Financial Analysis

Note 8 Commitments and Contingencies Contractual Obligations As of March 31, 2026 , the Company is obligated under agreements with its content providers and other contractual obligations to make guaranteed payments as follows: $0.1 million and $0.1 million for the fiscal year ending March 31, 2027 and 2028, 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, members, and other terms of each agreement that impact the Companys expected attainment or recoupment of the minimum guarantees based on the relative attribution method. On June 27, 2025 and effective as of June 1, 2025 ( the Effective Date), the Company entered into a new employment agreement with Kit Gray, the Companys current President (the Gray Employment Agreement). The term of the Gray Employment Agreement is for two years from the Effective Date at an annual salary of $375,000. Mr. Gray is eligible to earn a discretionary annual performance bonus for each whole or partial fiscal year of his employment period with the Company in accordance with the Companys annual bonus plan ap …

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Note 9 Employee Benefit Plan The Companys parent LiveOne sponsors a 401 (k) plan (the 401 (k) Plan) covering all of the Companys employees. 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 Companys matching contributions were not material to the financial statements for the years ended March 31, 2026 and 2025 , respectively. …

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Note 4 Goodwill and Intangible Assets Goodwill The Company currently has one reporting unit. The following table presents the changes in the carrying amount of goodwill for the year ended March 31, 2026 (in thousands): Goodwill Balance as of March 31, 2025 $ 12,041 Acquisitions - Balance as of March 31, 2026 $ 12,041 Finite-Lived Intangible Assets The Companys finite-lived intangible assets were as follows as of March 31, 2026 (in thousands): Gross Net Carrying Accumulated Carrying Value Amortization Value Content creator relationships $ 3,229 $ 3,045 $ 184 Brand and trade names 1,010 581 429 Total $ 4,239 $ 3,626 $ 613 The Companys finite-lived intangible assets were as follows as of March 31, 2025 (in thousands): Gross Net Carrying Accumulated Carrying Value Amortization Value Content creator relationships $ 3,229 $ 2,573 $ 656 Brand and trade names 1,010 480 530 Total $ 4,239 $ 3,053 $ 1,186 The Companys amortization expense on its finite-lived intangible assets was $0.6 million and $1.1 million for the years ended March 31, 2026 and 2025 , respectively. The Company recorded an impairment charge of none and $0.2 million for the year ended March 31, 2026 and 2025, respectively. The impairment for the year ended March 31, 2025 was the result of the winding down of a podcast show acquired by PodcastOne. The Company expects to record amortization of intangible assets for fiscal years ending March 31, 2026 and future fiscal years as follows (in thousands): For Years Ending Marc …

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Note 11 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 (benefit) expense are as follows (in thousands): Year Ended March 31, 2026 2025 Loss before income taxes: Domestic $ (2,644 ) $ (6,434 ) Foreign - - Total loss before income taxes $ (2,644 ) $ (6,434 ) The provision for income taxes consisted of the following: Current U.S. Federal $ - $ - State 17 24 Foreign - - Total Current 17 24 Deferred: U.S. Federal (209 ) (899 ) State (851 ) (163 ) Foreign - - Total Deferred (1,060 ) (1,062 ) Valuation allowance 1,043 1,062 Total provision for income taxes $ - $ 24 The differences between income taxes expected at U.S. statutory income tax rates and the income tax provision are as follows (dollars in thousands): Year Ended March 31, 2026 Income taxes computed at Federal statutory rate $ (555 ) 21.00 % State and local income taxes, net of federal income tax effect (a) 179 (6.78 )% Valuation allowance 209 (7.92 )% Other 167 (6.30 )% Total provision for taxes $ - 0.00 % (a) State taxes in California make up the majority of the tax effect in this category Year Ended …

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Note 6 Leases The Company's 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 accompanying consolidated balance sheets. Rent expense for these operating leases totaled $0.1 million and $0.1 million for the years ended March 31, 2026 and 2025, respectively. Operating lease cost for the years ended March 31, 2026 and 2025 consist of the following (in thousands): Year Ended Year Ended March 31, March 31, 2026 2025 Fixed rent cost $ 36 $ - Short term lease cost 80 68 Total operating lease cost $ 116 $ 68 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 $ 166 $ - Operating lease liability, current $ 70 $ - Operating lease liability, noncurrent 97 - Total operating lease liabilities $ 167 $ - Significant judgments Discount rate the Companys lease is discounted using the Companys incremental borrowing rate of 3.43% as the rate implicit in the lease is not readily determinable. Options the lease term is the minimum noncancelable period of the lease. The Company does not 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 determined not to be material. Future maturities of our operating lease is …

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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. Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU No. 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses. The amendments in ASU 2024 - 03 require a public business entity to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods. The objective of the disclosure requirements is to provide disaggregated information about a public business entitys expenses to help investors (i) better understand the entitys performance, (ii) better assess the entitys prospects for future cash flows, and (iii) compare an ent …

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Note 7 Related Party Transactions As of March 31, 2026 , the Companys parent, LiveOne, holds approximately 19.3 million shares of the Company's common stock and 1,100,000 common stock warrants to purchase shares of the Company with an exercise price of $3.00 per share. In addition, directors and management affiliated with LiveOne hold approximately 1.8 million shares of the Company's common stock. During the years ended March 31, 2026 and 2025 , the Company was allocated expenses by LiveOne attributed to the overhead expenses incurred on behalf of the Company. The amount allocated to the Company from LiveOne for the years ended March 31, 2026 and 2025 , was $1.3 million and $1.0 million, respectively. As of March 31, 2026 and 2025 , the Company had a related party payable owed to LiveOne of $5.0 million and $0.5 million, respectively, which primarily consisted of expenses related to overhead expenses paid on behalf of the Company (See Note 2 Summary of Significant Accounting Policies). As of March 31, 2026 and 2025 , the Company had a related party receivable from LiveOne of $5.3 million and $0.4 million, respectively, which primarily consisted of cash allocated to LiveOne. During the year ended March 31, 2026 and 2025, the Company issued 906,189 and 1,315,880 shares of its common stock, respectively, with a fair value of $1.7 million and $2.5 million, respectively, in exchange for amounts owed under a cost sharing agreement between LiveOne and the Company. …

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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 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 and the fair value of the Companys equity-based compensation awards. 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. 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 …

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"Note 10 Stockholders Equity Spin-Out Prior to the Spin-Out, LiveOne, through its wholly owned subsidiary, LiveXLive PodcastOne, Inc., canceled 127,984,230 shares of the Companys common stock. As of March 31, 2026 , LiveOne, Inc. owned approximately 18.4 million shares of the Companys common stock ( not including any shares of common stock underlying the PC1 Warrants (as defined below) held by LiveOne), which constituted approximately 71% of the Companys issued and outstanding shares of common stock as of such date. Pursuant to the Companys Amended and Restated Certificate of Incorporation which was approved by the Companys board of directors and LiveOne as the sole stockholder on December 15, 2022, which became effective on September 12, 2023, in connection with the completion of the Spin-Out, the Company is authorized to issue up to 110,000,000 shares, consisting of 100,000,000 shares of the Companys common stock and 10,000,000 shares of the Companys preferred stock, $0.00001 par value per share (the ""preferred stock""). On September 8, 2023, the Company completed the Spin-Out and converted the outstanding PC1 Bridge Loan (as defined below) into 2,340,707 shares of common stock based on a fair value of $4.39 per share, which was the closing price of the stock on the date of conversion. The book value of the PC1 Bridge Loan and the bifurcated embedded derivative were converted into additional paid in capital, which equaled the fair value of the 2,340,707 shares issued for t …

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Note 12 Subsequent Events On April 8, 2026, the Company 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 the Companys board of directors. Such increase is subject to approval of the Companys stockholders, which the Company 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 LiveOne) exercised their warrants for cash at an exercise price of $3.00 per share resulting in proceeds to the Company of approximately $3.95 million. LiveOne also exercised all of its 1.1 million PC1 Warrants. …

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