S-1/A 1 fs12017a2_livexlivemedia.htm

As filed with the Securities and Exchange Commission on September 11, 2017

Registration No. 333-217893

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

Amendment No. 2
to

FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

_________________

LiveXLive Media, Inc.

(Exact Name of Registrant as Specified in Its Charter)

_________________

Delaware

 

5812

 

98-0657263

(State or Other Jurisdiction of Incorporation or Organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

_________________

269 South Beverly Drive, Suite #1450
Beverly Hills, CA 90212
(310) 601-2500
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

_________________

Robert Ellin
Chairman and Chief Executive Officer
LiveXLive Media, Inc.
269 South Beverly Drive, Suite #1450
Beverly Hills, CA 90212
(310) 601-2500
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

_________________

Copies to:

Allen Z. Sussman, Esq.
Alan C. Enriquez, Esq.
Loeb & Loeb LLP
10100 Santa Monica Blvd, Suite 2200
Los Angeles, CA 90067
(310) 282-2000
(310) 919-2200 (facsimile)

 

Gregg A. Noel, Esq.
Jonathan Ko, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
(213) 687-5000
(213) 687-5600 (facsimile)

_________________

Approximate date of commencement of proposed sale to the public:

As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

¨

 

 

 

Accelerated filer

 

¨

Non-accelerated filer

 

¨

 

(Do not check if a smaller reporting company)

 

Smaller reporting company

 

x

 

 

 

 

 

 

Emerging growth company

 

¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ¨

 

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered

 

Proposed
maximum
aggregate
offering price(1)

 

Amount of
registration fee(2)

Common Stock, $0.001 par value per share

 

$100,000,000

 

$11,590

____________

(1)      Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended. Assumes exercise in full of the underwriters’ over-allotment option to purchase additional shares of common stock.

(2)      Previously Paid

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Preliminary Prospectus

 

Subject to Completion, dated September 11, 2017

 

        Shares

LiveXLive Media, Inc.

Common Stock

$      Per Share

We are offering        shares of our common stock. We currently expect the public offering price of our common stock will be between $     and $     per share.

We intend to apply for listing of our common stock on          under the symbol “LIVX” and the closing of this offering is contingent upon the successful listing of our common stock on a national securities exchange.

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 12.

 

 

Per Share

 

Total

Public offering price

 

$

 

$

Underwriting discount(1)

 

$

 

$

Proceeds, before expenses, to LiveXLive Media, Inc.

 

$

 

$

(1)      See “Underwriting” for a description of compensation payable to the underwriters.

To the extent that the underwriters sell more than         shares of common stock, the underwriters have the option to purchase up to an additional          shares from us at the public offering price less the underwriting discount.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of common stock to the purchasers on              , 2017.

Sole Book-Running Manager

BMO Capital Markets

Prospectus dated                , 2017

 

We are responsible for the information contained in this prospectus and in any free-writing prospectus we prepare or authorize. Neither we nor the underwriters have authorized anyone to provide you with different information, and we and the underwriters take no responsibility for any other information others may give you. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date of this prospectus.

TABLE OF CONTENTS

 

 

Page

Use of Market and Industry Data

 

ii

Trademarks, Service Marks and Trade Names

 

ii

Summary

 

1

Risk Factors

 

12

Special Note Regarding Forward-Looking Statements

 

32

Use of Proceeds

 

33

Price Range of our Common Stock

 

34

Dividend Policy

 

35

Capitalization

 

36

Dilution

 

37

Unaudited Pro Forma Condensed Combined Financial Statements

 

38

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

43

Business

 

59

Management

 

82

Executive Compensation

 

88

Certain Relationships and Related Party Transactions

 

95

Principal Stockholders

 

99

Description of Capital Stock

 

101

Shares Eligible for Future Sale

 

104

Material U.S. Federal Income Tax Consequences to Non-U.S. Holders of Our Common Stock

 

107

Underwriting

 

110

Legal Matters

 

115

Experts

 

115

Where You Can Find More Information

 

115

Index to Financial Statements

 

F-1

i

USE OF MARKET AND INDUSTRY DATA

This prospectus includes market and industry data that we have obtained from third party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third party sources referred to in this prospectus are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this prospectus or ascertained the underlying economic assumptions relied upon by such sources. Furthermore, references in this prospectus to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this prospectus.

Forecasts and other forward-looking information obtained from these sources involve risks and uncertainties and are subject to change based on various factors, including those discussed under “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

This prospectus contains references to our trademarks, service marks and trade names and to trademarks, service marks and trade names belonging to other entities. Solely for convenience, trademarks, service marks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names, service marks or trademarks or any artists’ or other individuals’ names to imply a relationship with, or endorsement or sponsorship of us by, any other companies or persons.

ii

SUMMARY

This summary highlights information contained in other parts of this prospectus. Because it is only a summary, it does not contain all of the information that you should consider before investing in shares of our common stock, and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information included elsewhere in this prospectus. You should read the entire prospectus carefully, especially “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus, before deciding to buy shares of our common stock.

Unless the context requires otherwise or unless otherwise stated, references to “our Company,” “LXL,” “LiveXLive,” “we,” “us,” “our” and similar references refer to LiveXLive Media, Inc. and its consolidated subsidiaries, including LiveXLive, Corp., our wholly owned subsidiary (“LXL”), in each case giving effect to our recently completed acquisition (the “Wantickets Acquisition”) of certain operating assets of Wantickets RDM, LLC (“Wantickets”), which occurred on May 5, 2017.

LiveXLive

Our Business Overview

We are one of the world’s only premium internet networks devoted to live music and music-related video content. We intend to fill a market void by becoming a central content, information and transaction hub for music consumers and industry stakeholders around the world. We are geared for the digital generation, and our mission is to bring the experience of live music and entertainment to internet users by delivering live streamed and on demand content to nearly any internet-connected screen. Our goal is to become a leading destination for premium music video content on the internet by continuing to aggregate and create our content, including through strategic acquisitions. We are also building a proprietary engagement platform that we believe will attract and retain users, which we believe will allow us to collect valuable user data and monetize our growing content library through subscriptions, advertising, sponsorships and e-commerce.

Since our launch in 2015, we have sought to become the singular online destination for music fans to enjoy premium live performances from music venues and leading music festivals around the world, as well as premium original content, artist exclusives and industry interviews. We have live streamed music festivals such as Rock in Rio, Outside Lands Music and Arts Festival and Hangout Music Festival, and our platform has featured performances and content from over 200 of the most popular artists in various music genres, including Rihanna, Katy Perry, Metallica, Duran Duran, Radiohead, Chance The Rapper, Bruce Springsteen, Major Lazer and Maroon 5. We have successfully distributed such content through our online platform and major third party distributors such as MTV International, Complex Media, Dailymotion and AOL.

Our content strategy includes continuing to aggregate live and on demand performance (e.g., on stage sets) and non-performance (e.g., behind the scenes, interviews) music-related video content from festivals, clubs, events, concerts, artists, promoters, venues, music labels and publishers (“Content Providers”); acquiring and producing original music-related video content; and curating existing online premium content. In addition to acquiring and/or partnering with third party Content Providers, our digital studio, LXL Studios, will develop and produce original music-related video content, including digital magazine-style news programming and original-concept digital pilots and documentaries.

Our platform engagement strategy is to build a compelling online experience for our users, anchored by a pioneering website and our custom mobile application, the “LXL App.” The LiveXLive platform will offer access to some of the world’s leading music festivals and events with multi-day and simultaneous multi-stage coverage, unique concerts, intimate performances and premium programming. It will be fueled by our custom LXL App, which we believe will drive 24/7/365 user engagement and data that we will be able to convert to earnings and cash flow through multiple potential revenue streams. We intend to initially release the first version of the LXL App in September 2017 on the iOS and Android operating systems in anticipation of Rock in Rio 2017. We plan to release the Apple TV, Roku and Amazon Fire TV LiveXLive applications later in 2017.

By executing the above strategies, we are creating a platform that is dedicated to live music and has the breadth and depth of content to reach and be relevant to a global audience of all ages.

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Our Opportunity

We believe there is significant unmet demand for experiencing live music, musical performance video on demand and related content online. For example, there is a large market for live music events worldwide, with an estimated $19.6 billion in live music industry revenue in 2016 (IBISWorld), with more than 2,000 music festivals worldwide. Each festival can attract hundreds of thousands of people with attendance at the largest festival in the United States estimated at 125,000 people per day. In 2015 and 2016, on average almost 80,000 people attended each day of the Rock in Rio music festivals in Rio de Janeiro and Lisbon. Due in part to a combination of costs, logistics, event capacity and publicity, the attendance at any one festival or live event is a fraction of the total potential audience for that content. For example, while almost 100,000 people attended Coachella in 2016, the live stream garnered over nine million views. This demonstrates the potential demand for online viewership of live music events. We believe there is currently no centralized platform dedicated to online streaming of live music and music-related video content. We intend to fill this market void by executing each component of our business approach.

Our Approach

Our business approach consists of the following core components that we believe, when combined with our competitive strengths and growth strategy, will allow us to successfully monetize and grow our Company:

We believe that the combination of our content, technology, marketing and distribution, platform engagement, data and monetization strategies will make us a sought-after partner for Content Providers and other music industry stakeholders. Our management team and advisors are comprised of media and entertainment industry experts with long-standing relationships with industry stakeholders, including agents, managers, distributors, producers, labels, publishers, advertisers, and social influencers (collectively, “Industry Stakeholders”). We expect Content Providers and other Industry Stakeholders will provide additional content and cross-promotion that will not only reach millions of music fans globally, but also engage users on our platform for extended periods of time. We believe that our growing supply of content offerings, customized programming and our interactive LXL App will help us become part of our users’ daily routine with respect to their music needs and consumption of music-related video content. We expect we will be able to leverage the data generated from our users’ engagement with our platform to more efficiently tailor our programming, further develop our monetization efforts and enhance the overall user experience.

We describe each of the key components of our business approach below:

Our Content — Our current Content Providers populate our platform with authentic premium music content that we will offer live and on demand. We currently have agreements in place to provide thousands of hours of content over the next several years, including from Rock in Rio, Outside Lands Music and Arts Festival and Hangout Music Festival, as well as other compelling live and catalog music rights. For example, a single festival can provide over eight hours of live performance music content per day, per stage, in addition to multiple hours of non-performance content between each performance. Part of our strategy is to continue acquiring premium content from around the world. We

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expect to provide additional custom premium content programming that will supplement the live and catalog content offerings through LXL Studios, which initially will cover news, reality, comedy and drama.

Live music and music-related video content can be acquired and/or produced at costs lower than that required for comparable exclusive premium video content in other genres like sports, feature film and broadcast television. For example, music festivals present an attractive opportunity for us to produce premium content at lower cost by taking advantage of the critical mass of participating artists performing on the same date and at the same venue at marginal costs to us. When artists are not performing during the music festival, we intend to capture artist interviews and other premium non-performance content in a cost-efficient manner. Furthermore, at music clubs and indoor venues, we will be able to deliver additional performance and non-performance content at a low cost using a “mini-studio” captive environment venue solution through the installation of permanent hardware, software and camera systems at such venues (the “Venue Production Studio System”). The Venue Production Studio System will allow us to produce live streamed and recorded music-related video content on a daily basis. In addition, we will have the capability to curate free content provided by third party sources such as talk shows and artists and host such content on our platform. When our performance content, non-performance content and original programming are combined, we believe our content costs will be at a substantially lower, cost-effective price point to provide a competitive advantage versus providers of other premium content.

Our Technology Platform — Our technology platform is a key component of the LiveXLive network that brings the LiveXLive ecosystem to life for both our users and our Content Providers. We currently deliver our user experience through an HTML-based responsive website compatible with most major web browsers and operating systems. In September 2017, in anticipation of Rock in Rio 2017, we plan to initially release our proprietary LXL App on the iOS and Android operating systems. We plan to launch the AppleTV, Roku and Amazon Fire TV television LiveXLive applications later in 2017. We are creating an ecosystem that will support greater social sharing, community and deep user engagement with our content. We believe our full-service, delivery to distribution back-end will allow us to capitalize on monetization opportunities and is the first step in creating a digital supply chain for live music and music-related video content.

Our Marketing & Distribution — Our content and brand marketing and distribution efforts will focus on third party distributors, individual artist and social media promotion, traditional media outlets and social-viral events. We will leverage the reach of major distribution platforms in a way similar to our past distributions with major third parties such as MTV International, Complex Media, Dailymotion and AOL. We also have engaged artists and social influencers to conduct marketing on their own social media and other marketing platforms. For example, individual artists such as Rihanna at Rock in Rio 2015 and Avicii at Rock in Rio 2016 promoted our live stream to their massive and dedicated fan bases. We will also partner with major mobile carriers and web and broadcast distributors to drive distribution and viewership of LiveXLive and LXL Studios branded content. Given that our content appeals to a diverse user demographic spanning a variety of music genres, we plan to customize our campaigns to best suit the need of our Content Providers and potential advertising partners. Marketing and distribution of our content and brand will be integral to our business and the execution of our platform engagement, data collection and monetization strategies.

Our Platform Engagement — We are designing our custom platform with interactive features that will enhance the live music experience and, when combined with our platform’s functionality and unique features, will create an immersive digital experience in and of itself. We believe the combination of the intuitive, modern LiveXLive user interface and cross-platform capabilities will be instrumental in creating a deeply engaging, personally-tailored central hub for live music and music-related video content, particularly for those users who are otherwise unable to attend live events in person. Our aim is to also include options for artist fan club membership, merchandise, ticketing, VIP packages and other offerings to further solidify users’ affinity toward our platform and their interests. On our platform, users will be immediately greeted with a main viewing window featuring the most current content and multiple sub-windows that highlight additional stages, venues, events and our other content. Users will be able to move seamlessly, at the swipe of a finger, from stage to stage and venue to venue, to enjoy our content, creating a personalized viewing environment. By creating this free-flowing user experience, the platform will encourage users to connect with others to share their individual experience, further deepening social interaction and platform engagement.

Our Data — As we continue to aggregate premium content offerings and grow our user base, we will gain valuable insights on users’ viewing habits, trends and preferences based upon specific clicks on viewing windows, music genre trends and popularity, duration of user engagement, social networks activity and geographical data. This data, paired with general demographic data supplied via integration of users’ social media, Google and/or Spotify accounts, will

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provide a rich, nuanced understanding of our user base. We expect data collection will provide valuable information for each of our monetization strategies. We will be able to identify specific music genres, geographic markets and content programming most conducive to the success of our business. We aim to provide targeted e-commerce opportunities for music fans, including offering artist merchandise, tickets to upcoming live music events, fan club access and more.

Our Monetization Capabilities — We expect to generate revenue from distribution, sponsorship, advertising and e-commerce. Once we aggregate enough premium content, we anticipate adding a monthly subscription video on demand (“SVoD”) fee and pay-per-view (“PPV”) fees. Once an SVoD model is established, we will maintain a free tier with limited content that is supported by advertising revenue. Our diversified and growing portfolio of content will enable us to appeal to a broad range of consumers, not just the millennial demographic often desired by new media companies. This diversified user base will make it easier for us to generate substantial revenue from multiple streams. These revenue streams should be sufficient to pay for the total costs of operations, including production, rights, marketing, administrative and travel.

Our Competitive Strengths

We believe we will be able to capitalize on the following competitive strengths to execute the approach described above:

Experienced Management Team. Our management team is comprised of media and entertainment industry experts with a longstanding history of achievements and experience in their respective industries. Over their careers, our management team has cultivated deep, decades-long relationships and contacts across the media and entertainment industries, including with key Industry Stakeholders, Content Providers, strategic distributors and technology partners. In particular, Mr. Robert Ellin, the chairman of our board of directors (our “Chairman”) and our Chief Executive Officer, Mr. Andy Schuon, our President, Mr. Jerome N. Gold, our Executive Vice President and Chief Financial Officer, Mr. Douglas Schaer, our Chief Operating Officer, Mr. Mike Bebel, our Executive Vice President, Corporate Development and Rights Management, Mr. Blake Indursky, our Chief Business Officer and Executive Vice President, Russ Gilbert, Chief Digital Officer, and Mr. Schuyler Hoversten, our Chief Revenue Officer, have significant experience and success building other leading entertainment platforms and assets and are considered thought leaders within the live entertainment space.

Content Acquisitions. We have exclusive broadcast and distribution rights agreements with well-known festivals such as Rock in Rio, Outside Lands Music and Arts Festival and Hangout Music Festival, as well as an agreement to broadcast live performances from Exchange LA, among others. We also have the exclusive broadcast and distribution rights to the extensive content library of JBTV, which includes over 2,500 hours of Emmy and Billboard award winning music and media content. Our content library includes thousands of hours of premium content, including live performances and interviews from some of the most popular artists in the world. As we continue to grow our content library, we believe this solid base of existing offerings make us attractive to Content Providers and Industry Stakeholders seeking new and exciting distribution and production opportunities in the live music industry.

User Experience. We have created and continue to develop a live music experience that is not currently available on any other platform. We believe the fluid viewing experience, social interactivity, e-commerce and other distinct feature sets of the LiveXLive platform will be particularly attractive to users who are unable to attend live events in person or any user who is looking for a personally-tailored, central hub for live music and music-related video content.

We are an early stage company that has not yet taken full advantage of these strengths, and we are not yet profitable.

Our Growth Strategy

We believe that the continued development of digital formats for the consumption, distribution, exploitation and monetization of streamed live music and music-related video content and increasing access to digital music services present significant promise and opportunity for us. We believe that the large demand for premium live content combined with consumers’ willingness to pay for other premium streamed content creates an opportunity to capitalize on this consumer trend for live music and music-related video content. We believe that we are at the nascent stage of a revolution in live streamed music that will mirror the explosion of live sports events and consumption. To leverage this and grow our Company, we intend to pursue the following core growth strategies:

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         Grow Our Live and On Demand Content Library. In order to continue to grow our content base, we will strategically acquire the digital rights to live music events, concerts, and festivals, acquire existing content, partner with Content Providers and create custom premium content. Most recently in March 2017, we entered into a content license agreement to broadcast and distribute JBTV’s extensive content library, and in April 2017, we acquired the exclusive broadcast and distribution rights to Hangout Music Festival’s live broadcast. Hangout Music Festival is an annual three-day music festival in Gulf Shores, Alabama, which was held in May of this year and had approximately 45,000 people in attendance per day. JBTV is a leading source of music programming for the past 30 years, which includes over 2,500 hours of Emmy and Billboard award winning music and media content. We will seek to acquire and/or license existing libraries of live content in order to capitalize on underutilized existing live content assets. We intend to collaborate with Content Providers to provide our users with access to ever-growing new and relevant premium content. Our recently launched LXL Studios division will also create synergistic, complementary, short-form original content that will further enhance our user experience and deepen our relationship with our users and Content Providers. See “Business — Pending Acquisitions — Slacker, Inc. — Content” for information regarding the content we expect to acquire in connection with our planned acquisition of Slacker, Inc.

         Pursue Strategic Acquisitions. We intend to continue expanding our business in part through strategic acquisitions in markets where we see opportunities to grow our brand and revenues, which will ultimately expand the reach of our network. We have an active program for identifying and pursuing potential acquisitions of companies and content. We will continue to utilize a “buy and build” strategy and to use the operations of LiveXLive and our talented management team as the overall infrastructure to which we will add more companies and assets. For example, in May 2017, we acquired certain operating assets of Wantickets, a branded leading online nightlife, electronic dance music and event ticketing company in North America that is designed to promote ticket sales for live events. This acquisition will allow us to expand the reach of our content and build our subscription model by utilizing Wantickets’ large database of ticket buyers to live music events. Similar to our acquisition of Wantickets, we will continue to identify businesses and assets that we believe will accelerate the growth of our vertical markets through strategic acquisitions. To that end, we recently agreed to acquire Slacker, Inc. and its online music audio streaming services, Slacker Radio, as well as SNAP Interactive, Inc., a leading provider of live video social networking and interactive dating applications. See “— Recent Developments and Initiatives.”

         Expand our Reach. We will continue to identify distribution partners in territories across the world that will benefit from sharing our programming on mutually beneficial terms, similar to our recent agreements with Dailymotion, Cinedigm and Twitter. See “— Recent Developments and Initiatives.” We will also seek to exploit the potential of previously under-monetized live music content and underexposed genres of music beyond the most popular through online distribution. We will also continue to expand our global footprint through partnerships and organic growth in markets where we see opportunities to grow revenues and expand the reach of our network.

         Programming Premium Content. We believe users value personalized offerings of both premium existing and new content. We believe that the following three components will drive our programming success: (1) investment in original content and gaining a stronger foothold in production; (2) building scale and aggregating content to maintain a differentiated way for our users to access live music; and (3) utilizing data analytics to complement editorial approaches. We will utilize programming and curation as a driver for our platform as great programming is valuable to both our users and our financial performance.

         Expand Our Monetization Opportunities. The growth of digital formats and the expansion of our user base will continue to produce new means for the monetization of our increasing premium and unique content. We believe that our network will deliver large-scale audiences and engagement, while concurrently providing a monetization model that is commercially viable and scalable. We anticipate being capable of increasingly realizing the value of our various revenue streams across our distribution, partnerships, advertising, sponsorship, e-commerce merchandising and ticketing opportunities. Potential revenue streams include but are not limited to the following:

         Subscription, SVoD and PPV: Various types of premium content will lend themselves to different monetization opportunities. We plan to take advantage of our growing premium content by offering

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different methods of user access, such as subscription-only content, SVoD across our entire platform, PPV for special events or groups with strong fan bases and virtual reality for certain premium content. We also plan to launch a number of LiveXLive proprietary concepts such as digital festivals and digital residencies. See “Business — Our Approach and Business — Content Aggregation — LXL Studios and Original Content — LXL Studios Live Events.”

         Advertising and Sponsorship: We believe that the ability to monetize our growing content library will improve over time as we drive users and engagement across current and emerging distribution channels. We will also continue to drive growth in our sponsorship and advertisings relationships, together with our focus on expanding existing partnerships, to provide them with targeted strategic programs, leveraging our increasing user base.

         E-Commerce: Through our LiveXLive ecosystem, we plan to sell artist merchandise, tickets to upcoming shows, VIP packages, fan club access and more, all of which will be focused on a global captive audience of music fans on our platform.

         Data: We expect to capitalize on an expansive user database we will build as our content offerings and user base grow. For example, our recent acquisition of Wantickets provides the opportunity to expand the reach of our content and build our subscription model by utilizing Wantickets’ large database of ticket buyers who consume live music events.

Through the combination of these monetization strategies and acquisitions, we hope to create a music network with the breadth and depth of content to have global relevance, fueled by our LXL App, to drive user engagement and data that we can convert to earnings and cash flow through the multiple revenue opportunities.

With our business approach and our strategic approach to growth, we believe we will be able to increase our scale through our content offerings and use of data.

Recent Developments and Initiatives

Since January 2017, our management team has expanded our business as follows:

Pending Acquisitions

         Slacker, Inc. — On August 25, 2017, we entered into an agreement and plan of merger (the “Slacker Agreement”), by and among LiveXLive Media, Inc., LXL Music Acquisition Corp., a Delaware corporation and our wholly owned subsidiary (“LXL Music”), Slacker Inc., a Delaware corporation (“Slacker”), commonly known as “Slacker Radio”, and Columbia Capital Equity Partners V (QP), L.P., solely as the stockholders’ agent. Subject to the terms and conditions of the Slacker Agreement, we will acquire Slacker through a merger of LXL Music with and into Slacker, with Slacker surviving as our wholly owned subsidiary (the “Slacker Acquisition”). The aggregate purchase price for the Slacker Acquisition is $50.0 million, consisting of $44.0 million of cash and $6.0 million in our common stock. The cash portion will be adjusted based on Slacker’s net working capital at the effective time of the merger and other purchase price adjustments, including amounts related to convertible notes and accrued interest thereon that are not assumed in the transaction. The number of shares of our common stock issuable as stock merger consideration will be determined based on the public offering price set forth on the cover of this prospectus. The Slacker Acquisition is subject to certain closing conditions and there can be no assurance that the Slacker Acquisition will be consummated on the terms described herein or at all. See “Business — Pending Acquisitions — Summary of Acquisition Agreements — Slacker Agreement” and “Risk Factors — Risks Related to Our Acquisition Strategy” for more information regarding this transaction.

Slacker is a key player in the digital audio industry, offering a digital spin on the classic radio listening experience. Slacker delivers both free and subscription-based access to millions of songs and hundreds of expert-programmed stations, as well as news, sports and talk radio content, on internet-connected devices, in-car infotainment systems and other consumer electronics platforms. Slacker hosts approximately 13 million audio tracks and has 1.5 million monthly unique users. As of April 1, 2017, Slacker had over 400,000 subscribers on its paid and ad-supported platforms and has recorded 55 billion plays since 2007. See “Business — Pending Acquisitions — Slacker, Inc.” for more information regarding this transaction.

6

         SNAP Interactive, Inc. — On September 6, 2017, we entered into an agreement and plan of merger (the “SNAP Agreement”), by and among LiveXLive Media, Inc., LXL Video Acquisition Corp., a Delaware corporation and our wholly owned subsidiary (“LXL Video”), SNAP Interactive, Inc., a Delaware corporation (“SNAP”), and Jason Katz, solely as the stockholders’ agent. Subject to the terms and conditions of the SNAP Agreement, we will acquire SNAP through a merger of SNAP with and into LXL Video, with LXL Video surviving as our wholly-owned subsidiary (the “SNAP Acquisition”). The aggregate purchase price for the SNAP Acquisition is approximately $34.0 million, consisting of approximately $20.4 million in cash and approximately $13.6 million in our common stock. The purchase price will be adjusted based on SNAP’s actual cash balance, net working capital and indebtedness at the effective time of the merger. The number of shares of our common stock issuable as stock merger consideration will be determined based on the public offering price set forth on the cover of this prospectus, or the volume weighted average of the trading price of our common stock at the time of issuance if the merger is not consummated concurrently with or prior to the closing of this offering. The SNAP Acquisition is subject to certain closing conditions and there can be no assurance that the SNAP Acquisition will be consummated on the terms described herein or at all. See “Business — Pending Acquisitions — Summary of Acquisition Agreements — SNAP Agreement” and “Risk Factors — Risks Related to our Acquisition Strategy” for more information regarding this transaction.

SNAP is a leading provider of live video social networking and interactive dating applications. SNAP currently has multiple mobile applications with users in 180 countries. As of June 30, 2017, SNAP had approximately 179,000 premium subscribers and approximately 45,000 new users joining per day in June 2017. SNAP’s revenue streams include subscriptions, virtual gifts, micro-transactions, and advertising revenue. See “Business — Pending Acquisitions — SNAP Interactive, Inc.” for more information regarding this transaction.

Other Recent Developments

         Content Expansion — In April 2017, we obtained the exclusive worldwide distribution rights to Hangout Music Festival. In March 2017, we obtained the exclusive broadcast and distribution rights to JBTV’s extensive content library of over 2,500 hours of archived Emmy and Billboard award winning music and media. In addition, we obtained the exclusive worldwide distribution rights to “The Secret Show,” a 45-minute program produced by LiveXLive and JBTV featuring recorded live performances, interviews and videos of BTS (Bangtan Boys). BTS is a leading Korean pop boy band with a large social media presence of approximately 5.6 million followers on Twitter. In June 2017, we obtained the exclusive worldwide distribution rights to Paléo Festival de Nyon, an annual rock festival held in Nyon, Switzerland, which was recently named the “Best Medium-Sized Festival” by the European Festival Awards in 2017. In late June 2017, we co-distributed, marketed and promoted the live stream of Summerfest, an annual music festival held along the lakefront in Milwaukee, Wisconsin.

         Technology — Pursuant to our Wantickets Acquisition, we are integrating a proprietary, mobile-first ticketing platform with end-to-end solutions for both reserved seating and general admission venues. These event services will be integrated into our e-commerce store. These services are hosted on Amazon Web Services, which provides cloud service stability in the event of traffic spikes and simplifies our IT management and disaster recovery tasks.

         Marketing and Distribution

         LiveXLive Influencers: Since January 2017 we have increased our social marketing efforts, including by engaging three prominent social media influencers: Amanda Cerny, Andrew B. Bachelor (also known as “King Bach”) and Jake Paul. With an aggregate following of over 85 million followers as of September 1, 2017, these social media influencers have begun to create original, short-form content and promotional content on behalf of LiveXLive, including content produced in connection with Hangout Music Festival in May 2017 and Outside Lands Music and Arts Festival in June 2017. Furthermore, Wantickets also has a large social following, with more than 170,000 followers focused on the nightlife category and over 135,000 unique emails in its marketing database. Wantickets builds relationships between leading social media influencers and everyday users to evoke authentic marketing while working towards automating a personalized experience.

7

         Cinedigm:In June 2017, we signed a non-exclusive agreement with Cinedigm (NASDAQ: CIDM), a leading distributor of over-the-top (“OTT”) networks and digital content, under which Cinedigm will focus on circulating the LiveXLive service worldwide on cable, satellite and digital distributors. Through a recent joint agreement with Cinedigm and Jungo TV, LiveXLive’s channels and content will also be distributed through cable, telecommunication, and technology companies in fast-growing, emerging markets, which represent over 2.5 billion consumers. Territories and countries targeted will include: China, South East Asia, India, Turkey, the Middle East and North Africa. The partnership will also extend to CIS nations (Commonwealth of Independent States), including Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.

         Twitter, Inc.: In July 2017, we signed a distribution agreement with Twitter, Inc. to broadcast/distribute the 18th edition of Rock in Rio Music Festival, live from Olympic Park in Rio de Janeiro, including full performances, artist interviews and halo content. Artists scheduled to appear at the festival include Justin Timberlake, Maroon 5, Aerosmith, Guns N’ Roses, The Who, Bon Jovi, Red Hot Chili Peppers, Alicia Keys, Fergie, Shawn Mendes, Def Leppard, 30 Seconds to Mars, 5 Seconds of Summer, and many others. Under this distribution agreement, LiveXLive will expand its digital footprint and ability to make some of the most valuable music and entertainment content come alive across one of the most well-known social media platforms, where six of the ten most followed accounts are musicians.

         Dailymotion: In August 2017, we granted Dailymotion a non-exclusive right to co-distribute the LiveXLive broadcast of the 2017 edition of Outside Lands Music and Arts Festival outside of the United States. DailyMotion, owned by Vivendi, is a video-sharing website based in France which allows users to upload, watch and share videos, attracting 300 million users from around the world, who watch 3.5 billion videos on its player each month. The Outside Lands broadcast was featured on Dailymotion’s home page across desktop and mobile devices from August 11, 2017 through August 13, 2017 and message via social media posts in multiple languages for differing markets. Nearly 190,000 people viewed the Outside Lands broadcast through Dailymotion. The broadcast proved especially popular in France, Mexico, Brazil, Germany and Malaysia, but registered viewership in countries across the globe.

         Data Collection — Wantickets’ robust data and analytics software is an important first step toward our development of an in-house division focused on data collection. Data collection will assist in identifying key demographics and analyzing consumer behavior.

         Monetization — In addition to Wantickets ticketing revenues, we recently launched our new e-commerce store, which features a broad array of items from major established artists.

         Leadership Team — We recently added a President, a Chief Financial Officer, a Chief Operating Officer, an Executive Vice President of Corporate Development and Rights Management, a Chief Digital Officer and a Senior Vice President of Artist Relations to our leadership team and one independent director to our board of directors and plan to continue growing our leadership team and our board of directors as we consider necessary in the coming months. To complement our management team and board of directors, we have engaged a group of experienced advisors in the entertainment industry whom we refer to as our “Advisory Board.” We believe the Advisory Board will further enhance our credibility and provide strategic guidance to our business.

Summary Risk Factors

Our business is subject to many risks and uncertainties of which you should be aware before you decide to invest in our common stock. These risks are discussed more fully under “Risk Factors.” Some of these risks include:

         our limited operating history makes it difficult to evaluate our current business and future prospects, and we may be unsuccessful in executing our business model;

         we have incurred significant losses since our inception, have generated minimal revenues to date and anticipate that we will continue to incur significant losses for the foreseeable future, and our auditors have

8

included in their audit report for the fiscal year ended March 31, 2017 an explanatory paragraph as to substantial doubt as to our ability to continue as a going concern;

         our business is dependent on our ability to identify, acquire, secure and develop live music and music-related video content from Content Providers and to stream their live music and music-related video content on our platform, and we may not be able to secure such content on commercially reasonable terms or at all;

         we may fail to increase the number of users, and to retain existing users, consuming our live music and music-related video content on our platform;

         we face completion for users’ attention and time and face intense completion from competitors;

         we can give no assurances as to our ability to consummate the Slacker Acquisition, the SNAP Acquisition or any other future acquisitions on terms acceptable to us or at all, and we may not recognize the anticipated benefits of any such acquisition;

         we have identified material weaknesses in our internal controls over financial reporting, and we may fail to implement and maintain such controls which could result in material misstatements in our financial statements;

         we may be unable to adequately protect our intellectual property rights;

         changes in how network operators handle and charge for access to data that travel across their networks could adversely impact our business;

         we heavily depend on relationships with our Content Providers and other Industry Stakeholders, and adverse changes in these relationships could adversely affect our business, financial condition and results of operations;

         our business and growth may suffer if we are unable to attract and retain key officers, employees or other individual service providers, particularly our Chairman and Chief Executive Officer, Mr. Robert Ellin;

         we may not be able to protect our users’ data which could harm our reputation;

         we will rely heavily on technology to stream content and manage other aspects of our operations, and the failure of this technology to operate effectively could adversely affect our business;

         we are subject to governmental regulation, which may change from to time, and we may be unable to comply with these regulations; and

         future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

Our Corporate and Other Information

We were incorporated in the State of Nevada on December 28, 2009 and reincorporated in the State of Delaware on August 2, 2017 in connection with the reincorporation merger discussed below. Pursuant to the Agreement and Plan of Merger, dated as of July 20, 2017, by and between Loton, Corp, a Nevada corporation (“Loton”), and LiveXLive Media, Inc., a Delaware corporation and wholly owned subsidiary of Loton, Loton merged with and into LiveXLive Media, Inc., with LiveXLive Media, Inc. being the surviving entity. This merger was consummated to complete our reincorporation from the State of Nevada to the State of Delaware and name change. As a result of this merger, each outstanding share of common stock, par value $0.001 per share, of Loton was automatically converted into one share of common stock, $0.001 par value per share, of LiveXLive Media, Inc. Our principal executive offices are located at 269 South Beverly Drive, Suite #1450, Beverly Hills, California 90212, and our telephone number is (310) 601-2500. We maintain a website at www.livexlive.com. Information contained on or accessible through our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.

9

The Offering

Common stock offered by us

 

         shares

 

 

 

Underwriters over-allotment option to purchase additional common stock

 


         shares

 

 

 

Common stock to be outstanding immediately after this offering

 


         shares

 

 

 

Use of proceeds

 

We intend to use the net proceeds from this offering to fund working capital, capital expenditures, the Slacker Acquisition, the SNAP Acquisition and other general corporate purposes, which may include future acquisitions of businesses and content. See “Use of Proceeds” for more information.

 

 

 

Risk factors

 

See “Risk Factors” beginning on page 12 of this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

 

 

 

Proposed Symbol

 

We will apply for listing of our common stock on        under the symbol “LIVX” in connection with this offering. There can be no assurance that our application will be approved. The closing of this offering is contingent upon the successful listing of our common stock on a national securities exchange.

The number of shares of our common stock to be outstanding immediately after this offering is based on 108,583,887 shares of common stock outstanding as of September 7, 2017. Unless otherwise indicated, all information contained in this prospectus:

         excludes 22,800,000 shares of common stock reserved for future issuance under our 2016 Equity Incentive Plan (the “2016 Plan”), of which options to purchase 7,500,000 shares have been granted;

         reflects the 2-for-1 forward split of our common stock in the form of a dividend effected on September 27, 2016;

         reflects the issuance of an aggregate of      shares of our common stock upon conversion of outstanding convertible notes in connection with the completion of this offering, which amount is determined based on an assumed public offering price of $         per share (the midpoint of the estimated price range set forth on the cover of this prospectus);

         reflects our reincorporation from Nevada to Delaware on August 2, 2017; and

         assumes no exercise by the underwriters of their over-allotment option to purchase additional shares of our common stock.

10

Summary Historical Consolidated Financial Information

The following table sets forth a summary of our historical financial information at, and for the period ended on, the dates indicated. We have derived our summary historical consolidated financial information at June 30, 2017 and 2016 and for the three months ended June 30, 2017 and 2016 from our unaudited condensed consolidated financial statements included elsewhere in this prospectus, which reflect, in the opinion of our management, all adjustments, consisting of normal recurring items that are necessary to present fairly the results for the interim periods. We have derived our summary historical consolidated financial information at March 31, 2017 and 2016 and for the fiscal years ended March 31, 2017 and 2016 from our audited consolidated financial statements included elsewhere in this prospectus. Our historical results for any prior period are not necessarily indicative of results to be expected for the year ending March 31, 2018 or for any other period. The following information is only a summary and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and unaudited condensed consolidated financial statements and related notes thereto, included elsewhere in this prospectus.

 

 

Three Months Ended

 

Year Ended

 

 

June 30,
2017

 

June 30,
2016

 

March 31,
2017

 

March 31,
2016

Statement of Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

276,243

 

 

$

 

 

$

225,000

 

 

$

 

Gross profit

 

 

197,374

 

 

 

 

 

 

225,000

 

 

 

 

Operating expenses

 

 

2,377,585

 

 

 

1,174,886

 

 

 

5,709,801

 

 

 

3,979,000

 

Other income (expenses)

 

 

(634,949

)

 

 

(629,084

)

 

 

(8,764,918

)

 

 

232,055

 

Net loss

 

$

(2,815,160

)

 

$

(1,803,970

)

 

$

(14,249,719

)

 

$

(3,746,945

)

Basic and diluted net loss per common share(1)

 

 

(0.03

)

 

$

(0.02

)

 

$

(0.15

)

 

$

(0.04

)

Weighted average shares outstanding, basic and diluted(1)

 

 

106,584,364

 

 

 

92,596,918

 

 

 

97,596,206

 

 

 

90,082,796

 

Statements of Cash Flows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities

 

$

(1,462,949

)

 

$

(1,220,338

)

 

$

(3,123,169

)

 

$

(2,999,941

)

Cash flows from investing activities

 

 

(15,000

)

 

 

(18,593

)

 

 

2,163,321

 

 

 

223,406

 

Cash flows from financing activities

 

 

1,515,233

 

 

 

1,279,006

 

 

 

2,400,179

 

 

 

2,777,314

 

Cash, end of period

 

$

1,514,513

 

 

$

76,613

 

 

$

1,477,229

 

 

$

36,898

 

Balance Sheet Data (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,514,513

 

 

$

76,613

 

 

$

1,477,229

 

 

$

36,898

 

Prepaid expenses

 

 

198,390

 

 

 

90,000

 

 

 

21,569

 

 

 

15,995

 

Investment in affiliate

 

 

 

 

 

4,972,699

 

 

 

 

 

 

 

Goodwill and intangible assets

 

 

3,120,000

 

 

 

 

 

 

 

 

 

 

Other assets

 

 

410,927

 

 

 

295,335

 

 

 

57,407

 

 

 

5,165,415

 

Total Assets

 

$

5,243,830

 

 

$

5,434,647

 

 

$

1,556,205

 

 

$

5,218,308

 

Liabilities and stockholders’ equity (deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

$

5,692,157

 

 

$

3,400,816

 

 

$

4,729,689

 

 

$

4,877,311

 

Long term portion of unsecured convertible notes, net of discount

 

 

349,150

 

 

 

 

 

 

232,208

 

 

 

110,273

 

Stockholders’ equity/(deficit)

 

 

(797,477

)

 

 

2,033,831

 

 

 

(3,405,692

)

 

 

230,724

 

Total liabilities and stockholders’ equity (deficit)

 

$

5,243,830

 

 

$

5,434,647

 

 

$

1,556,205

 

 

$

5,218,308

 

____________

(1)      For further details on the calculation of basic and diluted net loss per share attributable to common stockholders, see Note 2 to our consolidated financial statements included elsewhere in this prospectus.

11

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this prospectus, before deciding whether to invest in our common stock. The occurrence of any of the risks described below could have a material adverse effect on our business, financial condition, results of operations and future growth prospects. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business and Industry

Our limited operating history makes it difficult to evaluate our current business and future prospects, and we may be unsuccessful in executing our business model.

We began our current business operations in February 2015 and have a limited operating history related to our current business. Prior to the launch of our current operations, our primary business related to our former 50% interest in a company that operates the nightclub and live music venue “KOKO” in Camden, London, which we sold in November 2016. Our business operations now primarily relate to our premium internet network devoted to live music and music-related video content. To date, we have generated minimal revenue through our current business and have devoted most of our financial resources to developing our current business. We expect to continue to incur substantial and increased expenses as we continue to execute our business approach, including expanding and developing our content and platform.

The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a developing company starting a new business enterprise, the difficulties that may be encountered with integrating acquired companies and the highly competitive environment in which we operate. For example, while several companies have been successful in the digital music streaming industry and the online video streaming industry, companies have had no or limited success in operating a premium internet network devoted to live music and music-related video content. Because we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenue to fully meet our expenses and support our anticipated activities.

We have incurred significant losses since our inception, have generated minimal revenues to date and anticipate that we will continue to incur significant losses for the foreseeable future; our auditors have included in their audit report for the fiscal year ended March 31, 2017 an explanatory paragraph as to substantial doubt as to our ability to continue as a going concern.

We have incurred significant net losses in each year since our inception, including net losses of $2,815,160 for the three months ended June 30, 2017, and $14,249,719 and $3,746,944 for the fiscal years ended March 31, 2017 and 2016, respectively. As of June 30, 2017, we had an accumulated deficit of $30,911,050. We anticipate incurring additional losses until such time we can generate significant revenues, and/or reduce operating costs. To date, we have had minimal revenues and have financed our operations exclusively through the sale of equity and debt securities (including convertible securities). The size of our future net losses will depend, in part, on the rate of future expenditures and our ability to generate revenue. We expect to continue to incur substantial and increased expenses as we grow our business. We also expect a 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.

Our auditors have included in their audit report for the fiscal year ended March 31, 2017 a “going concern” explanatory paragraph as to substantial doubt as to our ability to continue as a going concern. Our ability to meet our total liabilities of $6,041,307 as of June 30, 2017, and to continue as a going concern, is dependent on us generating substantial revenues and/or obtaining adequate capital to fund operating losses until we become profitable. We may never achieve profitability, and even if we do, we may not be able to sustain being profitable. As a result of our going concern qualification, 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.

12

Our business is dependent on our ability to secure music streaming rights from Content Providers and to stream their live music and music-related video content on our platform, and we may not be able to secure such content on commercially reasonable terms or at all.

Our business is dependent on our ability to secure rights to stream on our platform a variety of popular content from Content Providers. Our licensing, distribution and/or production arrangements with Content Providers may be short-term and do not guarantee the continuation or renewal of these arrangements on commercially reasonable terms, if at all. For example, our agreement with Rock in Rio expires in 2020 and there is no guarantee that we will be able to renew this agreement on commercially reasonable terms or at all. Additionally, while our agreements with music festivals and other live music events and venues allow us to stream content from such events and venues, we typically require additional permission from the artists performing at such events and venues. While artists at music festivals and other live music events and venues that we have contracts with have in the past agreed to allow us to stream their performances, there is no guarantee that artists at an event will agree to allow us to stream their performances. Any unwillingness of such partners to supply content to us or lack of availability of popular artists to perform at such venues and events could limit our ability to enhance user experience and deepen user engagement with our platform and therefore reduce our revenue opportunities. If we are unable to secure rights to steam our content, then our business, financial condition and results of operations would be adversely affected. Additionally, to the extent any music festival or other live music event that we have rights to stream is cancelled or delayed, whether as a result of cancellation by artists, weather, terrorism or otherwise, we may receive little or no content from such live event.

Some Content Providers and distributors, currently or in the future, may also take action to make it more difficult or impossible for us to license, distribute and/or produce their content, including as a result of them offering a competing product. Other content owners, providers or distributors may seek to limit our access to, increase the cost of, or otherwise restrict or prohibit our use of such content. As a result, we may be unable to offer a wide variety of content at reasonable prices with acceptable usage rules or expand our geographic reach.

Additionally, some content on our platform is currently provided free of digital rights management to prevent the unauthorized redistribution of digital media. If our business model changes, we may have to develop or license digital rights management technology. There is no assurance that we will be able to develop or license such technology at a reasonable cost and in a timely manner. In addition, certain countries have passed or may propose and adopt legislation that would require us to license our digital rights management, if any, which could weaken the protection of content, subject us to piracy and also negatively affect arrangements with our Content Providers.

We may be unable to fund any significant up-front or guaranteed payment cash requirements associated with our live music streaming rights, which could result in the inability to secure and retain such streaming rights.

In order to secure event and festival live music streaming rights, we may be required to fund significant up-front or guaranteed payment cash requirements to artists or festival or event promoters prior to the event or festival taking place. If we do not have sufficient cash on hand or available capacity to advance the necessary cash for any given artist, event or festival, we would not be able to retain the rights for that artist, festival or event and our business, financial condition and results of operations may be adversely affected.

If we fail to increase the number of users consuming our live music and music-related video content on our platform, our business, financial condition and results of operations may be adversely affected.

The size of our user base is critical to our success, and we will need to develop and grow our user base to be successful. We expect to generate revenue based upon subscription, SVoD, and PPV, advertising and sponsorship, e-commerce and data, which is dependent on the number of users we retain and attract. For example, if we are unable to retain and attract users, we may be unable to attract users to our network and/or increase the frequency of users’ engagement with our platform. In addition, if users do not perceive our content as original, entertaining or engaging, we may not be able to attract sponsorship opportunities and/or increase the resulting frequency of users’ engagement with our platform and content. If we are unable to retain and attract users, our network and services could also be less attractive to potential new users, as well as to Content Providers and other Industry Stakeholders, which would have a material and adverse impact on our business, financial condition and results of operations.

13

Our ability to attract and retain users is highly sensitive to rapidly changing public tastes in music and technology.

Our ability to attract and retain users is highly sensitive to rapidly changing public tastes in music and technology and is dependent on our ability to maintain the attractiveness of our platform, content, technology and reputation as a place where quality online live music and music-related video content can be accessed and enjoyed. We will rely on the popularity of our Content Providers and the quality of their respective content to retain customers, secure sponsorships and to facilitate growth in revenue from advertising and e-commerce. Maintaining the popularity of our content will be challenging, and our relationship with music fans could be harmed for many reasons, including the quality and diversity of our online content, quality of the experience with a particular festival, event or club, our competitors developing relationships with more popular festivals, events or clubs or attracting talent from our businesses, adverse occurrences or publicity in connection with a festival, event or club and changes to public tastes that are beyond our control and difficult to anticipate. For example, if users do not perceive our platform and services to be original, entertaining, engaging, useful, reliable or trustworthy, we may be unable to attract and retain users to our network and/or increase the frequency of users’ engagement with our platform. Additionally, any cancellation or delay in music festivals, concerts or other live music events that we have rights to stream, or are otherwise associated with, may harm our reputation and make any related content less desirable to our users. A number of consumer-oriented websites that achieved early popularity have since seen their user bases or levels of engagement decline, in some cases precipitously. There is no guarantee that we will not experience a similar erosion of our user base. If our platform or content become less popular with music fans, our growth strategy would be harmed, which could in turn harm our business and financial results.

Our ability to attract and retain users depends upon many additional factors both within and beyond our control.

In addition to the popularity of our content, we believe that our ability to attract and retain users depends upon many factors both within and beyond our control, including:

         the popularity, usefulness, ease of use, performance and reliability of our platform, products and services, including the LXL App, compared to those of our competitors;

         the timing and market acceptance of our platform, products and services, including the LXL App;

         users’ willingness to pay for subscription rights to our platform;

         our ability to develop and monetize an effective strategy to attract advertisers and sponsor of our platform;

         the frequency and relative prominence of the ads displayed by us or our competitors;

         our ability to establish and maintain relationships with our Content Providers to provide new content for our network;

         user concerns related to user privacy and our ability to keep user data secure;

         changes mandated by, or that we elect to make to address, legislation, regulatory authorities or litigation, including settlements and consent decrees, some of which may have a disproportionate effect on us;

         our ability to attract, retain and motivate talented employees, particularly engineers, designers and platform and content managers;

         fluctuations in costs of content which we may be unwilling or unable to pass through to our users;

         competitors’ offerings that may include more favorable terms than we offer in order to obtain agreements for new content or venue, festival or ticketing arrangements;

         technological changes and innovations that we are unable to adopt or are late in adopting that offer more attractive entertainment alternatives than we or other live streamed entertainment providers currently offer;

         general economic conditions which could cause consumers to reduce discretionary spending;

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         our ability to develop and monetize an effective strategy to buildout our e-commerce revenue stream;

         acquisitions or consolidation within our industry, which may result in more formidable competitors; and

         our reputation and the brand strength relative to our competitors.

If we are unable to attract and retain users, it could adversely affect our business, financial condition and results of operations.

We may be unsuccessful in developing our original content.

We plan to produce original music-related video content, including digital magazine-style news programming and original-concept digital pilots, documentaries and other original content. We believe that a positive reputation with users concerning our original content is important in attracting and retaining users. To the extent our content, in particular, our original programming, is perceived as low quality, offensive or otherwise not compelling to users, our ability to establish and maintain a positive reputation may be adversely impacted. If the original content we produce does not attract new users, we may not be able to cover our expenses to produce such programs, and our business, financial condition and results of operations may be adversely affected.

As we develop our original content, we will become responsible for production costs and other expenses. We may also take on risks associated with production, such as completion and key talent risk. To the extent we do not accurately anticipate costs or mitigate risks, or if we become liable for content we acquire, produce, license and/or distribute, our business may suffer. Litigation to defend these claims could be costly and the expenses and damages arising from any liability or unforeseen production risks could harm our results of operations. We may not be indemnified against claims or costs of these types and we may not have insurance coverage for these types of claims.

We face competition for users’ attention and time.

The market for entertainment video content is intensively competitive and subject to rapid change. We compete against other entertainment video providers, such as (i) interactive on-demand audio content and pre-recorded entertainment, (ii) broadcast radio providers, including terrestrial and internet radio providers, (iii) cable, satellite and internet television and movie content providers, (iv) video gaming providers and (v) other sources of entertainment for our users’ attention and time. These content and service providers pose a competitive threat to the extent existing or potential users choose to consume their content or use their services rather than our content or our services. The online marketplace for live music and music-related content may rapidly evolve and provide users with a number of alternatives or new access models, which could adversely affect our business, financial condition and results of operations.

We face intense competition from competitors and we may not be able to increase our revenues, which could adversely affect our business, financial condition and results of operations.

The music streaming industry is highly competitive. The music streaming industry competes with other forms of entertainment for consumers’ discretionary spending, and within this industry we compete with other platforms to secure rights to content. In the markets in which we promote our streaming live music and music-related content, we face competition from other promoters and streaming operators. These competitors may engage in more extensive development efforts, undertake more far-reaching marketing campaigns, adopt more aggressive pricing policies and make more attractive offers to existing and potential artists. Our competitors may also develop services, advertising options or music platforms that are equal or superior to those we provide or that achieve greater market acceptance and brand recognition than we achieve. It is possible that new competitors may emerge and rapidly acquire significant market share.

Our current and future competitors may have more well-established brand recognition, more established relationships with, and superior access to, Content Providers and other Industry Stakeholders, greater financial, technical and other resources, more sophisticated technologies or more experience in the markets in which we compete. These competitors may also compete with us for key employees and other individual service providers who have relationships with popular music artists or other Content Providers and that have a history of being able to book such artists or secure the rights to stream their music. If we are unable to compete successfully for users against other providers by maintaining and increasing our presence and visibility, the number of users of our network may fail to increase as expected or decline and our advertising sales, subscription fees and other revenue streams will suffer.

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We will face significant competition for advertiser and sponsorship spend.

We will face significant competition for advertiser spend. We expect the substantial majority of our revenue will be generated through subscriptions to our platform, as well as sponsorships and ads on our website and mobile app (when released). We compete against online and mobile businesses, including those referenced above, and traditional media outlets, such as television, radio and print, for advertising budgets. We also compete with advertising networks, exchanges, demand side platforms and other platforms, such as Google AdSense, DoubleClick Ad Exchange, Yahoo Ad Exchange, AOL’s Ad.com and Microsoft Media Network, for marketing budgets and in the development of the tools and systems for managing and optimizing advertising campaigns. In order to grow our revenues and improve our operating results, we will need to increase our share of spending on advertising relative to our competitors, many of which are larger companies that offer more traditional and widely accepted advertising products. In addition, some of our larger competitors have substantially broader product or service offerings and leverage their relationships based on other products or services to gain additional share of advertising budgets. If we are not able to compete effectively for users and advertisers spend, our business, financial condition and results of operations would be materially and adversely affected.

Our success depends, in significant part, on discretionary consumer and corporate spending on entertainment and factors adversely affecting such spending could have a material adverse effect on our business, financial condition and results of operations.

Our business depends on discretionary consumer and corporate spending. Many factors related to discretionary consumer and corporate spending, including economic conditions affecting disposable consumer income such as employment, interest and tax rates and inflation can significantly impact our operating results. Business conditions, as well as various industry conditions, including corporate marketing and promotional spending and interest levels, can also significantly impact our operating results. These factors can affect user subscription sales, advertising sales, sponsorship and e-commerce spending, as well as the financial results of sponsors of our venues, events, festivals and other Content Providers and the industry as a whole. Negative factors such as challenging economic conditions, public concerns over terrorism and security incidents, particularly when combined, can impact corporate and consumer spending, and one negative factor can impact our results more than another. There can be no assurance that consumer and corporate spending will not be adversely impacted by current economic conditions, or by any further or future deterioration in economic conditions, thereby possibly impacting our operating results and growth.

During past economic slowdowns and recessions, many consumers reduced their discretionary spending and advertisers reduced their advertising expenditures. In addition, a decline in attendance at or reduction in the number of live entertainment and leisure events may have an adverse effect on our revenue and operating income. The impact of economic slowdowns on our business is difficult to predict, but they may result in reductions in sponsorship, advertising, ticketing and e-commerce opportunities and our ability to generate revenue. The risks associated with our businesses may become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in attendance at live entertainment and leisure events.

We are subject to governmental regulation, which may change from to time, and our failure to comply with these regulations could adversely affect our business, financial condition and results of operations.

Our operations are subject to federal, state and local laws, statutes, rules, regulations, policies and procedures, both domestically and internationally, which may change from time to time. Our failure to comply with these laws and regulations could result in fines and proceedings against us by governmental agencies and consumers, which if material, could adversely affect our business, financial condition and results of operations. In addition, the promulgation of new laws, rules and regulations could restrict or unfavorably impact our business, which could decrease demand for services, reduce revenue, increase costs and subject us to additional liabilities. From time to time, federal, state and local authorities and consumers commence investigations, inquiries or litigation with respect to our compliance with applicable consumer protection, advertising, unfair business practice, antitrust (and similar or related laws) and other laws. We may be required to incur significant legal expenses in connection with the defense of future governmental investigations and litigation.

Changes in laws or regulations that adversely affect the growth, popularity or use of the internet, including laws impacting net neutrality, could decrease the demand for our service and increase our cost of doing business. See “— Changes in how network operators handle and charge for access to data that travel across their networks could

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adversely impact our business.” Certain laws intended to prevent network operators from discriminating against the legal traffic that traverse their networks have been implemented in many countries, including the United States and the European Union. In others, the laws may be nascent or non-existent. Given uncertainty around these rules, including changing interpretations, amendments or repeal, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.

Risks Related to Our Acquisition Strategy

We can give no assurances as to when we will consummate the Slacker Acquisition, the SNAP Acquisition or any other future acquisitions or whether we will consummate any of them at all.

We intend to continue to build our business through strategic acquisitions, and we hope to close the Slacker Acquisition and the SNAP Acquisition after the closing of this offering and to use part of the proceeds of this offering to fund the cash portions of the consideration we will pay in connection with those acquisitions. However, the Slacker Acquisition and the SNAP Acquisition are each subject to certain closing conditions and other impediments to closing, including some that are beyond our control, and we may not be able to close either of on the terms described herein or at all. See “Business — Pending Acquisitions — Summary of Acquisition Agreements.”

We also intend to pursue and consummate one or more additional acquisitions after the closing of this offering and to possibly use remaining proceeds from this offering to fund any cash portion of the consideration we will pay in connection with those acquisitions. However, such additional acquisitions may also be subject to conditions and other impediments to closing, including some that are beyond our control, and we may not be able to close any of them successfully. In addition, our future acquisitions will be required to be closed within certain timeframes as negotiated between us and the acquisition target, and if we are unable to meet the closing deadlines for a given transaction, we may be required to forfeit payments we have made, if any, be forced to renegotiate the transaction on less advantageous terms and could fail to consummate the transaction at all.

If we are unable to close the Slacker Acquisition, the SNAP Acquisition or any other future acquisition, it would significantly alter our business strategy and impede our prospects for growth. If we are unable to successfully consummate a particular acquisition, we may not be able to stream desired live music content on our network, produce and/or participate in the planned festivals or events or have ownership or licenses of the brands owned or licensed by that acquisition target. Further, we may not be able to identify suitable acquisition candidates to replace these acquisitions, and even if we were to do so, we may only be able to consummate them on less advantageous terms. In addition, some of the businesses we acquire may incur significant losses from operations, which, in turn, could have a material and adverse impact on our business, results of operations and financial condition.

We may face difficulty in integrating the operations of Wantickets, Slacker, SNAP or any other businesses we have acquired and may acquire in the future.

As shown by our recent acquisition of Wantickets and our planned acquisitions of Slacker and SNAP, acquisitions have been and will continue to be an important component of our growth strategy; however, we will need to integrate these acquired businesses successfully in order for our growth strategy to succeed and for us to become profitable. We expect that the management teams of the acquired businesses will adopt our policies, procedures and best practices, and cooperate with each other in scheduling events, booking talent and in other aspects of their operations. We may face difficulty with the integration of Wantickets, Slacker, SNAP and any other business we acquire, such as coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures, the diversion of management’s attention from other business concerns, the inherent risks in entering markets or lines of business in which we have either limited or no direct experience; and the potential loss of key employees, individual service providers, customers and strategic partners of acquired companies.

In addition, our growth strategy also includes further development of our online live streamed music network that we intend to integrate across all of our acquired businesses. This will require, among other things, the integration of the individual websites and databases of each business we currently operate or will acquire in the future. This will be a complex undertaking that may prove more difficult, expensive and time consuming than we currently expect. Even if we are able to achieve this integration, it may not achieve the benefits we anticipate. If we fail to do this properly and in a timely manner, it could harm our revenue and relationship with our fans.

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Further, we expect that future target companies may have material weaknesses in internal controls relating to the proper application of accrual based accounting under the accounting principles generally accepted in the United States of America (“GAAP”) prior to our acquiring them. The Public Company Accounting Oversight Board (the “PCAOB”) defines a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. We will be relying on the proper implementation of our policies and procedures to remedy any such material weaknesses, and prevent any potential material misstatements in our financial reporting. Any such misstatement could adversely affect the trading price of our common stock, cause investors to lose confidence in our reported financial information, and subject us to civil and criminal fines and penalties. If our acquired companies fail to integrate in these important ways, or we fail to adequately understand the business operations of our acquired companies, our growth and financial results could suffer.

A number of other companies are seeking to make acquisitions in our industry, which may make our acquisition strategy more difficult or expensive to pursue.

The emergence and growth of live streamed music, music events, festivals and concerts has brought increased media attention, and a number of companies and investors have begun making acquisitions of such businesses or announced their intention to do so. We compete with many of these companies, and certain of them have greater financial resources than we do for pursuing and consummating acquisitions and to further develop and integrate acquired businesses. Our strategy relies on our ability to consummate important future acquisitions to foster the growth of our core business and to establish ourselves as the key provider of streamed high quality live music content. The increased focus on acquisitions of such companies may impede our ability to acquire these companies because they choose another acquirer. It could also increase the price that we must pay for these companies. Either of these outcomes could reduce our growth, harm our business and prevent us from achieving our strategic goals.

We may enter into acquisitions and take actions in connection with such transactions that could adversely affect our business and results of operations.

Our future growth rate depends in part on our selective acquisition of additional businesses and assets. We may be unable to identify suitable targets for acquisition or make further acquisitions at favorable prices. If we identify a suitable acquisition candidate, our ability to successfully complete the acquisition would depend on a variety of factors, and may include our ability to obtain financing on acceptable terms and requisite government approvals. In addition, any credit agreements or credit facilities that we may enter into in the future may restrict our ability to make certain acquisitions. In connection with future acquisitions, we could take certain actions that could adversely affect our business, including:

         using a significant portion of our available cash;

         issuing equity securities, which would dilute current stockholders’ percentage ownership;

         incurring substantial debt;

         incurring or assuming contingent liabilities, known or unknown;

         incurring amortization expenses related to intangibles; and

         incurring large accounting write-offs or impairments.

We may also enter into joint ventures, which involve certain unique risks, including, among others, risks relating to the lack of full control of the joint venture, potential disagreements with our joint venture partners about how to manage the joint venture, conflicting interests of the joint venture, requirement to fund the joint venture and its business not being profitable.

In addition, we cannot be certain that the due diligence investigation that we conduct with respect to any investment or acquisition opportunity will reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. For example, instances of fraud, accounting irregularities and other deceptive practices can be difficult to detect. Executive officers, directors and employees may be named as defendants in litigation involving a company we are acquiring or have acquired. Even if we conduct extensive due diligence on a particular investment or acquisition, we may fail to uncover all material issues relating to such investment, including regarding

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the controls and procedures of a particular target or the full scope of its contractual arrangements. We rely on our due diligence to identify potential liabilities in the businesses we acquire, including such things as potential or actual lawsuits, contractual obligations or liabilities imposed by government regulation. However, our due diligence process may not uncover these liabilities, and where we identify a potential liability, we may incorrectly believe that we can consummate the acquisition without subjecting ourselves to that liability. Therefore, it is possible that we could be subject to litigation in respect of these acquired businesses. If our due diligence fails to identify issues specific to an investment or acquisition, we may obtain a lower return from that transaction than the investment would return or otherwise subject ourselves to unexpected liabilities. We may also be forced to write-down or write-off assets, restructure our operations or incur impairment or other charges that could result in our reporting losses. Charges of this nature could contribute to negative market perceptions about us or our shares of common stock.

Risks Related to Our Company

We have identified material weaknesses in our internal control over financial reporting that, if not properly remediated, could result in material misstatements in our financial statements in future periods.

In connection with the audits of our financial statements for the fiscal years ended March 31, 2017 and 2016, and review of our financial statements for each of the quarterly reporting periods during such fiscal years and for the quarter ended June 30, 2017, we have identified certain deficiencies relating to our internal control over financial reporting that constitute a material weakness under standards established by the PCAOB. The PCAOB defines a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.

The following material weaknesses in our internal control over financial reporting continued to exist at June 30, 2017:

         we do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

         we do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our limited size and early stage nature of operations, segregation of all conflicting duties may not always be possible and may not be economically feasible; however, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals;

         lack of independent audit committee of our board of directors; and

         insufficient monitoring and review controls over the financial reporting closing process, including the lack of individuals with current knowledge of GAAP that led to the restatement of our previously issued financial statements.

Prior to hiring Mr. Jerome Gold as our Chief Financial Officer in April 2017, we outsourced the functions of the principal financial officer on an interim basis to assist us in implementing the necessary financial controls over the financial reporting and the utilization of internal management and staff to effectuate these controls.

We believe that these material weaknesses primarily related, in part, to our lack of sufficient staff with appropriate training in GAAP and SEC rules and regulations with respect to financial reporting functions, and the lack of robust accounting systems, as well as the lack of sufficient resources to hire such staff and implement these accounting systems.

We plan to take a number of actions to correct these material weaknesses including, but not limited to, establishing an audit committee of our board of directors comprised of three independent directors, adding experienced accounting and financial personnel and retaining third party consultants to review our internal controls and recommend improvements. We hired Mr. Gold as a first step in building out our accounting department. However, we may need to take additional measures to fully mitigate these issues, and the measures we have taken, and expect to take, to improve our internal controls may not be sufficient to (i) address the issues identified, (ii) ensure that

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our internal controls are effective or (iii) ensure that the identified material weakness or other material weaknesses will not result in a material misstatement of our annual or interim financial statements. In addition, other material weaknesses may be identified in the future. If we are unable to correct deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected. This failure could negatively affect the market price and trading liquidity of our common stock, cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties, and generally materially and adversely impact our business and financial condition.

If we fail to implement and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act, or the subsequent testing by our independent registered public accounting firm, if and when required, may reveal additional deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our consolidated financial statements or identify other areas for further attention or improvement. If in the future we identify other material weaknesses in our internal control over financial reporting, including at some of our acquired companies, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are then listed, the SEC, or other regulatory authorities, which could require additional financial and management resources. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

Additionally, we currently do not have an internal audit group nor an audit committee of our board of directors, and we will eventually need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge to have effective internal controls for financial reporting.

We will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance requirements as a result of our planned uplisting to         .

As a public company, we will continue to incur significant legal, accounting and other expenses. For example, as a result of our planned uplisting to        , we will be subject to mandatory reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which require, among other things, that we continue to file with the SEC annual, quarterly and current reports with respect to our business and financial condition, that we were not required to file as a voluntary reporting company (though we did file such reports with the SEC on a voluntary basis). We have incurred and will continue to incur costs associated with the preparation and filing of these SEC reports. Furthermore, after our planned uplisting to        , we will be subject to mandatory new corporate governance and other compliance requirements. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act and        have imposed various other requirements on public companies. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact (in ways we cannot currently anticipate) the manner in which we operate our business. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have and will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we will incur additional expense to increase our director and officer liability insurance.

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In addition, if and when we cease to be a smaller reporting company and become subject to Section 404(b) of the Sarbanes-Oxley Act, we will be required to furnish an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed time period, we will continue to be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to dedicate substantially greater internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that our independent registered public accounting firm, when required, will not be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

We heavily depend on relationships with our Content Providers and other Industry Stakeholders and adverse changes in these relationships, could adversely affect our business, financial condition and results of operations.

Our business is particularly dependent upon personal relationships, as executives within entertainment companies such as ours leverage their network of relationships with Content Providers and other Industry Stakeholders to secure the rights to their content and develop other partnerships that are critical to our success. Due to the importance of those industry contacts, the loss of any of these relationships, and adverse changes in these relationships could adversely affect our business, financial condition and results of operations. We can give no assurance that all or any of these Content Providers or other Industry Stakeholders will retain their associations with us or our executives, directors, employees or other individual service providers. Additionally, to the extent the decision makers of our music partners are replaced with individuals with whom our executives, directors or other key personnel do not have relationships, our competitive position and financial condition could be harmed.

We rely on key members of management, particularly our Chairman and Chief Executive Officer, Mr. Robert Ellin, and the loss of their services or investor confidence in them could adversely affect our success, development and financial condition.

Our success depends, to a large degree, upon certain key members of our management, particularly our Chairman and Chief Executive Officer, Robert Ellin. Mr. Ellin has extensive knowledge about our business and our operations, and the loss of Mr. Ellin or any other key member of our 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. Ellin or any other member of our management. Our executive team’s expertise and experience in acquiring, integrating and growing businesses, particularly those focused on live music and events, 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.

We may not be able to attract qualified personnel.

Our ability to expand operations to accommodate our anticipated growth will depend on our ability to attract and retain qualified personnel. However, competition for the types of employees we seek is intense. We face particular challenges in recruiting and retaining personnel who have experience in software engineering, mobile application development and other technical expertise, particularly those focused on live music and events, which is critical to our initiatives. Our ability to meet our business development objectives will depend in part on our ability to recruit, train and retain top quality personnel with advanced skills who understand our technology and business. We cannot provide any assurance that we will be able to attract qualified personnel to execute our business strategies or develop and expand our online properties. If we are unable to engage and retain the necessary personnel, our business may be materially and adversely affected.

Additionally, we expect to retain the existing managers and executives of certain companies we acquire to have them continue managing and operating the acquired business. We believe that these individuals will have the market expertise and network of personal relationships to best implement the growth strategies of the acquired businesses. If we are unable to retain the key personnel of the acquired businesses, we may not be able to achieve the anticipated benefits and synergies of an acquisition.

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We engage a number of consultants to work for us; if we are deemed to be delinquent in our payroll taxes or incur other employment-related liabilities with respect to those consultants, we and our management team could incur significant liabilities.

We engage a number of consultants to work for us in various aspects of our business. Although we do not believe that such persons are our employees, if applicable government agencies determine that they should be classified as employees, we would be delinquent with respect to the deposit of required payroll tax withholdings and related employer taxes and other employment obligations. In addition to the taxes that we would be required to pay if we were required to remit payroll taxes for our consultants, and the payments that we would be required to make for other employment-related obligations, our operations would be severely disrupted and individual officers or members of our board of directors could be personally liable for certain of any assessments made. A government entity could potentially shut down our operations until such time as the payroll taxes were brought current. Such a shutdown could effectively push us into bankruptcy and an investor could lose all his or her investment in us.

Unfavorable outcomes in legal proceedings may adversely affect our business, financial conditions and results of operations.

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 these 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. 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.

Our results of operations will vary from month to month, so our financial performance in certain quarters may not be indicative of, or comparable to, our financial performance in other quarters.

Our results of operations will vary from month to month, and this may impact our results of operations from quarter to quarter. We believe our financial results and cash needs may vary materially from quarter to quarter depending on, among other things, the timing of festivals and events, cancellations, ticket on-sales, capital expenditures, seasonal and other fluctuations in our business activity, the timing of guaranteed payments and receipt of ticket sales and fees, financing activities, acquisitions and investments and receivables management. Accordingly, our results for any particular quarter may vary for a number of reasons, and we caution investors to evaluate our quarterly results in light of these factors.

Risks Related to Technology and Intellectual Property

We will rely heavily on technology to stream content and manage other aspects of our operations, and the failure of this technology to operate effectively could adversely affect our business.

We utilize a combination of proprietary and third party technology. Our business will be substantially dependent on our LXL App, which will include live video streaming, VoD, push notifications, festival-, venue- and original content-specific functionality, Google Ads capability, digital rights management (e.g., geo-blocking), and the capability to display time-shifted content and enhanced function. We cannot be sure that our LXL App when launched, or any enhancements or other modifications we make in the future, will perform as intended or otherwise be of value to our users. Future enhancements and modifications to our technology could consume considerable resources. If we are unable to successfully develop, maintain and enhance our technology to manage the streaming of live events in a timely and efficient manner, our ability to attract and retain users may be impaired. In addition, if our technology or that of third parties we utilize in our operations fails or otherwise operates improperly, our ability to attract and retain users may be impaired. Also, any harm to our users’ personal computers or mobile devices caused by software used in our operations could have an adverse effect on our business, results of operations and financial condition.

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We may be unable to adequately protect our intellectual property rights.

We may be unable to detect unauthorized use of, or otherwise sufficiently protect, our intellectual property rights. We rely on a combination of laws and contractual restrictions with employees, individual service providers, users, artists, suppliers and others content licensors and Content Providers to establish and protect these proprietary rights. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use proprietary information, trademarks, or copyrighted material without authorization which, if discovered, might require legal action to correct. Furthermore, our recently acquired assets and the assets we may acquire in connection with any future acquisitions (including brand names and trademark rights), may have been improperly adopted or inadequately protected prior to our acquisitions of them. This could include failures to obtain assignments of ownership or confidentiality agreements from third parties, failures to clear use of trademarks, or other failures to protect trademarks and other proprietary rights. In addition, third parties may independently and lawfully develop similar intellectual property or duplicate our services.

We will apply to register, or secure by contract when appropriate, our trademarks and service marks as they are developed and used and reserve and register domain names as we deem appropriate. While we intend to vigorously protect our trademarks, service marks and domain names as we deem appropriate, effective trademark protection may not be available or may not be sought in every country in which we operate, and contractual disputes may affect the use of marks governed by private contract. Similarly, not every variation of a domain name may be available or be registered, even if available. Our failure to protect our intellectual property rights in a meaningful manner or challenges to related contractual rights could result in the erosion of brand names or the loss of rights to our owned or licensed marks and limit our ability to control marketing on or through the internet using our various domain names or otherwise, which could adversely affect our business, financial condition, and results of operations. In addition, the loss of, or inability to otherwise obtain, rights to use third party trademarks and service marks, including the loss of exclusive rights to use third party trademarks in territories where we present festivals, could adversely affect our business or otherwise result in competitive harm.

We may be accused of infringing upon intellectual property rights of third parties.

From time to time, we have been and may be in the future subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement and other violations of the trademarks, copyrights, patents and other intellectual property or proprietary rights of third parties. The legal proceedings and claims include notices provided to us by content owners of users’ violation of the Digital Millennium Copyright Act, which obligate us to investigate and remove infringing user content from our website.

Music contained within content we distribute may require us to obtain licenses for such distribution. In this regard, we will engage with collection management organizations (“CMOs”) that hold certain rights to music interests in connection with streaming content into various territories. If we are unable to reach mutually acceptable terms with these organizations, we could become involved in litigation and/or could be enjoined from distributing certain content, which could adversely impact our business. Additionally, pending and ongoing litigation as well as negotiations between certain CMOs and other third parties in various territories could adversely impact our negotiations with CMOs, or result in music publishers represented by certain CMOs unilaterally withdrawing rights, and thereby adversely impact our ability to reach licensing agreements reasonably acceptable to us. Failure to reach such licensing agreements could expose us to potential liability for copyright infringement or otherwise increase our costs.

We also face a risk that content licensors may bring claims for copyright infringement or breach of contract if our users exceed the scope of the content licenses. Certain live performance content may involve remixing and sampling of others’ music, and if our content license agreements do not grant us or our users sufficient use rights, or if we facilitate the performance of music for which we do not have a license, our distribution of such content could expose us to claims of copyright infringement. Due to the nature of our business, we could be accused of infringing on the copyrights of Content Providers or other rights holders, or such persons could attempt to prevent us from otherwise making certain content available to our users.

We may not be able to successfully defend against such claims, which may result in a limitation on our ability to use the intellectual property subject to these claims and also might require us to enter into settlement or license agreements, pay costly damage awards or face an injunction prohibiting us from using the affected intellectual property

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in connection with our services. Defending ourselves against intellectual property claims, whether they are with or without merit or are determined in our favor, results in costly litigation and may divert the attention of our management and technical personnel from the rest of our business.

Our inability to obtain accurate and comprehensive information necessary to identify the musical works embodied in sound recordings used in our services and/or the rightsholders of such musical works, may impact our ability to perform our obligations under our licenses from the rightsholders, may require us to remove or decrease the number of recordings on our streaming music services, and/or may subject us to potential copyright infringement claims.

We currently rely on the assistance of third parties to determine comprehensive and accurate rightsholder information for the musical works embodied in the sound recordings made available on our services. If the information provided to us or obtained by such third parties does not comprehensively or accurately identify which composers, songwriters or publishers own or administer musical works, or if we are unable to determine which musical works correspond to specific sound recordings, it may be difficult to identify the appropriate rightsholders from whom a license is required, to identify the applicable rightsholders to pay and/or to comply with other applicable terms and obligations of the licenses. Our failure to timely obtain licenses and/or comply with such terms or obligations may subject us to significant liability for copyright infringement (and/or result in termination of certain licenses). Further, our inability to accurately identify rightsholders may prevent us from obtaining necessary licenses, which could lead to a reduction in the music available to stream on our services, adversely impacting our ability to retain and expand our listener base.

Our live music streaming network uses open source software, and we license some of our software through open source projects, which may pose particular risks to our proprietary software, products, and services in a manner that could have a negative effect on our business.

We use open source software in connection with our website and our live music streaming network and may use open source software in the future. The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services. Some open source software licenses require users who distribute open source software as part of their own software product to publicly disclose all or part of the source code to such software product or make available any derivative works of the open source code on unfavorable terms or at no cost. Additionally, we may from time to time face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that we developed using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to make our software source code freely available, purchase a costly license or cease offering the implicated products or services unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and development resources, and we may not be able to complete it successfully. In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third party commercial software, as open source licensors generally do not provide warranties or controls on the origin of software. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a negative effect on our business, financial condition and results of operations. While we have assessed the use of open source software on our website to ensure that we have not used open source software in a manner that would require us to disclose the source code to the related technology, use requiring such disclosure could inadvertently occur and any requirement to disclose our proprietary source code could be harmful to us.

Changes in how network operators handle and charge for access to data that travel across their networks could adversely impact our business.

We will rely upon the ability of consumers to access our service through the internet. To the extent that network operators implement usage based pricing, including meaningful bandwidth caps, or otherwise try to monetize access to their networks by data providers, we could incur greater operating expenses and our subscriber acquisition and retention could be negatively impacted. For example, in late 2010, Comcast informed Level 3 Communications that it would require Level 3 to pay for the ability to access Comcast’s network. Furthermore, to the extent network operators were to create tiers of internet access service and either charge us for or prohibit us from being available through these tiers, our business could be negatively impacted.

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Most network operators that provide consumers with access to the internet also provide these consumers with multichannel video programming. As such, companies like Comcast, Charter Spectrum and Cablevision have an incentive to use their network infrastructure in a manner adverse to our continued growth and success. For example, Comcast exempted certain of its own internet video traffic (e.g., Streampix videos to the Xbox 360) from a bandwidth cap that applies to all unaffiliated internet video traffic (e.g., Netflix videos to the Xbox 360).While we believe that consumer demand, regulatory oversight and competition will help check these incentives, to the extent that network operators are able to provide preferential treatment to their data as opposed to ours or otherwise implement discriminatory network management practices, our business could be negatively impacted. In international markets, especially in Latin America, these same incentives apply; however, the consumer demand, regulatory oversight and competition may not be as strong as in our domestic market.

The success of our business and operations depends, in part, on the integrity of our systems and infrastructures, as well as affiliate and third party computer systems, wifi and other communication systems. System interruption and the lack of integration and redundancy in these systems and infrastructures may have an adverse impact on our business, financial condition and results of operations.

System interruption and the lack of integration and redundancy in the information systems and infrastructures, both of our own systems and other computer systems and of affiliate and third party software, wifi and other communications systems service providers on which we rely, may adversely affect our ability to operate websites, process and fulfill transactions, respond to user inquiries and generally maintain cost-efficient operations. Such interruptions could occur by virtue of natural disaster, malicious actions such as hacking or acts of terrorism or war, or human error. In addition, the loss of some or all of certain key personnel could require us to expend additional resources to continue to maintain our software and systems and could subject us to systems interruptions.

Although we maintain up to date information technology systems and network infrastructures for the operation of our businesses, techniques used to gain unauthorized access to private networks are constantly evolving, and we may be unable to anticipate or prevent unauthorized access to our systems and data.

Privacy concerns could limit our ability to leverage our subscriber data and compliance with privacy regulations could result in significant expense.

In the ordinary course of business and in particular in connection with merchandising our service to our users, we collect and utilize data supplied by our users. We currently face certain legal obligations regarding the manner in which we treat such information. Other businesses have been criticized by privacy groups and governmental bodies for attempts to link personal identities and other information to data collected on the internet regarding users’ browsing and other habits. Increased regulation of data utilization practices, including self-regulation or findings under existing laws, that limit our ability to use collected data, could have an adverse effect on our business. As our business evolves and as we expand internationally, we may become subject to additional and/or more stringent legal obligations concerning our treatment of customer information, and to the extent that we need to alter our business model or practices to adapt to these obligations, we could incur significant expenses.

In addition, we cannot fully control the actions of third parties who may have access to the user data we collect and the user data collected by our third party vendors. We may be unable to monitor or control such third parties and the third parties having access to our website in their compliance with the terms of our privacy policies, terms of use, and other applicable contracts, and we may be unable to prevent unauthorized access to, or use or disclosure of, user information. Any such misuse could hinder or prevent our efforts with respect to growth opportunities and could expose us to liability or otherwise adversely affect our business. In addition, these third parties may become the victim of security breaches or have practices that may result in a breach, and we could be responsible for those third party acts or failures to act.

Any failure, or perceived failure, by us or the prior owners of acquired businesses to maintain the privacy of data relating to our users (including disclosing data in a manner that was objectionable to our users), to comply with our posted privacy policies, our predecessors’ posted policies, laws and regulations, rules of self-regulatory organizations, industry standards and contractual provisions to which we or they may be bound, could result in the loss of confidence in us, or result in actions against us by governmental entities or others, all of which could result in litigation and financial losses, and could potentially cause us to lose users, advertisers, revenue and employees.

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Our reputation and relationships with subscribers would be harmed if our subscriber data, particularly billing data, were to be accessed by unauthorized persons.

We will maintain personal data regarding our users, including names and, in many cases, mailing addresses. With respect to billing data, such as credit card numbers, we expect to rely on licensed encryption and authentication technology to secure such information. If we or our payment processing services experience any unauthorized intrusion into our users’ data, current and potential users may become unwilling to provide the information to us necessary for them to become subscribers, we could face legal claims, and our business could be adversely affected. Similarly, if a well-publicized breach of the consumer data security of any other major consumer website were to occur, there could be a general public loss of confidence in the use of the internet for commerce transactions which could adversely affect our business.

In addition, we do not plan to obtain signatures from subscribers in connection with the use of credit and debit cards (together, “payment cards”) by them. Under current payment card practices, to the extent we do not obtain cardholders’ signatures, we will be liable for fraudulent payment card transactions, even when the associated financial institution approves payment of the orders. From time to time, fraudulent payment cards may be used on our website to obtain service. Typically, these payment cards will not have been registered as stolen and therefore will not be rejected by any automatic authorization safeguards. We do not currently carry insurance against the risk of fraudulent credit card transactions. A failure to adequately control fraudulent credit card transactions would harm our business and results of operations.

Regulatory and business practice developments relating to personal information of our users and/or failure to adequately protect the personal information of our users may adversely affect our business.

The businesses we have acquired or intend to acquire in the future maintain, or have arrangements with third parties who maintain, information on users who purchase tickets and other products electronically through their individual websites or otherwise register on the website for access to the content provided. We are in the process of evaluating the information collected to understand if we can aggregate and reuse the contact information to inform these individuals of upcoming events, offerings and other products and services that we believe enhance the fan experience. Data protection laws and regulation may impair our ability to use these data in such ways, as certain uses may be prohibited. The use of such user information is an important component of our growth strategy in the future. The collection, storage and use of user information is subject to regulation in many jurisdictions, including the United States and the European Union, and this regulation is becoming more prevalent and stringent. Further, there is a risk that data protection regulators may seek jurisdiction over our activities even in locations in which we do not have an operating entity. This may arise in a number of ways, either because we are conducting direct marketing activities in a particular jurisdiction and the local laws apply to and are enforceable against us, or because one of our databases is controlling the processing of information within that jurisdiction. We intend to develop a comprehensive policy aimed at ensuring adequate protection of our users’ personal information and compliance with applicable law. There is a risk that we will be unable to successfully adopt and implement this policy, which may give rise to liabilities or increased costs. In addition, we could face liability if the third parties to which we grant access to our user data were to misuse or expose it.

In some countries, the use of cookies and other information placed on users’ internet browsers or users’ computing devices is currently regulated, regardless of the information contained within or referred to by the cookie. Specifically, in the European Union, this is now subject to national laws being introduced pursuant to the amended Directive 2002/58 on Privacy and Electronic Communications. The effect of these measures may require users to provide explicit consent to such a cookie being used. The laws being introduced pursuant to this measure are not finalized in every European Member State, and we have not determined what effect this could have on our business when we place the cookie on the user’s computer or when a third party does so. The effect may be to limit the amount of information we receive in relation to each use of the service and/or to limit our ability to link this information to a unique identity, which could adversely affect our business and financial condition.

In the United States, the Federal Trade Commission (“FTC”) is starting to exercise greater authority over how online consumer data is collected and maintained by businesses. Prompted by the FTC’s recommendation regarding online tracking, a number of federal legislative proposals have been introduced that would allow users to opt out of online monitoring. A number of states have passed similar legislation and some states are becoming more active in enforcing these laws to protect consumers.

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The laws in this area are complex and developing rapidly. For instance, on April 14, 2016, the EU General Data Protection Regulation (the “GDPR”) was adopted within Europe and will become effective on May 25, 2018. The primary objectives of the GDPR are to give citizens of the European Union back the control of their personal data and to simplify the regulatory environment for international business by unifying the regulation within the European Union. We have not yet assessed the full effect of the GDPR. There is a risk that internet browsers, operating systems, or other applications might be modified by their developers in response to this regulation to limit or block our ability to access information about our users. It is possible that existing or future regulations could make it difficult or impossible for us to collect or use our user information in the way we would like which would impede our growth strategy and potentially reduce the revenue we hope to generate. It is also possible that we could be found to have violated regulations relating to user data, which could result in us being sanctioned, suffering fines or other punishment, being restricted in our activities and/or suffering reputational harm. Any of the foregoing could adversely affect our business and financial results.

Risks Related to this Offering and Ownership of Our Common Stock

The market price of our common stock may be highly volatile, you may not be able to resell your shares at or above the public offering price and you could lose all or part of your investment.

The trading price of our common stock after this offering may be volatile. Our stock price could be subject to wide fluctuations in response to a variety of factors, including the following:

         actual or anticipated fluctuations in our revenue and other operating results;

         actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

         issuance of our equity or debt securities, or disclosure or announcements relating thereto;

         additional shares of our common stock being sold into the market by us or our existing stockholders or the anticipation of such sales;

         announcements by us or our competitors of significant events or features, technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;

         changes in operating performance and stock market valuations of companies in our industry;

         price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

         lawsuits threatened or filed against us;

         regulatory developments in the United States and foreign countries; and

         other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

In addition, the stock market in general, and the OTC Pink marketplace in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.

Our Chairman and Chief Executive Officer and stockholders affiliated with him own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

As of September 7, 2017, Mr. Ellin, our Chairman and Chief Executive Officer, and stockholders affiliated with him beneficially owned approximately 41.9% of our common stock. Immediately following this offering, after giving pro forma effect to the sale of         shares of our common stock in this offering at an assumed public offering price of $        per share (the midpoint of the estimated price range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, after giving

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pro forma effect to the Slacker Acquisition and the SNAP Acquisition and assuming no exercise of the underwriters’ over-allotment option to purchase additional shares, that same group will beneficially own approximately     % of our outstanding voting stock. Therefore, even after this offering, Mr. Ellin and stockholders affiliated with him may have the ability to influence us through their ownership positions. Mr. Ellin and these stockholders may be able to determine or significantly influence all matters requiring stockholder approval. For example, Mr. Ellin and these stockholders, acting together, may be able to control or significantly influence elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may believe are in your best interest as one of our stockholders.

If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.

Investors purchasing common stock in this offering will pay a price per share that substantially exceeds the pro forma book value per share of our tangible assets after subtracting our liabilities. As a result, investors purchasing common stock in this offering will incur immediate dilution of $         per share, based on an assumed public offering price of $        per share (the midpoint of the estimated price range set forth on the cover of this prospectus) and our pro forma net tangible book value as of June 30, 2017. For more information on the dilution you may suffer as a result of investing in this offering, see “Dilution.”

This dilution is due to the substantially lower price paid by our investors who purchased shares prior to this offering as compared to the price offered to the public in this offering. In addition, the issuance of any restricted stock awards or other equity awards or the exercise of any stock options or warrants that may be issued in the future under our 2016 Plan will cause additional dilution. As a result of the dilution to investors purchasing shares in this offering, investors may receive significantly less than the purchase price paid in this offering, if anything, in the event of our liquidation. See “— Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plan and any acquisition agreement, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.” below.

Sales of a substantial number of shares of our common stock in the public market by our existing stockholders could cause our stock price to fall.

Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our common stock.

Our directors, executive officers and the entities affiliated with our directors and executive officers are subject to lock-up agreements with the underwriters of this offering that restrict the stockholders’ ability to transfer shares of our common stock for at least 180 days from the date of this prospectus. The lock-up agreements limit the number of shares of common stock that may be sold immediately following this offering. Subject to certain limitations, all of our outstanding shares held by our directors, executive officers and entities affiliated with our directors prior to this offering will become eligible for sale upon expiration of the lock-up period. In addition, shares issued or issuable upon exercise of warrants, if any, held by these stockholders and vested as of the expiration of the lock-up period will be eligible for sale at that time. Sales of stock by these stockholders could have a material adverse effect on the trading price of our common stock.

Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plan and any acquisition agreement, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital by issuing equity and/or convertible securities, our stockholders may experience substantial dilution. In addition to the Slacker Acquisition and the SNAP Acquisition, we may sell or otherwise issue our common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell or issue our common stock, convertible securities or other equity

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securities in more than one transaction, investors may be materially diluted by subsequent issuances. These issuances may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

Pursuant to the 2016 Plan, there are 22,800,000 shares of our common stock reserved for future issuance to our employees, directors and consultants, of which options to purchase 7,500,000 shares of our common stock have been granted. If our board of directors elects to issue restricted stock, stock options and/or other equity-based awards under the 2016 Plan, our stockholders may experience additional dilution, which could cause our stock price to fall.

Pursuant to the Slacker Agreement and the SNAP Agreement, a portion of the purchase price for the Slacker Acquisition and the SNAP Acquisition consists of $6.0 million and approximately $13.6 million in shares of our common stock, respectively, which upon their issuance may result in material dilution to our existing stockholders depending on the value of the shares of our common stock at the time of each closing. We may pay for future acquisitions with additional issuances of shares of our common stock as well, which would result in further dilution for existing stockholders.

A limited public trading market may cause volatility in the price of our common stock.

Our common stock is currently quoted on the OTC Pink marketplace. We plan to apply for the listing of our common stock on        , and the closing of this offering is contingent upon the successful listing of our common stock on a national securities exchange. If we fail to maintain the listing of our common stock on        , our common stock will continue to be quoted on one of the OTC marketplaces. The quotation of our common stock on the OTC marketplace does not assure that a meaningful, consistent and liquid trading market currently exists, and in recent years such market has experienced extreme price and volume fluctuations that have particularly affected the market prices of many smaller companies like us. Our common stock is subject to this volatility. Sales of substantial amounts of our common stock, or the perception that such sales might occur, could adversely affect prevailing market prices of our common stock and our stock price may decline substantially in a short time and our stockholders could suffer losses or be unable to liquidate their holdings. Because our common stock does not trade on a national securities exchange, our common stock is subject to the securities laws of the various states and jurisdictions of the United States in addition to federal securities law. While we have qualified for exemptions from registering our common stock in one or more states, if we fail to do so in other states, the investors in those states where we have not taken such steps may not be allowed to purchase our common stock or those who presently hold our common stock may not be able to resell their shares without substantial effort and expense. These restrictions and potential costs could be significant burdens on our stockholders.

If we are not able to comply with the applicable continued listing requirements or standards of        ,        could delist our common stock.

We plan to list our common stock on        in connection with the closing of this offering. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price, and certain corporate governance requirements. There can be no assurances that we will be able to comply with the applicable listing standards.

In the event that our common stock is delisted from        and is not eligible to be listed on another national securities exchange, trading of our common stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the OTC Pink marketplace. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for, our common stock, and there would likely also be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further. Also, it may be difficult for us to raise additional capital if we are not listed on a major exchange.

If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline.

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We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. We are in preliminary discussions with a number of entities, each of which we believe would add content, technology, subscribers or festivals and venues to our business. However, we have no present understandings, commitments or agreements with respect to any material acquisition or investment, and you will not be provided an opportunity to evaluate the specific merits or risks of any such transaction. The amounts and timing of capital expenditures will be determined by numerous factors, including growth of our business and cash needs of our business. Therefore, we cannot at this time estimate the amount of the net proceeds from this offering to be used for any of the purposes described above, and their ultimate use may vary substantially from their currently intended use. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”), contains rules that limit the ability of a company that undergoes an ownership change to utilize its net operating losses (“NOLs”) and tax credits existing as of the date of such ownership change. Under the rules, such an ownership change is generally any change in ownership of more than 50% of a company’s stock within a rolling three-year period. The rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning, directly or indirectly, 5% or more of the stock of a company and any change in ownership arising from new issuances of stock by the company. As a result of this Section 382 limitation, any ownership changes as defined by Section 382 may limit the amount of NOL carryforwards that could be utilized annually to offset future taxable income.

We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.

We have never declared or paid any cash dividend on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Additionally, any credit and security agreement that we may enter into in the future will likely contain covenants that will restrict our ability to pay dividends. Any return to stockholders will therefore be limited to the appreciation of their stock.

Provisions in our Certificate of Incorporation and Bylaws and provisions under Delaware law could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, and may prevent or frustrate attempts by our stockholders to replace or remove our current management.

Some provisions of our charter documents may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management. These provisions include: authorizing the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval; and establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law (“Section 203”) regulating corporate takeovers. In general, Section 203 prohibits publicly held Delaware corporation from engaging in a business combination with an interested stockholder (generally, any entity, person or group beneficially owning 15% or more of the outstanding voting stock of the company) for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:

         prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

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         upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

         at or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders.

As a smaller reporting company, we are subject to scaled disclosure requirements that may make it more challenging for investors to analyze our results of operations and financial prospects.

As a “smaller reporting company,” we (i) are able to provide simplified executive compensation disclosures in our filings, (ii) are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting and (iii) have certain other decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of audited financial statements in annual reports. Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects.

We will remain a smaller reporting company until the beginning of a fiscal year in which we had a public float of $75 million held by non-affiliates as of the last business day of the second quarter of the prior fiscal year, assuming our common stock is registered under Section 12 of the Exchange Act on the applicable evaluation date. As a result of this offering, we expect to not qualify as a smaller reporting company for the fiscal year ending March 31, 2018.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the U.S. federal securities laws, which involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections entitled “Summary,” “Risk Factors,” “Summary — Summary Historical Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors.”

In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding:

         our ability to identify, acquire, secure and develop live music and music-related video content from Content Providers and to distribute or otherwise exploit such content on our platform;

         our ability to attract and retain users through our content and platform engagement strategies and ultimately establish a subscription-based revenue stream;

         our ability to continue to expand and develop our content and platform, including through future acquisitions of businesses or assets;

         our ability to utilize our technology and the LXL App to stream our content and leverage other aspects of our operations;

         our ability to consummate the Slacker Acquisition, the SNAP Acquisition or any other future acquisitions on terms acceptable to us or at all, and our ability to recognize the anticipated benefits of any such acquisition;

         our ability to integrate certain operating assets of Wantickets, and the operations and assets of Slacker, SNAP and any other businesses we may acquire in the future;

         our belief that our management team’s relationships with Content Providers and Industry Stakeholders provide us a competitive advantage;

         our belief that the costs of acquiring our content will be at substantially lower, cost-effective price points relative to other content;

         our ability to generally acquire the licenses from Content Providers necessary to operate our business;

         our belief that the demand for live music and music-related video content and the global music community will grow substantially and quickly;

         our ability to produce original programming in-house through LXL Studios and future acquisitions; and

         our ability to execute our monetization strategies, including subscriptions, advertising, sponsorships and e-commerce.

Forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Also, forward-looking statements represent our estimates and assumptions only as of the date of this prospectus. You should read this prospectus and the documents that we filed as exhibits to the Registration Statement of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements by these cautionary statements.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

32

USE OF PROCEEDS

We estimate that we will receive net proceeds of approximately $         million (or approximately $         million if the underwriters’ over-allotment option is exercised in full) from the sale of the shares of common stock offered by us in this offering, based upon an assumed public offering price of $         per share (the midpoint of the estimated price range set forth on the cover of this prospectus), and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use the net proceeds of this offering to fund working capital, capital expenditures, the Slacker Acquisition, the SNAP Acquisition and other general corporate purposes, which may include future acquisitions of businesses and content.

The aggregate purchase price for the Slacker Acquisition is $50.0 million, consisting of $44.0 million of cash and $6.0 million in our common stock, valued at the public offering price set forth on the cover of this prospectus. The aggregate purchase price for the SNAP Acquisition is approximately $34.0 million consisting of approximately $20.4 million in cash and approximately $13.6 million in shares of our common stock, valued at the public offering price set forth on the cover of this prospectus, or, if not consummated contemporaneously with or prior to the closing of this offering, the volume weighted average of the trading price of our common stock at the time of issuance. See “Summary — Recent Developments and Initiatives — Pending Acquisitions.”

The amounts and timing of capital expenditures will be determined by numerous factors, including growth of our business and cash needs of our business. Therefore, we cannot at this time estimate the amount of the net proceeds from this offering to be used for purposes other than those described above.

Our expected use of net proceeds of this offering represents our intentions based upon our current plans and business conditions. Our management will retain broad discretion over the allocation of any net proceeds.

Pending use of the proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short- and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

33

PRICE RANGE OF OUR COMMON STOCK

Our common stock has been quoted on the OTC Pink marketplace under the symbol “LIVX” since July 24, 2015. Prior to that, our common stock was eligible for trading on the OTC Bulletin Board under the symbol “LTNR,” but a trading market did not develop. There has been minimal reported trading to date in our common stock. The following table sets forth the high and low closing prices for our common stock for the periods indicated. The prices set forth below represent inter-dealer quotations, without adjustment for retail mark-up, mark-down or commission, and may not represent the prices of actual transactions. All stock prices included in the following table are adjusted for the 2-for-1 forward split of our common stock in the form of a dividend effected on September 27, 2016.

 

 

High

 

Low

Fiscal Year Ended March 31, 2016

 

 

 

 

 

 

Quarter ended June 30, 2015(1)

 

$

n/a

 

$

n/a

Quarter ended September 30, 2015

 

$

2.98

 

$

2.35

Quarter ended December 31, 2015

 

$

4.45

 

$

2.73

Quarter ended March 31, 2016

 

$

5.00

 

$

2.50

 

 

 

 

 

 

 

Fiscal Year Ended March 31, 2017

 

 

 

 

 

 

Quarter ended June 30, 2016(1)

 

$

n/a

 

$

n/a

Quarter ended September 30, 2016

 

$

5.20

 

$

5.00

Quarter ended December 31, 2016

 

$

20.00

 

$

5.20

Quarter ended March 31, 2017(1)

 

$

n/a

 

$

n/a

 

 

 

 

 

 

 

Fiscal Year Ending March 31, 2018

 

 

 

 

 

 

Quarter ended June 30, 2016

 

$

30.00

 

$

20.00

____________

(1)      No trades were reported during the periods indicated.

As of September 7, 2017, there were 318 stockholders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers. The actual number of common stockholders is greater than the number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

34

DIVIDEND POLICY

We have not paid any cash dividends on our common stock to date and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain earnings, if any, for the future operation and expansion of our business. Any determination to pay cash dividends in the future will be at the discretion of our board of directors and will depend upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by applicable laws and other factors that our board of directors may deem relevant.

35

CAPITALIZATION

The following table sets forth our cash and cash equivalents, and our capitalization as of June 30, 2017:

         on an actual basis; and

         on an as adjusted basis, giving effect to this offering at an assumed public offering price of $         per share (the midpoint of the estimated price range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

         on an as adjusted basis, giving effect to the Slacker Acquisition, the SNAP Acquisition and this offering at an assumed public offering price of $        per share (the midpoint of the estimated price range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The as adjusted information below is illustrative only, and our capitalization following the closing of this offering will be adjusted based on the actual public offering price and other terms of this offering determined at pricing. You should read the following table in conjunction with “Use of Proceeds,” “Summary — Summary Historical Financial Information,” “Unaudited Pro Forma Condensed Combined Financial Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and unaudited pro forma condensed combined financial statements and related notes thereto included elsewhere in this prospectus.

 

 

As of June 30, 2017

 

 



Actual

 

As Adjusted(1)

 

Pro Forma
As
Adjusted(1)

Cash and cash equivalents

 

$

1,514,513

 

 

 

 

 

Debt

 

 

6,896,788

 

 

 

 

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued or outstanding, actual; 10,000,000 shares authorized, shares issued or outstanding, as adjusted

 

 

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized, 107,948,639 shares issued and outstanding, actual; 500,000,000 shares authorized,           shares issued and outstanding, as adjusted

 

 

107,949

 

 

 

 

 

Additional paid-in capital

 

 

30,005,624

 

 

 

 

 

Accumulated deficit

 

 

(30,911,050

)

 

 

 

 

Total stockholders’ deficit

 

 

(797,477

)

 

 

 

 

Total capitalization

 

$

6,099,311

 

 

 

 

 

____________

(1)      Each $1.00 increase (decrease) in the assumed public offering price of $        per share (the midpoint of the estimated price range set forth on the cover of this prospectus) would increase (decrease) the as adjusted amounts of cash, cash equivalents and marketable securities, additional paid-in capital, total stockholders’ equity and total capitalization by $        million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the as adjusted amounts of cash, cash equivalents and marketable securities, additional paid-in capital, total stockholders’ equity and total capitalization by $        million, assuming the public offering price of $        per share (the midpoint of the estimated price range set forth on the cover of this prospectus) remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

36

DILUTION

If you invest in our common stock in this offering, your investment will be immediately diluted to the extent of the difference between the public offering price per share and the pro forma net tangible book value per share of our common stock immediately after this offering.

Our historical net tangible book value as of June 30, 2017 was $(797,477), or $(0.01) per share of common stock. Our historical net tangible book value is the amount of our total tangible assets less our liabilities. Historical net tangible book value per share is our historical net tangible book value divided by the number of shares of common stock outstanding as of June 30, 2017.

After giving pro forma effect to the sale of         shares of our common stock in this offering at an assumed public offering price of $        per share (the midpoint of the estimated price range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, and after giving pro forma effect to the Slacker Acquisition and the SNAP Acquisition, our net tangible book value as of June 30, 2017 would have been approximately $        million, or $        per share of common stock. This represents an immediate increase in pro forma net tangible book value of $        per share to our existing stockholders and an immediate dilution of $        per share to new investors purchasing shares of common stock in this offering at the assumed public offering price. The following table illustrates this dilution on a per share basis:

Assumed public offering price per share

 

 

 

 

 

 

Historical net tangible book value per share as of June 30, 2017

 

$

(0.01

)

 

 

Increase in pro forma net tangible book value per share attributable to new investors participating in this offering

 

$

 

 

 

 

Pro forma net tangible book value per share after this offering

 

 

 

 

 

 

Dilution of pro forma as adjusted net tangible book value per share to
new investors

 

 

 

 

 

 

A $1.00 increase (decrease) in the assumed public offering price of $        per share (the midpoint of the estimated price range set forth on the cover of this prospectus) would increase (decrease) the pro forma net tangible book value per share after this offering by $        per share and the dilution per share to new investors participating in this offering by $        per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. A one million share increase (decrease) in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the pro forma net tangible book value per share after this offering by $        and decrease (increase) the dilution per share to new investors participating in this offering by $        , assuming the assumed public offering price of $        per share (the midpoint of the estimated price range set forth on the cover of this prospectus) remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their over-allotment option in full to purchase an additional         shares of our common stock in this offering, the pro forma as adjusted net tangible book value will increase to $        per share, representing an immediate increase to existing stockholders of $        per share and an immediate dilution of $        per share to new investors participating in this offering.

In addition, we may choose to raise additional capital through the sale of equity and/or debt (including convertible debt securities) due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. A portion of the purchase price in each of the Slacker Agreement and the SNAP Agreement consists of $6.0 million and approximately $13.6 million in shares of our common stock, respectively. We may issue shares of our common stock in any future acquisitions that we consummate. To the extent that shares of our common stock are issued under our equity incentive plans or we issue additional shares of common stock, other equity and/or convertible debt securities in the future, there will be further dilution to investors participating in this offering.

37

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

We prepared the following unaudited pro forma condensed combined financial statements, which present LiveXLive’s pro forma financial position and results of operations after giving effect to the Wantickets Acquistion completed in May, 2017, and the Slacker Acquisition and the SNAP Acquisition, based on the historical financial statements of Wantickets, LiveXLive, Slacker, and SNAP.

LiveXLive’s fiscal year ends March 31. Wantickets’ fiscal year ends June 30. SNAP and Slacker’s fiscal year end are both December 31. Preparing the unaudited pro forma condensed combined statement of operations for the fiscal year ended March 31, 2017, the statement of operations for the fiscal year ended March 31, 2017 for LiveXLive was combined with the statements of operations for the twelve-months ended March 31, 2017 for each of Wantickets and SNAP and the twelve months ended December 31, 2016 for Slacker. In preparing the unaudited pro forma condensed combined statement of operations for the three months ended June 30, 2017, the statement of operations for the three months ended June 30, 2017 for LiveXLive was combined with Wantickets for the period from April 1, 2017 to May 5, 2017 (the date of the acquisition), the statements of operations for the three months ended March 31, 2017 for Slacker and the three months ended June 30, 2017 for SNAP. The unaudited pro forma information adjusts the historical consolidated balance sheets to give effect to the Slacker Acquisition and the SNAP Acquisition as if each had occurred on June 30, 2017, noting that the Wantickets information is consolidated with LiveXLive for that period as presented.

We have based the pro forma adjustments upon available information and certain assumptions that we believe are reasonable under the circumstances. We describe in greater detail the assumptions underlying the pro forma adjustments in the accompanying notes, which you should read in conjunction with these unaudited pro forma condensed combined financial statements. In many cases, we based these assumptions on preliminary information and estimates. The actual adjustments to our condensed consolidated financial statements will depend upon a number of factors and additional information that will be available after the closing date of this offering. Accordingly, the actual adjustments that will appear in our financial statements will differ from these pro forma adjustments, and those differences may be material.

We will account for the Slacker Acquisition and the SNAP Acquisition using the acquisition method of accounting for business combinations under GAAP. Under the acquisition method of accounting, the total consideration paid is allocated to an acquired company’s tangible and intangible assets, liabilities, and any non-controlling interest based on their estimated fair values as of the acquisition date. Once we complete our final valuation processes for the Slacker Acquisition and the SNAP Acquisition, we may report changes to the value of the assets acquired, as well as the amount of goodwill, and those changes could differ materially from what we present here.

We provide these unaudited pro forma condensed combined financial statements for informational purposes only. These unaudited pro forma condensed combined financial statements do not purport to represent what our results of operations or financial condition would have been had the transactions actually occurred on the assumed dates, nor do they purport to project our results of operations or financial condition for any future period or future date. You should read these unaudited pro forma condensed combined financial statements in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes thereto of LiveXLive included elsewhere in this prospectus.

38

LiveXLive Media, Slacker and SNAP Interactive

Unaudited Pro Forma Condensed Combined Balance Sheet

As of June 30, 2017

 

 

LiveXLive Media(14)

 

Slacker

 

SNAP Interactive

 

LiveXLive Media Financing Transaction

 

Pro Forma Adjustments

 

Notes

 

Pro Forma Combined

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 1,514,513

 

 

$

 830,505

 

 

$

 4,614,619

 

 

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(28,469,016

)

 

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,746,267

)

 

(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(300,000

)

 

(3)

 

 

Restricted cash/CC Holdback

 

 

 

 

 

150,000

 

 

 

168,960

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

6,298

 

 

 

3,972,723

 

 

 

646,095

 

 

 

 

 

 

 

 

 

Prepaid expense to related party

 

 

90,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepaid expense

 

 

108,390

 

 

 

865,213

 

 

 

406,788

 

 

 

 

 

 

 

 

 

Total Current Assets

 

 

1,719,201

 

 

 

5,818,441

 

 

 

5,836,462

 

 

 

 

(48,515,284

)

 

 

 

 

Other Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed assets, net

 

 

149,636

 

 

 

625,373

 

 

 

657,010

 

 

 

 

 

 

 

 

 

Intangible assets

 

 

1,798,700

 

 

 

43,158

 

 

 

4,762,818

 

 

 

 

(43,158

)

 

(16)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,762,818

)

 

(16)

 

 

Goodwill

 

 

 

 

 

 

 

 

14,304,667

 

 

 

 

(14,304,667

)

 

(16)

 

 

Goodwill and intangibles

 

 

1,321,300

 

 

 

 

 

 

 

 

 

 

 

81,053,369

 

 

(4)

 

 

Other assets

 

 

254,993

 

 

 

49,995

 

 

 

226,922

 

 

 

 

 

 

 

 

 

Total Assets

 

$

5,243,830

 

 

$

6,536,967

 

 

$

25,787,879

 

 

 

$

13,427,442

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued
liabilities

 

$

 858,632

 

 

$

 14,008,923

 

 

$

 2,700,272

 

 

 

$

 (22,252

)

 

(5)

 

 

Note payable/Bank debt

 

 

281,429

 

 

 

4,515,267

 

 

 

 

 

 

 

 

 

 

 

 

Due to producers/Deferred revenue

 

 

205,096

 

 

 

2,844,477

 

 

 

2,600,388

 

 

 

 

 

 

 

 

 

Note payable, shareholder

 

 

3,657,015

 

 

 

 

 

 

 

 

 

 

 

 

(13)

 

 

Unsecured convertible notes, net of
discount

 

 

685,214

 

 

 

2,985,488

 

 

 

 

 

 

 

(2,985,488

)

 

(6,13)

 

 

Other

 

 

4,771

 

 

 

3,010

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Liabilities

 

 

5,692,157

 

 

 

24,357,164

 

 

 

5,300,660

 

 

 

 

(3,007,740

)

 

 

 

 

Unsecured convertible notes, net of
discount

 

 

349,150

 

 

 

 

 

 

 

 

 

 

 

 

(13)

 

 

Preferred stock warrants

 

 

 

 

 

29,132

 

 

 

 

 

 

 

(29,132

)

 

(7)

 

 

Deferred tax liability

 

 

 

 

 

 

 

 

1,452,339

 

 

 

 

(1,452,339

)

 

(8)

 

 

Total Liabilities

 

 

6,041,307

 

 

 

24,386,296