GAIA, INC

Previous wording

“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, 2025.

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, 2025.

Previous wording

Gaia subscription service our members have unlimited access to a library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation related content, live events, and more – 90% of which is exclusively available to our members for digital streaming on most internet-connected devices. Gaia’s position in the streaming video landscape is firmly supported by its wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services. Our original content is developed and produced in-house in our lifestyle campus near Boulder, Colorado. By offering exclusive and unique content through our streaming service, we believe we will be able to significantly expand our target member base.

Current wording

Gaia’s position in the streaming video landscape is firmly supported by its wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services. Our original content is developed and produced in-house in our lifestyle campus near Boulder, Colorado. By offering exclusive and unique content through our streaming service, we believe we will be able to significantly expand our target member base.

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 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.

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 alternatives to 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

Cost of revenues. Cost of revenues increased $0.1 million or 4.1% to $3.4 million during the three months ended June 30, 2026, compared to $3.3 million during the three months ended June 30, 2025. Gross profit margin declined during the three months ended June 30, 2026 to 85.3% from 86.7% for the three months ended June 30, 2025. The decrease was primarily attributable to lower revenue while content-related costs remained relatively consistent.

Current wording

Cost of revenues. Cost of revenues decreased $0.1 million or 4.3%, to $3.3 million during the three months ended September 30, 2026, compared to $3.4 million during the three months ended September 30, 2025. Gross profit margin declined during the three months ended September 30, 2026 to 85.2% from 86.7% for the three months ended September 30, 2025. The decrease was primarily attributable to lower revenue while content-related amortization remained relatively consistent.

Previous wording

Selling and operating expenses. Selling and operating expenses increased to $21.6 million during the three months ended June 30, 2026, compared to $20.6 million for the three months ended June 30, 2025, which is primarily due to change in marketing strategy. As a percentage of net revenues, selling and operating expenses increased to 92.6% for the three months ended June 30, 2026 compared to 83.8% for the three months ended June 30, 2025.

Current wording

Selling and operating expenses. Selling and operating expenses decreased to $19.6 million during the three months ended September 30, 2026, compared to $20.6 million for the three months ended September 30, 2025, primarily due to a decision to reduce acquisition of lower ARPU members and prioritize direct subscribers who have historically demonstrated longer retention and lower churn. As a percentage of net revenues, selling and operating expenses increased to 89.1% for the three months ended September 30, 2026 compared to 82.4% for the three months ended September 30, 2025.

Previous wording

Corporate, general and administration expenses. Corporate, general and administration expenses decreased $1.4 million to $1.5 million for three months ended June 30, 2026 from $2.9 million for three months ended June 30, 2025. As a percentage of net revenues, these expenses decreased to 6.5% for the three months ended June 30, 2026 from 11.8% for the three months ended June 30, 2025. The decrease was primarily due to a decrease in incentive compensation during the three months ended June 30, 2025.

Current wording

Corporate, general and administration expenses. Corporate, general and administration expenses decreased $0.1 million to $2.1 million for the three months ended September 30, 2026 from $2.2 million for the three months ended September 30, 2025. As a percentage of net revenues, these expenses increased to 9.5% for the three months ended September 30, 2026 from 9.0% for the three months ended September 30, 2025, reflecting lower revenues. The decrease in absolute dollars was primarily due to lower compensation expense during the three months ended September 30, 2026 compared to the three months ended September 30, 2025.

Previous wording

Cost of revenues. Cost of revenues increased $0.6 million or 9.8% to $6.8 million during the six months ended June 30, 2026, compared to $6.2 million during the six months ended June 30, 2025. Gross profit margin declined during the six months ended June 30, 2026 to 85.7% from 87.2% for the six months ended June 30, 2025. The decrease was primarily attributable to lower revenue while content-related costs remained relatively consistent. The six months ended June 30, 2025 benefited from a one-time adjustment in royalty expense.

Current wording

Cost of revenues. Cost of revenues increased $0.5 million or 4.8% to $10.1 million during the nine months ended September 30, 2026, compared to $9.6 million during the nine months ended September 30, 2025. Gross profit margin declined during the nine months ended September 30, 2026 to 85.5% from 86.9% for the nine months ended September 30, 2025. The decrease was primarily attributable to lower revenue while content-related amortization remained relatively consistent. The nine months ended September 30, 2025 benefited from a one-time adjustment in royalty expense.

Previous wording

Selling and operating expenses. Selling and operating expenses increased to $41.6 million during the six months ended June 30, 2026, compared to $40.7 million for the six months ended June 30, 2025. As a percentage of net revenues, selling and operating expenses increased to 87.3% for the six months ended June 30, 2026 compared to 83.9% for the six months ended June 30, 2025, which primarily related to a change in marketing strategy.

Current wording

Selling and operating expenses. Selling and operating expenses remained flat at $61.2 million during the nine months ended September 30, 2026, and for the nine months ended September 30, 2025. As a percentage of net revenues, selling and operating expenses increased to 87.9% for the nine months ended September 30, 2026 compared to 83.4% for the nine months ended September 30, 2025, which primarily related to a decision to reduce acquisition of lower ARPU members and prioritize direct subscribers who have historically demonstrated longer retention and lower churn..

Previous wording

Corporate, general and administration expenses. Corporate, general and administration expenses decreased $0.9 million to $3.9 million for six months ended June 30, 2026 from $4.8 million for six months ended June 30, 2025. As a percentage of net revenues, these expenses decreased to 8.1% for the six months ended June 30, 2026 from 9.9% for the six months ended June 30, 2025. The decrease was primarily due to a decrease in incentive compensation during the six months ended June 30, 2025.

Current wording

Corporate, general and administration expenses. Corporate, general and administration expenses decreased $1.1 million to $5.9 million for the nine months ended September 30, 2026 from $7.0 million for the nine months ended September 30, 2025. As a percentage of net revenues, these expenses decreased to 8.1% for the nine months ended September 30, 2026 from 9.6% for the nine months ended September 30, 2025. The decrease was primarily due to lower compensation expense during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Previous wording

On December 19, 2025, Boulder Road and Westside (collectively, the “Borrower”) entered into a business loan agreement with KeyBank National Association (“KeyBank”), as lender, providing for a mortgage loan in the principal amount of $11.4 million (the “2025 Mortgage Loan”). The promissory note evidencing the 2025 Mortgage Loan bears interest at a fixed rate of 5.090% per annum, matures on December 19, 2030, and is secured by a deed of trust on our corporate campus, a portion of which is owned by Boulder Road and Westside as tenants-in-common and the remainder of which is owned by Boulder Road. The loan proceeds from the 2025 Mortgage Loan were used to refinance the 2020 Mortgage Loan. Westside and Boulder Road each received 50% of the proceeds and are each responsible for 50% of the monthly installments. The 2025 Mortgage Loan contains customary affirmative and negative covenants (each with customary exceptions) for loans of this type, including limitations on the Borrower’s ability to incur liens or debt, make investments, or engage in certain fundamental changes, and is fully guaranteed by Gaia. Additionally, the 2025 Mortgage Loan requires Boulder Road, LLC maintain a Net Operating Income to Debt Service Coverage Ratio of not less than 1.25 to 1.00. The 2025 Mortgage Loan has a remaining balance of $11.1 million as of June 30, 2026.

Current wording

On December 19, 2025, Boulder Road and Westside (collectively, the “Borrower”) entered into a business loan agreement with KeyBank National Association (“KeyBank”), as lender, providing for a mortgage loan in the principal amount of $11.4 million (the “2025 Mortgage Loan”). The promissory note evidencing the 2025 Mortgage Loan bears interest at a fixed rate of 5.090% per annum, matures on December 19, 2030, and is secured by a deed of trust on our corporate campus, a portion of which is owned by Boulder Road and Westside as tenants-in-common and the remainder of which is owned by Boulder Road. The loan proceeds from the 2025 Mortgage Loan were used to refinance the 2020 Mortgage Loan. Westside and Boulder Road each received 50% of the proceeds and are each responsible for 50% of the monthly installments. The 2025 Mortgage Loan contains customary affirmative and negative covenants (each with customary exceptions) for loans of this type, including limitations on the Borrower’s ability to incur liens or debt, make investments, or engage in certain fundamental changes, and is fully guaranteed by Gaia. Additionally, the 2025 Mortgage Loan requires Boulder Road, LLC maintain a Net Operating Income to Debt Service Coverage Ratio of not less than 1.25 to 1.00. The 2025 Mortgage Loan has a remaining balance of $11.0 million as of September 30, 2026.

Previous wording

The Amendment amended the Prior Credit Agreement to, among other things, (i) refinance and extend the prior revolving credit facility with a revolving credit facility in an aggregate principal amount of up to $10 million (which may be increased up to $15 million) that matures on August 25, 2028, the loan proceeds of which may be used for working capital, general corporate purposes, and permitted acquisitions, (ii) modify the interest rate applicable to revolving loan advances to 1.75% per annum for advances that are SOFR loans and 0.75% per annum for advances that are base rate loans and eliminate the 0.10% per annum SOFR index adjustment, and (iii) provide for a maximum leverage ratio of 2.00 to 1.00 for each computation period. Borrowings under the Amendment are available for working capital and general corporate purposes and permitted acquisitions. There was no outstanding balance as of June 30, 2026.

Current wording

The Amendment amended the Prior Credit Agreement to, among other things, (i) refinance and extend the prior revolving credit facility with a revolving credit facility in an aggregate principal amount of up to $10 million that matures on August 25, 2028, the loan proceeds of which may be used for working capital, general corporate purposes, and permitted acquisitions, (ii) modify the interest rate applicable to revolving loan advances to 1.75% per annum for advances that are SOFR loans and 0.75% per annum for advances that are base rate loans and eliminate the 0.10% per annum SOFR index adjustment, and (iii) provide for a maximum leverage ratio of 2.00 to 1.00 for each computation period. Borrowings under the Amendment are available for working capital and general corporate purposes and permitted acquisitions. As of September 30, 2026,there was $7.0 million outstanding and $3.0 million of available borrowing capacity under the revolving credit facility.

Previous wording

On September 30, 2025, Gaia entered into a cost method investment in Orion Architect LLC (“Orion”) for $2 million according to ASC Topic 321. The Company has less than 10% ownership and does not have significant influence over the investee as there is no representation on the investee's board of directors, no participation in policy-making decisions, and no material intercompany transactions. The initial valuation of this investment will be made at historical cost and adjusted only for impairment or observable price changes from comparable transactions. No unrealized gain/loss will be recognized unless an observable transaction occurs. The investment will be subject to impairment testing and any permanent declines in value will be recognized in net income.

Current wording

On September 30, 2025, Gaia entered into a cost method investment in Orion Architect LLC (“Orion”) for $2 million in accordance with ASC Topic 321. The Company has less than 10% ownership and does not have significant influence over the investee as there is no representation on the investee's board of directors, no participation in policy-making decisions, and no material intercompany transactions. The investment is accounted for under the measurement alternative in ASC Topic 321 because the equity security does not have a readily determinable fair value. Under the measurement alternative, the investment is measured at cost, less impairment, if any, plus or minus changes resulting from observable transactions for identical or similar investments of the same issuer.

Previous wording

We intend to invest approximately 15%-20% of our revenues each year to support continued investment in our content library and technology platform. This spending is entirely discretionary in nature with no contractual commitments and due to our in-house production capabilities, we can scale back our content investment based on the cash flows generated from operations if necessary to ensure we have sufficient liquidity to operate our business into the future.

Current wording

We intend to invest approximately 15% of our revenues each year to support continued investment in our content library and technology platform. This spending is entirely discretionary in nature with no contractual commitments and due to our in-house production capabilities, we can scale back our content investment based on the cash flows generated from operations if necessary to ensure we have sufficient liquidity to operate our business into the future.

Previous wording

While there can be no assurances, we believe our cash on hand, cash expected to be generated from operations, and potential capital raising capabilities should be sufficient to fund our operations on both a short-term and long-term basis. However, our projected cash needs may change as a result of acquisitions, product development, unforeseen operational difficulties or other factors.

Current wording

While there can be no assurances, we believe our cash on hand, cash expected to be generated from operations, availability under our revolving credit facility and our ability to reduce discretionary spending will be sufficient to meet our anticipated cash requirements for at least the next twelve months and thereafter for the foreseeable future. However, our projected cash needs may change as a result of acquisitions, product development, unforeseen operational difficulties or other factors.

Previous wording

Operating activities. Net cash flows from operating activities decreased approximately $7.7 million during the three months ended June 30, 2026 compared to the same period in 2025. The decrease was driven by the timing of working capital, changes in earnings and deferred revenue.

Current wording

Operating activities. Net cash flows from operating activities decreased approximately $4.4 million during the three months ended September 30, 2026 compared to the same period in 2025. The decrease was driven by the timing of working capital, changes in earnings and deferred revenue.

Previous wording

Investing activities. Cash flows used in investing activities increased approximately $0.9 million during the three months ended June 30, 2026 compared to the same period in 2025. The increase was primarily driven by purchases related to fixed assets due to Igniton-related capital spend during the three months ended June 30, 2026.

Current wording

Investing activities. Cash flows used in investing activities decreased approximately $1.4 million during the three months ended September 30, 2026 compared to the same period in 2025. The decrease was primarily due to an investment purchase in prior year quarter of $2 million with no similar investments occurring during the three months ended September 30, 2026.

Previous wording

Financing activities. Net cash flows from financing activities decreased $0.1 million during the three months ended June 30, 2026 compared to the same period in 2025 due to share repurchases related to Section 16 Officer tax coverage exchange during the three months ended June 30, 2026.

Current wording

Financing activities. Net cash flows from financing activities increased $4.5 million during the three months ended September 30, 2026 compared to the same period in 2025, primarily due to borrowings under our revolving credit facility during the three months ended September 30, 2026.

Previous wording

Operating activities. Net cash flows from operating activities decreased approximately $7.5 million during the six months ended June 30, 2026 compared to the same period in 2025. The decrease was driven by the timing of working capital, changes in earnings and deferred revenue.

Current wording

Operating activities. Net cash flows from operating activities decreased approximately $11.9 million during the nine months ended September 30, 2026 compared to the same period in 2025. The decrease was driven by the timing of working capital, changes in earnings and deferred revenue.

Previous wording

Investing activities. Cash flows used in investing activities increased approximately $1.7 million during the six months ended June 30, 2026 compared to the same period in 2025. The increase was primarily driven by purchases related to fixed assets due to Igniton-related capital spend during the six months ended June 30, 2026.

Current wording

Investing activities. Cash flows used in investing activities decreased approximately $0.2 million during the nine months ended September 30, 2026 compared to the same period in 2025.

Previous wording

Financing activities. Net cash flows from financing activities decreased $7.2 million during the six months ended June 30, 2026 compared with the same period in 2025 due to proceeds received from the issuance of common stock during the six months ended June 30, 2025.

Current wording

Financing activities. Net cash flows from financing activities decreased $4.1 million during the nine months ended September 30, 2026 compared with the same period in 2025 primarily due to proceeds from the issuance of Class A common stock during the nine months ended September 30, 2025, with no comparable proceeds in 2026, partially offset by $6.8 million of net borrowings under our revolving credit facility during the nine months ended September 30, 2026.