LiveOne Inc

For the Three and Six Months Ended September 30, 2024 and 2023

Note1 — Organization and Basis of Presentation

Organization

LiveOne, Inc. together with its subsidiaries (“we,” “us,” “our”, the “Company” or “LiveOne”) is a Delaware corporation headquartered in Beverly Hills, California. The Company is a creator-first, music, entertainment and technology platform focused on delivering premium experiences and content worldwide through memberships, live and virtual events.

The Company was reincorporated in the State of Delaware on* August 2, 2017,pursuant to a reincorporation merger of Loton, Corp (“Loton”) with and into LiveXLive Media, Inc., Loton’s wholly owned subsidiary at the time. As a result of the reincorporation merger, Loton ceased to exist as a separate entity, with LiveXLive Media, Inc. being the surviving entity. On December 29, 2017,the Company acquired Slacker, Inc. (“Slacker”), an Internet music and radio streaming service incorporated in the state of Delaware, and it became a wholly owned subsidiary of LiveOne. On February 5, 2020,the Company acquired (i) React Presents, LLC a Delaware limited liability company (“React Presents”), and it became a wholly owned subsidiary of LiveXLive Events, LLC, a wholly owned subsidiary of the Company and (ii) indirectly Spring Awakening, LLC, which is a wholly owned subsidiary of React Presents, a producer, promoter and manager of in person live music festivals and events. On July 1, 2020,the Company through its wholly owned subsidiary, LiveXLive PodcastOne, Inc., acquired PodcastOne, Inc. (formerly Courtside Group, Inc.) (“PodcastOne”). On December 22, 2020,the Company through its wholly owned subsidiary LiveXLive Merchandising, Inc., acquired Custom Personalization Solutions, Inc. (“CPS”). Effective as of October 5, 2021,the Company changed its corporate name to "LiveOne, Inc." On October 17, 2021,the Company through its wholly owned subsidiary LiveXLive PR, Inc., acquired Gramophone Media, Inc. ("Gramophone"). On February 28, 2023,the Company acquired a majority interest in Splitmind LLC and Drumify LLC. On September 8,*2023, PodcastOne completed a Qualified Event (as defined below) (its spin out from the Company to become a standalone publicly trading company) as a result of its direct listing on The NASDAQ Capital Market on such date (the "Direct Listing"). As of the date of this Quarterly Report, PodcastOne continues to be a majority owned subsidiary of the Company.

Basis of Presentation

The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements for the fiscal year ended* March 31, 2024*, and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s interim unaudited condensed consolidated financial statements for thethree andsix months ended* September 30, 2024*. The results for thethree andsix months ended* September 30, 2024* arenot necessarily indicative of the results expected for the full fiscal year ending* March 31, 2025* (“fiscal2025”). The condensed consolidated balance sheet as of* March 31, 2024* has been derived from the Company’s audited balance sheet included in the Company’s Annual Report on Form10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on* July 1, 2024 (the“2024* Form10-K”).

The interim unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form10-Q and Article10 of Regulation S-X. They donot include all of the information and footnotes required by GAAP for complete audited financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the2024 Form10-K.

Going Concern and Liquidity

The Company’s interim unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

The Company’s principal sources of liquidity have historically been its debt and equity issuances and its cash and cash equivalents (which cash, cash equivalents and restricted cash amounted to $11.1 million as of* September 30, 2024*). As reflected in its interim unaudited condensed consolidated financial statements included elsewhere herein, the Company has a history of losses, incurred a net loss of $3.9 million for thesix months ended* September 30, 2024*, and provided cash of $7.1 million in operating activities for thesix months ended* September 30, 2024* and had a working capital deficiency of $22.3 million as of* September 30, 2024*. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern withinone year from the date that these financial statements are filed. The Company’s interim unaudited condensed consolidated financial statements donot include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

F-5

The Company’s ability to continue as a going concern is dependent on its ability to execute its growth strategy and on its ability to raise additional funds. The Company filed a new universal shelf Registration Statement on Form S-3 (the “New Shelf S-3”) with the SEC, which was declared effective by the SEC on* February 17, 2022.Under the New Shelf S-3, the Company has the ability to raise up to $150.0 million in cash from the sale of its equity, debt and/or other financial instruments. In May 2024,the Company entered into a Sales Agreement with Roth Capital Partners, LLC ("Roth Capital"), under which the Company mayoffer and sell shares of our common stock having an aggregate offering price of up to $25 million from time to time through Roth Capital acting as the Company's sales agent. As of the filing of this Quarterly Report, we havenot* sold any shares under such agreement. The uncertain market conditions* maylimit the Company’s ability to access capital, mayreduce demand for its services and maynegatively impact its ability to retain key personnel. Management mayseek additional funds, primarily through the issuance of equity and/or debt securities for cash to operate the Company’s business.No assurance can be given that any future financing will be available or, if available, that it be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it maycontain terms that result in undue restrictions on its operations, in the case of debt financing or cause substantial dilution for its stockholders, in case of equity and/or convertible debt financing. If the Company is unable to obtain sufficient financing when needed, the Company mayalso have to reduce certain overhead costs through the reduction of salaries and other means and settle liabilities through negotiation. There can beno* assurance that management’s attempts at any or all of these endeavors will be successful.

Principles of Consolidation

The interim unaudited condensed consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. Acquisitions are included in the Company’s interim unaudited condensed consolidated financial statements from the date of the acquisition. The Company uses purchase accounting for its acquisitions, which results in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain amounts in the Company’s previously issued financial statements have been reclassified to conform to the current year presentation.

Note2 — Summary of Significant Accounting Policies

There have beenno material changes in the Company’s significant accounting policies from those previously disclosed in the consolidated financial statements included in the2024 Form10-K, other than those included below.

F-6

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with the United States of America (“US”) generally accepted accounting principles (“GAAP”) requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue, allowance for doubtful accounts, the assigned value of acquired assets and assumed and contingent liabilities associated with business combinations and the related purchase price allocation, useful lives and impairment of property and equipment, intangible assets, goodwill and other assets, inventory calculations and reserves, the fair value of the Company’s equity-based compensation awards and convertible debt and debenture instruments, fair values of derivatives, and contingencies. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. There is a reasonable possibility that actual results could differ from those estimates and such differences could be material to the financial position and results of operations, specifically in assessing when the collectability of revenue related consideration is probable, and the impairment assessment of goodwill, indefinite lived assets or long-lived assets that are depreciated or amortized.

Segment Reporting

The Company presents the financial statements by segment in accordance with ASC TopicNo. 280, Segment Reporting (“ASC280”) to provide investors with transparency into how the chief operating decision maker (“CODM”) manages the business. The Company determined the CODM is its Chief Executive Officer. The CODM reviews financial information and allocates resources across itsthree operating segments.

Revenue Recognition Policy

The Company accounts for a contract with a customer when an approved contract exists, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and the collectability of substantially all of the consideration is probable. Revenue is recognized when the Company satisfies its obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company uses the expected value method to estimate the value of variable consideration on advertising and with original equipment manufacturer contracts to include in the transaction price and reflect changes to such estimates in periods in which they occur. Variable consideration for these services is allocated to and recognized over the related time period such advertising and membership services are rendered as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company’s efforts to satisfy its performance obligation. The amount of variable consideration included in revenue is limited to the extent that it is probable that the amount willnot be subject to significant reversal when the uncertainty associated with the variable consideration is subsequently resolved.

Practical Expedients

The Company elected the practical expedient and recognized the incremental costs of obtaining a contract, if any, as an expense when incurred if the amortization period of the asset that would have been recognized isone year or less.

Gross Versus Net Revenue Recognition

The Company reports revenue on a gross or net basis based on management’s assessment of whether the Company acts as a principal or agent in the transaction and is evaluated on a transaction by transaction basis. To the extent the Company acts as the principal, revenue is reported on a gross basis net of any sales tax from customers, when applicable. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service prior to transfer to the customer. Where applicable, the Company has determined that it acts as the principal in all of its membership service, sponsorship, and merchandising streams and* may*act as principal or agent for its ticketing/live events, advertising and licensing revenue streams.

F-7

The Company’s revenue is principally derived from the following services:

Membership Services

Membership services revenue substantially consist of monthly to annual recurring membership fees, which are primarily paid in advance by credit card or through direct billings arrangements. The Company defers the portions of monthly to annual recurring membership fees collected in advance and recognizes them in the period earned. Membership revenue is recognized in the period of services rendered. The Company’s membership revenue consists of performance obligations that are satisfied over time. This has been determined based on the fact that the nature of services offered are membership based where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services ornot. As a result, the Company has concluded that the best measure of progress toward the complete satisfaction of the performance obligation over time is a time-based measure. The Company recognizes membership revenue straight-line through the membership period.

Membership Services consist of:

Direct member, mobile service provider and mobile app services

The Company generates revenue for membership services on both a direct basis and through memberships sold through certainthird-party mobile service providers and mobile app services (collectively the “Mobile Providers”). For memberships sold through the Mobile Providers, the member executes an on-line agreement with Slacker outlining the terms and conditions between Slacker and the member upon purchase of the membership. The Mobile Providers promote the Slacker app through their e-store, process payments for memberships, and retain a percentage of revenue as a fee. The Company reports this revenue gross of the fee retained by the Mobile Providers, as the member is Slacker’s customer in the contract and Slacker controls the service prior to the transfer to the member. Membership revenues from monthly memberships sold directly through Mobile Providers are subject to such Mobile Providers’ refund or cancellation terms. Revenues from Mobile Providers are recognized net of any such adjustments for variable consideration, including refunds and other fees. The Company’s payment terms vary based on whether the membership is sold on a direct basis or through Mobile Providers. Memberships sold on a direct basis require payment before the services are delivered to the customer. The payment terms for memberships sold through Mobile Providers vary, but are generally payable within30 days.

Third-Party Original Equipment Manufacturers

The Company generates revenue for membership services through memberships sold through athird-party Original Equipment Manufacturer (the “OEM”). For memberships sold through the OEM, the OEM executes an agreement with Slacker outlining the terms and conditions between Slacker and the OEM upon purchase of the membership. The OEM installs the Slacker app in their equipment and provides the Slacker service to the OEM’s customers. The monthly fee charged to the OEM is based upon a fixed rate per vehicle, multiplied by the variable number of total vehicles which have signed up for a paid membership. The number of customers, or the variable consideration, is reported by OEMs and resolved on a monthly basis. The Company’s payment terms with OEM are up to30 days.

Advertising revenue primarily consist of revenues generated from the sale of audio, video, and display advertising space tothird-party advertising exchanges. Revenues are recognized based on delivery of impressions over the contract period to thethird-party exchanges, either when an ad is placed for listening or viewing by a visitor or when the visitor “clicks through” on the advertisement. The advertising exchange companies report the variable advertising revenue performed on a monthly basis which represents the Company’s efforts to satisfy the performance obligation. Additionally, following the acquisition of PodcastOne, the Company began deriving revenue from podcast advertising. PodcastOne earns advertising revenues primarily for fees earned from advertisement placement purchased by the customer during the time the podcast is delivered to the viewing audience, under the terms and conditions as set forth in the applicable podcasting agreement calculated using impressions.

From time to time the Company enters into barter transactions involving advertising provided in exchange for goods and services. Revenue from barter transactions is recognized ratably over time based on the terms of the contract as delivery of impressions is performed on a consistent basis. Services received are charged to expense in the same manner. Barter revenue for thethree months ended* September 30, 2024and2023* was $6.0 million and $3.6 million, respectively. Barter revenue for thesix months ended* September 30, 2024and2023* was $12.0 million and $7.7 million, respectively.

F-8

Licensing Revenue

Licensing revenue primarily consists of sales of licensing rights to digitally stream the Company’s live music services. Licensing revenue is recognized when the Company satisfies its performance obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, which is typically when the live event has aired. Any license fees collected in advance of an event are deferred until the event airs. We report our licensing revenue on a gross basis as we act as the principal in the underlying transactions.

Sponsorship Revenue

Sponsorship revenue primarily consists of sales of sponsorship programs that provide sponsors with opportunities to reach the Company’s customers. Sponsorship revenue is recognized as the event airs. Any sponsorship fees collected in advance of the contract term (typically an event) are deferred until the event airs. The Company reports sponsorship revenue on a gross basis as the Company acts as the principal in the underlying transactions.

Merchandising Revenue

Revenue is recognized upon the transfer of control to the customer. The Company recognizes revenue and measures the transaction price net of taxes collected from customers and remitted to governmental authorities. Sales also include shipping and handling charges billed to customers, with the related freight costs included in cost of goods sold. Sales commissions are expensed as incurred and are recorded in sales and marketing expenses in the accompanying condensed consolidated statements of operations. The Company’s customer contracts donot have a significant financing component due to their short durations, which are typically effective forone year or less and have payment terms that are generally30 to60 days. Wholesale revenue is generally recognized when products are shipped, depending on the applicable contract terms. The Company records a refund liability for expected returns based on prior returns history, recent trends, and projections for returns on sales in the current period. The refund liability at* September 30, 2024and2023* was less than $0.1 million, respectively.

Ticket/Event Revenue

Ticket/Event revenue is primarily from the sale of tickets and promoter fees earned from venues or other co-promoters underone of several formulas, including a fixed guaranteed amount and/or a percentage of ticket sales or event profits.

Revenue from the promotion or production of an event is recognized at a point in time when the show occurs. Revenue collected in advance of the event is recorded as deferred revenue until the event occurs. Revenue collected from sponsorship agreements, which isnot related to a single event, is classified as deferred revenue and recognized over the term of the agreement or operating season as the benefits are provided to the sponsor.

Revenue from the Company’s ticketing operations primarily consists of service fees charged at the time a ticket for an event is sold in either the primary or secondary markets, including both online pay-per-view ("PPV") tickets as well as ticket physically purchased through a ticket sale vendor. For primary tickets sold to the Company’s PPV and festival events the revenue for the associated ticket service charges collected in advance of the event is recorded as deferred revenue until the event occurs. For PPV arrangements that include multiple performance obligations, i.e. delivery of the online stream, sponsorships, digital meet and greet, or physical merchandise, the Company allocates the total contract consideration to each performance obligation using the standalone selling price. If the standalone selling price isnot readily determinable, it is estimated using observable inputs including an adjusted market-based approach, expected cost plus margin, or the residual approach.

F-9

Net Income (Loss) Per Share

Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period adjusted to addback dividends (declared or cumulative undeclared) applicable to the Series A Preferred Stock. Diluted earnings (loss) per share is computed using the weighted-average number of common shares and the dilutive effect of contingent shares outstanding during the period. Potentially dilutive contingent shares, which primarily consist of stock options issued to employees, directors and consultants, restricted stock units, warrants issued tothird parties and accounted for as equity instruments and convertible notes would be excluded from the diluted earnings per share calculation because their effect is anti-dilutive.

Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with thetwo-class method required for participating securities such as our preferred stock. Under thetwo-class method, basic and diluted net income (loss) per share attributable to common stockholders is computed by dividing the basic and diluted net income (loss) attributable to common stockholders by the basic and diluted weighted-average number of shares of common stock outstanding during the period. Diluted net income per share attributable to common stockholders adjusts basic net income per share for the potentially dilutive impact of stock options and restricted stock units ("RSUs").

The treasury stock method is used to calculate the potentially dilutive effect of stock options and RSUs. The if-converted method is used to calculate the potentially dilutive effect of the Preferred Stock. In both methods, diluted net income (loss) attributable to common stockholders and diluted weighted-average shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.

At* September 30, 2024and2023*, the Company had 2,251,667 and 2,281,667 options outstanding, respectively,1,726,237 and 2,874,855 restricted stock units outstanding, respectively, and 4,949,399 andno common stock warrants, respectively, that are excluded from the calculation of diluted earnings per share as their effect is anti-dilutive.

The following table shows the calculation of basic and diluted earnings per share for the periods Series A Preferred Stock was outstanding:

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents include all highly liquid investments with original maturities, when purchased, ofthree months or less.

The following table provides amounts included in cash, cash equivalents and restricted cash presented in the Company’s condensed consolidated statements of cash flows for the periods ended* September 30, 2024* and* March 31, 2024* (in thousands):

F-10

Non-ControllingInterest

The Company consolidates entities in which the Company has a controlling financial interest. The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than50% of the voting rights. Non-controlling interests representthird-party equity ownership interests in the Company’s consolidated entities. The amount of net income (loss) attributable to non-controlling interests is disclosed in the accompanying interim unaudited condensed consolidated statements of operations.

Restricted Cash and Cash Equivalents

The Company maintains certain letters of credit agreements with its banking provider, which are secured by the Company’s cash for periods of less thanone year. As of* September 30, 2024* and* March 31, 2024*, the Company had restricted cash of $30,000 and $0.2 million, respectively.

Allowance for Credit Losses

The Company evaluates the collectability of its accounts receivable based on a combination of factors. Generally, it records specific reserves to reduce the amounts recorded to what it believes will be collected when a customer’s account ages beyond typical collection patterns, or the Company becomes aware of a customer’s inability to meet its financial obligations.

The Company believes that the credit risk with respect to trade receivables is limited due to the large and established nature of its largest customers and the nature of its membership receivables. At* September 30, 2024*, the Company hadone customer that made up 45% of the total accounts receivable balance. At* September 30, 2023*, the Company hadone customer that made up 29% of the total accounts receivable balance.

The Company’s accounts receivable at* September 30, 2024* and* March 31, 2024* is as follows (in thousands):

Inventories

Inventories, principally raw materials awaiting final customization process, are stated at the lower of cost or net realizable value. Inventories are relieved on afirst-in,first-out basis.

The carrying value of inventories is reduced for any excess and obsolete inventory. Excess and obsolete reductions are determined based on currently available information, including the likely method of disposition, such as through sales to individual customers and liquidations, and the age of inventory.

Goodwill and Indefinite-Lived Assets

Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination and is carried at cost. Acquired trademarks and trade names are assessed as indefinite lived assets if there areno foreseeable limits on the periods of time over which they are expected to contribute cash flows. Goodwill and indefinite-lived assets arenot amortized, but are subject to an annual impairment testing, as well as between annual tests when events or circumstances indicate that the carrying value* may**not* be recoverable. Estimations and assumptions regarding future performance, results of the Company’s operations and comparability of its market capitalization and net book value will be used. We perform our annual impairment testing at* January 1*of each year.

Our annual goodwill impairment test is performed at the reporting unit level. As of* March 31, 2024and September 30, 2024,our reporting unit is the same as ourthree operating segments. We generally test goodwill for possible impairment byfirst* performing a qualitative assessment to determine whether any triggering events have occurred during the quarter that indicate that it is more likely thannot that the fair value of a reporting unit is less than its carrying value. If a qualitative assessment isnot used, or if the qualitative assessment isnot conclusive, a quantitative impairment test is performed. If a quantitative test is performed, we determine the fair value of the related reporting unit and compare this value to the recorded net assets of the reporting unit, including goodwill. The fair value of our reporting unit is determined using an income approach based on a discounted cash flow model. In the event the recorded net assets of the reporting unit exceed the estimated fair value of such assets, an impairment charge is recorded. Due to change in terms of our agreement with our largest OEM customer, we determined that a triggering event had occurred within the reporting unit. Based on the discounted cash flows calculated for the Audio Group - Slacker operations segment being greater than the net assets of the segment, no impairments of goodwill were identified in thesix months ended* September 30, 2024and2023.* We concluded that there wasno impairment for thesix months ended* September 30, 2024based on an evaluation, on the basis of the weight of the evidence, of the significance of all identified events and circumstances that could affect the significant inputs used to determine the fair value of goodwill for determining whether it is more likely thannot* that goodwill is impaired. We prepared our estimate of the fair value of goodwill using certain inputs and information that is available to us at this time. Such inputs and information include the percentage and timing at which users of our OEM customer convert to our service and the service plan selected by such converting users. There can beno assurance that such inputs willnot be revised as more information is obtained. Additionally, there can beno assurance that such revised inputs, if any, willnot result in management’s determination that an impairment has occurred at that time. We will continue to assess goodwill for potential impairment in future periods as more information on the inputs becomes available. At* September 30,*2024, the amount of goodwill allocated to reporting units with negative net assets was as follows: Slacker, $9.7 million.

We test our acquired trademarks and trade names for possible impairment by applying the same process as for goodwill. In the instance when a qualitative test isnot performed or is inconclusive, a quantitative test is performed by using a discounted cash flow model to estimate fair value of our acquired trademarks and trade names. Due to change in terms of our agreement with our largest OEM customer, we determined that a triggering event had occurred within the reporting unit. Based on the discounted cash flows calculated for the Audio Group - Slacker operations segment being greater than the carrying value of the trademarks and trade names,no impairments of acquired trademarks and trade names were identified in thesix months ended* September 30, 2024.We concluded that there wasno* impairment for thesix months ended* September 30, 2024based on an evaluation, on the basis of the weight of the evidence, of the significance of all identified events and circumstances that could indicate that the carrying value of the indefinite-lived assets isnot* recoverable and that that could affect the significant inputs used to determine the fair value of the indefinite-lived assets for determining whether it is more likely thannot that the indefinite-lived assets are impaired. We prepared our estimate of the fair value of the indefinite-lived assets using certain inputs and information that is available to us at this time. Such inputs and information include the percentage and timing at which users of our OEM customer convert to our service and the service plan selected by such converting users. There can beno assurance that such inputs willnot be revised as more information is obtained. Additionally, there can beno assurance that such revised inputs, if any, willnot result in management’s determination that an impairment has occurred at that time. We will continue to assess the indefinite-lived assets for potential impairment in future periods as more information on the inputs becomes available.

Intangible Assets with Finite Useful Lives

The Company has certain finite-lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of Intellectual Property, Customer Relationships, Content Creator Relationships, Wholesale Relationships, Domain Names, Customer List, Capitalized Software Development Costs, and Non-compete Agreements resulting from business combinations. Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives, which are generally as follows: Intellectual Property (15 years), Customer, Content Creator and Wholesale Relationships (1-6 years), Domain Names, Customer Lists, and Software (5 years), Patents (15 years), and Non-Compete Agreements (3 years).

The Company reviews all finite lived intangible assets for impairment when circumstances indicate that their carrying values* may**not* be recoverable. If the carrying value of an asset group isnot recoverable, the Company recognizes an impairment loss for the excess carrying value over the fair value in its consolidated statements of operations. In our assessment for potential impairment we identified triggering events due to the events resulting from the change in terms with our largest OEM customer. We performed a quantitative assessment using the guidance in ASC360 and we concluded that there wasno impairment for thethree months ended* September 30, 2024based on an evaluation, on the basis of the weight of the evidence, of the significance of all identified events and circumstances that could indicate that the carrying value of the long-lived assets isnot* recoverable and that could affect the significant inputs used to determine the fair value of the long-lived assets. We prepared our estimate of the fair value of the long-lived assets using certain inputs and information that is available to us at this time. Such inputs and information include the percentage and timing at which users of our OEM customer convert to our service and the service plan selected by such converting users. There can beno assurance that such inputs willnot be revised as more information is obtained. Additionally, there can beno assurance that such revised inputs, if any, willnot result in management’s determination that an impairment has occurred at that time. We will continue to assess the long-lived assets for potential impairment in future periods as more information on the inputs becomes available. We recorded an impairment of $0.2 million andnone for thesix months ended* September 30, 2024and2023,* respectively. We notedno impairment that needed to be recorded for thethree months ended* September 30, 2023.*

Concentration of Credit Risk

The Company maintains cash balances at commercial banks. Cash balances commonly exceed the*$250,000* amount insured by the Federal Deposit Insurance Corporation. The Company hasnot experienced any losses in such accounts, and management believes that the Company isnot exposed to any significant credit risk with respect to such cash and cash equivalents.

F-11

Recently Adopted Accounting Pronouncements

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective beginning with the Company’s2024 fiscal year annual reporting period, with early adoption permitted. The Company adopted ASU2023-07 on* April 1, 2024on a prospective basis. The adoption of this standard didnot* have an impact on the Company’s interim condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In* December**2023,* the FASB issued ASU2023-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures (“ASU2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU2023-09 beginning in thefirst quarter of2026. ASU2023-09 allows for adoption using either a prospective or retrospective transition method. The Company is currently assessing the impact this standard will have on the Company’s consolidated financial statements.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC didnot or arenot believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures.

Note3 — Revenue

The following table represents a disaggregation of revenue from contracts with customers for thethree months ended* September 30, 2024and2023* (in thousands):

For some contracts, the Company* mayinvoice up front for services recognized over time or for contracts in which the Company has unsatisfied performance obligations. Payment terms and conditions vary by contract type, although terms generally cover monthly payments. In the circumstances where the timing of invoicing differs from the timing of revenue recognition, the Company has determined its contracts donot* include a significant financing component. The Company has elected to apply the practical expedient under ASC606-10-50-14 andnot provide disclosure of the amount and timing of performance obligations as the performance obligations are part of a contract that has an original expected duration ofone year or less.

F-12

For thethree months ended* September 30, 2024and2023*, one customer accounted for 57% and 51% of the Company’s consolidated revenues, respectively. For thesix months ended* September 30, 2024and2023*, one customer accounted for 55% and 51% of the Company’s consolidated revenues, respectively.

The following table summarizes the significant changes in the deferred revenue balances during thethree months ended* September 30, 2024* (in thousands):

Note4 — Property and Equipment

The Company’s property and equipment at* September 30, 2024* and* March 31, 2024* was as follows (in thousands):

Depreciation expense was $0.8 million and $0.8 million for thethree months ended* September 30, 2024and2023,* respectively. Depreciation expense was $1.6 million and $1.6 million for thesix months ended* September 30, 2024and2023,* respectively. During thesix months ended* September 30, 2024* the Company disposed of $3.3 million of equipment with a corresponding write-off to accumulated depreciation.

F-13

Note5 — Goodwill and Intangible Assets

Goodwill

The following table presents the changes in the carrying amount of goodwill for thesix months ended* September 30, 2024* (in thousands):

Indefinite-Lived Intangible Assets

The following table presents the changes in the carrying amount of indefinite-lived brand and trade names intangible assets that are only in the Company’s Audio Group operating segment for thethree months ended* September 30, 2024* (in thousands):

Finite-Lived Intangible Assets

The Company’s finite-lived intangible assets were as follows as of* September 30, 2024* (in thousands):

The Company’s finite-lived intangible assets were as follows as of* March 31, 2024* (in thousands):

Intangible assets are amortized over their estimated useful lives based on the pattern in which the economic benefits associated with the asset are expected to be consumed, which to date has approximated the straight-line method of amortization. The estimated useful lives for patents, customer relationships, domain names, brand and tradename and customer list are generallythree to 15 years, one totwo years, two tofive years, seven toten years andthree tofour years, respectively.

The Company’s amortization expense on its finite-lived intangible assets was $0.5 million and $0.5 million for thethree months ended* September 30, 2024and2023,* respectively. The Company’s amortization expense on its finite-lived intangible assets was $1.1 million and $0.7 million for thesix months ended* September 30, 2024and2023,* respectively. The Company recorded an impairment charge of $0.2 million andnone for thesix months ended* September 30, 2024and2023,* respectively. The impairment for thesix months ended* September 30, 2024* was the result of the winding down of a podcast show acquired by PodcastOne.

F-14

Finder's Agreement

In* September 2023,PodcastOne entered into a finder's fee arrangement pursuant to which it agreed to issue shares of PodcastOne common stock at a price of $8.00 per share (subject to adjustment in certain limited circumstances) as a finder’s fee to a certainthird* party podcast platform in the event certain former and/or current podcasts creators of such platform entered into new podcasting agreements with PodcastOne, with the amount of the fee to be based on the amount of revenues actually derived by PodcastOne from such podcasts during a predetermined period. Payments made to suchthird party attributed to PodcastOne entering into new podcast contracts were capitalized to content creator relationship intangibles. As of* September 30, 2024* and* March 31, 2024*, the Company has capitalized $3.2 million of payments made to suchthird party. $1.8 million of the $3.2 million capitalized of payments made to suchthird party was paid with PodcastOne common stock.

The Company expects to record amortization of intangible assets for fiscal years ending* March 31, 2025* and future fiscal years as follows (in thousands):

Note6 — Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at* September 30, 2024* and* March 31, 2024* were as follows (in thousands):

Note7 — Notes Payable

Notes payable at* September 30, 2024* and* March 31, 2024* were as follows (in thousands):

SBA Loan

On* June 17, 2020,the Company received the proceeds from a loan in the amount of less than $0.2 million from the United States. Small Business Administration (the “SBA”). Installment payments, including principal and interest, begin12*-months from the date of the promissory note. The balance is payable 30-years from the date of the promissory note, and bears interest at a rate of 3.75% per annum. There areno covenants associated with the SBA loan.

Loan and Security Agreement

In* August 2023,the Company entered into a Loan and Security Agreement with Capchase Inc. (“Capchase”) pursuant to which the Company borrowed the amount of $1.7 million to further develop and acquire certain podcasts acquired by PodcastOne and for general working capital. The debt is subordinated to the ABL Credit Facility and bears an interest rate of 9%, which is included in the monthly amortization payments of approximately $73,100, with the final amortization payment due on February 4, 2026.As of September 30, 2024*, the Company was in compliance with covenants under the Capchase agreement.

Maturities of notes payables as of* September 30, 2024* were as follows (in thousands):

F-15

Note8 — PodcastOne Bridge Loan

PodcastOne’s Private Placement

On* July 15, 2022,PodcastOne completed a private placement offering (the“PC1* Bridge Loan”) of PodcastOne’s unsecured convertible notes with an original issue discount of 10% (the “OID”) in the aggregate principal amount of $8.8 million (the*“PC1* Notes”) to certain accredited investors and institutional investors (collectively, the “Purchasers”), for gross proceeds of $8.0 million pursuant to the Subscription Agreements entered into with the Purchasers (the “Subscription Agreements”). In connection with the sale of thePC1 Notes, the Purchasers received warrants (the*“PC1* Warrants”) to purchase a number of shares (the*“PC1* Warrant Shares”) of PodcastOne’s common stock, par value $0.00001 per share. ThePC1 Notes were scheduled to matureone year from* July 15, 2022,subject to aone*-timethree-month extension at PodcastOne’s election, and were subsequently extended to* October 15, 2023 (the “Maturity Date”). ThePC1* Notes bore interest at a rate of 10% per annum payable on maturity. ThePC1 Notes automatically convert into the securities of PodcastOne sold in a Qualified Financing (an initial public offering of PodcastOne’s securities from which PodcastOne’s trading market at the closing of such offering is a national securities exchange) or Qualified Event (a direct listing of PodcastOne’s securities on a national securities exchange), as applicable, upon the closing of a Qualified Financing or Qualified Event, as applicable, at a price per share equal to the lesser of (i) the price equal to $60.0 million divided by the aggregate number of shares of PodcastOne’s common stock outstanding immediately prior to the closing of a Qualified Financing or "Qualified Event", as applicable (assuming full conversion or exercise of all convertible and exercisable securities of PodcastOne then outstanding, subject to certain exceptions), and (ii)70% of the offering price of the shares (or whole units, as applicable) in the Qualified Financing or 70% of the initial listing price of the shares on a national securities exchange in the Qualified Event, as applicable. Each holder of thePC1 Notes (other than the Company) could at such holder’s option require PodcastOne to redeem up to 45% of the principal amount of such holder’sPC1 Notes (together with accrued interest thereon, but excluding the OID), in aggregate up to $3,000,000 for all of thePC1 Notes (other than those held by the Company), immediately prior to the completion of a Qualified Financing or a Qualified Event, as applicable, with such redemption to have been made pro rata to the redeeming holders of thePC1 Notes (the “Optional Redemption”).

The Company also agreed (i)not to effect a Qualified Financing or a Qualified Event, as applicable, unless immediately following such event the Company ownsno less than 66% of PodcastOne’s equity, unless in either case otherwise permitted by the written consent of the holders of the majority of thePC1 Notes (excluding the Company) (the “Majority Noteholders”) and the senior lender, as applicable, (ii) that until a Qualified Financing or a Qualified Event, as applicable, is consummated, the Company guaranteed the repayment of thePC1 Notes when due (other than the Bridge Notes issued to LiveOne) and any interest or other fees due thereunder, and (iii) that if PodcastOne hasnot consummated a Qualified Financing or a Qualified Event, as applicable, by* February 15, 2023,** March 15, 2023or April 15, 2023,unless in either case permitted by the written consent of the Majority Noteholders, PodcastOne was required to redeem $1,000,000 of the then outstandingPC1* Notes (other than thePC1 Notes issued to the Company) by thetenth calendar day of each month immediately following such respective date, up to an aggregate redemption of $3,000,000 over the course of suchthree months, each of which shall be distributed to the holders of the Bridge Notes (other than LiveOne) on a prorated basis (the “Early Redemption”).

PodcastOne further agreed to register the shares of its common stock issuable upon conversion of thePC1 Notes and exercise of thePC1 Warrants in connection with a Qualified Financing or a Qualified Event. If PodcastOne didnot file such registration statement on or prior to* April 15, 2023,PodcastOne would have been required to prepay $1,000,000 of thePC1* Notes pro rata to thePC1 Notes holders (other than the Company), and if PodcastOne didnot file such registration statement on or prior to* July 15, 2023,PodcastOne would have been required to prepay $2,000,000 of thePC1* Notes pro rata to thePC1 Notes holders (other than the Company) (the “Reg St Redemption”). PodcastOne wasnot required to redeem or repay more than a total of $3,000,000 of the principal amount of thePC1 Notes as a result of the Optional Redemption, the Early Redemption and/or the Reg St Redemption.

As part of thePC1 Bridge Loan, PodcastOne redeemed $3.0 million (excluding the OID) worth ofPC1 Notes.

On* September 8,*2023, PodcastOne completed a Qualified Event (its spin out from the Company to become a standard publicly trading company (the “Spin-Out”)) as a result of the Direct Listing. In connection with such completed Qualified Event, all of the remainingPC1 Notes (including interest thereunder) in the aggregate amount of approximately $7.02 million converted into approximately 2,341,000 shares of PodcastOne’s common stock.

Warrants

ThePC1 Warrants were classified as liabilities as they represent an obligation to deliver a variable number of shares of common stock in the future and are therefore required to be initially and subsequently measured at fair value each reporting period. The Company recorded a warrant liability in the amount of $1.7 million (and reduced the proceeds allocated to thePC1 Notes accordingly). The fair value of thePC1 Warrant liability is remeasured each reporting period using a Black Scholes model, and the change in fair value is recorded as an adjustment to thePC1 Warrant liability with the unrealized gains or losses reflected in other income (expense). On* September 8, 2023,*as a result of the Direct Listing and the shares of PodcastOne's common stock becoming publicly traded, the warrant liability was reclassified to equity as the number and exercise price of the warrants was settled at 3,114,000 warrants with an exercise price of $3.00 per warrant per the warrant agreement.

F-16

The fair value of thePC1 Warrants is measured in accordance with ASC820 “Fair Value Measurement”, using “Black Scholes” modeling, incorporating the following inputs at issuance:

The fair value of thePC1 Warrants is measured in accordance with ASC820 “Fair Value Measurement”, using “Black-Scholes” modeling, incorporating the following inputs for the periods noted below:

Total loss of $4.0 million for warrant liabilities accounted for as derivatives have been recorded in other expense for thesix months ended* September 30, 2023,in the accompanying interim unaudited condensed consolidated statements of operations. The fair value of the warrant as of September 8, 2023was $5.9 million and was classified as equity as the warrants were exercisable for a fixed price of $3.00. As of September 30, 2024*,3,114,000 warrants of PodcastOne remain outstanding andnone have been exercised.

Redemption Features

The Company determined that the redemption features associated with thePC1 Bridge Loan meet the accounting definition of an embedded derivative that must be separated from thePC1 Bridge Loan and initially and subsequently be reported as a liability (“the Redemption Liability”) and measured at fair value. The fair value of the Redemption Liability was determined using a Monte Carlo simulation model usingthree scenarios (1) redemption prior to the initial maturity date (65% weighted), (2) redemption at the initial maturity date (25% weighted) and (3) redemption after the initial maturity date (10% weighted).

F-17

The fair value of the redemption features is measured in accordance with ASC820 “Fair Value Measurement”, using “Monte Carlo simulation” modeling, incorporating the following inputs for the following periods:

The fair value of the Redemption Liability wasnone at* September 30, 2023and was eliminated as thePC1* Bridge Loan notes were converted into common stock, therefore the derivative component was cancelled. The $0.2 million change in the fair value of the Redemption Liability derivative as of* September 30, 2023* was recorded as a loss and included in other income in the interim unaudited accompanying condensed consolidated statements of operations for thesix months ended* September 20, 2023.*

The resulting discount from the OID, underwriting fees,PC1 Warrants, and embedded Redemption Liability derivative of $2.8 million was amortized to interest expense through* July 15, 2023,the term of thePC1* Bridge Loan, using the effective interest method. Interest expense resulting from the amortization of the discount for thethree andsix months ended* September 30, 2024* was $1.1 million and $1.0 million, respectively.

Interest expense with respect to thePC1 Bridge Loan for thethree andsix months ended* September 30, 2024* was $0.1 million and $0.2 million, respectively. There wereno restrictive operational covenants associated with thePC1 Bridge Loan.

During thesix months ended* September 30, 2023,PodcastOne redeemed $3.0 million of thePC1* Notes held bythird-party holders (other than the Company). At* September 30, 2023,all of thePC1* Notes and accrued interest therein have been converted in full in connection with the Spin-Out.

F-18

Note9 — Senior Secured Line of Credit

On* June 2, 2021,the Company entered into a Business Loan Agreement (the "Former Business Loan Agreement") with East West Bank (the “Senior Lender”), which provided for a revolving credit facility collateralized by all of the assets of the Company and its subsidiaries. In connection with the Former Business Loan Agreement, the Company entered into a Promissory Note with the Senior Lender and established the revolving line of credit in the amount of $7.0 million (the “Revolving Credit Facility”), maturing on June 2, 2023.*

In* July 2022,the Company extended the maturity date of its revolving credit facility to June 2024and its variable interest rate was increased to 2.5%. The Revolving Credit Facility bears interest at a variable rate equal to the Wall Street Journal Prime Rate, plus 2.5%. The interest rate for the period ended September 30, 2024* was 10.50%.

The principal balance under the Revolving Credit Facility as of* September 30, 2024* was $7.0 million. The Company recorded interest expense of $0.3 million and $0.3 million for thethree months ended* September 30, 2024and2023*, respectively. The Company recorded interest expense of $0.5 million and $0.6 million for thethree months ended* September 30, 2024and2023*, respectively. As of* September 30, 2024* the Company was in compliance with covenants under the Revolving Credit Facility.

On* September 8, 2023and effective as of August 22, 2023,the Company entered into a new Business Loan Agreement (the “New Business Loan Agreement”) with the Senior Lender, to convert the Company’s revolving credit facility with the Senior Lender into an assets backed loan credit facility with the Senior Lender, which shall continue to be collateralized by afirst* lien on all of the assets of the Company and its subsidiaries (the “ABL Credit Facility”). The New Business Loan Agreement provides the Company with borrowing capacity of up to the Borrowing Base (as defined in the Business Loan Agreement). Pursuant to the New Business Loan Agreement, the requirement that the Company and its related entities shall at all times maintain a certain minimum deposit with the Senior Lender was reduced from $8,000,000 to $5,000,000.

On* May 31, 2024,the Company was granted an extension of90* days on the maturity date, therefore the Revolving Credit Facility was scheduled to mature in* September 2024.*

Borrowings under the ABL Credit Facility are subject to certain covenants as set forth in the New Business Loan Agreement and bear interest at a rate equal to theprime rate plus 2.50%, provided, that it shallnot be less than 7.00%. The Company* may*prepay at any time without penalty all or a portion of the amount owed to the Senior Lender. The Business Loan Agreement includes various financial and other covenants with which the Company has to comply in order to maintain borrowing availability, including maintaining required minimum liquidity amount and Borrowing Base capacity.

In connection with the New Business Loan Agreement, the Company’s current Promissory Note, dated as of* June 2, 2021,issued to the Senior Lender in the principal amount of $7,000,000 (the “Promissory Note”) continues in effect except as modified by the New Business Loan Agreement and the Change in Terms Agreement, dated as of August 22, 2023*entered into by the Company and the Senior Lender in connection with the New Business Loan Agreement.

The principal balance under the ABL Credit Facility as of* September 30, 2024* was $7.0 million, respectively. The Company was in compliance with all debt covenants associated with the ABL Credit Facility as of* September 30, 2024*.

Note10 — Related Party Transactions

As of* March 31, 2022,the Company had unsecured convertible Trinad Notes outstanding which were issued to Trinad Capital. In February 2023,the Trinad Notes along with accrued interest were converted into 6,177 shares of Series A Preferred Stock in addition to 200,000 shares of common stock.3,813 shares of Series A Preferred Stock was outstanding as of September 30, 2024*. In* April 2023and July 2023,*the Company issued 116 and 192 shares of its Series A Preferred Stock, respectively, to Trinad Capital as dividend payments required by the terms of the Series A Preferred Stock.

On* September 8, 2023,PodcastOne completed its Direct Listing on the Nasdaq Capital Market which resulted in the Company owning 15,672,186 shares of common stock in PodcastOne along with 1,100,000 common stock warrants to purchase shares of PodcastOne's common stock as of March 31, 2024*. Also, on this date, PodcastOne issued 147,044 shares of PodcastOne common stock to the Company's CEO as a result of his ownership of the Company's preferred stock.

During thesix months ended* September 30, 2024* and the year ended* March 31, 2024*, the Company received 424,000 and 159,333 shares of PodcastOne Common stock with a fair value of $0.9 million $0.3 million, respectively, in exchange for amounts owed under a cost sharing arrangement between PodcastOne and the Company.

During thesix months ended* September 30, 2024and2023*, the Company issue or reserved 46,113 and 149,496 shares of common stock with a value of $0.1 million and $0.2 million to a relative of the CEO for services performed, respectively.

Note11 — Leases

The Company leases a space at a location under a non-cancellable operating lease with a remaining lease term ofone year, which originally expired in fiscal year2022 and was renewed for an additional year. On* December 22, 2020,the Company acquired CPS which included the assumption of an operating lease for a 55,120 square foot light manufacturing facility located in Addison Illinois, which expired June**30,* 2024. During thethree months ended* September 30, 2024,CPS entered into athree* year lease for office space in Palatine, Illinois.

The Company leases several office locations with lease terms that are less than12 months or are on month to month terms. Rent expense for these leases totaled less than $0.1 million for thethree andsix months ended* September 30, 2024and2023*, respectively. Operating leases with lease terms of greater than12 months are capitalized in operating lease right-of-use assets and operating lease liabilities in the accompanying condensed consolidated balance sheets. Rent expense for these operating leases totaled$0.2 million during each of thethree months ended* September 30, 2024and2023*, respectively. Rent expense for thesix months ended* September 30, 2024and2023* was $0.4 million and $0.5 million, respectively.

F-19

Operating lease costs for thesix months ended* September 30, 2024and2023* consisted of the following (in thousands):

Supplemental balance sheet information related to leases was as follows (in thousands):

The operating lease right-of-use assets are included in other assets and current operating lease liabilities are included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets.

Significant judgments

Discount rate – the Company’s lease is discounted using the Company’s incremental borrowing rate of 8.5% as the rate implicit in the lease isnot readily determinable.

Options – the lease term is the minimum noncancelable period of the lease. The Company doesnot include option periods unless the Company determined it is reasonably certain of exercising the option at inception or when a triggering event occurs.

Lease and non-lease components – non-lease components were considered and determinednot to be material.

F-20

Note12 — Other Long-Term Liabilities

Other long-term liabilities consisted of the following (in thousands):

The Company classified $7.1 million and $7.5 million of accrued royalties into long term based on contractual arrangements with the royalty holders as of* September 30, 2024* and* March 31, 2024*, respectively.

Note13 — Commitments and Contingencies

Contractual Obligations

As of* September 30, 2024*, the Company is obligated under agreements with various music right holders and labels, festivals, clubs, events, concerts, artists, promoters, venues, music labels and publishers and other contractual obligations to make guaranteed payments as follows: $6.0 million for the fiscal year ending* March 31, 2025*, $0.4 million for the fiscal year ending* March 31, 2026,$0.5 million for the fiscal year ending March 31, 2027and $0.5 million for the fiscal year ending March 31, 2028.*

On a quarterly basis, the Company records the greater of the cumulative actual content acquisition costs incurred or the cumulative minimum guarantee based on forecasted usage for the minimum guarantee period. The minimum guarantee period of time is the period that the minimum guarantee relates to, as specified in each agreement, which* may*be annual or a longer period. The cumulative minimum guarantee, based on forecasted usage, considers factors such as listening hours, revenue, members, and other terms of each agreement that impact the Company’s expected attainment or recoupment of the minimum guarantees based on the relative attribution method.

Several of the Company’s content acquisition agreements also include provisions related to the royalty payments and structures of those agreements relative to other content licensing arrangements, which, if triggered, could cause the Company’s payments under those agreements to escalate, which included payments to be made in common stock. In addition, record labels, publishers and performing rights organizations with whom the Company has entered into direct license agreements have the right to audit the Company’s content acquisition payments, and any such audit could result in disputes over whether the Company has paid the proper content acquisition costs. However, as of* September 30, 2024*, the Company doesnot believe it is probable that these provisions of its agreements discussed above will, individually or in the aggregate, have a material adverse effect on its business, financial position, results of operations or cash flows.

On* August 4, 2022,the Company entered into a settlement agreement with a certain music partner attributed to past royalties owed. The Company issued 800,000 shares of its common stock to the music partner and settled $0.4 million of accounts payable with the remaining value of the shares attributed to prepayment for future royalties. The fair value of the shares was determined to be $1.0 million based on the Company’s share price at the date the shares were issued. As of September 30, 2024*,no amount was recorded as a prepaid asset related to this transaction in order to fund future amounts owed for royalties. As the agreement wasnot terminated by the music partner afterone year, the Company issued to the music partner an additional 200,000 shares of its common stock as prepayment of future royalties during the fiscal year ended* March 31, 2024* ("Fiscal2024").

F-21

Employment Arrangements

As of* September 30, 2024*, the Company has an employment arrangement with itstwo named executive officers (“Section16 Officers”) that provide salary payments of $0.7 million and target bonus compensation of up to $0.3 million on an annual basis. Furthermore, such employment arrangements consist of an employment agreement which contains severance clauses that could require severance payments in the aggregate amount of $0.3 million (excluding the value of potential payouts of discretionary bonuses, pro-rata bonuses, and potential accelerated vesting of equity awards granted to such executive officers) to the Company’s CFO.

On* August 28, 2023,the Company's subsidiary, PodcastOne, Inc., entered into a newtwo*-year employment contract with its President for $0.4 million per year effective* January 1, 2023.*

The Company’s CEO agreed to forgive his salary of $0.5 million per annum for the period from* August 2021until December 31, 2022in exchange for shares of the Company’s common stock and/or restricted stock units to be issued in the future. As of September 30, 2024*, the Company’s board of directors hasnot yet determined the number of shares of the Company’s common stock and/or restricted stock units to be issued to the CEO as such compensation.

Legal Proceedings

During thesix months ended* September**30,* 2023, the Company recorded legal settlement expenses relating to potential claims arising in connection with litigation brought against the Company by certainthird parties that werenot material and were included in general and administrative expenses in the accompanying consolidated statement of operations. See also Note13 ⸺ Legal Proceedings in the Company’s Quarterly Report on Form10-Q, filed with the SEC on* August 13, 2024.*

From time to time, the Company is involved in legal proceedings and other matters arising in connection with the conduct of its business activities. Many of these proceedings* maybe at the preliminary stages and/or seek an indeterminate amount of damages. In the opinion of management, after consultation with legal counsel, such routine claims and lawsuits arenot* significant and we donot currently expect them to have a material adverse effect on our business, financial condition, results of operations, or liquidity.

Note14 — Employee Benefit Plan

The Company sponsors a401(k) plan (the*“401*(k) Plan”) covering all employees. Prior to* March 31, 2019,only Slacker employees were eligible to participate in the401*(k) Plan. Employees are eligible to participate in the401(k) Plan thefirst day of the calendar month following their date of hire. The Company* maymake discretionary matching contributions to the401*(k) Plan on behalf of its employees up to a maximum of 100% of the participant’s elective deferral up to a maximum of 5% of the employees’ annual compensation. The Company’s matching contributions werenot material to the financial statements for thethree andsix month periods ended* September 30, 2024and2023*.

Note15 — Stockholders’** Deficit**

Authorized Common Stock and Authority to Create Preferred Stock

The Company has the authority to issue up to 510,000,000 shares, consisting of 500,000,000 shares of the Company’s common stock, $0.001 par value per share, and 10,000,000 shares of the Company’s preferred stock, $0.001 par value per share (the “preferred stock”).

The Company* mayissue shares of preferred stock from time to time inone* or more series, each of which will have such distinctive designation or title as shall be determined by the Company’s board of directors and will have such voting powers, full or limited, orno voting powers, and such preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated in the resolution or resolutions providing for the issue of such class or series of preferred stock as* maybe adopted from time to time by the Company’s board of directors. The Company’s board of directors will have the power to increase or decrease the number of shares of preferred stock of any series after the issuance of shares of that series, butnot* below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased, the shares constituting such decrease will resume the status of authorized but unissued shares of preferred stock.

It isnot possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of the common stock until and unless the Company’s board of directors determines the specific rights of the holders of the preferred stock; however, these effects* may*include: restricting dividends on the common stock, diluting the voting power of the common stock, impairing the liquidation rights of the common stock, or delaying or preventing a change in control of the Company without further action by the stockholders.

F-22

Stock Repurchase Program

In* December 2020,the Company announced that its board of directors has authorized the repurchase of up totwo million shares of its outstanding common stock from time to time. In November 2022,the Company announced that its board of directors has authorized it to expand its stock repurchase program by up to an additional $2,000,000 worth of shares of its common stock to be repurchased from time to time. The timing, price, and quantity of purchases under the program will be at the discretion of our management and will depend upon a variety of factors including share price, general and business market conditions, compliance with applicable laws and regulations, corporate and regulatory requirements, and alternative uses of capital. The program maybe expanded, suspended, or discontinued by our board of directors at any time. Although our board of directors has authorized this stock repurchase program, there isno* guarantee as to the exact number of shares, if any, that will be repurchased by us, and we* maydiscontinue purchases at any time that management determines additional purchases arenot* warranted. We cannot guarantee that the program will be consummated, fully or all, or that it will enhance long-term stockholder value. The program could affect the trading price of our common stock and increase volatility, and any announcement of a termination of this program* mayresult in a decrease in the trading price of our common stock. In addition, this program could diminish our cash reserves. The Company purchased 558,247 and 1,009,744 shares of its common stock under the stock repurchase program for thesix* months ended* September 30, 2024and2023* for a total of $1.0 million and $1.6 million, respectively.

Series A Preferred Stock

The Series A Preferred Stock is convertible at any time at a Holder’s option into shares of the Company’s common stock, at a price of $2.10 per share of common stock, bears a dividend of 12% per annum, is perpetual and hasno maturity date. At the option of the Company, the dividend was to be paid in-kind for thefirst 12 months after* April 1, 2024 (the “Effective Date”), and thereafter, the Holders had the option to select whether subsequent dividend payments shall be paid in kind or in cash; provided, that as long as any Series A Preferred Stock is held by the “Harvest Funds”, Trinad Capital shall receive the dividend solely in kind. The Series A Preferred Stock shall haveno* voting rights, except as set forth in the Certificate of Designation or as otherwise required by law.

The Company had the option (the “Optional Redemption Right”), on or before the Mandatory Redemption Date (as defined herein), to purchase up to $5,000,000 in aggregate of the then outstanding shares of Series A Preferred Stock held by the Harvest Funds at a cash redemption price per share of Series A Preferred Stock equal to the Stated Value (the “Redemption Price”). The Company was required on or before* August 3, 2024 (the “Mandatory Redemption Date”), and in any event if prior to the Mandatory Redemption Date the Company consummated any financing transaction in which the Company, directly or indirectly, raised, in aggregate, gross proceeds of more than $20,000,000 of new capital, to purchase $5,000,000 in aggregate of the then outstanding shares of Series A Preferred Stock held by the Harvest Funds (the “Mandatory Redemption Amount”) at the Redemption Price (the “Mandatory Redemption”). If the Optional Redemption Right was exercised up to the full $5,000,000 amount, the Mandatory Redemption requirement would be terminated; provided, that if the Optional Redemption Right was exercised in any amount less than $5,000,000, the Mandatory Redemption Amount would be reduced by the amount that the Optional Redemption Right has been elected and exercised. Without the prior express consent of the majority of the votes entitled to be cast by the holders of Series A Preferred Stock outstanding at the time of such vote (the “Majority Holders”), the Company shallnot* authorize or issue any additional or other shares of its capital stock that are (i) of senior rank to the Series A Preferred Stock or (ii) of pari passu rank to the Series A Preferred Stock, in each case in respect of the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation.

Pursuant to the Exchange Agreements, the Company agreed that at any time that any of the shares of Series A Preferred Stock issued to the Harvest Funds are outstanding, (i) to directly or through its100% owned subsidiaries (as applicable), to own on a fully diluted basis at least66% of the total equity and voting rights of any and all classes of securities of each of PodcastOne, Slacker, PPV One, Inc., and LiveXLive Events, LLC subsidiaries of the Company, (ii)not to issue shares of its common stock or convertible equity securities at a price less than $2.10 per share (subject to certain exceptions), provided, that such consent shallnot be required in connection with any merger, acquisition or other business combinations of the Company and/or any of its subsidiaries with any unaffiliatedthird party, (iii)not to raise more than an aggregate of $20,000,000 of capital inone or more offerings, including without limitation,one or more equity or debt offerings or a combination thereof, on an accumulated basis commencing after* February 3, 2023 (the “Qualified Offering”); provided, that such consent shallnot* be required for any equity financing of the Company at a price of $2.25 per share or above, and (iv) if after* February 3, 2023the Company distributes any of its assets or any shares of its common stock or Common Stock Equivalents (as defined in the Exchange agreements) of any of its subsidiaries pro rata to the record holders of any class of shares of its common stock, the Company shall distribute to the Holders its pro rata portion of any such distribution (calculated on an as-converted basis with respect to the then outstanding Series A Preferred Stock) concurrently with the distribution to the then record holders of any class of its common stock (including an applicable distribution of shares of PodcastOne’s common stock to the Harvest Funds in connection with PodcastOne’s Spin-Out and special dividend of PodcastOne’s common stock to the Company’s stockholders of record), in each case without the Majority Holders’ prior written consent. Any breach of the aforementioned covenants shall constitute a material breach, which if uncured, shall result in the issuance of an aggregate of 56,473 shares of the Company’s restricted common stock (the “Default Shares”) to the Holders for eachfive* trading days (or pro rata thereof) after the date of the breach; provided, that if such breach is cured within the applicable cure period,no Default Shares shall be issued.

F-23

In accordance with ASC480, the Company classified $5.0 million of its Series A Preferred Stock as temporary equity due to the Company’s obligation to redeem $5.0 million of the Series A Preferred Stock on or before18 months after issuance for cash, which also contains a substantive conversion feature. The redemption feature wasnot deemed to be closely and clearly related to the equity-type host instrument. Accordingly, it was accounted for as a liability at inception based on its fair value of $0.2 million with subsequent changes in fair value included in earnings.

On the Effective Date, the Company entered into Letter Agreements (collectively, the “Agreements”) with (i) Harvest Small Cap Partners Master, Ltd. (“HSCPM”), (ii) Harvest Small Cap Partners, L.P. (“HSCP” and together with HSCPM, the “Harvest Funds”), and (iii) Trinad Capital Master Fund Ltd., a fund controlled by Mr. Ellin, the Company’s Chief Executive Officer, Chairman, director and principal stockholder (“Trinad Capital” and collectively with the Harvest Funds, the “Holders”), the holders of the Company’s Series A Perpetual Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), with a stated value of $1,000 per share. Pursuant to the Agreements (i) the Holders converted approximately $11.4 million worth of shares of Series A Preferred Stock into shares of the Company’s common stock, at a price of $2.10 per share, as follows: HSCPM converted 5,602.09 shares of Series A Preferred Stock into 2,667,664 shares of the Company’s common stock, HSCP converted 2,397.91 shares of Series A Preferred Stock into 1,141,860 shares of the Company’s common stock, and Trinad Capital converted 3,395.09 shares of Series A Preferred Stock into 1,616,709 shares of the Company’s common stock (collectively, the “Shares”), and (ii) HSCPM, HSCP and Trinad Capital received 910,340,389,660 and 535,399 three-year warrants to purchase the Company’s common stock exercisable at a price of $2.10 per share (collectively, the “Warrants”). The Company accounted for the redemption of the Series A Preferred Stock as a Redemption and extinguished $5.0 million of mezzanine equity and $6.4 million of permanent equity. In addition, the Company recorded the fair value of the common stock issued in the amount of$10.0 million and the fair value of the common stock warrants of $1.6 million to equity in accordance with ASC260, Earnings Per Share. The derivative associated with the mezzanine equity was extinguished and a gain was recognized for thesix months ended* September 30, 2024* in the amount of $0.6 million. The difference between the carrying value of the Series A Preferred Stock extinguished, and the fair value of the common stock and common stock warrants issued was recorded as a deemed dividend in the amount of $0.3 million. In addition, pursuant to the Agreements, the Harvest Funds agreed (x) that any future dividends payable on the Series A Preferred Stock shall be paid in-kind or in cash at the option of the Company; provided, that as long as any Series A Preferred Stock is held by the Harvest Funds, Trinad Capital shall receive the dividend solely in kind, (y) to remove the Mandatory Redemption.

The change in fair value of the embedded derivative included in the statement of earnings was a loss of $0.5 million for thesix months ended* September 30, 2024*.

In accordance with ASC480, the Company classified $16.2 million of the Series A Preferred Stock as permanent equity in the financial statements as it wasnot subject to mandatory redemption at the option of the holder. The Company concluded that the Series A Preferred Stock is more akin to an equity-type instrument than a debt-type instrument, therefore the conversion features associated with the Series A preferred stock classified as permanent equity were deemed to be clearly and closely related to the host instrument andnot a derivative under ASC815. Accordingly, the Series A Preferred Stock wasnot accreted to the redemption amount in effect on the balance sheet date.

Each share of Series A Preferred Stock is entitled to receive cumulative dividends payable at a rate per annum of 12% of the Series A Stated Value. During thesix months ended* September 30, 2024and2023*, the Company issued 378 andno shares of its Series A Preferred Stock as a dividend in accordance with terms of the Certificate of Designation.

2016 Equity Incentive Plan

The Company’s board of directors and stockholders approved the Company’s2016 Equity Incentive Plan, as amended (the*“2016* Plan”) which reserved a total of 12,600,000 shares of the Company’s common stock for issuance. On* September 17, 2020,our stockholders approved the amendment to the2016* Plan to increase the number of shares available for issuance under the plan by 5,000,000 shares increasing the total up to 17,600,000 shares which the Company formally increased on* June**30,* 2021. Incentive awards authorized under the2016 Plan include, but arenot limited to, nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section162(m) of the Internal Revenue Code of1986, as amended (the “Code”), and stock appreciation rights. If an incentive award granted under the2016 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to the Company in connection with the exercise of an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the2016 Plan.

The Company recognized share-based compensation expense of $2.3 million and $0.9 million during thethree months ended* September 30, 2024and2023*, respectively. The Company recognized share-based compensation expense of $4.0 million and $1.7 million during thesix months ended* September 30, 2024and2023*, respectively. The total tax benefit recognized related to share-based compensation expense wasnone for thethree andsix months ended* September 30, 2024and2023*

PodcastOne2022* Equity Plan*

On* December**15,* 2022, the PodcastOne’s board of directors and the Company as the sole stockholder, through its wholly owned subsidiary, LiveXLive PodcastOne, Inc., approved PodcastOne’s2022 Equity Incentive Plan (the*“2022* Plan”) which reserved a total of 2,000,000 shares of PodcastOne’s common stock for issuance. Incentive awards authorized under the2022 Plan include, but arenot limited to, nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance grants intended to comply with Section162(m) of the Code and stock appreciation rights. If an incentive award granted under the2022 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to PodcastOne in connection with the exercise of an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the2022 Plan.

As of* September 30, 2024*, PodcastOne has granted incentive awards underlying 879,060 shares of PodcastOne's common stock under the2022 Plan with a fair value of $3.64 per share.150,960 of the awards had vested or have been forfeited as of* September 30, 2024*. As of* September 30, 2024*, PodcastOne recognized $1.8 million of stock compensation for vested restricted stock units. Unrecognized compensation costs for unvested PodcastOne restricted stock units issued to employees was $1.3 million, which is expected to be recognized over a weighted-average service period of 0.65 years.

Non- Controlling * Interest*

On* September 8, 2023,the Company completed its spin out of PodcastOne from the Company with PodcastOne becoming a standalone publicly trading company (the "Spin-Out"), as a result of which 4.3 million shares of PodcastOne common stock were issued to holders outside of the Company resulting in a non-controlling interest in PodcastOne of 21.64%. The stock dividend of 4.3 million shares was a non-reciprocal transfer between PodcastOne and non-LiveOne shareholders. As a result, the transaction was recorded as a change in non-controlling interest under ASC810,* which resulted in an increase to non-controlling interest of $ $1.5 million. In the Spin-Out, PodcastOne issued an additional 3.2 million shares to non-LVO holders primarily from the conversion of thePC1 Bridge Loan which resulted in a non-controlling interest of 26.50%, resulting in an increase of $2.5 million to non-controlling interest within the accompanying condensed consolidated statement of stockholders' deficit and mezzanine equity during the year ended* March 31, 2024*. In addition, as a result of the completion of the Spin-Out and the PodcastOne shares of common stock being publicly traded, the variability in the terms of the warrants issued as part of thePC1 Bridge Loan was resolved so that the warrants issued to purchase PodcastOne's common stock were reclassified to equity and classified within non-controlling interest in the amount of $5.9 million during the year ended* March 31, 2024*. The Company had a non-controlling interest of 28.16% as of* September 30, 2024*.

Note 16 —** Business Segments and Geographic Reporting**

The Company determined its operating segments in accordance with ASC280, “Segment Reporting” (“ASC280”).

F-24

Beginning in thesecond quarter of Fiscal2024, management has determined that the Company hasthree operating segments (PodcastOne, Slacker and Media Group). The Audio Group consists of the Company's PodcastOne and Slacker subsidiaries and the Media Group consists of the Company's remaining subsidiaries. As a result of the Spin-Out of PodcastOne, the Company’s chief operating decision maker (“CODM”) began to make decisions and allocate resources based onthree operating segments of the business (PodcastOne, Slacker and Media group). The Company’s operating segments reflects the manner in which its CODM reviews results and allocates resources. The CODM reviews operating segment performance exclusive of share-based compensation expense, amortization of intangible assets, depreciation, and other expenses (including legal fees, expenses, and accruals) related to acquisitions, associated integration activities, and certain other non-cash charges. As a result, the segment information for the prior periods has been recast to conform with the current period presentation.

The Company’sthree operating segments are also consistent with its internal organizational structure, which is the way the Company assesses operating performance and allocates resources.

Customers

The Company hasone external customer that accounts for more than10% of its revenue and accounts receivable. Such original equipment manufacturer (the “OEM”) provides premium Slacker service in its new vehicles. Total revenues from the OEM were $18.5 million and $14.8 million for thethree months ended* September 30, 2024and2023*, respectively. Total revenues from the OEM were $36.0 million and $28.1 million for thesix months ended* September 30, 2024and2023*, respectively. Total receivables from the OEM were 45% and 29% of total accounts receivable as of* September 30, 2024* and* March 31, 2024*, respectively.

Segment and Geographic Information

The Company’s operations are based in the United States. All material revenues of the Company are derived from the United States. All long-lived assets of the Company are located in the United States, of which $0.3 million resides in PodcastOne, $3.1 million in Slacker and $0.4 million is attributed to our Media Operations.

We manage our working capital on a consolidated basis. Accordingly, segment assets arenot reported to, or used by, our management to allocate resources to or assess performance of our segments, and therefore, total segment assets and related depreciation and amortization havenot been presented.

The following tables present the results of operations for our reportable segments for thethree andsix months ended* September 30, 2024and2023*:

F-25

Geographic Information

All material revenues of the Company are derived from the United States. All long-lived assets of the Company are located in the United States.

Note17 — Fair Value Measurements

The following table presents the fair value of the Company’s financial liabilities that are measured at fair value on a recurring basis (in thousands):

The following table presents a reconciliation of the Company’s financial liabilities that are measured at Level3 within the fair value hierarchy (in thousands):

F-26

Note18 — Subsequent Events

On* October 1, 2024,we announced an amended relationship with our largest OEM customer. Effective December 1, 2024,the OEM customer willno* longer subsidize our products to some of its customers, however, we will offer all OEM customer vehicles in North America the opportunity to convert to become direct subscribers of our LiveOne music app. The direct subscription to our LiveOne app will allow such users for thefirst time to access their LiveOne music and LiveOne’s other service offerings directly across all of their devices. Our LiveOne music streaming button/icon, which allows users to directly connect their subscription to LiveOne, is expected to remain in the OEM customer’s music streaming services dashboard in perpetuity. As a result, we believe that we now have a unique opportunity to convert as many of such OEM’s drivers as possible to a higher priced LiveOne subscription service creating a meaningful upside opportunity for us, and we are working in good faith with such OEM customer to convert as many of these drivers as possible. The OEM customer will continue to pay us monthly for grandfathered vehicles for the term of the OEM license agreement.

On* November 1, 2024,*the Company repaid $1 million of the principal amount of the Credit Facility and decreased the size of the Credit Facility to $6 million.

F-27