Financial Analysis

"Note 15 Commitments and Contingencies Contractual Obligations As of March 31, 2026 , the Company is obligated under agreements with Content Providers and other contractual obligations to make guaranteed payments as follows: $0.5 million, $0.4 million, $0.4 million and $0.4 million for the fiscal year ending March 31, 2027, 2028, 2029 and thereafter, respectively. 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, paid users, and other terms of each agreement that impact the Companys expected attainment or recoupment of the minimum guarantees based on the relative attribution method. Several of the Companys 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 Companys 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 agreeme …

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Note 16 Employee Benefit Plan The Company sponsors a 401 (k) plan (the 401 (k) Plan) covering all employees. Prior to March 31, 2019, only Slacker employees were eligible to participate in the 401 (k) Plan. Employees are eligible to participate in the 401 (k) Plan the first day of the calendar month following their date of hire. The Company may make discretionary matching contributions to the 401 (k) Plan on behalf of its employees up to a maximum of 100% of the participants elective deferral up to a maximum of 5% of the employees annual compensation. The Company provided a contribution of $0.2 million and $0.2 million, to its employees for the years ended March 31, 2026 and 2025 , respectively. …

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"Note 9 PodcastOne Bridge Loan PodcastOne s Private Placement On July 15, 2022 ( the Closing Date), PodcastOne completed a private placement offering (the PC1 Bridge Loan) of PodcastOnes 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 the PC1 Notes, the Purchasers received warrants (the PC1 Warrants) to purchase a number of shares (the PC1 Warrant Shares) of PodcastOnes common stock, par value $0.00001 per share. The PC1 Notes were due to mature one year from the Closing Date, subject to a one -time three -month extension at PodcastOnes election (the Maturity Date). The PC1 Notes bear interest at a rate of 10% per annum payable on maturity. The PC1 Notes would automatically convert into the securities of PodcastOne sold in a Qualified Financing (an initial public offering of PodcastOnes securities from which PodcastOnes trading market at the closing of such offering is a national securities exchange) or Qualified Event (a direct listing of PodcastOnes 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 less …

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Year Ended March 31, 2026 2025 Revenue Paid user services $ 11,972 $ 56,939 Advertising 61,616 52,285 Merchandising 3,556 5,181 Sponsorship and Licensing - - Ticket/Event - - Total Revenue $ 77,144 $ 114,405

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Note 5 Goodwill and Intangible Assets Goodwill The Company currently has three reporting units. The following table presents the changes in the carrying amount of goodwill for the years ended March 31, 2026 and 2025 (in thousands): Goodwill Balance as of April 1, 2024 $ 23,379 Impairment (1,667 ) Balance as of March 31, 2025 $ 21,712 Impairment - Balance as of March 31, 2026 $ 21,712 The Company recorded an impairment on the goodwill balance of $1.7 million for the year ended March 31, 2025. During the year ended March 31, 2025 the Company performed an quantitative assessment of our Media Group reporting unit. The results of the Company's quantitative goodwill impairment analysis performed indicated an impairment of goodwill within our Media Group reporting unit, and the Company recorded a non-cash impairment charge of $1.7 million. The impairment was driven by the company's most recent cash flow projections as revised in the fourth quarter of Fiscal 2025 which reflected current market conditions and current trends in business performance, including slower than anticipated actualization of bookings. No impairment was recorded for the year ended March 31, 2026. Indefinite-Lived Intangible Assets The following table presents the changes in the carrying amount of indefinite-lived intangible assets in the Companys reportable segment for the year ended March 31, 2026 (in thousands): Tradenames Balance as of April 1, 2024 $ 4,637 Acquisitions - Impairment losses (3,863 ) Balance as …

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"Note 18 Income Tax Provision The Companys income tax provision can be affected by many factors, including the overall level of pre-tax income, the mix of pre-tax income generated across the various jurisdictions in which the Company operates, changes in tax laws and regulations in those jurisdictions, changes in valuation allowances on its deferred tax assets, tax planning strategies available to the Company, and other discrete items. The components of pretax loss and income tax expense (benefit) are as follows (in thousands): Year Ended March 31, 2026 2025 Loss before income taxes: Domestic $ (21,223 ) $ (20,555 ) Foreign - - Total loss before income taxes $ (21,223 ) $ (20,555 ) The provision for income taxes consisted of the following: Current U.S. Federal $ - $ - State 29 95 Foreign - - Total Current 29 95 Deferred: U.S. Federal (1 ) (68 ) State 2 (212 ) Foreign - - Total Deferred 1 (280 ) Total provision (benefit) for income taxes $ 30 $ (185 ) The differences between income taxes expected at U.S. statutory income tax rates and the income tax provision are as follows (in thousands): Year Ended March 31, 2026 Income taxes computed at Federal statutory rate $ (4,457 ) 21.00 % State and local income taxes, net of federal income tax effect (a) 336 (1.58 )% Valuation allowance 3,494 (16.46 )% Other 657 (2.82 )% Total provision for taxes $ 30 0.14 % (a) State taxes in California make up the majority of the tax effect in this category Year Ended March 31, 2025 Income taxes com …

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Note 13 Leases 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 the year ended March 31, 2025, CPS entered into a three year lease for office space in Palatine, Illinois. The Company leases office locations with lease terms that are less than 12 months or are on month to month terms. Rent expense is recognized over the term of the lease on a straight-line basis. Rent expense for these leases totaled $0.5 million and $0.5 million for the year ended March 31, 2026 and 2025, respectively. Operating leases with lease terms of greater than 12 months are capitalized in Operating lease right-of-use assets and Operating lease liabilities in the consolidated balance sheet. Rent expense for these operating leases totaled $0.4 million and $0.4 million the years ended March 31, 2026 and 2025 , respectively, which is included in general and administrative expenses in the consolidated statement of operations. Operating lease costs for the years ended March 31, 2026 and 2025 consisted of the following (in thousands): Year Ended March 31, 2026 2025 Fixed rent cost $ 414 $ 456 Short term lease cost 48 88 Total operating lease cost $ 462 $ 544 Supplemental balance sheet information related to leases was as follows (in thousands): March 31, March 31, Operating leases 2026 2025 Operating lease right-of-use assets $ 229 $ 97 Opera …

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Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures (ASU 2023 - 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. ASU 2023 - 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 adopted ASU 2023 - 09 on April 1, 2025 on a prospective basis. The adoption of this standard did not have an impact on the Companys consolidated financial statements. In December 2023, the FASB issued ASU 2023 - 08, Intangibles Goodwill and Other Crypto Assets (Subtopic 350 - 60 ): Accounting for and Disclosure of Crypto Assets (ASU 2023 - 08 ). This ASU is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entitys crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023 - 08 requires a cumulative-effect adjustment to the opening balance of retained earnings as of …

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Note 12 Related Party Transactions As of March 31, 2022, the Company had unsecured 8.5% Senior Secured Convertible Notes previously issued to Trinad Capital (as defined below). In February 2023, the Trinad Notes along with accrued interest thereunder were converted into 6,177 shares of Series A Preferred Stock, with a stated value of $1,000 per share of Series A Preferred Stock and convertible at $21.00 per share, and Trinad Capital also received 200,000 shares of the Company's common stock. On April 1, 2024, Trinad Capital converted 3,395.09 shares of Series A Preferred Stock into 161,671 shares of the Companys common stock and received 53,540 three -year warrants to purchase the Companys common stock exercisable at a price of $21.00 per share. For the fiscal years ended March 31, 2026 and 2025, the Company issued 205.19 and 802.20 shares of its Series A Preferred Stock, respectively, to Trinad Capital as dividend payments required by the terms of the Series A Preferred Stock. As of March 31, 2026, Trinad Capital owned 2,253.99 shares of 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 of PodcastOne along with 1,100,000 warrants to purchase shares of PodcastOne's common stock with an exercise price of $3.00 per share, which remain outstanding as of March 31, 2026. Also, on this date, PodcastOne issued 147,044 shares of PodcastOne common s …

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Note 3 Revenue The following table represents a disaggregation of revenue from contracts with customers for the years ended March 31, 2026 and 2025 (in thousands): Year Ended March 31, 2026 2025 Revenue Paid user services $ 11,972 $ 56,939 Advertising 61,616 52,285 Merchandising 3,556 5,181 Sponsorship and Licensing - - Ticket/Event - - Total Revenue $ 77,144 $ 114,405 For some contracts, the Company may invoice 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 do not include a significant financing component. The Company has elected to apply the practical expedient under ASC 606 - 10 - 50 - 14 and not 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 of one year or less. For the years ended March 31, 2026 and 2025 , one customer accounted for 7% and 45% of our consolidated revenues, respectively. The following table summarizes the significant changes in contract liabilities (deferred revenue) balances during the years ended March 31, 2026 and 2025 (in thousands): Contract Liabilities Balance as of April 1, 2024 $ 728 Revenue recognized that was included in …

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Note 19 Business Segments and Geographic Reporting The Company determined its operating segments in accordance with ASC 280, Segment Reporting (ASC 280 ). Beginning in the second quarter of Fiscal 2024, management has determined that the Company has three operating segments (PodcastOne, Slacker and Media Group). The Audio Group consist of the Company's PodcastOne and Slacker subsidiaries and the Media Group consist of the Company's remaining subsidiaries. As a result of the Spin-Out of PodcastOne, the Companys CODM began to make decisions and allocate resources based on three operating segments of the business (PodcastOne, Slacker and Media group). The Companys reporting 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. The Companys three 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 had one external customer that accounts for more than 10% of its revenue and accounts receivable during the year ended March 31, 2025. Such original equipment manufacturer (the OEM) provides premium Slacker service in …

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Note 2 Summary of Significant Accounting Policies Use of Estimates The preparation of the Companys consolidated financial statements in conformity with the United States of America (US) generally accepted accounting principles (GAAP) requires the Companys 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 Companys 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 p …

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"Note 17 Stockholders Equity Authorized Common Stock and Authority to Issue Preferred Stock The Company has the authority to issue up to 510,000,000 shares, consisting of 500,000,000 shares of the Companys common stock, $0.001 par value per share, and 10,000,000 shares of the Companys preferred stock, $0.001 par value per share (the preferred stock). The Company may issue shares of preferred stock from time to time in one or more series, each of which will have such distinctive designation or title as shall be determined by the Companys board of directors and will have such voting powers, full or limited, or no 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 may be adopted from time to time by the Companys board of directors. The Companys 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, but not 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 is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights …

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Note 20 Subsequent Events On April 8, 2026, PodcastOne amended its 2022 Plan to increase the number of shares of its common stock available for issuance under the 2022 Plan by 2,000,000 shares, which increase was previously approved by PodcastOnes board of directors. Such increase is subject to approval of PodcastOnes stockholders, which PodcastOne anticipates obtaining at its 2026 annual meeting of stockholders. As of the date of this Annual Report, holders of 1,317,331 PC1 Warrants (other than the Company) exercised their warrants for cash at an exercise price of $3.00 per share resulting in proceeds to PodcastOne of approximately $3.95 million. We also exercised all of our 1.1 million PC1 Warrants. …

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