Thank you. Good morning and welcome to LiveOne's Business Update and Financial Results Conference Call for the company's fiscal first quarter ended June 30th, 2025.

Presenting on today's call with me is Rob Ellin, CEO and Chairman of LiveOne. Some of the statements made on today's call are forward-looking and are based on current expectations, forecasts, and assumptions that involve various risks and uncertainties.

Please refer to the company's filings with the SEC for information about factors which could cause the company's actual results to differ materially from these forward-looking statements, including those described in its annual report on Form 10-K for the year ended March 31st, 2025, and subsequent SEC filings. You'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on the Investor Relations website.

I'd now like to turn the call over to LiveOne's CEO, Rob Ellin.

Thank you, Ryan. To start with, I want to thank Ryan for the brilliant job he's done as our new CFO, coming off the dramatic changes in the Tesla agreement and the loss of those revenues.

Ryan has done an absolutely spectacular job of fixing our balance sheet. We replaced East West Bank, who had called in their loan over $7 million, with JGB for over $16.5 million.

Subsequently, we just closed a $10 million equity financing. Confidently, I can tell you we have the strongest balance sheet that we've had in many years, with over $20 million in cash.

We have also eliminated $14 million of short-term liabilities, including $2.5 million alone this quarter. We've just taken the initiative to reduce staff by 31%, cutting our staff from 138 employees to 95 employees.

Now, moving to the positive side. As we've cleaned up the balance sheet and fortified ourselves with a big cash position and long-term partners, we move to the really exciting side of the B2B partnerships that have been worked on for numerous years.

Starting with the biggest launch in the history of the company with a Fortune 500 company, we have the opportunity of driving to 30+ million paying subscribers with that partner. We've done the first soft launch as of August 5th.

We see this as a potential opportunity to not only replace Tesla, but could be much bigger than Tesla over the next five years. Secondly, our Amazon deal has gotten off to a spectacular start — a $16.5 million three-year deal, and we fully expect to not only hit our numbers but beat those numbers and start looking at larger minimum guarantees based on the traffic and audience that we deliver.

With our Fortune 250 streaming network, we can now say it's well over $26 million and increasing, and could finish the year even higher. We have 75 additional B2B deals in the works.

Our technology team is doing a brilliant job of continuing to work with some of the biggest carriers, car companies, retailers, streaming networks, cable networks around the world. We also just reported record revenues at PodcastOne doing $15 million for the quarter.

As you may remember, we started this when we acquired that company doing $17 million a year, and we're now on a run rate to do $60 million-plus this year. We've just launched for the first time inside of Tesla cars.

We have converted a staggering 1.3 million people out of 2 million total cars. For the first time, with a large partnership with DAX, the largest programmatic advertiser in the world, we have just launched our ad network and grown from 30% to 82% ad growth in Tesla cars.

We have also increased our ARPU from $3 to $5, and this is the time to start converting those Tesla subscribers. We just completed a $10 million equity raise with our partners at Lucid.

We raised this in a Bitcoin yield strategy and to advance our Web3 initiatives. We have just added three prominent leaders in Web3, including Steve McClurg, who ran the first ETF and sold it to Coinbase, Steve Lehman, who sits on the board of Coinbase, and Andy Vick, who we brought back to our team to monetize our 10,000-plus hours of video content through tokenization, NFTs, and other digital assets.

We have just sold our third TV show to a streaming platform — Varnamtown, Vigilante, and Opportunist. We took in almost $1 million from those sales, and we now have the opportunity for those TV shows to become major hits and deliver millions to tens of millions of dollars with no additional cost to the company.

We now have a slate of over 20 potential shows on our platform that are all in discussions with streaming networks about TV and film. On our live events business — we have announced that we will launch our biggest live event since Social Gloves.

When we did Social Gloves, we did $27 million that night and $4.5 million in EBITDA. We have now announced and are launching a reality Olympics series featuring some of the biggest reality stars in the world in a format like the Olympics, with over 275 million followers amongst their audience.

Our M&A opportunities — we continue to work with JP Morgan and have moved very aggressively now to potential mergers, acquisition opportunities, including a potential sale of a subsidiary. As we look forward over the next three years, I see the opportunity again that we can easily achieve the goals of hitting 10 million subscribers and $500 million in revenues with substantial bottom line over the next three to five years.

I'd now like to open up for Q&A.

Can you give a rough idea of what the annualized revenue of all the currently signed partnerships would look like for LiveOne and PodcastOne?

We can't go much deeper than we've gone publicly — we've said we expect $50 million in B2B revenues. We can't get deeper than that yet, but we will shortly.

As I just articulated, we've just launched what could be our biggest partnership in history with multiple others that could be very close behind that.

Just to clarify, the $50 million includes both Slacker and PodcastOne B2B, correct?

Correct. It's across our entire audio business.

On the expense side, you just announced the staff reductions. What does EBITDA look like pro forma with those reductions?

Have you reduced the Slacker technology team that seems key to all 75 of the partnerships you're working with?

We can't provide guidance at this point and give you EBITDA numbers. What I can tell you is those cuts are across the board and a substantial amount are at Slacker.

What AI has done for not just us but the overall industry gives us the ability to curate with a way smaller staff. We have 500 music channels and over 50 million songs on our platform.

We have the ability now utilizing AI to deliver radio stations at an equal or better level than we've ever done before with a way smaller staff. We've cut across the board and we're not done — there will be additional cost savings moving forward.

We couldn't be more excited about what AI initiatives have done for our technology team.

On the Tesla relationship evolution — you mentioned 1.3 million conversions out of 2 million total cars. What kind of ARPU are you seeing?

How many are ad-supported on top of that? And how is the AI-driven conversion going?

That 1.3 million is the total of the Tesla conversions. Previously, consumers had to choose whether or not they paid $10 a month for connectivity, and not all used the radio service.

We couldn't be more proud and excited that 1.3 million have converted. We're well over 1.5 million total subscribers, and our ARPUs are increasing from $3 to a little over $5.

We see opportunities for those to increase to closer to $7 with our new B2B partnerships. Even at close to $7, we'll still be at the lowest end of the market range — so far below the market that we're still the cheapest by far in the industry.

Just to clarify, is the $5 ARPU a blended figure including advertising revenue?

No, that's the paying subscribers. Advertising is just baby steps — we partnered with DAX and just started to launch that advertising.

You'll get roughly $0.50 to $0.60 per user from ads, which won't replace the $3 difference. What you get is the opportunity to understand that customer better, use AI to drive them to convert, and use your hosts to convert them.

What we're watching is a conversion rate that is above $5.

On the reality series — do you have a formal name, host, location, distribution plans? Is it going to be expensive to produce?

You're going to read a lot about it very shortly. It's not in the early stages — it's actually moving fast.

This already has 230 million followers, and producers expect the numbers to be over 400 million on social media. There could be a pay-per-view component, a distributor like we did with Social Gloves, a VR element, and certainly a very sizable NFT element.

There is going to be music on top of it. This is going to read and smell exactly like Social Gloves, except I don't have the risk of someone getting hurt like boxing.

The social media and talent have come to us. We have multiple other events like this — small, medium, and large.

This will put us back very much in the forefront of that live events, music, pop culture crossover that made this company before COVID. The biggest win, like Social Gloves, is you get millions to tens of millions of people coming through who you collect data on and who eventually become your subscribers and partners.

Could you elaborate on how this new Fortune 500 B2B deal might work with the 30 million subscribers? Do the subs have to opt in to the Slacker service?

How do you get paid?

I can't answer too many questions yet but will be able to very shortly. It will be a white label solution where they're actually branding it and aggressively marketing it to their members as a product of their own.

We'll be in the background powering it like Intel inside. They'll be using everything we've built over 20 years and $200 million spent building Slacker Radio and PodcastOne and the infrastructure.

They'll be delivering what they believe is a fantastic service at a discount to their members. Opting in may be as simple as pressing a button — think about how Disney and Verizon launched: anyone who re-upped their service or bought a new phone immediately got Disney service for free.

They subsidized it.

The $50 million of B2B revenues — is that over a 12-month period?

Over a 12-month period, correct. Some of it started a little earlier as it was building up, but you'll start to see a much heavier contribution at the end of Q3, really kicking in in Q4.

Did you say something about the sale of a subsidiary?

What I said was, based on the inbound calls that have come in — as you see the likes of Netflix going into audio and Spotify going into video — everyone is missing pieces of what we have. You just saw Napster sell for $210 million doing $40 million in revenues, and Tidal sell for $400 million, neither of which were anywhere near profitability.

We've had a staggering amount of inbound calls. We need to be vigilant and protective of our shareholders.

There are so many parties in this space right now that must have a music platform — Facebook, Microsoft, Walmart which just bought Vizio, Costco, Target, every carrier, every streaming network. If a sale of a division, a merger, or a strategic investor came in, we need to be evaluating all of that.

You raised the $10 million to buy Bitcoin. Have you actually purchased it?

We'll be talking about that literally in the next 72 hours. We've done a Bitcoin treasury strategy where the partner we've hired to manage it has been delivering between 12% and 15% returns for the last five years.

It's actually a managed account that protects you on the downside and is yielding cash flow. With a $110 million NOL, if they can generate $1 million of cash flow off a $10 million position, that comes straight through and can be used to either buy additional Bitcoin treasury or other things.

It also positions the company very strongly back into the NFT and token market. We took in $3 million in NFT money and over $5 million total in NFT money off our content in the first round — the numbers are going to be staggeringly higher next time.

Can you give us a sense of what the run rate is today on B2B so we can understand the incremental contribution going forward?

The breakdown is very small amounts kicking in today — it's just beginning. You are going to see a lot more of that revenue at the end of Q3 and really in Q4.

Can you articulate your digital currency strategy? Are you mimicking MicroStrategy, raising as much capital as quickly as you can, or is it more about having balance sheet exposure?

The movie hasn't been written yet. We always want to be at the forefront of where technology is going, and we're huge believers in where this is going directionally.

We also want a protected position, which is why we did this Bitcoin yield with an option strategy against it, protecting against the downside. We have deep plans and board approval for substantially more money to come in — that could come from a sale of a subsidiary, or if the stock performs like it should.

We're very focused on what we've accomplished so far, and you'll see the acquisition of Bitcoin yield as well as our NFT and token strategy starting to kick in, driving both revenues and a balance sheet that has ownership in what we believe strongly will go way higher.

How long do you think it will take before Tesla subscriber conversion will have a major impact on results?

It's a tricky question. You're going to lose some people that walk away because of the ads, gain some revenues from advertising, and then convert a percentage of them.

Our aspirations over a 12-month to 24-month period are to convert somewhere between 20% and 30% of those subscribers.

If some of these are white labeled, will you ever be able to announce who they are?

You actually will see it. Not only will you see it, you'll see powered by it — very much like Intel inside.

These are audio and video, not necessarily just audio. There are massive opportunities as streaming networks include video.

Our video content is now coming into fruition, and podcasting combined with our live events gives us thousands of hours of the biggest music events in the world that can all be revived. Now you're watching video being so important, especially for AI models.

We have a lot of content that could be monetized right now through companies looking to use A+ content to build those AI models.

Is the $5 ARPU figure what you're actually getting now or a near-term goal?

That's what we're getting.

When you become a paying subscriber, you don't have any ads?

Correct.

On the TV shows — Varnamtown, Vigilante, Opportunist — where does that revenue go? Which segment?

That is going to be more on the podcast side for those three shows. Monetizing of television, film, and documentaries could be anything from our six years of Rock in Rio footage to other live content.

The NFT and tokenization side of it could be more on the LiveOne side. For those three specific television shows — which are true crime — the $1 million was the upfront money.

If one gets greenlit, you then get paid per episode and back end, with no additional costs.

Any sense of when we might see realization on the slate of 20 potential shows?

It could be greenlit next week, it could be three months, or six months — but they're in production today, meaning they're paying millions of dollars to writers and producers to build toward making a show. That doesn't guarantee the final greenlight, but having three of them in the trenches, I'd be shocked if at least one wasn't greenlit.

Varnamtown is one of my favorite podcasts ever made. Vigilante and Opportunist both have multiple season potential.

More color on the reality show — what kind of show are we talking about?

It's like the Olympics — there'll be a long jump, physical competitions. No one's getting hurt or injured.

The faces are there for hours at a time, collaborating over a full weekend. It'll be done in Los Angeles at a major stadium.

You're going to see reality names of some of the biggest stars. It's literally like Battle of the Network Stars brought back, to a T.

Where does that revenue go?

That revenue is at LiveOne.

When will the Q be out?

We're on track to file tomorrow.

When you talked about the $50 million in revenue over the next 12 months with more in Q3 and Q4 — you meant fiscal Q3 and Q4?

Yeah.

I want to thank everyone for taking the time and joining the call. The company has just bought back another 300,000-plus shares, and we've also bought back a lot of PodcastOne shares.

We still have $5.5 million remaining on our buyback and will be prudent and smart about when we use that capital. I truly believe this is the most exciting time for the company in many years.

We have a tremendous amount of optionality and upside. The Amazon partnership, the Fortune 250 streaming partnership, the S&P 500 company — the B2B business really feels like it's building momentum.

The flywheel is building and revenue is coming from different places. We have a lot to make up with Tesla and this team will come through as they always do.

This should be a really exciting next six months for this company.