GAIA, INC

Notes to Condensed Cons olidated Financial Statements

References in this report to “we”, “us”, “our”, the “Company” or “Gaia” refer to Gaia, Inc. and its consolidated subsidiaries, unless we indicate otherwise. All textual currency references are expressed in thousands of U.S. dollars (unless otherwise indicated).

1. Organization, Nature of Operations, and Principles of Consolidation

Gaia, Inc. operates a global digital video subscription service and on-line community that strives to connect a unique and underserved member base. Our digital content library includes over 10,000 titles, with a growing selection of titles available in Spanish, German and French. Our members have unlimited access to this vast library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation-related content and more –90% of which is exclusively available to our members for digital streaming on most internet-connected devices anytime, anywhere, commercial free.

Our mission is to create a transformational network that empowers a global conscious community. Content on our network is currently organized into four primary channels—Yoga, Transformation, Alternative Healing, and Seeking Truth—and delivered directly to our members through our streaming platform. We curate programming for these channels by producing content in our in-house production studios with a staff of media professionals. This produced and owned content currently comprises approximately 75% of our members’ viewing time. We complement our produced and owned content through long term licensing agreements.

We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with GAAP, and they include our accounts and those of our subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. The unaudited condensed consolidated financial position, results of operations and cash flows for the interim periods disclosed in this report are not necessarily indicative of future financial results.

Use of Estimates and Reclassifications

The preparation of the condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying condensed consolidated financial statements and disclosures. Although we base these estimates on our best knowledge of current events and actions that we may undertake in the future, actual results may be different from the estimates.

Reclassifications of Previously Issued Financial Statements

We have made certain reclassifications to prior period amounts to conform to the current period presentations. These reclassifications had no impact on previously reported total net income (loss), total cash flows, or total stockholders’ equity. As disclosed below, the Company’s Board voted to discontinue its stand-alone business unit selling transactional courses and, as such, we reclassified the results of operations for this business unit in our condensed consolidated financial statements for the three and nine months ended September 30, 2025.

Discontinued Operations

On March 7, 2025, the Company’s Board voted to discontinue its stand-alone business unit selling transactional courses, which represented approximately $0 and $0.2 million of revenue for the three months ended September 30, 2026 and 2025, respectively, and approximately $0 and $0.6 million of revenue for thenine months ended September 30, 2026 and 2025, respectively. On November 4, 2025, the Company completed a sale of all assets of its discontinued operations under an asset purchase agreement. We have presented the results of operations related to winding up this line of business as discontinued operations on the accompanying condensed consolidated statements of operations.

Recently Issued Accounting Pronouncements Not Yet Adopted

There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2025. The following recently issued accounting pronouncements are being evaluated but have not yet been adopted.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (ASC Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

In September 2025, the FASB issued ASU 2025-06, titled Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU updates the guidance for internal-use software costs to reflect modern software development practices and address stakeholder concerns about the relevance and operability of existing guidance. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-06.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (ASC Topic 270): Narrow-Scope Improvements, which clarifies the guidance in ASC Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

2. Revenue Recognition

Revenues consist primarily of subscription fees paid by our members. We present revenues net of the taxes that are collected from members and remitted to governmental authorities. Members are billed in advance and revenues are recognized ratably over the subscription term. Deferred revenues consist of subscription fees collected from members that have not been earned and are recognized ratably over the remaining term of the subscription. We recognize revenue on a net basis for relationships where our third-party platform partners (“Partners”) have the primary relationship, including billing and service delivery, with the member. We recognize revenue on a gross basis for members whose primary relationship is with Gaia. Payments made to Partners to assist in promoting our service on their platforms are expensed to marketing expenses in the period incurred. We do not allow access to our service to be provided as part of a bundle by any of our Partners.

3. Equity and Share-Based Compensation

During the three months ended September 30, 2026 and 2025, we recognized approximately $0.3 million and $0.4 million, respectively, of share-based compensation expense. During thenine months ended September 30, 2026 and 2025, we recognized approximately $1.1 million and $1.2 million, respectively, of share-based compensation expense. Total share-based compensation expense is reported in selling and operating expenses and corporate, general and administration expenses on our condensed consolidated statements of operations. There wereno options exercised during the three and nine months ended September 30, 2026 and 2025.

Class A Common Stock Offering

In February 2025, we entered into an underwriting agreement with Roth Capital Partners, LLC and Lake Street Capital Markets, LLC (the “Underwriters”) relating to the offer and sale of 1,600,000 shares of our Class A common stock ($0.0001 par value) (the “Shares”). The public offering price was $5.00 per share, resulting in gross proceeds of $8.0 million before underwriting discounts, commissions and offering expenses. After deducting underwriting discounts, commissions and other offering costs, we received net proceeds of approximately $7.0 million, which were recorded in additional paid‑in capital. The offering was made pursuant to a registration statement on Form S-3. We provided a 45-day option to the Underwriters to purchase up to an additional 240,000 Shares at $5.00 per share, less underwriting discounts and commissions (the “Over-Allotment Option”). On March 7, 2025, the Underwriters elected to waive the right to exercise the Over-Allotment Option.

4. Debt

Long-term debt

On September 9, 2020, our wholly owned subsidiary Boulder Road LLC (“Boulder Road”) sold a 50% undivided interest in a portion of our corporate campus to Westside Boulder, LLC (“Westside”). Boulder Road retained a 50% undivided interest in the property as well as full ownership of our studio and production facilities. Boulder Road received consideration of $13.2 million in the transaction.

On December 28, 2020, Boulder Road and Westside (collectively, the “Borrower”) entered into a loan agreement with First Interstate Bank (formerly Great Western Bank), as lender, providing for a mortgage loan in the principal amount of $13.0 million (the “2020 Mortgage Loan”). The promissory note evidencing the 2020 Mortgage Loan bore interest at a fixed rate of 3.75% per annum and was scheduled to mature on December 28, 2025, before being extinguished by the Borrower with the proceeds from the 2025 Mortgage Loan as discussed below.

On December 19, 2025, 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 remainderof 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 maintain a Net Operating Income to Debt Service Coverage Ratio of not less than 1.25 to 1.00. As compliance is not required until December 31, 2026, the Company was not required to test compliance with the financial covenants as of September 30, 2026. The 2025 Mortgage Loan has a remaining balance of $11.0 million as of September 30, 2026.

Maturities on long-term debt, net are as follows:

Credit and Security Agreement

On July 25, 2025 (the “Closing Date”), the Company entered into a Second Amendment to the Credit and Security Agreement (the “Amendment”) among the Company, the subsidiary guarantors party thereto, and KeyBank National Association (the “Lender”), which amends that certain Credit and Security Agreement, dated as of August 25, 2022 (as amended prior to the Closing Date, the “Prior Credit Agreement”), among the Company, the subsidiary guarantors from time to time party thereto, and the Lender.

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 Secured Overnight Financing Rate (“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. As of September 30, 2026, the Company had $7.0 million outstanding and $3.0 million of available borrowing capacity under the revolving credit facility.

Loans made, or letters of credit issued, under the Amendment mature on August 25, 2028, and are secured (subject to permitted liens and other exceptions) by a first priority lien on all business assets, including intellectual property, of Gaia and the subsidiary guarantors.

The Amendment contains customary affirmative and negative covenants (each with customary exceptions), including limitations on the Company’s ability to incur liens or debt, make investments, pay dividends, enter into transactions with its affiliates and engage in certain fundamental changes. As of September 30, 2026 and December 31, 2025, the Company was in compliance with all related covenants.

5. Leases

In connection with the sale of a portion of our corporate campus as further discussed in Note 4, we leased the property pursuant to a master lease which was amended effective December 8, 2025 (together, the “Lease Amendment”). The Lease Amendment, among other things, extended the term through September 30, 2035, with twofive-year extension options. The extension options are not recognized as part of the right-of-use asset and lease liability. We record the right to use the underlying asset for the operating lease term as an asset and our obligation to make lease payments as a liability, based on the present value of the lease payments over the lease term. As of September 30, 2026, the weighted average remaining lease term was 9.00 years and the weighted average discount rate was 5.090%.

Because the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate to determine the present value of lease payments. Information related to our right-of-use asset and related lease liability were as follows:

Operating lease expense is recognized on a straight-line basis over the lease term. Our operating lease expense was $0.3 million and $0.3 million for thethree months ended September 30, 2026 and 2025, and $0.9 million and $0.8 million for thenine months ended September 30, 2026 and 2025, respectively. At September 30, 2026, and for the subsequent years ending December 31, future maturity is as follows:

6. Loss Per Share

Basic loss per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted loss per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period (“common stock equivalents”). Common stock equivalents consist of incremental shares issuable upon the assumed exercise of stock options and vesting of restricted stock units utilizing the treasury stock method.

The weighted-average diluted shares outstanding computation is:

We excluded the effect of the below elements from our calculation of diluted loss per share, as their inclusion would have been anti-dilutive, as there were no earnings attributable to common shareholders:

7. Income Taxes

Periodically, we perform assessments of the realization of our net deferred tax assets considering all available evidence, both positive and negative. Based on our historical operating losses, combined with our plans to continue to invest in our revenue growth and content library, we have a full valuation allowance on our deferred tax assets as of September 30, 2026. As of September 30, 2026, our net operating loss carryforwards on a gross basis were $93.9 million and $31.0 million for federal and state, respectively, of which $7.8 million in federal net operating losses expire in 2037. Net operating losses generated in 2018 and beyond do not expire.

8. Commitments and Contingencies

From time to time, we are involved in legal proceedings that we consider to be in the normal course of business. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, that are considered probable of being rendered against us in litigation or arbitration in existence at September 30, 2026, and that can be reasonably estimated, are either reserved against or would not have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

The Company is subject to non‑income tax examinations in certain foreign jurisdictions where it provides services to consumers residing in those jurisdictions. A number of these examinations are ongoing and, in certain cases, have resulted in assessments from foreign tax authorities. The Company recognizes an accrual for non‑income tax liabilities in foreign jurisdictions when it is probable that a liability has been incurred and the exposure can be reasonably estimated. For other foreign jurisdictions where non‑income taxes may be due, the Company has determined that it is reasonably possible that additional non‑income tax exposures exist. However, because certain examinations are in the early stages and based on the Company’s prior experience with foreign tax authorities, the Company is currently unable to reasonably estimate the possible loss or range of loss that may result from these matters.

9. Segment and Geographic Information

The Company operates asone operating segment. The Company's chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated operating margin and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the determination of the rate at which the Company seeks to grow global operating margin and the allocation of budget between cost of revenues, sales and marketing, technology and development, and general and administrative expenses.

The following table presents selected financial information with respect to the Company’s single operating segment for the three and nine months ended September 30, 2026 and 2025:

Geographic Information

We have members in the United States and over 185 foreign countries. The major geographic territories are the U.S., Canada and Australia, which are determined based on the member's billing location.

The following represents geographical data for our operations:

10. Goodwill and Investment and Other Assets, Net

Goodwill

Goodwill was $34.0 million as of September 30, 2026 and as of December 31, 2025. There wasno impairment of goodwill during thenine months ended September 30, 2026 and 2025.

On September 30, 2025, Gaia completed an acqu isition of UTV L.L.C. (“UTV”), in accordance with ASC Topic 805 Business Combinations for a purchase price of $2.5 million, of which $0.2 million was accrued for as aliability as of September 30, 2026, and will be settled in cash during 2027. This transaction resulted in $2.0 million of goodwill which is expected to be deductible for tax purposes and $0.5 million of assets including acquired media and customer relationships intangibles. The Company entered into this transaction to acquire content, expand market presence, increase member base, and market to a core growth audience focused on conscious lifestyle. There wereno other adjustments to goodwill during the period.

The following table presents unaudited pro forma revenue and earningsfor the three and nine months ended September 30, 2025 and are based on the individual historical results of UTV and Gaia, with adjustments to give effect as if the acquisition had occurred on January 1, 2024 after giving effect to certain adjustments, including the amortization of intangible assets and assumes the purchase price was allocated to the assets purchased and liabilities assumed based on their fair market values at the date of purchase:

The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred had the transactions been consummated as of January 1, 2024. Furthermore, such pro forma information is not necessarily indicative of future operating results of the combined companies and should not be construed as representative of the operating results of the combined companies for any future dates or periods.

Investments and Other Assets, Net

Investments and other assets, net represents Gaia’s investments in entities for which we do not exercise significant influence or have significant ownership stake, as well as any assets that are held for sale not in the ordinary course of business.

Other intangible assets, net include customer-related intangible assets amortized on a straight-line basis over 24 and 48 months and domain names.

Investments and other assets, net consist of the following as of September 30, 2026 and December 31, 2025:

The following table represents our other intangible assets, net by major asset class as of the dates indicated, which are included in Investments and other intangible assets, net on the accompanying condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025:

The customer-related intangible assets are amortized on astraight-line basis over 24 and 48 months. Amortization expense was$55 thousand and $165 thousand for thethree and nine months ended September 30, 2026, respectively, and$142 thousand and$426 thousand for the three and nine months ended September 30, 2025, respectively. Amortization expense is included in selling and operating expense and corporate, general and administration expense in the accompanying consolidated statements of operations. The weighted-average remaining useful life for these intangible assets is 12 months. Future amortization of our amortizable intangible assets as of September 30, 2026 is expected to be$55 thousand for the remainder of the year ended December 31, 2026 and $165 thousand for the year ended December 31, 2027.

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. Following the close of the investment, the Company holds less than 10% ownership of the investee. The Company 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. During thethree and nine months ended September 30, 2026, no impairment was recognized.

11. Technology License

In April 2024, the Company's subsidiary, Igniton, Inc., a Colorado corporation (“Igniton”), purchased a royalty-free perpetual license for $16.2 million. This license is recorded within the Technology license, net line item on the consolidated balance sheets.

Technology license, net consists of the following as of September 30, 2026:

The license is amortized on astraight-line basis over 20 years. Amortization expense was $202 thousand and $606 thousand for thethree and nine months ended September 30, 2026 and 2025, respectively.

12. Subsequent Events

Management has evaluated subsequent events through November 2, 2026, the date on which these condensed consolidated financial statements were issued, and determined that there were no subsequent events requiring recognition or disclosure.