LiveOne, Inc.

Good afternoon. Thank you for attending today's Live One, Inc. Q2 Fiscal 2023 Business Update and Earnings Call. My name is Tamia, and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. It is now my pleasure to pass the conference over to your host, Aaron Sullivan, Interim CFO. Please proceed.

Thank you. Good afternoon and welcome to Live One's Business Update and Financial Results Conference call for the company's second quarter of the fiscal year ended March 31, 2023. Presenting on today's call are Rob Ellen, CEO and Chairman, and myself, Aaron Sullivan, Interim CFO. I would like to remind you that 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. These statements include but are not limited to statements regarding the future performance of the company, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for more information about factors which 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 31, 2022 and subsequent SEC filings. You will 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 its investor relations website at ir.live1.com. And the company encourages you to periodically visit its IR website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, November 10, 2022. And except as required by law, the company does not undertake any obligation to update or revise this information after the date of this call. I'd like to highlight to investors that this call is being recorded. The company is making it available to investors and the media via webcast and a replay will be available on its website in the investor relations section shortly following the conclusion of the call. Additionally, it is the property of the company, and any redistribution, retransmission, or rebroadcast of the call or the webcast in any form without the company's express written consent is strictly prohibited. Now, I would like to turn the call over to LiveOne CEO, Rob Allen.

Thank you, Aaron, and good afternoon, everyone. I'd like to thank you for joining us for today's fiscal 2023 first quarter business update and financial results. Over the past three quarters, LiveOne's team has made a strategic decision to execute on a concise and specific number of initiatives. Number one, consolidate and integrate our six previous acquisitions with a focus on reducing costs and overhead and cherry-picking the superstar talent in those divisions. Positive EBITDA. Number two, to focus our resources directly and capital on growing our business that are profitable and to aggressively grow our members, subscribers, and sponsors. Number three, to substantially improve our balance sheet. Number four, to forego producing or investing any large-tempo events without a sponsor paying for and being profitable. Number five, to buy back a substantial piece of stock in the open market at this giant discount to what fair market value would be. So what have we done to date? To date, through the consolidation of our prior six acquisitions, we have implemented cost and expense reductions that will result in $25 million in cost savings, including $2 million this quarter. These cost savings include substantial headcount, but we selectively retained our strongest managers and employees to focus on generating positive adjusted EBITDA. With respect to focus on our profitable business and growing our members and subscribers, we announced today that our audio division, which is comprised of streaming music, business slacker, as well as podcast business, delivered six-month revenues of $42 million, and a staggering $9.8 million of adjusted EBITDA. And we expect the audio division to achieve revenues in excess of 88 million this year and approximately 17 million of EBITDA. We have posted record growth in paid members, having added 181,000 subscribers this quarter and passing 1.8 million total members, including free and sponsored members. We have now hit 2.6 million. We've grown our sponsors from seven pre-COVID to now over 300 last year, and they expect the number to surpass over 500 sponsors on our platform this year. We are greatly expanding our B2B partnerships, which includes our nine-year exclusive partnership with Tesla, 86 other cars. Adding Google Android Automotive gives us the opportunity to white-label any other car within a matter of days, be able to Immediately change them from Ford cars to Ford radio. Hardware makers, retailers, cell carriers, social media companies, media companies, all with 10 million to 2.5 billion eyeballs must have live and must have music. You'll see more and more B2B deals on a weekly and biweekly basis over the next six months. We recently launched Live One Brand. a division featuring celebrity-backed branded products. We are utilizing our community of 55 billion listens, 2.4 billion downloads of our podcast, and 5 billion engagements across our live streaming to attempt to see whether or not we can launch specific brands, starting with Jeremiah, with Russell Bevan, number one winemaker in the country, more 100-point wines than anyone in history, to launch today. the first ever white wine for Jeremiah in the second quarter of this year. We also have new initiatives in publishing NFT with Polygon as our partner. On the balance sheet, we've extinguished close to $20 million of payables in just six months without raising any capital. And we have also paid in advance many of the record labels, And we expect the maturity of our $7 million security facility, a decent bank, which was just extended to 2024. All of our senior debt has been extended to 2024 or two years out. Regarding our tempo and pay-per-view events, we have kept our powder dry in fiscal two 23, but see substantial opportunity to produce and be part of some of the largest live events fiscal 2024, which includes pay-per-view for festivals, social media events, boxing that will create the opportunity to finish the financing of our pay-per-view business and our spinoff into its own public company. sometime by the end of fiscal 2024. The strategic decisions to forego live events in fiscal 2023 has resulted in adjustment for our fiscal 2023 consolidated revenue guidance of between 100 to $110 million in revenues. But most important is, It moves our EBITDA number to nine to 11 and a half million. This is more than a $20 million swing positive swing from last year. We, we respect with respect to podcast one, we will file our S one by December 15th. We closed 90 days ago. Approximately. We closed $8 million at a $68 million valuation. All of our shareholders of record will receive a dividend of 5% to 10% of Podcast One who own the stock as of December 15th. And we will list that on a national exchange, NASDAQ or New York Stock Exchange, in the early parts of next year. I believe we have made enormous progress in a very short amount of time, which positions LiveOne with its shareholders to win big. The Live One board and I believe that shares of Live One have been significantly undervalued. We have repurchased 2 million shares of Live One common stock in the open market, and we announced today we'll be expanding that program to repurchase $2 million of additional stock. This is an additional substantial amount of open market insider buying of Live One shares by myself and other members of our board. With that, I would like to hand it back over to Aaron Sullivan, who will review our Q2 finance fiscal 2013 results. After that, I'll have a few closing remarks. Thank you, Aaron.