Note 20 - Fair Value Measurements

12 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 20 — Fair Value Measurements

The following table presents the fair value of the Company’s financial liabilities that are measured at fair value on a recurring basis (in thousands):

	March 31, 2024
	Fair		Hierarchy Level
	Value		Level 1		Level 2		Level 3
Assets:
Prepaid expenses - common stock issued subject to market adjustment at settlement	$	-	$	-	$	-	$	-
Total	$	-	$	-	$	-	$	-
Liabilities:
Bifurcated embedded derivative on Series A Preferred Stock	$	607	$	-	$	-	$	607
	$	607	$	-	$	-	$	607

	March 31, 2023
	Fair		Hierarchy Level
	Value		Level 1		Level 2		Level 3
Assets:
Prepaid expenses - common stock issued subject to market adjustment at settlement	$	140	$	140	$	-	$	-
Total	$	140	$	140	$	-	$	-
Liabilities:
Contingent consideration liability from Gramophone acquisition	$	174	$	-	$	-	$	174
Warrant liability on PodcastOne bridge loan		1,860		-		-		1,860
Bifurcated embedded derivative on PodcastOne bridge loan		1,288		-		-		1,288
Bifurcated embedded derivative on Series A Preferred Stock		376		-		-		376
	$	3,698	$	-	$	-	$	3,698

The following table presents a reconciliation of the Company’s financial liabilities that are measured at Level 3 within the fair value hierarchy (in thousands):

	Amount
Balance as of April 1, 2022	$	3,157
Embedded derivative and warrant issued in connection with PodcastOne bridge loan		2,845
Embedded derivative and warrant issued in connection with Series A Preferred Stock		173
Settlement of PodcastOne contingent consideration		(3,000	)
Change in fair value of bifurcated embedded derivatives, reported in earnings		523
Balance as of March 31, 2023	$	3,698
Change in fair value of bifurcated embedded derivatives, reported in earnings		4,460
Conversion of embedded derivatives to equity		(1,481	)
Conversion of warrant liability to non-controlling interest		(5,896	)
Change in fair value of contingent consideration liabilities, reported in earnings		(174	)
Balance as of March 31, 2024	$	607

The settlement of the PodcastOne contingent consideration of $3.0 million consisted of 414,137 shares of the Company's common stock issued to the Company with a fair value of $0.5 million, cash payment of $0.3 million and a gain of $2.2 million attributed to the former owners of PodcastOne forgiving the remaining balance of $2.2 million.

The Company did not elect the fair value measurement option for the following financial assets or liabilities. The fair values of certain financial instruments measured at amortized cost and the hierarchy level the Company used to estimate the fair values are shown below (in thousands):  

 

	March 31, 2023
	Carrying		Hierarchy Level
	Value		Level 1		Level 2		Level 3
Liabilities:
PodcastOne bridge loan	$	4,726	$	-	$	-	$	9,152

The fair values of financial instruments not included in these tables are estimated to be equal to their carrying values as of March 31, 2024 and March 31, 2023. The Company’s estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values.

Cash equivalents and restricted cash equivalents primarily consisted of short-term interest-bearing money market funds with maturities of less than 90 days and time deposits. The estimated fair values were based on available market pricing information of similar financial instruments.

Due to their short maturity, the carrying amounts of the Company’s accounts receivable, accounts payable and accrued expenses approximated their fair values as of March 31, 2024 and March 31, 2023.

The Company’s notes payable and senior secured line of credit are not publicly traded and fair value is estimated to equal carrying value.