to an overall increase in our investment of our original content offerings and revenue mix.