LiveOne Inc

​

Shareholders and Board of Directors

LiveOne, Inc.

Beverly Hills, CA

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of LiveOne, Inc. and its subsidiaries (the “Company”) as of March 31, 2024 and 2023, 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, 2024 and 2023, 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 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 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 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 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 audit 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 audit provides 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.

Impairment Assessment of Goodwill - Media Group

At March 31, 2024, the carrying value of the Company’s goodwill was $23,379,000, of which $1,666,000 was allocated to the Media Group reporting unit. As discussed in Note 2 to the consolidated financial statements, goodwill is tested for impairment at the reporting unit level, annually on January 1 or more frequently if events or circumstances indicate that an impairment may have occurred. Management determined that a quantitative goodwill impairment analysis was required as of January 1, 2024 for the Media Group’s goodwill. The impairment test was performed by calculating the fair value of the Media Group reporting unit, using a combination of an income approach and market approach. March 31, 2024, the carrying value of the Company’s goodwill was $23,379,000, of which $1,666,000 was allocated to the Media Group reporting unit. As discussed in Note 2 to the consolidated financial statements, goodwill is tested for impairment at the reporting unit level, annually on January 1 or more frequently if events or circumstances indicate that an impairment may have occurred. Management determined that a quantitative goodwill impairment analysis was required as of January 1, 2024 for the Media Group’s goodwill. The impairment test was performed by calculating the fair value of the Media Group reporting unit, using a combination of an income approach and market approach.

We identified the impairment assessment 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:

/s/ Macias Gini & O’Connell LLP

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

Los Angeles, CA

July 1, 2024

PCAOB ID No. 324