LiveOne, Inc.

Good morning and welcome to the Live One Inc fourth quarter fiscal 2023 financial results and business conference call. My name is Carla and I will be operating this call. During the presentation if you wish to register a question for the Q&A portion of your call you can register this by pressing start followed by one on your telephone keypad. I will now hand over to your host Aaron Sullivan interim CFO to begin. Please go ahead.

Thank you. Good morning and welcome to Live One's Business Update and Financial Results conference call for the company's fourth quarter ended March 31, 2023. Presenting on today's call are Rob Ellen, CEO and Chairman, Hit Gray, President of Podcast One, Bradley Conkle, Head of Flacker, John Semelhack, President of CPS, Josh Holbauer, Head of Music, 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. These 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 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. The company encourages you to periodically visit it Investor Relations 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, June 27, 2023. And except as required by law, the company does not undertake any obligation to update or revise this information after the date of the call. I'd like to highlight to investors that this call is being recorded. The company is making it available to investors and 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 Ellens.

Thank you, Aaron. And good morning, everyone. I'd like to thank everyone for joining us today. After five years and a tremendous amount of hard work and many obstacles, including consolidation of aid acquisitions into our core business, proudly my team has delivered on a magnificent year and even a bigger start to this year. We are raising our guidance in fiscal 2024. LIBORN early projections increased to 122 to 130 million in revenue with 12 to 16 million of adjusted EBITDA. And our audio division, which includes slacker and podcast one to a hundred million to 110 and adjusted EBITDA between 18 and 21 million with over $12 million of operating cashflow. As a creative first platform, we have built a flywheel that off the same piece of content, we can deliver so many different revenue streams. LiveXLive, Slacker, Podcast One, Pay-Per-View One, CPS, SplitMind, Drumify, Cast Media, and Fantasy Guru. All substantial creative platforms with big communities. The combination provides the most robust offering in music and pop culture at the lowest cost and the highest margins. Proving the superior quality of our tech team, our 45 patents combined with a unique original programming, Slacker Radio was handpicked by Elon Musk and the Tesla team as the white label music service branded Tesla Radio. Every Tesla car sold in North America comes with a paid membership to Live One. These memberships are paid directly by Tesla at an average of seven years. We proudly just extended for a 10 straight year. The combination of Tesla, Verizon, T-Mobile, Sprint made exciting B2B partnerships and an army of over 3,000 artists, podcasters, social media stars engaging across the LiveOne platform and utilizing their social media to alert fans to listen, watch, and engage on LiveOne has driven our revenues and our membership at record pace. I indicated to the street last year that we'll pass 10 million members within five years and over a billion dollars in revenues. Exploding out of the gate this year, we have over 350,000 new paid members since January 1st, adding over 60,000 per month. We passed 3.1 million total members and 2.2 million paid members. Expecting to pass 4 million total members this year and over 3 million paid an average of approved $3. To better understand and appreciate these metrics, Goldman Sachs just came out with a report, the industry growth will hit 1.7 billion paying subscribers to music by 2027. Live One would only need 1%, less than 1% of that expected total addressable market to reach our goal. In 2018, we acquired Slacker Radio, which at the time had 20 million in revenues, losing over 10 million a year and 400,000 total members. We've increased our membership eightfold in just five years. At this pace, 10 million members is extremely achievable goal. Live One reported today, 2023 fiscal results, revenues of 99 million and 10.9 million adjusted EBITDA. That is a 24.4 million improvement and adjusted EBITDA compared to 2022. Our audio division comprised of award-winning streaming music platforms, Slacker Radio and Podcast One, one of the largest remaining podcast networks reported record revenues of 86.8 million and a record adjusted EBITDA of 18.2 million, an increase of 289% from 6.3 million last year. With the strongest balance sheet in the history of the company, We can now focus our capital and energy on both internal growth as well as external and utilize the balance sheet to buy back substantial amount of stock. We believe our stock remains undervalued and in such we have undertaken three separate initiatives to unlock substantial shareholder value. First, on an ongoing share buyback, we repurchased 2.9 million shares, leaving an additional $2.3 million remaining to acquire additional shares. The second exciting initiative is the spin-off of our Podcast One business. We've just received approval on our registration statement as declared effective by the SEC, and we increased our dividend to our shareholders from 12% to 19%. Live on the Parent Company will own over 74% of Podcast One. Independent valuations have come out between $230 and $275 million. which would value that division over $2.60 alone. The spin-out will allow Podcast One to utilize its stock as currency for both acquisitions and capital formations. We've already announced two planned all-stock acquisitions by Podcast One. The first is a network called Cast Media. The second, Fantasy Guru. The combined acquisitions are expected to increase Podcast One's revenues by $12.5 million and over $2 million of adjusted EBITDA. Podcast One was acquired very similar to Slacker three years ago with $20 million in revenues and is now estimating that this quarter alone will be over $10.5 million. We've increased our guidance to $40 to $45 million this year before acquisitions. Our third initiative is our proposed merger of Slacker Radio with NASDAQ-listed SPAC, ticker ROTC, at a minimum of $160 million valuation or another $2 a share. If you combine these two prices, it's over $5 a share. With that, I would say this is the most exciting time in the history of the company. We continue to grow and expect our biggest year ever. Now I'd like to hand it over to my president, Kit Gray, over at Podcast One. Thank you, everyone.