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

OurWe ability to meet our total liabilities of $6.1 million as of March 31, 2025, andexpect to continue to incur substantial and increased expenses as awe going concern, is dependent on our abilitycontinue to increase revenue, reduce costs, achieve a satisfactory level of profitable operations, obtain additional sources of suitable and adequate financing and further develop and execute on our business plan.approach, Weincluding may never achieve profitability,expanding and even if we do, we may not be able to sustain being profitable. As a result of the going concern uncertainty, there is an increased risk that you could lose the entire amount of your investment indeveloping our company, which assumes the realization of our assetscontent and the satisfaction of our liabilitiesplatform and commitmentspotentially inmaking theother normalaccretive courseacquisitions, of business. Weand anticipate incurring additional losses until such time that we can generate significant increases to our revenues, and/or reduce our operating costs and losses. To date, we have financed our operations exclusivelythrough throughcash generated by our business, the sale of equity and/or issuancedebt securities (including convertible securities) of our equity securities and cash from operations,Company and after our acquisition by LiveOne on July 1, 2020, also through the sale or issuance of our and/or LiveOne’s equity and/or debt securities (including convertible securities) and/or cashintercompany loans from operations.LiveOne. The size of our future net losses will depend, in part, on the rate of future expenditures and our ability to significantly grow our business and increase our revenues. We expect to continue to incur substantial and increased expenses as we grow our business. We also expect ana continued increase in our expenses associated with our operations as a publicly-traded company. We may incur significant losses in the future for a number of other reasons, including unsuccessful acquisitions, costs of integrating new businesses, expenses, difficulties, complications, delays and other unknown events. As a result of the foregoing, we expect to continue to incur significant losses for the foreseeable future and we may not be able to achieve or sustain profitability.

If LiveOne does not comply with the terms of its Debentures and/or the Capchase Loan, its senior lenders may terminate its obligations to LiveOne and require LiveOne and/or us to repay all outstanding amounts owed thereunder.

Over the term of the Debentures and at maturity, the outstanding principal amount of the Debentures and the Capchase Loan (as defined below), will become due and payable by us in installments. As of May 31, 2025, $0.6 million of the principal amount of the Capchase Loan is due and matures in fiscal 2026 and2026, the principal amount of the Debentures is due and matures in fiscal 2029. The holders of the Debentures may also require LiveOne to redeem the Debentures up to $0.8 million due in fiscal 2026, $1.2 million due in fiscal 2027, $1.2 million due in fiscal 2028 and $13.6 million due in fiscal 2029.

LiveOne’s Debentures and the Capchase Loan contain certain provisions that limit its and our operating activities, including the Debentures containing a covenant relating to the requirement to maintain a certain amount cash (as provided in the Debentures). If an event of default occurs and is continuing, the Debentures holders and/or Capchase may among other things, terminate their obligations thereunder, accelerate their debt and require LiveOne and/or us to repay all amounts thereunder. For example, on October 13, 2022, a judgement was entered in favor of SoundExchange, Inc. (“SX”) against LiveOne and Slacker in the United States District Court Central District of California in the amount of approximately $9.8 million. In February 2023, LiveOne and Slacker settled the dispute (the “SX Settlement Agreement”) to pay the outstanding amount in monthly payments subject to increase in the event LiveOne or Slacker complete certain future financings, which agreement, as amended in January 2025, requires LiveOne and Slacker to pay SX the remaining sum on or before February 1, 2027, in 48 monthly payments, unless LiveOne or Slacker repays the judgment amount earlier pursuant to the terms of the SX Settlement Agreement, and SX agreed not to take any action to enforce such judgment, so long as the defendants are not in default under the agreement. As of March 31, 2025,2026, LiveOne and Slacker owed $2.6$0.2 million to SX under the SX Settlement Agreement. If for any reason LiveOne fails to comply with the terms of the SX Settlement Agreement, the Debentures holders may declare an event of default and at their option may immediately accelerate the Debentures debt and require LiveOne and/or us to repay all outstanding amounts owed under the Debentures and which would then allow Capchase to declare a default under their loan agreement with LiveOne,Debentures, which would materially adversely impact our business, operating results and financial condition. In the event LiveOne fails to make any payment of any principal of, or interest or premium on, any indebtedness owed to the Debentures holders, Capchase would have the right to declare a default under its loan agreement with LiveOne.

A default under the Debentures could also lead to a default under agreements governing our future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, LiveOne may not have sufficient funds to repay its Debentures, the Capchase LoanDebentures or make cash payments as required by such debt agreements. Furthermore, upon the occurrence and during the continuation of any event of default, the Debentures holders shall have the right to, among other things, take possession of LiveOne’s, our Company’s and LiveOne’s and our respective subsidiaries’ assets and property constituting the collateral thereunder and the right to assign, sell, lease or otherwise dispose of all or any part of the collateral. As of March 31, 2025,2026, LiveOne was in compliance with all covenants under the Capchase Loan. As of March 31, 2025, LiveOne was not in compliance with all covenants under its former senior secured line of credit. As of May 31, 2025, LiveOne was in compliance with all covenants under the Debentures and Capchase Loan as the senior secured line of credit was paid off in full with the issuance of the Debentures.

Our common stock is currently listed on Nasdaq, which has qualitative and quantitative listing criteria. There can be no assurance that we will be able to continue to meet all of the criteria necessary for Nasdaq to allow us to remain listed. If we fail to satisfy the applicable continued listing requirement and continue to be in non-compliance after notice and the applicable grace period ends, Nasdaq may commence delisting procedures against our Company (during which we may have additional time of up to six months to appeal and correct our non-compliance).

Our business is highly dependent on information systems and technology. The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means. Cybersecurity has become a priority for regulators in the U.S. and around the world. Recently, the SEC adopted rules requiring public companies to disclose material cybersecurity incidents on Form 8-K and periodic disclosure of a registrant’s cybersecurity risk management, strategy, and governance in annual reports. The rules became effective beginning with annual reports for fiscal years ending on or after December 15, 2023, beginning with Current Reports on Form 8-Ks on December 18, 2023. The SEC has also particularly focused on cybersecurity, and we expect increased scrutiny of our policies and systems designed to manage our cybersecurity risks and our related disclosures as a result. We also expect to face increased costs to comply with the new SEC rules, including increased costs for cybersecurity training and management. The SEC has indicated in recent periods that one of its examination priorities for the Division of Examinations is to continue to examine cybersecurity procedures and controls, including testing the implementation of these procedures and controls.

Our success depends, to a large degree, upon certain key members of our management, particularly Kit Gray, our President, Robert Ellin, our Executive Chairman, RyanCraig Carhart,Christensen, our Interim Chief Financial Officer, and Sue McNamara, our Chief Revenue Officer. Mr. Gray has extensive knowledge about our business and our operations, and the loss of Mr. Gray, Mr. Ellin, Mr. CarhartChristensen or Ms. McNamara or any other key member of our senior management would likely have a material adverse effect on our business and operations. We do not currently maintain a key-person insurance policy for Mr. Gray or any other member of our management. Our executive team’s expertise and experience in acquiring, integrating and growing businesses, particularly those focused on podcasts and Content Providers, have been and will continue to be a significant factor in our growth and ability to execute our business strategy. The loss of any of our executive officers could slow the growth of our business or have a material adverse effect on our business, results of operations and financial condition.

Our results may be affected by the outcome of future litigation. Unfavorable rulings in our legal proceedings may have a negative impact on us that may be greater or smaller depending on the nature of the rulings. In addition, from time to time in the future we may be subject to various claims, investigations, legal and administrative cases and proceedings (whether civil or criminal) or lawsuits by governmental agencies or private parties, including as described in the immediately preceding risk factor. If the results of such investigations, proceedings or suits are unfavorable to us or if we are unable to successfully defend against third party lawsuits, we may be required to pay monetary damages or may be subject to fines, penalties, injunctions or other censure that could have a material adverse effect on our business, financial condition and results of operations. For example, please see more under “⸺ If LiveOne does not comply with the terms of its Debentures and/or the Capchase Loan, its senior lenders may terminate its obligations to LiveOne and require LiveOne and/or us to repay all outstanding amounts owed thereunder.” Even if we adequately address the issues raised by an investigation or proceeding or successfully defend a third-party lawsuit or counterclaim, we may have to devote significant financial and management resources to address these issues, which could harm our business, financial condition and results of operations.

We are undergoing growth in our business, including in our employee headcount. A significant portion of our management team has been with us since inception. We expect that significant additional hiring will be necessary to support our strategic plans. This rapid influx of new team members from different business backgrounds may make it difficult for us to maintain our corporate culture. We believe our culture has contributed significantly to our ability to attract and retain talent, to acquire podcast content and to innovate and grow successfully. If our culture is negatively affected, our ability to support our growth and innovation may diminisdiminish.

LiveOne has a significant amount of indebtedness. Its total outstanding consolidated indebtedness as of March 31, 20252026 was $3.7$14.7 million, net of fees and discounts. In addition, in May 2025, LiveOne borrowed an additional $16.5 million as a result of the issuance of the Debentures. Furthermore, while LiveOne has certain restrictions and covenants with its current indebtedness, LiveOne could in the future incur additional indebtedness beyond such amount, including by issuing the Additional Debentures subject to Conditions. LiveOne’s existing debt agreements with the senior lenders contain certain financial and restrictive covenants that require LiveOne to redeem a portion of the Debentures monthly, limit our ability to merge with other companies or consummate certain changes of control, make certain investments, pay dividends or repurchase shares of our common stock, transfer or dispose of assets, or enter into various specified transactions. We therefore may not be able to engage in any of the foregoing transactions unless we obtain the consent of LiveOne’s senior secured lenders or terminate our existing debt agreements. LiveOne’s debt agreements related to the Debentures also contain certain financial covenants, including maintaining a minimum cash amount at all times and are secured by substantially all of our assets. There is no guarantee that LiveOne, our Company and LiveOne’s other subsidiaries will be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal and interest under our debt agreements or to satisfy all of the financial covenants. We and/or LiveOne may also incur significant additional indebtedness in the future.

Certain statements contained in this Annual Report that are not statements of historical fact constitute “forward-looking statements” within the meaning of the Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified. These forward-looking statements relate to expectations or forecasts for future events, including without limitation our earnings, revenues, expenses or other future financial or business performance or strategies, or the impact of legal or regulatory matters on our business, results of operations or financial condition. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “would,” “could,” “should,” “will likely result,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target” or the negative or other variations thereof or comparable terminology. These forward-looking statements are not guarantees of future performance and are based on information available to us as of the date of this Annual Report and on our current expectations, forecasts and assumptions, and involve substantial risks and uncertainties. Actual results may vary materially from those expressed or implied by the forward-looking statements herein due to a variety of factors, including: ourLiveOne’s abilityreliance toon successfullyits implementlargest ourOEM growthcustomer strategy,for includinga relatingsubstantial topercentage ourof technologyits platformsrevenue; LiveOne’s and applications; our ability to attract, maintain and increase the number of our listeners; management’s relationships with industry stakeholders; if and when required, our ability to obtain additional capital, including to fund our and/or LiveOne’s current debt obligations and to fund potential acquisitions and capital expenditures; our and LiveOne’s ability to consummate any proposed financing, acquisition, merger, distribution or other transaction, the timing of the consummation of any such proposed event, including the risks that a condition to the consummation of any such event would not be satisfied within the expected timeframe or at all, or that the consummation of any proposed financing, acquisition, merger, special dividend, distribution or transaction will not occur or whether any such event will enhance shareholder value; our ability to continue as a going concern; our ability to identify,attract, acquire, securemaintain and develop content; our ability to recognize and timely implement future technologies inincrease the music and live streaming space; our ability to capitalize on investments in developing our service offerings, including our ability to deliver and develop upon current and future technologies; significant product development expenses associated with our technology initiatives; our ability to timely and economically obtain necessary approval(s), releases and or licenses on a timely basis for the use of our content on an appliable platform; our ability to obtain and maintain international authorizations to operate our service over the proper foreign jurisdictions our listeners utilize; our ability to expand our service offerings and deliver on our service roadmap; our ability to timely and cost-effectively produce, identify and or deliver compelling content that brands will advertise on and/or listeners desire to listen to; general economic and technological circumstances in the podcasting and digital streaming markets; our ability to obtain and maintain our current and new desirable content; the loss of, or failure to realize benefits from, agreements with our content providers and partners; unfavorable economic conditions in the podcasting industry and economy as a whole; our ability to expand our domestic or international operations, including our ability to grow our business with current and potential future podcasting platforms and partners; the effects of service interruptions or delays, technology failures, material defects or errors in our software, damage to our equipment or geopolitical restrictions; costs associated with defending pending or future intellectual property infringement actions and other litigation or claims; increases in our projected capital expenditures due to, among other things, unexpected costs incurred in connection with the roll out of our technology roadmap or our plans of expansion in North America and internationally; fluctuation in our operating results; the demand for podcasting and digital media streaming services and market acceptance for our products and services; LiveOne’s reliance on its largest OEM customer for a substantial percentagenumber of its revenuelisteners; PodcastOne identifying, acquiring, securing and developing content; LiveOne’s intent to repurchase shares of its and/or our common stock from time to time under LiveOne’s announced stock repurchase program and the timing, price, and quantity of repurchases, if any, under the program; LiveOne’s ability to maintain compliance with certain of its financial and other covenants; ourPodcastOne abilitysuccessfully implementing its growth strategy, including relating to generateits sufficienttechnology cash flow to make payments on ourplatforms and/or LiveOne’sapplications; indebtednessmanagement’s relationships with industry stakeholders; LiveOne’s ability to repay its indebtedness when due; LiveOne’s ability to satisfy the conditions for closing on its announced additional convertible debentures financing; ourLiveOne’s incurrenceability ofto additionalimplement indebtednessits indigital assets treasury strategy and/or purchase digital assets from time to time pursuant to such strategy, including for up to the futuremaximum announced amount, and other risks related to such strategy; uncertain and unfavorable outcomes in legal proceedings and/or our and/or LiveOne’s ability to pay any amounts due in connection with any such legal proceedings; changes in economic conditions; competition; risks and uncertainties applicable to the businesses of our Company, LiveOne and/or LiveOne’s other subsidiaries; and other risks, uncertainties and factors set forth herein. Other factors that could cause actual results to differ from those discussed in the forward-looking statements include,including, but are not limited to, those set forth belowdescribed in Part II – Item 1A.1A of this Annual Report and in our other filings and submissions with the SEC. Except as required by law, we do not undertake any obligation to update forward-looking statements as a result of as a result of new information, future events or developments or otherwise.

We were incorporated in the State of Delaware on February 5, 2014 and are a leading podcast platform and publisher that makes our content available to audiences via all podcasting distribution platforms, including our website (www.podcastone.com), our PodcastOne app, Apple Podcasts, Spotify, Amazon Music and more. We wereare a majority owned subsidiary of LiveOne, Inc., a Delaware corporation and a Nasdaq-listed company (“LiveOne”). We have recently been ranked as high as #8 on the list of Top Podcast Publishers by the podcast metric company Podtrac.Podtrac, as a leading podcast publisher.

We also produce vodcasts (video podcasts), branded podcasts, merchandise and live events on behalf of our talent and clients. With a proven 360-degree advertiser solution for multiplatform integration opportunities and hyper-targeting, we deliver millions of monthly impressions, 5.76.0+ million monthly unique listeners and 1917+ million IAB monthly downloads. With content covering all verticals (i.e. sports, entertainment, true-crime, business, audio dramas, self-growth, etc.), we provide a platform for brands to reach their most sought after targeted audiences. We intend to continue to acquire multiple assets over time and across a broad spectrum of podcast related media and companies. We intend to develop these assets to provide returns via organic growth, revenue production, out-licensing, sale or spin out.

Our operating model is focused on offering white glove service to our shows, talenttalent, and advertising clients. With an in-house sales, production, marketing, and tech team, we believe PodcastOne delivers more to clients and talent than any other publisher in the marketplace. This allows us to scale our operations while attracting talent who bring in brand advertisers and revenue. We earn revenue through the sale of embedded host-readhost read ads, dynamic ads (host read and otherwise), segment sponsorships, and programmatic monetization channels. We also provide the opportunity for clients to have 100% share of voice with branded podcast episodes or series as well as live tours, merchmerch, and IP ownership for original programming.

In addition to our core business, we also built,build, own and operate a solution for the growing number of independent podcasters, LaunchpadLaunchpadOne. One. Launchpad OneLaunchpadOne is a free innovative self-publishing podcast platform,hosting, distribution, and monetization platform that provides an end-to-end podcast solution, created to provide a low or no cost tool for independent podcasters without access to parent podcasting networks or state of the art equipment to create shows. Launchpad OneLaunchpadOne serves as a talent pool for us to find new podcasts and talent.

We are an Ad-Supported Service that provides free content to listeners via their mobile and desktop devices. We generate revenue from the sale of audio, video and social advertising delivered through advertising impressions. We generally enter into arrangements with advertising agencies that purchase advertising on our platform on behalf of the agencies’ clients. These advertising arrangements typically specify the type of advertising product, pricing, insertion dates, and number of impressions in a stated period. Revenue for our Ad-Supported segment is affected primarily by the number of a show’s listeners and our ability to provide innovative advertising products that are relevant to our Ad-Supported Users and enhance returns for our advertising partners. Our advertising strategy centers on the belief that advertising products that are based on content and are relevant to the Ad-Supported User can enhance Ad-Supported Users’ experiences and provide even greater returns for advertisers through the strength of our host-read embedded promos. According to a SuperAudacy ListenerInc. Survey in 2021,2025, an estimated 49%68% of listeners believe the hosts actually use the products and services they recommend and 60%76% of podcast listeners say they have bought something from hearing a podcast ad. Offering advertisers additional ways to purchase advertising on a programmatic basis is another key way that we expand our portfolio of advertising products and enhance advertising revenue. Furthermore, we continue to focus on analytics and measurement tools to evaluate, demonstrate, and improve the effectiveness of advertising campaigns on our platform.

We generate revenue by charging a CPM based on the volume of purchased digital ads that we measure on behalf of these customers. If the volume of impressions we measure does not continue to grow or decreases for any reason, our business will suffer. For example, if digital ad spending remains constant and our advertiser customers transition to higher CPM ad inventory, overall impression volumes may decrease, which may result in fewer impressions for us to verify and a corresponding decline in our revenues.

Our podcasts are available to users online alongside LiveOne’s digital Internet radio. Our users are able to listen to a variety of podcasts, from music, radio personalities, news, entertainment, comedy and sports. The podcasts are available on the LiveOne platforms and also on other leading podcast listening platforms such as Apple Music, Spotify, and Amazon. We monetize podcasts through paid advertising. We own one of the largest networks of podcast content in North America, which has over 300200 exclusive podcast shows that produces over 275300 episodes per week and has generated over 3.6200 billionmillion downloads to date.

The decreaseincrease in the number of podcast downloads can be attributed to duethe largelyincrease to modified download behavior by Apple iOS 17 as it continues to be adopted by podcast listeners, as well asin the departurenumber of non-revenuepodcasts generating partner networks fromin our podcast network.

Revenue increased $8.8$9.6 million, or 20%,18%, for our fiscal year ended March 31, 20252026 ("fiscal 20252026") compared to our year ended March 31, 20242025 ("fiscal 20242025"). The increase in revenue was primarily due to thegrowth in direct ad revenue of $6.3 million and an increase in barter revenue of $3.0 million due to an increase in advertising inventory.demand $8.2as milliona or 94%result of the increase can be attributed to our singleincreased largestpartnerships customer.and podcasts delivered.

Product development decreased $0.1 million,$6,000, or 39%,12%, for fiscal 20252026 compared to fiscal 2024.2025. The decrease was primarily due to a decrease in project activity.

Impairment of intangible assets increaseddecreased by $0.3 million, or 100%, for fiscal 20252026 compared to fiscal 2024.2025. The increasedecrease is attributed to the cancellation of a show previously acquired (see Note 4 – Goodwill and Intangible Assets) in the amount of $.02 million and the remining due to ceasing to use some of the company's internally developed software.

Amortization of intangible assets increaseddecreased by $0.2$0.5 million, or 22%,47%, for fiscal 20252026 compared to fiscal 2024.2025. The increasedecrease can be attributed to the increasedecrease in content related intangibles associated with the acquisitionwrite-off of certain podcasts.

We account 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 we satisfy ourits obligation by transferring control of the goods or services to ourits customers in an amount that reflects the consideration to which wethe expectCompany expects to be entitled in exchange for those goods or services. We use 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 wethe areCompany is entitled to and relate specifically to ourthe Company’s efforts to satisfy ourits performance obligation. The amount of variable consideration included in revenue is limited to the extent that it is probable that the amount will not be subject to significant reversal when the uncertainty associated with the variable consideration is subsequently resolved.

Advertising revenue primarily consistconsists of revenues generated from the sale of audio, video, and display advertising space to third-party advertising exchanges. Revenues are recognized based on delivery of impressions over the contract period to the third-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. The Company 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..impressions.

As of March 31, 2025,2026, our principal sources of liquidity were our cash and cash equivalents in the amount of $1.1$3.5 million, which primarily are invested in cash in banking institutions in the U.S. The vast majority of our cash proceeds were received as a result of our operations, completed private placement offering (the “Bridge Loan”) of our unsecured convertible notes with an original issue discount of 10% (the “OID”) in the aggregate principal amount of $8.8 million (the “Bridge Notes”) and intercompany loans from our parent, LiveOne. All of such Bridge Notes were converted into shares of our common stock in connection with the completion of our Direct Listing. As of March 31, 2025,2026, we had a net related party payablereceivable balance of $0.2$0.3 million. Our parent is required to maintain a minimum cash balance as a result of debt covenants on its debt.

On July 15, 2022, we completed a private placement offering of the Bridge Notes for gross proceeds of $8.0 million. In connection with the sale of the Bridge Notes, the holders of the Bridge Note received warrants to purchase shares of our common stock (the “Bridge Warrants,Warrants”), and we also issued thewarrants Placementto Agentpurchase Warrantsshares of our common stock to the placement agent.agent in the offering (the “Placement Agent Warrants”). The Bridge Notes were scheduled to mature on July 15, 2023, subject to a one-time three-month extension at our election. We elected the extension and extended the maturity date to October 15, 2023. On September 8, 2023, we completed a Qualified Event (as defined in the Bridge Notes) as a result of our direct listing on The NASDAQ Capital Market on such date. In connection with such completed Qualified Event, all of the remaining Bridge Notes (including interest thereunder) in the aggregate amount of approximately $7.02 million converted into approximately 2,341,000 shares of our common stock at the conversion price of $3.00 per share, and the exercise price of the Bridge Warrants and the Placement Agent Warrants was fixed at $3.00 per share. As a resultAll of the Spin-Out, we issued 3,114,000 warrantsBridge toWarrants purchaseand sharesthe ofPlacement ourAgent common stock all of whichWarrants were issued and outstanding as of March 31, 2025.2026.

In August 2023, LiveOne entered into a $1.7 million secured loan with Capchase which accrues interest at 8% and matures 30 months form issuance (the “Capchase Loan”). On January 28, 2025, LiveOne entered into a new Business Loan Agreement (the “2025 Business Loan Agreement”) with its then senior lender to update certain terms of its former credit facility (the “ABL Credit Facility”), including to reduce the principal amount outstanding under the promissory note underlying the facility (the “Promissory Note”) to $3,750,000, reflecting LiveOne’s repayment of the ABL Credit Facility as of such date, and to extend the maturity date of the Promissory Note to November 20, 2025. The Capchase Loan was repaid in full in February 2026.

Subject to applicable limitations in the instruments governing our outstanding indebtedness, if any, we may also use our current cash and cash equivalents to repurchase shares of our common stock, some or all of our convertible notes and pay down our debt, if any, and/or LiveOne's debt, in part or in full. We may do so in the open market, through tender offers, through exchanges for debt or equity securities, in privately negotiated transactions or otherwise.

As reflected in our consolidated financial statements included elsewhere in this Annual Report, we have a history of losses andwhich hadwas working capital of $1.5$2.6 million asfor ofthe year ended March 31, 2025.2026. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year from the date that the financial statements are issued. In addition, our independent registered public accounting firm in their audit report to our financial statements for the fiscal year ended March 31, 20252026 expressed substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not 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 we be unable to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to execute our strategy and on our ability to raise additional funds through the sale of equity and/or debt securities via public and/or private offerings.

For additional information regarding our credit agreement and other debt, see “Contractual Obligations” in this Item 7 below and in the footnotes to the Consolidated Financial Statements (Notes 6,7,6, 7, and 8 to our financial statements included elsewhere in this Annual Report).

Cash Provided By (Used In) Provided By Operating Activities

Net cash usedprovided inby operating activities for the year ended March 31, 20252026 of $0.2$2.5 million primarily resulted from our net loss during the period of $6.5$2.6 million, which included non-cash charges of $4.4$3.7 million largely comprised of depreciation and amortization, stock-based compensation,compensation and provision for credit losses and impairment of intangibles.losses. The remainder of our sources of cash used in operating activities of $1.8$1.4 million for this period was from changes in our working capital, including $2.4 million from timing of intercompany payables/receivables.capital.

Net cash provided by our operating activities for the year ended March 31, 20242025 of $2.2$0.2 million primarily resulted from our net loss during the period of $14.7$6.5 million, which included non-cash charges of $13.8$4.4 million largely comprised of depreciation and amortization, stock-based compensation, accretionprovision for credit losses and impairment of debt discount and change in fair value of derivatives.intangibles. The remainder of our sources of cash used in operating activities of $3.2$1.8 million for this period was from changes in our working capital, including $2.0$2.4 million from timing of intercompany payables/receivables.

As of March 31, 2025,2026, LiveOne was in compliance with all covenantsof underits theDebenture Capchasedebt Loan and the ABL Credit Facility.covenants.

We operate in a rapidly changing environment that involves a number of risks, which could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this Quarterly Report on Form 10-Q, the risks and uncertainties that we believe are most important for you to consider are discussed in Part I-Item 1A under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 20252026 (the "Annual Report"). During the ninethree months ended DecemberJune 31,30, 2025,2026, there were no material changes to the risk factors that were disclosed in our Annual Report except as noted below.

As reflected in our consolidated financial statements included elsewhere herein, we have a history of losses, incurred significant operating and net losses in each year since our inception, including net losses of $6.5$1.6 million and $14.7$6.5 million for the three months ended June 30, 2026 and the fiscal yearsyear ended March 31, 2025 and 2024,2026, respectively, and cash (used in) provided by operating activities of $(0.20.4) million and $2.2$0.9 million for the fiscal years ended March 31, 2025 and 2024, respectively, and had cash provided by (used in) operating activities of $2.4 million and $(0.7) million for the ninethree months ended DecemberJune 31,30, 20252026 and 2024, respectively. We incurred a net loss of $2.2 million and $4.6 million for the nine months ended December 31, 2025 and 2024,2025, respectively. As of DecemberJune 31,30, 2025,2026, we had an accumulated deficit of $38.3$40.3 million and a working capital of $2.8$1.5 million.

Our ability to meet our total liabilities of $8.9$13.4 million as of DecemberJune 31,30, 2025,2026, and to continue as a going concern, is dependent on our ability to increase revenue, reduce costs, achieve a satisfactory level of profitable operations, obtain additional sources of suitable and adequate financing and further develop and execute on our business plan. We may never achieve profitability, and even if we do, we may not be able to sustain being profitable. As a result of the going concern uncertainty, there is an increased risk that you could lose the entire amount of your investment in our company, which assumes the realization of our assets and the satisfaction of our liabilities and commitments in the normal course of business.

Over the term of the Debentures and at maturity, the outstanding principal amount of the Debentures and the Capchase Loan (as defined below), will become due and payable by us in installments. As of DecemberJune 31,30, 2025,2026, $13.1 million of the principal amount of the Debentures is due and matures in fiscal 2029. In addition, as of December 31, 2025, $0.1 million of the principal amount of the secured loan from Capchase to LiveOne remained unpaid (the “Capchase Loan”), with the final amortization payment due on February 4, 2026. The Capchase Loan was repaid in full in February 2026. The holders of the Debentures may also require LiveOne to redeem the Debentures up to $0.3 million due in fiscal 2026, $1.2$2.9 million due in fiscal 2027, $1.2$2.9 million due in fiscal 2028 and $13.6$11.2 million due in fiscal 2029.

LiveOne’s failure to repay any outstanding amount under the Debentures would constitute a default under the Debentures. LiveOne’s Debentures financing agreements contain provisions that limit its and our operating activities, including covenant relating to the requirement to maintain a certain amount cash (as provided in the Debentures financing agreements). LiveOne’s Debentures are secured by all of our and our subsidiaries’ assets. If an event of default occurs and is continuing, the senior lenders may among other things, terminate its obligations thereunder, accelerate its debt and require us to repay all amounts thereunder. If for any reason LiveOne fails to comply with the terms of the Debentures financing agreements, the senior lenders will have the right to declare a default under the Debentures financing agreements and at its option may immediately accelerate their debt and require LiveOne and/or our Company to repay all outstanding amounts owed under the Debentures, which would materially adversely impact our business, operating results and financial condition. Furthermore, upon the occurrence and during the continuation of any event of default, the holders of the Debentures shall have the right to, among other things, take possession of our assets and property constituting the collateral thereunder and the right to assign, sell, lease or otherwise dispose of all or any part of the collateral. As of DecemberJune 31,30, 2025,2026, LiveOne was in compliance with covenants under the Debentures and the Capchase Loan.Debentures.

LiveOne has a significant amount of indebtedness. LiveOne’s total outstanding consolidated indebtedness as of DecemberJune 31,30, 2025,2026, was $15.0$14.8 million, net of fees and discounts. While LiveOne and our Company have certain restrictions and covenants with LiveOne’s current indebtedness, we could in the future incur additional indebtedness beyond such amount including by issuing the Additional Debentures subject to Conditions. LiveOne’s Debentures financing agreements contain certain restrictive covenants that limit our ability to merge with other companies or consummate certain changes of control, make certain investments, pay dividends or repurchase shares of our common stock, transfer or dispose of assets, or enter into various specified transactions. We therefore may not be able to engage in any of the foregoing transactions unless we obtain the consent of our senior secured lenders and/or repay the amount owed to such lenders. LiveOne’s debt agreements also contain certain covenants, including maintaining a minimum cash amount at all times and are secured by substantially all of our and our subsidiaries’ assets. There is no guarantee that LiveOne and/or our Company will be able to generate sufficient cash flow or revenues to pay the principal and interest owed under our debt agreements or to satisfy all of the covenants. We and/or our subsidiaries may also incur significant additional indebtedness in the future.

As used herein, “PodcastOne,” the “Company,” “we,” “our” or “us” and similar terms include PodcastOne, Inc. and its subsidiaries, unless the context indicates otherwise. The following discussion and analysis of our business and results of operations for the three and nine months ended DecemberJune 31,30, 2025,2026, and our financial conditions at that date, should be read in conjunction with our condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

Certain statements contained in this Quarterly Report that are not statements of historical fact constitute “forward-looking statements” within the meaning of the Securities Litigation Reform Act of 1995, notwithstanding that such statements are not specifically identified. These forward-looking statements relate to expectations or forecasts for future events, including without limitation our earnings, revenues, expenses or other future financial or business performance or strategies, or the impact of legal or regulatory matters on our business, results of operations or financial condition. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “would,” “could,” “should,” “will likely result,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “continue,” “target” or the negative or other variations thereof or comparable terminology. These forward-looking statements are not guarantees of future performance and are based on information available to us as of the date of this Quarterly Report and on our current expectations, forecasts and assumptions, and involve substantial risks and uncertainties. Actual results may vary materially from those expressed or implied by the forward-looking statements herein due to a variety of factors, including: our ability to successfully implement our growth strategy, including relating to our technology platforms and applications; our ability to attract, maintain and increase the number of our listeners; management’s relationships with industry stakeholders; if and when required, our ability to obtain additional capital, including to fund our and/or LiveOne’s current debt obligations and to fund potential acquisitions and capital expenditures; our and/or LiveOne’s ability to consummate any proposed financing, acquisition, merger, distribution or other transaction, the timing of the consummation of any such proposed event, including the risks that a condition to the consummation of any such event would not be satisfied within the expected timeframe or at all, or that the consummation of any proposed financing, acquisition, merger, special dividend, distribution or transaction will not occur or whether any such event will enhance shareholder value; our ability to continue as a going concern; our ability to identify, acquire, secure and develop content; our ability to recognize and timely implement future technologies in the music and live streaming space; our ability to capitalize on investments in developing our service offerings, including our ability to deliver and develop upon current and future technologies; significant product development expenses associated with our technology initiatives; our ability to timely and economically obtain necessary approval(s), releases and or licenses on a timely basis for the use of our content on an appliable platform; our ability to obtain and maintain international authorizations to operate our service over the proper foreign jurisdictions our listeners utilize; our ability to expand our service offerings and deliver on our service roadmap; our ability to timely and cost-effectively produce, identify and or deliver compelling content that brands will advertise on and/or listeners desire to listen to; general economic and technological circumstances in the podcasting and digital streaming markets; our ability to obtain and maintain our current and new desirable content; the loss of, or failure to realize benefits from, agreements with our content providers and partners; unfavorable economic conditions in the podcasting industry and economy as a whole; our ability to expand our domestic or international operations, including our ability to grow our business with current and potential future podcasting platforms and partners; the effects of service interruptions or delays, technology failures, material defects or errors in our software, damage to our equipment or geopolitical restrictions; costs associated with defending pending or future intellectual property infringement actions and other litigation or claims; increases in our projected capital expenditures due to, among other things, unexpected costs incurred in connection with the roll out of our technology roadmap or our plans of expansion in North America and internationally; fluctuation in our operating results; the demand for podcasting and digital media streaming services and market acceptance for our products and services; LiveOne’s reliance on its largest OEM customer for a substantial percentage of its revenue; LiveOne’s intent to repurchase shares of its and/or our common stock from time to time under LiveOne’s announced stock repurchase program and the timing, price, and quantity of repurchases, if any, under the program; LiveOne’s ability to maintain compliance with certain of its financial and other covenants; our ability to generate sufficient cash flow to make payments on our and/or LiveOne’s indebtedness; LiveOne’s ability to repay its indebtedness when due; LiveOne’s ability to satisfy the conditions for closing on its announced additional convertible debentures financing; the uncertain and unfavorable outcome(s) of any legal proceedings pending or that may be instituted against us and/or LiveOne, our and/or LiveOne's respective subsidiaries, and/or our or LiveOne's ability to pay any amounts due in connection with any such legal proceedings, or third parties to whom we and/or LiveOne owes indemnification obligations; changes in laws or regulations that apply to us or our industry; our ability to recognize and timely implement future technologies in the podcasting and digital space; our ability to capitalize on investments in developing our service offerings, including our ability to deliver and develop upon current and future technologies; LiveOne’s ability to implement its recently announced digital asset treasury strategy and/or purchase digital assets from time to time pursuant to such strategy, including for up to the maximum announced amount; risks and uncertainties applicable to the businesses of our Company and/or our subsidiaries; and other risks and uncertainties set forth herein. Other factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those set forth below in Part II – Item 1A and in Item 1A. of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025,2026, filed with the U.S. Securities and Exchange Commission (the “SEC”) on JulyJune 2,29, 2025.2026. Except as required by law, we do not undertake any obligation to update forward-looking statements as a result of new information, future events or developments or otherwise.

We incorporated in the State of Delaware on February 5, 2014 and are a leading podcast platform and publisher that makes our content available to audiences via all podcasting distribution platforms, including our website (www.podcastone.com), our PodcastOne app, Apple Podcasts, Spotify, Amazon Music and more. We wereare a majority owned subsidiary of LiveOne, Inc., a Delaware corporation and a Nasdaq-listed company (“LiveOne”). We have recently been ranked as high as #86 on the list of U.S. Top Podcast Publishers by the podcast metric company Podtrac.

We have experienced significant growth in recent years driven by increased advertising activity. For the ninethree months ended DecemberJune 31,30, 20252026 and 2024,2025, our revenue was $46.0$16.1 million and $38.0$15.0 million, respectively, representing year-over-year growth of 21%.8%.

Recent Developments for the Quarter Ended DecemberJune 31,30, 20252026

During the quarter ended DecemberJune 31,30, 2025,2026, we expanded our programming slate to 194 shows and surpassed 3.8 billion network downloads.

We were recently ranked as high as #86 on the list of U.S. Top Podcast Publishers by the podcast metric company Podtrac.

Our Business Model

Three Months Ended DecemberJune 31,30, 2025,2026, as compared to Three Months Ended DecemberJune 31,30, 20242025

Revenue increased $3.2$1.1 million, or 25%,8%, to $15.9$16.1 million for the three months ended DecemberJune 31,30, 2025,2026, as compared to $12.7$15.0 million for the three months ended DecemberJune 31,30, 2024.2025. The increase in revenue was primarily due to growth in direct ad revenue of $1.5 million and an increase in barter revenue of $0.9$1.1 million due to an increase in advertising demand as a result of increased partnership and podcast delivered.

Cost of sales increased $1.2$0.7 million, or 11%,5%, to $13.2$14.2 million for the three months ended DecemberJune 31,30, 2025,2026, as compared to $12.0$13.6 million for the three months ended DecemberJune 31,30, 2024.2025. The increase was in line with our revenue growth as revenue share splits with our content creators remained consistent.

Sales and Marketing expenses decreased by $45,000,$0.1 million, or 5%,1%, to $0.8 million for the three months ended DecemberJune 31,30, 2025,2026, as compared to $0.9 million for the three months ended DecemberJune 31,30, 2024.2025. The decrease was primarily due to a decrease in advertising spending as the amount of marketing programs was increased.decreased.

Product development expenses remained constant at $9,000$12,000 for the three months ended DecemberJune 31,30, 2025,2026, as compared to $9,000$12,000 for the three months ended DecemberJune 31,30, 2024,2025, as no significant projects took place during both periods.

General and administrative expenses increased by $0.4$1.0 million, or 36%,70%, to $1.7$2.5 million for the three months ended DecemberJune 31,30, 2025,2026, as compared to $1.3$1.5 million for the three months ended DecemberJune 31,30, 2024,2025, the increase is attributed to an increase in stock compensation cost.

Amortization of intangible assets increased by $36,000,$33,000, or 29%,26%, to $0.2 million for the three months ended DecemberJune 31,30, 2025,2026, as compared to $0.1 million during the three months ended DecemberJune 31,30, 2024.2025. The increase can be attributed to the timing of intangibles acquired for podcast in the prior year.

The following table sets forth the reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure for the three and nine months ended DecemberJune 31,30, 20252026 (in thousands):

As of DecemberJune 31,30, 2025,2026, our principal sources of liquidity were our cash and cash equivalents in the amount of $3.4$7.0 million, which primarily are invested in cash in banking institutions in the U.S. The vast majority of our cash proceeds were received as a result of our operations, completed private placement offering (the “Bridge Loan”) of our unsecured convertible notes with an original issue discount of 10% (the “OID”) in the aggregate principal amount of $8.8 million (the “Bridge Notes”), which were converted in full in September 2023, and intercompany loans from our parent, LiveOne. All of such Bridge Notes were converted into shares of our common stock in connection with the completion of our Direct Listing. As of DecemberJune 31,30, 2025,2026, we had a related party net payablereceivable balance of $1.6$6.1 million. Our parent is required to maintain a minimum cash balance as a result of debt covenants on its debt.

On July 15, 2022, we completed a private placement offering of the Bridge Notes for gross proceeds of $8.0 million. In connection with the sale of the Bridge Notes, the holders of the Bridge Note received the Bridge Warrants, and we issued the Placement Agent Warrants to the placement agent. The Bridge Notes were scheduled to mature on July 15, 2023, subject to a one-time three-month extension at our election. We elected the extension and extended the maturity date to October 15, 2023. The Bridge Notes bore interest at a rate of 10% per annum payable on maturity. On September 8, 2023, we completed our direct listing on The NASDAQ Capital Market (our spin-out from LiveOne to become a standard publicly trading company) and as a result of the direct listing, all of the remaining Bridge Notes (including interest thereunder) in the aggregate amount of approximately $7.02 million converted into approximately 2,341,000 shares of our common stock.stock at the conversion price of $3.00 per share, and the exercise price of the Bridge Warrants and the Placement Agent Warrants was fixed at $3.00 per share. 696,670 of the Bridge Warrants were outstanding as of June 30, 2026, and all of the Placement Agent Warrants were exercised as of such date.

On May 19, 20252025, (the “Closing Date”), LiveOnewe and our CompanyLiveOne entered into a Securities Purchase Agreement (the “SPA”) with certain institutional investors (each, a “Purchaser” and collectively, the “Purchasers”), pursuant to which (i) LiveOne sold to the Purchasers itsour Original Issue Discount Senior Secured Convertible Debentures (the “Initial Debentures”) in an aggregate principal amount of $16,775,000 for an aggregate cash purchase price of $15.25 million,$15,250,000, and (ii) if certain conditions are satisfied as set forth in the SPA, including at least one of the Conditions (as defined below), weLiveOne may sell at its option to the Purchasers ourits additional Original Issue Discount Senior Secured Convertible Debentures in an aggregate principal amount of $11,000,000 on substantially the same terms as the Initial Debentures (the “Additional Debentures” and collectively with the Initial Debentures, the “Debentures”), in a private placement transaction.. The Debentures are convertible into shares of LiveOne’s common stock at the holder’s option at a conversion price of $21.00 per share, subject to certain customary adjustments such as stock splits, stock dividends and stock combinations. LiveOne may sell to the Purchasers the Additional Debentures if within 15 months of the Closing Date either of the following conditions have been satisfied during such 15-month period (the “Conditions”): (x) the VWAP (as defined in the SPA) of theLiveOne’s common stock has been equal to or greater than $4.20$42.00 per share (subject to certain customary adjustments such as stock splits, stock dividends and stock combinations) for 30 consecutive trading days, or (y) Free Cash Flow (as defined in the SPA) has been equal to or greater to $3,000,000 for three consecutive fiscal quarters, and has increased in each of the foregoing quarters from the immediately preceding fiscal quarter. The Initial Debentures mature on May 19, 2028 and accrue interest at 11.75% per year. Commencing with the calendar month of August 2025 (subject to the following sentence), the holders of the Initial Debentures will have the right, at their option, to require LiveOne to redeem an aggregate of up to $100,000 of the outstanding principal amount of the Debentures per month. For the month of August 2025, the holders may not submit a redemption notice for such a redemption prior to August 18, 2025. Commencing from November 18, 2025, May 18, 2026 and May 18, 2027, the holders of the Initial Debentures will have the right, at their option, to require LiveOne to redeem an aggregate of up to $150,000, $250,000 and $300,000, respectively, of the outstanding principal amount of the Initial Debentures per month. In connection with the sale of the Debentures, LiveOne paid off all obligations owing under, and terminated, the 2025 Business Loan Agreement, and all related loan agreements.

LiveOne’s obligations under the Debentures have been guaranteed under a Subsidiary Guarantee, dated as of the Closing Date, by certain of its wholly owned subsidiaries, including our Company (collectively, the “Guarantors”). LiveOne’s obligations under the Debentures and the Guarantors’ obligations under the Subsidiary Guarantee are secured under a Security Agreement (the “Security Agreement”) entered into on the Closing Date among LiveOne, the Guarantors, certain Purchasers and JGB Collateral, LLC (the “Agent”) as agent for the Purchasers (the “Security Agreement”), by a lien on all of LiveOne’s and the Guarantors’ assets, including our assets, subject to certain exceptions. In connection with the issuance of the Initial Debentures, LiveOne paid off all obligations owed under, and terminated, the ABL Credit Facility and all related loan agreements. As of July 30, 2026, LiveOne’s total outstanding consolidated indebtedness was $14.8 million, net of fees and discounts, which consisted of the Debentures and an SBA loan.

On October 1, 2024, LiveOne announced an amended relationship with itsour largest OEM customer. The OEM customer will no longer subsidize LiveOne's productsservices to some of its customers, however, LiveOne willcontinues to offer all OEM customer vehicles in North America the opportunity to convert to become direct subscribers of LiveOne’s LiveOne music app. The direct subscription to the LiveOne app will allowallows such users for the first time to access their LiveOne music and LiveOne’s other service offerings directly across all of their devices. LiveOne’s 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. The OEM customer will continue to pay LiveOne monthly for grandfathered vehicles for the term of the OEM license agreement. Accordingly, the change in LiveOne’s relationship with the OEM customer in October 2024 is likely to cause its liquidity and cash flows to fluctuate significantly beyond DecemberMarch 31, 2024,2025, which may then have an impact on our liquidity and potentially cause our liquidity to fluctuate significantly beyond DecemberMarch 31, 2024.2025. LiveOne’s liquidity will depend upon its ability to convert as many of the OEM drivers as possible to become direct subscribers of its LiveOne app and the OEM customer continuing to pay for any grandfather users, as well as LiveOne’s ability to enter into new B2B agreements to provide its services that could materially contribute to our liquidity and cash flows, which may then have an impact on our liquidity and potentially cause our liquidity to fluctuate significantly. In addition, LiveOne’s liquidity will depend on its ability to negotiate with its music labels, publishers and other partners to achieve flexibility in the terms of its license agreements to match ourtheir OEM driver conversions, which may then have an impact on our liquidity and potentially cause our liquidity to fluctuate significantly. Furthermore, LiveOne’s liquidity will be dependent on its ability to extendrepay the Debentures when due and/or refinance the terms of its senior secured line of credit and/or its ability to pay any amounts that LiveOne has agreed to pay under the SX Settlement Agreement, which may then have an impact on our liquidity and potentially cause our liquidity to fluctuate significantly.