GAIA 10-K & 10-Q changes, risk factors and insider trading

The market for streaming content is intensely competitive and subject to rapid change. New technologies and evolving business models for delivery of streaming content continue to develop at a fast pace. Through new and existing distribution channels, consumers are afforded various means for consuming streaming content. The various economic models underlying these differing means of streaming content delivery include subscription, transactional, ad-supported and piracy-based models. All of these have the potential to capture meaningful segments of the streaming content market. Several competitors have longer operating histories, larger customer bases, and stronger brand recognition than we do and have significant financial, marketing and other resources. They may secure better terms from suppliers, adopt more aggressive pricing and devote more resources to technology and marketing. New entrants may enter the market with unique service offerings or approaches to providing streaming content and other companies also may enter into business combinations or alliances that strengthen their competitive positions. In addition, new technological developments, including the development and use of generative artificial intelligence, are rapidly evolving. If we are unable to successfully compete with current and new competitors, programs and technologies, our business will be adversely affected and we may not be able to increase market share and revenues and/ or achieve profitability.

We reported net loss attributable to common shareholders of $5.4$(4.5) million in 20242025 compared to net loss attributable to common shareholders of $5.6$(5.2) million in 2023.2024. Additionally, we reported net losses during several prior years as a result of continued investment in member acquisition efforts to drive revenue growth. No assurance can be made that we will operate profitably in future periods and, if we do not, we may not be able to meet any future debt service requirements, working capital requirements, capital expenditure plans, production slate, acquisition plans or other cash needs. Our inability to meet those needs could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Our revenues and results of operations have fluctuated in the past, and will likely continue to fluctuate, on a quarterly basis. Such fluctuation is the result of a seasonal pattern that reflects variations when consumers are typically spending more time indoors and, as a result, tend to increase their viewing, similar to those of general video streaming services. We have generally experienced the greatest member growth in the fourth and first quarters (October through February), and slowest during May through August. This drives quarterly variations in our spending on member acquisition efforts and the number of net new subscribers we add each quarter but does not result in a corresponding seasonality in net revenue. As we continue to expand internationally, we also expect regional seasonality trends to demonstrate more predictable seasonal patterns as our service offering in each market becomes more established and we have a longer history to assess such patterns.

Our systems may be subject to damage or interruption from adverse weather conditions, natural disasters, solar flares, public health issues such as pandemics or epidemics, national or international conflicts, including war, civil disturbances and terrorist attacks, rogue employees, power loss, telecommunications failures, computer viruses, computer denial of service attacks or other attempts to harm these systems. Interruptions in these systems, or to the internet in general, could make our service unavailable or degraded or otherwise hinder our ability to deliver content to our members. Service interruptions, errors in our software or the unavailability of network or information systems used in our operations could diminish the overall attractiveness of our membership service to existing and potential members.

Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks that may be different from and incremental to those in the United States. In addition to the risks that we face in the United States, our international operations may involve risks that could adversely affect our business, including the following: the need to adapt our content and user interfaces for specific cultural and language differences, including licensing a certain portion of our content library before we have developed a full appreciation for its performance within a given territory; difficulties and costs associated with staffing and managing foreign operations; management distraction; international conflicts, including war, civil disturbances and terrorist attacks; political or social unrest and economic instability; public health issues such as pandemics or epidemics; compliance with U.S. anti-corruption laws, export controls and economic sanctions, including tariffs, and local laws prohibiting corrupt payments to government officials; unexpected changes in regulatory requirements; less favorable foreign intellectual property laws; adverse tax consequences such as those related to repatriation of cash from foreign jurisdictions into the United States, non-income related taxes, changes in tax laws or their interpretations, or the application of judgment in determining our global provision for income taxes and other tax liabilities given inter-company transactions and calculations where the ultimate tax determination is uncertain; fluctuations in currency exchange rates, which could impact revenues and expenses of our international operations and expose us to foreign currency exchange rate risk; profit repatriation and other restrictions on the transfer of funds; differing payment processing systems as well as consumer use and acceptance of electronic payment methods, such as credit and debit cards; new and different sources of competition; different and more stringent user protection, data protection, privacy and other laws; and availability of reliable broadband connectivity and wide area networks in targeted areas for expansion.

Revenues, net. Revenues, net increased $9.9$9.7 million, or 12.4%,10.9%, to $90.4$99.0 million during 2024,2025, compared to $80.4$89.3 million during 2023.2024. This was primarily driven by an increase in member count as well as an increase in Average Revenue Per User (“ARPU”).

Cost of revenues. Cost of revenues increased $0.9$0.4 million, or 8.6%,3.2%, to $12.6$12.8 million during 20242025 from $11.6$12.4 million during 2023,2024, with gross profit margin of 86.1%87.1% in the current year compared to 85.5%86.1% in 2023.2024. The increase in the cost of revenues is primarily related to thetiming increaseof media library amortization. Gross profit margin increased during 2025 from 2024 primarily due to improvements in prices and revenue mix.ARPU.

Selling and operating expenses. Selling and operating expenses increased $8.8$7.1 million, or 13.1%,9.5%, to $76.0$81.9 million during 2025 from $74.8 million during 2024 from $67.2 million during 2023 and, as a percentage of revenues, increaseddecreased to 84.1%82.7% during 20242025 from 83.5%83.8% during 2023.2024. The increase was driven primarily by an increase in marketing expense in addition to the absence of an ERTC benefit recognized in the prior year.expense.

Corporate, general and administration expenses. Corporate, general and administration expenses increased by $1.6 million, or 25.8%,20.5%, to $9.4 million during 2025 up from $7.8 million during 2024 from $6.2 million during 2023 and, as a percentage of net revenue, increased to 8.6%9.5% during 20242025 from 7.7%8.7% during 2023.2024. The increase was primarily driven by higher accounting and audit fees, legal fees, customer acquisition costs and stockhigher compensation expensecosts during 2024.2025.

Income tax (benefit) expense. Income taxexpense (benefit) expense reflects a current year provision of $(0.0)$0.2 million compared to the prior year provision of $0.1$(0.0) million from income taxes due to aan decreaseincrease in the current and deferred tax liability associated with goodwill.liability.

Our member base growth reflects seasonal variations driven primarily by periods when consumers typically spend more time indoors and, as a result, tend to increase their viewing. We have generally experienced the greatest member growth in the fourth and first quarters (October through February), and slowest during May through August. This drives quarterly variations in our spending on member acquisition efforts and the number of net new subscribers we add each quarter but does not result in a corresponding seasonality in net revenue. As we continue to expand internationally, we also expect regional seasonality trends to demonstrate more predictable seasonal patterns as our service offering in each market becomes more established and we have a longer history to assess such patterns.

Deferred income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. The tax expense or benefit related to ordinary income or loss must be computed at an annual effective tax rate and the tax expense or benefit related to all other items must be individually computed and recognized as a discrete item when it occurs. Where, based on the weight of available evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. As we have historically had cumulative losses, we have not released the current valuation allowance. The timing of the release of the valuation allowance will be dependent on cumulative income for a period of 36 months and an expectation that we will not have cumulative losses in the future.

We recognize compensation cost for share-based awards based on the estimated fair value of the award on the date of grant. We measure compensation cost at the grant date based on the estimated fair value of the award and recognize compensation cost upon the probable attainment of a specified performance condition over the estimated performance period or for time-based awards over the service period. Since 2019, we have only granted restricted stock units, for which we utilize the market price of our common stock on the date of grant to estimate fair value. In May 2025, we awarded performance restricted-stock units (“PSUs”), for which we utilized the market price of our common stock on the date of grant to estimate fair value.

Our capital needs arise from working capital required to fund operations, capital expenditures related to acquisition and development of media content, development and marketing of our digital platforms, acquisitions of new businesses and other investments, replacements, expansions and improvements to our infrastructure and future growth. These capital requirements depend on numerous factors, including the rate of market acceptance of our offerings, our ability to expand our customer base, the cost of ongoing upgrades to our offerings, our expenditures for marketing and other factors. Additionally, we will continue to pursue opportunities to expand our media libraries, evaluate possible investments in businesses and technologies and increase our marketing programs as needed.

On December 28, 2020, Boulderthe Road and Westside Boulder, LLCBorrower entered into a loan agreement with First Interstate Bank,Bank (formerly Great Western Bank), as lender, providing for a mortgage loan in the principal amount of $13.0 million.million (the “2020 Mortgage Loan”). The loanpromissory bearsnote evidencing the 2020 Mortgage Loan bore interest at a fixed rate of 3.75% per annumannum, and matureswas scheduled to mature on December 28, 2025.2025 Westsidebefore andbeing Boulderrefinanced Roadby eachthe receivedBorrower 50% ofwith the proceeds and are each responsible for 50% offrom the monthly2025 installments.Mortgage The loan is secured by a deed of trust, assignment of rents, security agreement and fixture filing on our corporate campus and is guaranteed by Gaia. The loan has a remaining balance of $11.6 million as of December 31, 2024.Loan.

On August 25, 2022, Gaiathe Company entered into athe Prior Credit andAgreement, Securitywhich Agreement with KeyBank National Association. The Credit Agreement providesprovided for a revolving credit facility in an aggregate amount of up to $10.0$10 million withand awas sublimitamended ofby $1.0the millionAmendment availableon forJuly issuances25, of2025. lettersThere ofwere credit.no Borrowingsoutstanding borrowings under the Prior Credit Agreement are available for working capital and general corporate purposes, but not to fund any permitted acquisitions or other investments. There was no outstanding balance as of December 31, 2024.

We intend to invest approximately 15%-20% of our consolidated revenues each year to support continued investment in our content library and technology platform. This spending is entirely discretionary in nature with no contractual commitments and due to our in-house production capabilities, we can scale our content investment based on the cash flows generated from operations if necessary to ensure we have sufficient liquidity to operate our business into the future. As of December 31, 2024,2025, our cash balance was $5.9$13.5 million.

As described in Note 16,15, in April 2024, the Company entered into a series of transactions with its subsidiary, Igniton, Inc., a Colorado corporation (“Igniton”), and a third-party entity to purchase a perpetual license for a total of $16.2 million of consideration comprised of $10.2 million of cash and $5.0 million of common stock of Igniton and $1.0 million of the Company’s equity security investment in Telomeron (the “License Purchase”). The license allows the Company to utilize the technology developed by the third party. This license is being recorded within the Technology license, net line item on the condensed consolidated balance sheets. The License Purchase was primarily funded through an equity financing through Igniton, which raised $6.8 million of cash and $5.0 million in Igniton stock issuance from third-party investors.

Operating activities. Cash flows from operations increaseddecreased $1.1$1.2 million during 20242025 compared to 2023.2024. This increasedecrease was primarily driven by anthe increasetiming of working capital and changes in directother membership subscriptions.liabilities.

Investing activities. Cash flow used in investing activities increaseddecreased $9.7$5.0 million during 20242025 compared to 20232024 due to impacts from theinvestment technologypurchases licenseand purchase.acquisitions.

Financing activities. Cash flows provided by financing activities increased $10.6$5.9 million during 20242025 compared to 20232024 primarily relateddue to debtthe repaymentsproceeds infrom 2023.the issuance of Gaia Class A common stock of $7.0 million. We had no outstanding borrowings at December 31, 2024.2025.

We operate a global digital video subscription service with a library of over 10,000 titles, with live communications and live events with a growing selection of titles available in Spanish, German and French that caters to a unique, underserved member base. Our digital content is available to our members on most internet-connected devices anytime, anywhere, commercial-free. Through our online Gaia subscription service our members have unlimited access to a library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation related content, live events, and more – 90% of which is exclusively available to our members for digital streaming on most internet-connected devices. Gaia’s position in the streaming video landscape is firmly supported by its wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services. Our original content is developed and produced in-house in our lifestyle campus near Boulder, Colorado. By offering exclusive and unique content through our streaming service, we believe we will be able to significantly expand our target member base.

Our core strategy is to growimprove our subscription business domestically and internationally by expanding our unique and exclusive content library, enhancing our user interface, extending our streaming service to new internet-connected devices as they are developed and creating a conscious community built around our content.

Three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025

CostRevenues, ofnet. revenues.Revenues Costdecreased of$1.3 revenues increased $0.5 millionmillion, or 16.1%5.29%, to $3.4$23.3 million during the three months ended MarchJune 31,30, 2026, compared to $2.9$24.6 million during the three months ended MarchJune 31,30, 2025,2025. whichRevenue primarily relates toin the increaseUnited inStates revenuesincreased $0.2 million and international revenue mix.decreased Gross$1.5 profit margin declinedmillion during the three months ended MarchJune 31,30, 2026 compared to 86.0% from 87.7% for the three months ended MarchJune 31,30, 2025. The threedecrease monthsprimarily endedreflected Marchthe 31,impact 2026of benefited from a one-time adjustmentchanges in royaltyour expense.marketing strategy, continued competition for consumer spending and engagement across the broader SVOD industry, and challenging macroeconomic conditions.

Selling and operating expenses. Selling and operating expenses stayedincreased flatto at $20.0$21.6 million during the three months ended MarchJune 31,30, 2026, compared to $20.0$20.6 million for the three months ended MarchJune 31,30, 2025.2025, which is primarily due to change in marketing strategy. As a percentage of net revenues, selling and operating expenses decreasedincreased to 82.3%92.6% for the three months ended MarchJune 31,30, 2026 compared to 84.0%83.8% for the three months ended MarchJune 31,30, 2025.

Corporate, general and administration expenses. Corporate, general and administration expenses increaseddecreased $0.4$1.4 million to $2.3$1.5 million for three months ended MarchJune 31,30, 2026 from $1.9$2.9 million for three months ended MarchJune 31,30, 2025. As a percentage of net revenues, these expenses increaseddecreased to 9.6%6.5% for the three months ended MarchJune 31,30, 2026 from 8.0%11.8% for the three months ended MarchJune 31,30, 2025. The increasedecrease was primarily drivendue byto legala fees,decrease accounting and audit fees, and higherin incentive compensation costs during the three months ended MarchJune 31,30, 2026.2025.

Our revenues and results of operations have fluctuated in the past, and will likely continue to fluctuate, on a quarterly basis. Such fluctuation is the result of a seasonal pattern that reflects variations when consumers are typically spending more time indoors and, as a result, tend to increase their viewing, similar to those of general video streaming services. This drives quarterly variations in our spending on member acquisition efforts and affects the net subscriber change each quarter but does not result in a corresponding seasonality in net revenue. As we continue to expand internationally, weWe also expect regional seasonality trends to demonstrate more predictable seasonal patterns as our service offering in each market becomes more established and we have a longer history to assess such patterns.

On December 19, 2025, Boulder Road and Westside (collectively, the “Borrower”) entered into a business loan agreement with KeyBank National Association (“KeyBank”), as lender, providing for a mortgage loan in the principal amount of $11.4 million (the “2025 Mortgage Loan”). The promissory note evidencing the 2025 Mortgage Loan bears interest at a fixed rate of 5.090% per annum, matures on December 19, 2030, and is secured by a deed of trust on our corporate campus, a portion of which is owned by Boulder Road and Westside as tenants-in-common and the remainder of which is owned by Boulder Road. The loan proceeds from the 2025 Mortgage Loan were used to refinance the 2020 Mortgage Loan. Westside and Boulder Road each received 50% of the proceeds and are each responsible for 50% of the monthly installments. The 2025 Mortgage Loan contains customary affirmative and negative covenants (each with customary exceptions) for loans of this type, including limitations on the Borrower’s ability to incur liens or debt, make investments, or engage in certain fundamental changes, and is fully guaranteed by Gaia. Additionally, the 2025 Mortgage Loan requires Boulder Road, LLC maintain a Net Operating Income to Debt Service Coverage Ratio of not less than 1.25 to 1.00. The 2025 Mortgage Loan has a remaining balance of $11.2$11.1 million as of MarchJune 31,30, 2026.

The Amendment amended the Prior Credit Agreement to, among other things, (i) refinance and extend the prior revolving credit facility with a revolving credit facility in an aggregate principal amount of up to $10 million (which may be increased up to $15 million) that matures on August 25, 2028, the loan proceeds of which may be used for working capital, general corporate purposes, and permitted acquisitions, (ii) modify the interest rate applicable to revolving loan advances to 1.75% per annum for advances that are SOFR loans and 0.75% per annum for advances that are base rate loans and eliminate the 0.10% per annum SOFR index adjustment, and (iii) provide for a maximum leverage ratio of 2.00 to 1.00 for each computation period. Borrowings under the Amendment are available for working capital and general corporate purposes and permitted acquisitions. There was no outstanding balance as of MarchJune 31,30, 2026.

We intend to invest approximately 15%-20% of our revenues each year to support continued investment in our content library and technology platform. This spending is entirely discretionary in nature with no contractual commitments and due to our in-house production capabilities, we can scale back our content investment based on the cash flows generated from operations if necessary to ensure we have sufficient liquidity to operate our business into the future. As of March 31, 2026, our cash balance was $13.1 million.

The three months ended MarchJune 31,30, 2026 compared to three months ended MarchJune 31,30, 2025

Operating activities. CashNet cash flows providedfrom byoperating operationsactivities increaseddecreased approximately $0.2$7.7 million during the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. The increasedecrease was driven by the timing of working capital, changes in earnings and thedeferred timing of working capital.revenue.

Investing activities. Cash flows used in investing activities increased approximately $0.8$0.9 million during the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. The increase was primarily driven by purchases related to other fixed assets due to Igniton-related capital spend during the three months ended MarchJune 31,30, 2026.

Financing activities. CashNet cash flows provided byfrom financing activities decreased $7.0$0.1 million during the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 due to proceedsshare fromrepurchases therelated issuanceto ofSection common16 stockOfficer tax coverage exchange during the three months ended MarchJune 31,30, 2025.2026.