Igniton Transaction

6 Months Ended

Jun. 30, 2024

10. Igniton Transaction

In April 2024, the Company entered into a series of transactions with its subsidiary, Igniton, and a third-party entity to purchase a perpetual license for a total of $16.2 million of consideration comprised of $10.2 million of cash and $5.0 million of common stock of Igniton and $1.0 million of the Company's equity security investment in Telomeron (the “License Purchase”). The license allows the Company to utilize the technology developed by the third party. This license is being recorded within the Technology license, net line item on the condensed consolidated balance sheets.

The License Purchase was funded through an equity financing through Igniton which raised $6.8 million of cash from third-party investors and $4.0 million investment from Gaia.

Technology license, net consists of the following as of June 30, 2024:


(in thousands)	June 30, 2024

Technology license	$	16,156
Accumulated amortization		(202	)
Technology license, net	$	15,954

The following schedule discloses the effects of changes in the Company’s ownership of Igniton on the Company’s equity, as a result of the Igniton Transaction, for the periods presented:


	Three Months Ended			Six Months Ended
(in thousands)	June 30, 2024			June 30, 2024

Net income attributable to Gaia, Inc. shareholders	$	(2,193	)	$	(3,238	)
Change in Gaia’s paid-in capital for sale of Igniton Shares, net of issuance costs		(809	)		(809	)
Net transfers from non-controlling interest		(809	)		(809	)

Change from net income attributable to Gaia, Inc. shareholders and transfers from Noncontrolling Interest	$	(3,002	)	$	(4,047	)

On April 18, 2024, Igniton, Inc., a Colorado corporation (“Igniton”), and subsidiary of the Company, closed a sale of 2,750,000 shares of Igniton common stock (the “Igniton Shares”) to certain funds managed by AWM Investment Company, Inc. (“AWM”) for total net proceeds of $3,162,500. Igniton’s total proceeds included a $412,500 premium (the “Premium”) that was passed to the Company in exchange for the issuance to AWM of a non-transferable right granting AWM a one-time ability to sell the Igniton Shares to the Company for the total net proceeds paid (the “Option”), payable at the Company’s option, in cash or shares of the Company’s Class A common stock having a value per share equal to the trailing 5-day average VWAP prior to the exercise of the Option. The amounts have been recorded within Additional paid-in capital and Noncontrolling interests within the Statement of Stockholder’s Equity.