(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement is declared effective.

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, 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, please 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, a smaller reporting company, or an emerging growth 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.

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 pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

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 these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

This prospectus relates to the registration of the resale of up to 6,183,664 shares of our common stock, $0.00001 par value per share (the “common stock”), by our stockholders identified in this prospectus, or their permitted transferees (and together with LiveOne, Inc., (the “Registered Stockholders”) in connection with our direct listing on the Nasdaq Capital Market (the “Direct Listing”), consisting of (i) 3,069,664 shares of our common stock reserved for issuance upon the conversion of $8,838,500 aggregate principal amount of our Bridge Notes (as defined in this prospectus) purchased by certain Registered Stockholders, plus the amount of accrued and unpaid interest, if any, that is payable in shares of our common stock in connection with the conversion thereof, (ii) 2,946,167 shares of our common stock that may be issued upon exercise of the Bridge Warrants (as defined in this prospectus) that we issued to certain Registered Stockholders, and (iii) 167,833 shares of our common stock that may be issued upon exercise of the Bridge Warrants that we issued to the placement agent, a Registered Stockholder, in connection with the offering of the Bridge Notes and the Bridge Warrants.

This prospectus is also being furnished to you as a stockholder of LiveOne, Inc., a Delaware corporation and our parent (“LiveOne”), in connection with the planned distribution at a future date (the “Distribution”) by LiveOne, a Registered Stockholder, as a special dividend to its stockholders of up to 1,260,000 shares of our common stock (the “Distribution Shares”) out of the 20,000,000 shares of our common stock held by LiveOne immediately prior to the Distribution, consisting of (i) 1,240,000 Distribution Shares to be distributed as a special dividend in the Distribution and (ii) an additional 20,000 Distribution Shares to the extent that any Distribution Shares to be issued to LiveOne’s stockholders of record in the Distribution are required to be rounded up.

Unlike an initial public offering, the resale by the Registered Stockholders is not being underwritten by any investment bank. The Registered Stockholders may, or may not, elect to sell their shares of common stock covered by this prospectus, as and to the extent they may determine. Such sales, if any, will be made through brokerage transactions on the Nasdaq Capital Market at prevailing market prices. See “Plan of Distribution.” If the Registered Stockholders choose to sell or distribute, as applicable, their shares of common stock, we will not receive any proceeds from the sale or distribution, as applicable, of shares of our common stock by the Registered Stockholders.

We refer to the Direct Listing and the Distribution herein collectively as the “Spin-Out.” Immediately prior to the time of the Spin-Out, LiveOne will hold 100% of the outstanding shares of our common stock. At the time of the Spin-Out, LiveOne will distribute the Distribution Shares constituting approximately 6.2% of our outstanding shares of common stock held by LiveOne on a pro rata basis to holders of record of LiveOne’s common stock, $0.001 par value per share (“LiveOne common stock”), as of January 15, 2023, the record date set by LiveOne for purposes of such distribution (the “Record Date”), and in connection with the Distribution, we will complete the Direct Listing. Each ______ shares of LiveOne common stock outstanding as of 5:00pm New York City, on the Record Date will entitle the holder thereof to receive one share of our common stock (the “Distribution Ratio”), with any holder of less than ______ shares of LiveOne common stock receiving one share of our common stock as result of rounding up of any fractional shares of our common stock. The Distribution will be made in book-entry form by our transfer agent. Fractional shares of our common stock will be rounded up in the Distribution. After giving effect to the Spin-Out and conversion of the Bridge Notes (not including the exercise of the Bridge Warrants held by the holders of the Bridge Notes), LiveOne will own approximately 86.3% of the outstanding shares of our common stock, the holders of the Bridge Notes (other than LiveOne) will own approximately 8.3% of the outstanding shares of our common stock, and our directors and executive officers will own the remaining approximately ______% of outstanding shares of our common stock. Pursuant to the terms of the Bridge Notes, the Bridge Notes held by the Registered Stockholders (including LiveOne) will automatically convert into shares of our common stock as a result of the Direct Listing, subject to us satisfying the conditions set forth therein.

The Distribution will be effective as of ______, New York City time, on ______, 2023 in connection with the consummation of the Direct Listing. Immediately after the Spin-Out, we will become a publicly-traded company listed on the Nasdaq Capital Market and shall continue as a majority owned subsidiary of LiveOne.

No established public trading market for our common stock currently exists, and shares of our common stock do not have a history of trading in private transactions. The purchase prices of our common stock in any private transactions may have little or no relation to the opening public price of shares of our common stock on the Nasdaq Capital Market or the subsequent trading price of shares of our common stock on the Nasdaq Capital Market. See “Sale Price History of our Capital Stock.” Further, the listing of our common stock on the Nasdaq Capital Market without underwriters is a novel method for commencing public trading in shares of our common stock and, consequently, the trading volume and price of shares of our common stock may be more volatile than if shares of our common stock were initially listed in connection with an underwritten initial public offering. There can be no guarantee that we will successfully list our common stock on the Nasdaq Capital Market or be able to complete the Spin-Out.

On the day that shares of our common stock are initially listed on the Nasdaq Capital Market, the Nasdaq Stock Market LLC (“Nasdaq”) will begin accepting, but not executing, pre-opening buy and sell orders and will begin to continuously generate the indicative Current Reference Price (as defined below) on the basis of such accepted orders. During a 10-minute “Display Only” period, market participants may enter quotes and orders for shares of our common stock in Nasdaq’s systems and such information is disseminated, along with other indicative imbalance information, to Joseph Gunnar & Co., LLC (“Joseph Gunnar”) and other market participants by Nasdaq on its NOII and BookViewer tools. Following the “Display Only” period, a “Pre-Launch” period begins, during which Joseph Gunnar, in its capacity as our designated financial advisor to perform the functions under Nasdaq Rule 4120(c)(8), must notify Nasdaq that our shares are “ready to trade.” Once Joseph Gunnar has notified Nasdaq that shares of our common stock are ready to trade, Nasdaq will calculate the Current Reference Price for shares of our common stock, in accordance with Nasdaq rules. If Joseph Gunnar then approves proceeding at the Current Reference Price, Nasdaq will conduct a price validation test in accordance with Nasdaq Rule 4120(c)(8). As part of conducting such price validation test, Nasdaq may consult with Joseph Gunnar, if the price bands need to be modified, to select the new price bands for purposes of applying such test iteratively until the validation tests yield a price within such bands. Upon completion of such price validation checks, the applicable orders that have been entered will then be executed at such price and regular trading of shares of our common stock on the Nasdaq Capital Market will commence. Under the Nasdaq rules, the “Current Reference Price” means: (i) the single price at which the maximum number of orders to buy or sell shares of our common stock can be matched; (ii) if more than one price exists under clause (i), then the price that minimizes the number of shares of our common stock for which orders cannot be matched; (iii) if more than one price exists under clause (ii), then the entered price (i.e. the specified price entered in an order by a customer to buy or sell) at which shares of our common stock will remain unmatched (i.e. will not be bought or sold); and (iv) if more than one price exists under clause (iii), a price determined by Nasdaq after consultation with Joseph Gunnar in its capacity as financial advisor. Joseph Gunnar will exercise any consultation rights only to the extent that it may do so consistent with the anti-manipulation provisions of the federal securities laws, including Regulation M (to the extent applicable), or applicable relief granted thereunder. The Registered Stockholders will not be involved in Nasdaq’s price-setting mechanism, including any decision to delay or proceed with trading, nor will they control or influence Joseph Gunnar in carrying out its role as financial advisor. Joseph Gunnar will determine when shares of our common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on consideration of volume, timing, and price. In particular, Joseph Gunnar will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. For more information, see “Plan of Distribution.”

We have applied to list our common stock on the Nasdaq Capital Market under the symbol “PODC.” We expect our common stock to begin trading on or about ______, 2023.

We are an “emerging growth company” as defined under the federal securities laws and have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary — Implications of Being an Emerging Growth Company.”

Investing in shares of our shares of common stock involves risks. See “Risk Factors” beginning on page 23 to read about factors you should consider before buying shares of our common stock.

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

You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”). Neither we nor any of the Registered Stockholders have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectus we have prepared or that have been prepared on our behalf or to which we have referred you. Neither we nor any of the Registered Stockholders take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. The Registered Stockholders are offering to sell, and seeking offers to buy, shares of their common stock but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, and results of operations may have changed since such date.

For investors outside the United States: Neither we nor any of the Registered Stockholders have done anything that would permit the use or possession or distribution of this prospectus or any related free writing prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock by the Registered Stockholders and the distribution of this prospectus outside the United States.

This prospectus is part of a registration statement on Form S-1 that we filed with the SEC using a “shelf” registration or continuous offering process. Under this process, the Registered Stockholders may, from time to time, sell the common stock covered by this prospectus in the manner described in the section titled “Plan of Distribution.” Additionally, we may provide a prospectus supplement to add information to, or update or change information contained in, this prospectus, including the section titled “Plan of Distribution.” You may obtain this information without charge by following the instructions under the section titled “Where You Can Find Additional Information” appearing elsewhere in this prospectus. You should read this prospectus and any prospectus supplement before deciding to invest in our common stock.

After giving effect to the Bridge Notes Conversion, as of December 15, 2022, we would have a total of 23,069,664 shares of our common stock issued and outstanding.

Certain amounts, percentages, and other figures presented in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals, dollars, or percentage amounts of changes may not represent the arithmetic summation or calculation of the figures that precede them.

PROSPECTUS SUMMARY

This summary highlights select information contained elsewhere in this prospectus and does not contain all the information you should consider before making an investment decision. You should read the entire prospectus carefully, including the sections entitled “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the accompanying notes included elsewhere in this prospectus before making an investment decision. Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “we,” “us,” “our,” the “Company,” “Courtside Group” and similar terms refer to Courtside Group, Inc. and its consolidated subsidiaries.

Overview

PodcastOne (the “Company,” “PodcastOne,” “we,” “us” or “our”) is a leading podcast platform and publisher that makes its content available to audiences via all podcasting distribution platforms, including PodcastOne’s website (www.podcastone.com), Apple Podcasts, Spotify, Amazon Music and more. We are a majority owned subsidiary of LiveOne, Inc., a Delaware corporation and a Nasdaq-listed company (“LiveOne”). We have recently been ranked #14 on the list of Top Podcast Publishers by the podcast metric company, Podtrac.

We also produce vodcasts (video podcasts), branded podcasts, merchandise and live events on behalf of our talent and clients. With a proven 360-degree advertiser solution for multiplatform integration opportunities and hyper-targeting, we deliver millions of monthly impressions, 14+ million monthly unique listeners, and 60+ million Interactive Advertising Bureau monthly downloads. With content covering all verticals (i.e., sports, entertainment, true-crime, business, society & culture, self-help, etc.), we provide a platform for brands to reach their most sought after targeted audiences.

Our operating model is focused on offering white glove service to our shows, talent and advertising clients. With an in-house sales, production, marketing and tech team, we believe PodcastOne delivers more to clients and talent than any other publisher in the marketplace. This allows us to scale our operations while attracting talent who in turn, will bring in additional brand advertisers and revenue. We earn revenue through the sale of embedded host-read ads, dynamic ads (host-read and otherwise), segment sponsorships and programmatic monetization channels. We also provide the opportunity for clients to have 100% share of voice with branded podcast episodes or series as well as live tours, merch and IP ownership for original programming.

In addition to our core business, we also built, own and operate a solution for the growing number of independent podcasters: LaunchPadOne. LaunchPadOne is our owned self-publishing podcast platform, created to provide a low or no cost tool for independent podcasters without access to parent podcasting networks or state of the art equipment to create and publish shows. LaunchPadOne serves as a talent pool for us to find new podcasts and talent.

For the fiscal years ended March 31, 2022 and 2021, we generated $32.3 million and $23.8 million in revenue, respectively, representing a compound annual growth rate (“CAGR”) of 36%. For the six months ended September 30, 2022 and 2021, we generated $17.2 million and $16.0 million in revenue, respectively, representing a CAGR of 8%. For the fiscal years ended March 31, 2022 and 2021, we incurred net losses $4.1 million and $4.6 million, respectively. For the six months ended September 30, 2022 and 2021, we had net income of $1.2 million and a net loss of $2.5 million, respectively.

Recent Developments

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Completed the $8.8 million Bridge Notes financing at a valuation of $68.1 million and announced LiveOne’s intention to spin-out our Company as a separate public company before year end. We agreed not to effect any Qualified Financing or Qualified Event (each as defined below), as applicable, unless our post-money valuation at the time of the Qualified Financing or Qualified Event, as applicable, is at least $150 million.

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Our President, Kit Gray, has been recently named one of the 22 most influential people in podcasting, and our Vice President of Brand and Talent Partnerships, Eli Dvorkin, has been named to this year’s Top 40 Under 40 in podcasting as chosen by Podcast Magazine. Our Head of Marketing, Ilana Susnow, was elected to The Podcast Academy’s Board of Governors, with her two-year term beginning May 1, 2022.

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We have an arrangement that allows us and our roster of top performing hosts to integrate unique visual elements into the podcasts they produce and distribute them via YouTube, becoming the first podcast network to utilize Adori, a pioneering interface technology. Adori’s unique YouTube integration technology allows podcast hosts and networks to seamlessly import episodes from RSS feeds, enhance them with visual elements and upload enriched assets directly to YouTube. Adori’s patented technology embeds contextual visuals, multi-format ads, AR experiences, buy buttons, polls, and other “call to action” features in the audio creating a more enhanced and richer listener experience. In creating visually enhanced podcasts, Adori’s YouTube product provides additional monetization avenues for our slate of original programming, increased discoverability and SEO presence.

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Several of our shows have hit recent milestones: Trust Me released its 100^th episode in November 2022 and was featured in Harper’s BAZAAR’s “20 of the Best Podcasts to Download Now.” In October 2022, Coffee Convos was named by Edison Research as the top show delivering women listeners for advertisers. Co-Hosts Kailyn Lowry and Vee Rivera won the 2022 People’s Choice Podcast Award for Influencer of the Year and Podcast Listener Influencer of Year for their podcast, Baby Mama’s No Drama. The show also brought home the Rob Has a Podcast Entertainment award. Southern Tea, hosted by Lindsie Chrisley received a People’s Choice Award in the Kids & Family category.

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We recently expanded the Chrisley family vertical by introducing a new podcast featuring Savannah Chrisley to the network. Unlocked With Savannah Chrisley premiered with 40,000 listeners and instantly ranked on the Apple Charts at #17. This show is a complement to Chrisley Confessions with co-hosts Todd and Julie Chrisley, Southern Tea, with host Lindsie Chrisley and Coffee Convos with co-hosts Lindsie Chrisley and Kail Lowry. PodcastOne also has a very successful vertical featuring Kail Lowry’s shows Baby Mamas No Drama, Barely Famous and Vibin’ and Kinda’ Thrivin.

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We also partnered with Hyundai to produce live events with our hosts that provide multiple revenue streams for our Company and our talent while giving Hyundai a platform to promote their new vehicle launches. Two live shows, including one with The LadyGang and one with Jordan Harbinger, were be captured as vodcasts and later streamed on LiveOne’s streaming platform. As part of the branded content partnership, we are also developing an always-on audio plan to further drive promotion for Hyundai. In November 2022, we announced that Hyundai will have share of voice in the first four episodes of our new Friday Night Lights re-watch podcast It’s Not Only Football: Friday Night Lights and Beyond, starring Friday Night Lights stars Scott Porter and Zach Gilford and their celebrity friend, Mae Whitman.

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In the quarter ended September 30, 2022, we and Action Park Media (“APM”) forged a partnership that added 11 podcasts to the LiveOne portfolio, including shows from Emmy Award-Winning Entourage creator Doug Ellin, Emmy-nominated star Kevin Dillon, retired NHL star Sean Avery, former NFL quarterback Ryan Leaf, as well as Kelly Stafford, Ted Foxman and more. This partnership gave PodcastOne exclusive distribution and advertising sales rights for APM’s current slate of podcast and vodcast programming. In addition, it also allows for the two media companies to co-develop future podcast/vodcast based IP, produce advertiser-sponsored live streaming and touring opportunities for hosts/talent and create exclusive licensing for podcast-specific branded merchandise.

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In the fourth fiscal quarter ended March 31, 2022, we partnered with MotorTrend to produce a 12-part series around their InEVitable campaign, a new multi-platform initiative giving consumers a source for information, in-depth reporting, research/testing, predictions and entertainment devoted entirely to the future of mobility. The InEVitable is a podcast and vodcast series hosted by MotorTrend Head of Editorial, Ed Loh and MotorTrend editor and automotive personality Jonny Lieberman. The series provides in-depth discussion on the greatest challenges and changes coming for the future of transportation. Subsequently, we and MotorTrend have renewed this partnership for an extended 20+ episodes podcast and vodcast series. Production began in the first half of the fiscal year ending March 31, 2023.

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We further strengthened our relationship with Hubbard’s WTOP with the launch of American Nightmare Season 3: UNKNOWN SUBJECT. We have partnered with them for all three seasons and are looking forward to continued Apple rankings and download success. We continue to see success in the sale of this show and anticipate the relationship continuing for additional seasons.

Industry Trends in Our Favor

The Podcast Industry Keeps Growing While Radio is Shrinking ⸺ For the first time ever, the podcast advertising marketing grew beyond $1B in FY 2021 and are expected to exceed $2B in 2022 and reach $4B by 2024. The audio industry has shifted share of voice significantly from 74% radio/12% podcasts/14% other in 2014 to 39% radio/41% podcasts/20% other.

High Growth of Podcasts Audience ⸺ In the United States, podcasts have historically been and are expected to continue to develop as a high growth segment within the next five years. An estimated 177 million Americans have listened to a podcast at some point in their life, with “superfans” consuming over 11 hours of content per week in 2021. Driven by product innovations and content accessibility, the podcast market represents significant growth and monetization potential in the long-term.

Launch of New Distribution Platforms ⸺ Being on the ground floor of a developing platform is another key to our growth strategy. This allows for more discoverability and exclusive feature opportunities. We are currently in beta with YouTube, which announced earlier this year that they are launching their own podcast platform. Approximately 18% of podcasts are consumed on YouTube and that number is quickly growing. When Facebook launched their audio platform, similarly, our shows were a part of their press plan, received exclusive boosting opportunities and were among the first podcasts to streaming on their platform.

Spoken Word is Increasing Among Gen Z ⸺ There has been a 214% increase in spoken word consumption since 2014 among the 13-24 year-old demographic, with 21% of that being podcast usage. We deliver content that spans various verticals, preferences and ages, positioning us to be part of that 21% and we expect to see that percentage grow as Gen Z continues to shift their listening habits to podcasts.

Increasing Penetration of Established Marketing ⸺ we have a strong opportunity for high growth, even in more in established markets. According to eMarketer, the number of podcast listeners is anticipated to grow to 126 million in 2022 and nearly 145 million listeners are expected to make podcasts a part of their media diet by 2026. Growth is projected to remain in double digits with an average podcast listening time per day topping 25 minutes by 2023.

Key Benefits to Our Listeners

Our Value Propositions

In addition to the highly favorable industry trends set forth above, the following elements denote the fundamental values of our PodcastOne community:

Easy audio making for everyone ⸺ We are one of the first online audio communities to provide a one-stop destination for creators to produce, edit, host and distribute audio content to consumer’s mobile and desktop devices. The turnkey production, sales and marketing services we offer make it possible for our partners to create high-quality, original podcasts. The monthly average number of podcasts downloaded from us increased from approximately 41.3 million in the second quarter of 2021 to approximately 58.4 million in the same period in 2022.

Reaching audience and getting paid ⸺ A host who makes such host’s podcasts, live streaming or interactive audio products available via PodcastOne gains access to one of the largest online audio communities. Our podcasts on publicly available platforms (Apple Podcasts, Spotify, Amazon Music, etc.) can be shared, further amplifying their reach. Leveraging our data-driven marketing strategies and best-in-class sales organization, we help increase the value of one’s original work, and motivate content creators to continue to create and share more content on our platform. Our data analytics also provide useful feedback to our hosts to help them create and distribute more unique and high-quality content that truly resonates with their audience and invites new listeners in.

“White Glove” Offerings ⸺ We differentiate ourselves from our competitors through deeply integrated sales, marketing, production and distribution services that are offered to creators once onboarded with PodcastOne. Our data driven marketing function range across in network cross promotion, social media best practices, video asset creation and off-network trade opportunities. As a result, we have cultivated a highly engaged listener community across a variety of verticals (true crime, Sports, TV & film, etc.). In the quarter ending September 30, 2022, we had recorded a total of 3.8 million average monthly listeners. We have an in-depth relationship with our creators on all levels as we are accessible and exude a work ethic incomparable to the other podcast networks in our industry.

Podcast Services ⸺ Listeners can access our podcasts on their mobile devices and desktops across all major distribution platforms (Apple Podcasts, Spotify, Amazon Music, etc.). We offer all of our podcasts for free to cultivate a broad and loyal user base and generate organic traffic to our audio entertainment which has attractive monetization potential. As we build and scale loyal listeners for our shows, we are also building listeners for our other shows, due to our internal cross promotional network. As shows increase in listenership, their value also increases to advertisers, often times resulting in higher cost per thousand impressions (“CPM”), in renewals and ultimately more revenue.

Our Market Opportunity

PodcastOne is a Leading Podcasting Company

PodcastOne is the leading advertiser-supported, on-demand digital audio network. With a 360-degree solution, including content creation, brand integration and distribution, PodcastOne sees more than 2.1 billion downloads annually, across 350 episodes produced weekly. Today, millions of people around the world have access to over 200 podcasts distributed by PodcastOne whenever and wherever they want. We were one of the first podcast companies and transformed the podcast industry by allowing users to stream audio content (podcasts) on demand. In contrast, traditional radio relies on a linear distribution model in which stations and channels are programmed to deliver a limited programming options with little freedom of choice.

We are one of the largest independent podcast publishers with deep routed relationships with our creators, advertisers and distribution platforms. With over 3.8M unique downloads a month in the US and 22.6M global streams and downloads, PodcastOne’s portfolio continues to grow with engaged listeners and top tier talent. As illustrated below, we have been recently ranked #14 on the list of Top Podcast Publishers by the podcast metric company, Podtrac, as a leading podcast publisher.

We are more than a podcast company. We are in the relationship business. Every day, brands and creators partner with us to reach consumers who will purchase, listen and subscribe to their favorite PodcastOne podcasts across the audio landscape. We offer content across verticals so there is truly something for consumers who have varied preferences (reality TV, sports, true crime self-help, business, etc.). The power of our network and love of our brands is evident through our shows which consistently rank in the top 100 on the Apple Charts. Furthermore, we have built a promotional strategy that enables discoverability of PodcastOne shows just by being a listener of a show in the same vertical. For example, if you are listening to a PodcastOne true crime show, you will likely hear a promo about another true crime show from PodcastOne.

PodcastOne wins and so do our listeners. Our brand reflects culture—and occasionally creates it—by turning vast and intriguing listening data into compelling stories that remind people of the role podcasts plays in their lives and encourages new fans to listen each week.

Podtrac Ranker October 2022

What Sets Us Apart

How is PodcastOne Different?

We are a leading US podcast network with nearly 270 podcasts/vodcasts, which have generated more than 2.381 billion downloads to date. We accomplish this through several unique approaches including:

Best In Class Content Portfolio with Deep Talent Relationships ⸺ PodcastOne publishes many of the biggest podcasts, including The Adam Carolla Show, Off the Vine with Kaitlyn Bristowe, Coffee Convos, The LadyGang, Nappy Boy Radio with T-Pain, and The Jordan Harbinger Show, spanning all major genres. We have personal relationships with each and every talent, which affords us the opportunity to build extensive multi-year agreements. These agreements provide exclusive rights to their podcasting content and derivative rights to new shows. Additionally, these value-added relationships with talent allow us to negotiate industry-leading participation splits.

Full Ownership of Technology Platform, with Proprietary Data and Insights ⸺ We are one of the few podcast networks with proprietary Content Management System (“CMS”)/Content Delivery Network (“CDN”) that allows for optimized programmatic capabilities and improved audience analytics. Our hosts/talent are also able to view their download numbers, trends and analytics on this proprietary software, something many competitors don’t provide. This fully owned and operated enterprise CMS rivals other paid platforms such as Megaphone (Spotify-owned), Art19 (Amazon-owned) and SimpleCast (SiriusXM/Pandora-owned). The CMS day to day operation and maintenance is managed by a vendor we contract with and is constantly being updated to be a best-in-class system. The CMS is the platform where podcast episodes are uploaded, RSS feeds are created and distributed to listening platforms, and the listening data is analyzed and displayed in a dashboard for the hosts / producers to see.

Blue Chip Advertiser Relationships with Targeted Measurable Campaigns and Value-Added Opportunities ⸺ We offer and book competitive campaigns with new and legacy brands by: (1) using measurement tools and partners to deploy leading podcast measurement solutions that are tailored to our clients key performance indicators, including brand impact and sales lift; (2) engaging with third party attribution partners to provide greater insight for our clients into the effectiveness of their campaigns across multiple publishers and hosting providers; and (3) conducting brand lift studies that allow the Company to demonstrate and validate campaign impacts.

In addition, because of our deep-rooted relationships with talent we are able to engage them in host-read embedded spots and coach them through voice-over delivery to increase direct response sales and advertiser satisfaction. Furthermore, these relationships allow us to create value-added opportunities with brands through talent socials, YouTube and other influencer marketing tools.

Advertisers also have the opportunity to brand entire podcast series, as executed by Microsoft and MotorTrend most recently. This would allow advertisers to enter into content development deals for their brand with us, where we would we produce and distribute an entire podcast series for the specific brand. Advertisers benefit from branding a podcast series by getting 100% share of voice ads, which in our experience significantly helps them launch a new product, service or offering. Two podcast series examples that we have recently put together in a similar format are The Inevitable podcast and On the Edge with Microsoft Edge podcast.

White Glove Services for Our Partners ⸺ PodcastOne is more than just a hosting platform. Our hands-on approach to launching original content and growing existing shows enables us to support our talent with production, editing, marketing and sales capabilities. We are a one-stop shop for everything creators need for their podcasts to be successful. When it comes to the sales and marketing, we are here to share best practices, allocate in-network promo inventory to their shows and engage in 360-degree sales efforts on their behalf.

LaunchPadOne ⸺ LaunchPadOne is a free innovative podcast hosting, distribution, and monetization platform that provides an end-to-end podcast solution. With over 1,000 available podcasts, LaunchPadOne offers creators a 360-degree podcasting ecosystem - a cutting-edge technology hosting platform, customizable design elements, a podcast player, distribution tools to publish on all major listening apps, including Apple Podcasts, Spotify, Google Podcasts, Overcast and Pocket Casts and others, and a deep network of shows. LaunchPadOne’s robust platform technology, promotion and monetization opportunities will allow podcast creators to leverage unique opportunities from PodcastOne, such as the ability to accumulate new listeners, get discovered, and collaborate with the established podcast network. PodcastOne will monetize the audience of the LaunchPadOne network through ad insertion technology platform, which generates revenue for PodcastOne. Simultaneously, LaunchPadOne creators will receive free hosting and also have the opportunity to generate revenue for their own podcasts by embedding any ads they sell on their own.

Best-In-Class Management Team with a Track Record of Execution and Growth ⸺ we have an unparalleled management team with expertise and resources to produce and manage our podcasts in a turnkey manner. Our list of services include Production studios, Producers, Editors, Social Media, Marketing, Public Relations, Guest Booking, Content Hosting, Nationwide Sales, Host Read Executions, Dynamic Ad Insertion, Programmatic Ads, Vodcasts, Live Events, and Merchandising.

Our best-in-class management team is comprised of the following executives who have scaled PodcastOne to position us as a competitive network in the industry that talent and advertisers want to be a part of:

Kit Gray: Co-Founder & President, PodcastOne ⸺ Mr. Gray founded PodcastOne in 2012 and attracted high impact podcast talent including Adam Carolla, The LadyGang and Kaitlyn Bristowe. Mr. Gray has been recently named a “Top Influencer in Podcasting” by Podcast Magazine.

Sue McNamara: Head of Sales ⸺ Ms. McNamara has 20 plus years of radio and podcast sales experience. Ms. McNamara is a former CBS radio sales management executive who was responsible for 35% PodcastOne revenue growth in fiscal year ended March 31, 2022.

Ilana Susnow: Head of Marketing and Audience Development ⸺ Ms. Susnow is a former NBCU marketing executive with 15+ years of experience in content marketing and audience development. Ms. Susnow built a marketing team that offers hosts swap and guest opportunities, public relations coverage, strategically paid, earned and owned media plans and event presence. Most recently, Ms. Susnow was elected to The Podcast Academy’s Board of Governors.

Eli Dvorkin: VP, Talent and Brand Partnerships ⸺ Mr. Dvorkin was our first outside hire. With over 15 years of audio experience, Mr. Dvorkin was recently named one of Podcast Magazine’s 40 Under 40 in podcasting for his ability to create profitable brand partnerships and his ability to grow new and existing talent.

Stacie Parra & Alistair Walford, Co-Heads of Production – with 20+ years of radio and podcast production experience, Ms. Parra has helped us scale a production team that provides a one-stop shop for talent that need production and editing resources for their podcasts.

Benefits for Creators

We provide a large but exclusive stage for creators to connect with existing fans and to be discovered by new fans. In addition to providing creators with access to a free, ad supported podcast marketplace. We also provide creators with a full stack of tools and services, enabling them to grow their podcasts in a turnkey manner.

Creator Services ⸺ Our in-house marketing and production teams are responsible for enhancing the growth and success of our talent/creators through various functions by focusing on brand building, audience development, strategy, talent, live events and sweepstakes. At the core of our shows are fundamental and trusted relationships with the hosts which collectively give us the ability to bring their vision to life. The multiple functions of creator services align cross-functionally and throughout PodcastOne to support creators on the platform while attracting new creators to our network.

Monetization ⸺ Between July 2020 and December 31, 2022, we have paid more than $30 million in MGs and advertiser revenue shares to creators. We do not pay to distribute our content and we monetize across all listener platforms.

Discovery ⸺ We not only help creators connect with existing fans, but we also support creators in connecting with the listeners who are most likely to become fans of their podcasts by running promos for all PodcastOne shows across respective verticals. From our data driven marketing approach that surface new podcasts to Users we offer creators the tools to reach their fans, new and old.

Distribution ⸺ A creator who makes their podcasts available on PodcastOne gains access to one of the largest publishing and distribution platforms based on our relationships with the top tier podcast apps and platforms. We enable creators to distribute their unique podcasts to this audience. We also pitch creator content for feature opportunities on Apple Podcasts, Spotify, Amazon Music, Stitcher, and iHeart to broaden their reach and discoverability. Additionally we promote our creator content across our social footprint and through email marketing to podcast fans.

Promotion ⸺ We empower creators and their managers to personalize and create unique profiles by providing them with best practices to develop their creator image, including featuring podcasts on their profiles and creating podcast playlists. On top of these standard services, we also offer creators specific promotional tools, designed to target specific Users and broad audiences in order to drive engagement.

Analytics ⸺ We provide numerous analytics for creators through our service. Analytics that creators can access include the demographics of their audience, users’ anonymized geographical locations, top listening platforms, and podcast performance data such as number of downloads and weekly listening trends. We provide analytical support that creators need to optimize their performance and focus on doing what they do best—creating unique, entertaining experiences to share with fans around the world. For example, many creators have used our analytics to inform tour locations by citing the geographical audience insights provided in the CMS that would otherwise not have been known.

Our Business Model

We are an Ad-Supported Service that provides free content to listeners via their mobile and desktop devices. We generate revenue from the sale of audio, video and social advertising delivered through advertising impressions. We generally enter into arrangements with advertising agencies that purchase advertising on our platform on behalf of the agencies’ clients. These advertising arrangements typically specify the type of advertising product, pricing, insertion dates, and number of impressions in a stated period. Revenue for our Ad-Supported segment is affected primarily by the number of a show’s listeners and our ability to provide innovative advertising products that are relevant to our Ad-Supported Users and enhance returns for our advertising partners. Our advertising strategy centers on the belief that advertising products that are based on content and are relevant to the Ad-Supported User can enhance Ad-Supported Users’ experiences and provide even greater returns for advertisers through the strength of our host-read embedded promos. According to a Super Listener Survey in 2021, an estimated 49% of listeners believe the hosts actually use the products and services they recommend and 60% of podcast listeners say they have bought something from hearing a podcast ad. Offering advertisers additional ways to purchase advertising on a programmatic basis is another key way that we expand our portfolio of advertising products and enhance advertising revenue. Furthermore, we continue to focus on analytics and measurement tools to evaluate, demonstrate, and improve the effectiveness of advertising campaigns on our platform.

When we are onboard new talent both parties have the common interest of creating content that advertisers want to purchase. We craft our deals with a percentage split of the advertising revenue (host-read embedded ads, DAI and programmatic) which strengthens our partnerships because when advertisers spend, we all win.

Our Growth Strategies

We believe we are still in the early stages of realizing our goal to connect creators and audiences around the world. Our growth strategies are focused on continuously improving our technology and attracting more listeners in current and new markets in order to collect more behavioral data, which we use to offer our Users, advertisers, and creators to achieve more targeted results. The key elements of our growth strategy are:

Strategically Launch New Podcasts with Culturally Relevant Creators ⸺ A creator with an engaged fanbase can strengthen our network and along with it, the PodcastOne brand. There is a lot of strategy that comes from onboarding new creators. Most importantly is how they will impact audience growth across their vertical within the PodcastOne ecosystem. We have seen success in this manner with the Kail Lowry vertical and our Real Housewife-hosted shows.

Acquire Existing Podcasts that will Thrive on Our Network ⸺ With the data we collect on show performance and show growth through our in-network promotional strategy we know what shows we can grow on our network. Additionally, this data can guide what is missing and why we may want to acquire a show with large numbers that will provide us with a jumping off point for growing our other shows.

Continue to Invest In Our Advertising Business ⸺ We will continue to invest in our advertising products in order to create more value for advertisers and our Ad-Supported Users by enhancing our ability to make advertising content more relevant for our Ad-Supported Users. Our advertising strategy centers on the belief that advertising products that are based in podcasts and are relevant to the Ad-Supported User can enhance Ad-Supported Users’ experiences and provide even greater returns for advertisers. We have introduced a number of new advertising products, including sponsored playlists, a self-serve audio advertising platform, and are testing skippable audio advertising. Offering advertisers additional ways to purchase advertising on a programmatic basis is one example of how we continue to expand our portfolio of advertising products. We also are focused on third party agency relationships and their development of analytics and measurement tools to evaluate, demonstrate, and improve the effectiveness of advertising campaigns on our platform.

Partner with New Distribution Platforms from Day One ⸺ Being on the ground floor of a developing platform is another key to our growth strategy. This allows for more discoverability and exclusive feature opportunities. When Facebook launched their audio platform, PodcastOne shows were a part of the press plan, received exclusive boosting opportunities and were among the first podcasts to streaming on their platform. Similarly, we are currently in beta with YouTube, who announced earlier this year that they are launching a podcast platform of their own. Approximately 18% of podcasts are consumed on YouTube and that number is quickly growing.

Advertising Solutions for Partners ⸺ Our Ad-Supported Service has grown from $23.8 million in revenue for the year ended March 31, 2021 to $32.3 million in revenue for the year ended March 31, 2022, representing an increase of 36%. As more audio content is created and converting listeners to buyers, brands and advertisers are continuing to shift their marketing spends from traditional mediums to podcasting. A March 2022 survey by Advertiser Perceptions shows that “while 31% of agencies and brands have dedicated podcast ad budgets, more than half (54%) are taking the money out of their overall digital allocation including 49% that said it comes from their digital audio budget line.”

Technology innovation and data mining are at the heart of our Ad-Supported Service. From a technology perspective, we continue to adapt to what consumers want and the tools that agencies and partners are building to support these needs. We create content that resonates with listeners and that brands want to be aligned with.

PodcastOne has partnered with third party attribution companies to assist with attribution metrics, click-through data and ROI metrics. Such companies include: Podsights, Chartable, Claritas, Artsai, Podtrac and Extreme Reach.

Our ability to harness our data allows us to know our audiences. We believe we understand people through their mindset, activities, and tastes, and we can serve them relevant advertising catered specifically to them. Our advertising platform is continually moving toward a holistic people-based marketing approach that is better for both our listeners and our advertisers.

By offering advertisers customized opportunities within our programs we are able to deliver results for our brands and advertisers. Taking our podcast brands beyond an audio experience, we also give advertisers the opportunity to scale their buys across our video and social products when aligning with a PodcastOne podcast. We believe we will further strengthen our advertising business, since these are increasingly popular mediums for our advertising partners, the brands they represent and consumer behaviors.

Blue Chip Advertiser Relationships with Targeted Measurable Campaigns and Value-Added Opportunities ⸺ Our in-house marketing and production teams are responsible for enhancing the growth and success of our talent/creators through various functions by focusing on brand building, audience development, strategy, talent, live events and sweepstakes. At the core of our shows are fundamental and trusted relationships with the hosts which collectively give us the ability to bring their vision to life. The multiple functions of creator services align cross-functionally and throughout PodcastOne to support creators on the platform while attracting new creators to our network.

In addition, because of our deep-rooted relationships with talent we are able to engage them in host read embedded spots and coach them through voice-over delivery to increase direct response sales and advertiser satisfaction. Furthermore, these relationships allow us to create value-added opportunities with brands through talent socials, YouTube and other influencer marketing tools.

Advertisers also have the opportunity to brand entire podcast series, as executed by Microsoft and our MotorTrend podcast most recently. This would allow advertisers to enter into content development deals for their brand with us, where we would we produce and distribute an entire podcast series for the specific brand. Advertisers benefit from branding a podcast series by getting 100% share of voice ads, which in our experience significantly helps them launch a new product, service or offering. Two podcast series examples that we have recently put together in a similar format are The Inevitable podcast and On the Edge with Microsoft Edge podcast.

We also offer comprehensive sales opportunities for advertisers ranging from video, audio and social to live events and merchandise. By scaling across our talent’s networks we can offer exclusive branding opportunities to our clients including higher CPMs for us and value added opportunities for advertisers.

Our Content Strategy

At the core, our content strategy is about partnering with influencers and creators who will not only thrive in the audio space but who complement our current programming. Since July 2020 we have onboarded over 50 shows, increasing downloads by more than 50% for some (On Display with Melissa Gorga, Trust Me) and consistently ranking in the top 15 publishers according to Podtrac. We grow by continuing to identify what resonates with our listeners and delivering content consumers want to listen to.

There is also a surge in video podcasts (vodcasts), a product we have been delivering for some of our shows since 2020. We are encouraging all of our podcasters to create video content, a platform we can support (produce, edit, distribute) on their behalf via YouTube and various social platforms. With YouTube’s recent hyper focus on bringing podcast content to their platform, we expect to see considerable podcast listener growth and AdSense dollars (revenue) from the platform.

Our Technology

We have built an internal Content Management System (“CMS”) system that creators and producers can use to track metrics about shows on an episode-by-episode basis. CMS is the platform where podcast episodes are uploaded, RSS feeds are created and distributed to listening platforms, and the listening data is analyzed and displayed in a dashboard for the creators / producers to see. We are focused on continuously improving our technology so that it is user-friendly and sets us apart from other independent publishers.

We are one of the few podcast networks with a proprietary CMS that allows for a customizable internal system resulting in improved audience analytics. Our hosts/talent are also able to view their own download numbers, trends and analytics on this proprietary software, something many network competitors don’t provide. This fully owned and operated enterprise CMS rivals other paid platforms such as Megaphone (Spotify-owned), Art19 (Amazon-owned) and SimpleCast (SiriusXM/Pandora-owned). The CMS’ day-to-day operation and maintenance is managed by a vendor we contract with and is constantly being updated to be a best-in-class system.

Marketing

Since our inception, we have focused our marketing efforts on enhancing our brand’s authenticity and presence among consumers, creators and advertisers. Initially, our campaigns were designed to educate the market on the concept of on-demand podcast streaming and the navigation functionality we provided. As familiarity with the podcast access model spread, our promotional efforts shifted to promote the specific shows, talent and brands in our portfolio. We’ve found that consumers don’t particularly know or care who is producing the content they are listening to. They are listening because they like what a host or creator represents and has to say.

Our Competition

We compete for the time and attention of our users across different forms of media, including traditional broadcast, satellite, and internet radio (iHeartRadio, LastFM, Pandora, and SiriusXM), other providers of on-demand audio streaming services (Spotify, Amazon Prime, Apple Music, Deezer, Google Play Music, Joox, Pandora, and SoundCloud), and other providers of in-home and mobile entertainment such as cable television, video streaming services, and social media and networking websites. Additionally, we compete with midsized publishers creating and distributing ad-supported content for the aforementioned audio platforms (Dear Media, Kast Media, Barstool Sports, etc.). We compete to attract and engage listeners with our content accessibility, perceptions of advertising load in our shows, brand awareness and reputation. Many of our competitors enjoy competitive advantages such as greater name recognition, legacy operating histories, and larger marketing budgets, as well as greater financial, technical, human, and other resources.

Additionally, we compete to attract and retain advertisers and a share of their advertising spend for our Ad-Supported Service. We believe our ability to compete depends primarily on the reputation and strength of our brand as well as our reach and ability to deliver a strong return on investment to our advertisers, which is driven by the size of our show-specific audiences, our advertising products, our targeting, delivery and measurement capabilities, and third party/agency relationships.

We also compete to attract and retain highly talented individuals, including producers, editors, sales executives and marketers. Our ability to attract and retain personnel is driven by compensation, culture, and the reputation and strength of our brand. We believe we provide competitive compensation packages and foster a team-oriented culture where each employee is encouraged to have a meaningful contribution to PodcastOne. We also believe the reputation and strength of our brand helps us attract individuals that are passionate about our Service.

For information on competition-related risks, see “Risk Factors” on page 23.

History and Development of the Company

We are a Delaware corporation incorporated on February 5, 2014. On July 1, 2020, we were acquired by LiveOne and became its wholly owned subsidiary. On July 15, 2022, we completed a private placement offering (the “Notes Financing”) of our unsecured convertible notes to certain accredited investors and institutional investors for gross proceeds of $8,835,800. After the Direct Listing, we will become LiveOne’s majority owned subsidiary.

Intellectual Property

Our success depends in part upon our ability to protect our technologies and intellectual property. To accomplish this, we rely on a combination of intellectual property rights, including trade secrets, patents, copyrights, and trademarks, as well as contractual restrictions, technological measures, and other methods.

In addition to the forms of intellectual property listed above, we own rights to proprietary processes and trade secrets, including those underlying the PodcastOne platform. We use contractual and technological means to control the use and distribution of our proprietary software, trade secrets, and other confidential information, both internally and externally, including contractual protections with employees, contractors, customers, and partners. Finally, since 2019, PodcastOne has included passive participation in substantially all of its agreements, meaning if a podcast goes to derivative, PodcastOne has creative control but does accrue payment as a passive participant.

LaunchPadOne ⸺ LaunchPadOne is a free innovative podcast hosting, distribution, and monetization platform that provides an end-to-end podcast solution. With over 1,000 available podcasts, LaunchPadOne offers creators a 360 podcasting ecosystem - a cutting-edge technology hosting platform, customizable design elements, a podcast player, distribution tools to publish on all major listening apps, including Apple Podcasts, Spotify, Google Podcasts, Overcast and Pocket Casts and others, and a deep network of shows. LaunchPadOne’s robust platform technology, promotion and monetization opportunities will allow podcast creators to leverage unique opportunities from us, such as the ability to accumulate new listeners, get discovered, and collaborate with the established podcast network. We will monetize the audience of the LaunchPadOne network through ad insertion technology platform, which generates revenue for us. Simultaneously, LaunchPadOne creators receive free hosting and also have the opportunity to generate revenue for their own podcasts by embedding any ads they sell on their own.

Certain Relationships and Related Party Transactions

Please see section “Certain Relationships and Related Party Transactions ⸺ Various Agreements Entered into with LiveOne ⸺ Other Agreements” in this prospectus for a summary of material agreements, other than material agreements entered into in the ordinary course of business, to which we are or have been a party.

Summary Risk Factors

Our business is subject to a number of risks and uncertainties, as more fully described under “Risk Factors” in this prospectus. We have various categories of risks, including risks related to our business and industry; risks related to our intellectual property; risks related to regulatory compliance and legal matters; risks related to tax and accounting matters; risks related to ownership of our common stock; and general risk factors, which are discussed more fully in the section titled “Risk Factors.” These risks could materially and adversely impact our business, financial condition, and results of operations, which could cause the trading price of our common stock to decline and could result in a loss of all or part of your investment. Additional risks, beyond those summarized below or discussed elsewhere in this prospectus, may apply to our business, activities, or operations as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate. Some of these risks include:

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We have incurred significant operating and net losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

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We may require additional capital, including to fund our and/or LiveOne’s current debt obligations and to fund potential acquisitions and capital expenditures, which may not be available on terms acceptable to us or at all and which depends on many factors beyond our control.

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If LiveOne does not comply with the provisions of the senior credit facility and the Harvest Notes, its lenders may terminate their obligations to it and require LiveOne and/or us to repay all outstanding amounts owed thereunder.

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We may require additional capital, including to fund our current debt obligations and to fund potential acquisitions and capital expenditures, which may not be available on terms acceptable to us or at all and which depends on many factors beyond our control.

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We face and will continue to face competition for ad-supported listening time.

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Our business is dependent upon the performance of the podcasts and their talent.

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Significant up-front and/or minimum guarantees required under certain of our podcast license agreements may limit our operating flexibility and may adversely affect our business, operating results, and financial condition.

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If we fail to increase the number of listeners consuming our podcast content, our business, financial condition and results of operations may be adversely affected.

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Our revenue and operating results are highly dependent on the overall demand for advertising. Factors that affect the amount of advertising spending, such as economic downturns, can make it difficult to predict our revenue and could adversely affect our business.

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Expansion of our operations to deliver additional podcasts subjects us to increased business, legal, financial, reputational and competitive risks.

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Increases in the costs in relation to podcast content creators, such as higher podcast MGs and/or talent revenue share compensation and costs of discovering and cultivating a top podcast content creator, may have an adverse effect on our business, financial condition and results of operations.

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We use third-party services and technologies in connection with our business, and any disruption to the provision of these services and technologies to us could result in adverse publicity and a slowdown in the growth of our users, which could materially and adversely affect our business, financial condition and results of operations.

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We face competition for users’ attention and time.

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We face significant competition for advertiser and sponsorship spend.

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We cannot assure you that we will be able to meet Nasdaq’s initial listing requirements to consummate the Direct Listing, and Nasdaq may not permit our shares of common stock to be quoted on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

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Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our common stock and penny stock trading.

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We plan to expand into international markets in the 2024 fiscal year, which would subject us to risks associated with the legislative, judicial, accounting, regulatory, political and economic risks and conditions specific to such markets, which could adversely affect our business, financial condition and results of operations.

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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.

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

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LiveOne’s debt agreements contain restrictive and financial covenants that may limit our operating flexibility, and LiveOne’s substantial indebtedness may limit cash flow available to us to invest in the ongoing needs of our business.

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LiveOne may not have the ability to repay the amounts then due under the senior credit facility, Harvest Notes and/or convertible notes at maturity, which may have a material adverse effect on our business, financial condition and results of operations.

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The Distribution could result in significant tax liability to LiveOne and its stockholders.

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We may be unable to achieve some or all of the benefits that we expect to achieve from the Spin-Out.

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We have no operating history as an independent publicly-traded company, and our historical financial information is not necessarily representative of the results we would have achieved as an independent publicly-traded company and may not be a reliable indicator of our future results.

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We may not be able to access the credit and capital markets at the times and in the amounts needed on acceptable terms.

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Certain of LiveOne’s and our agreements contain provisions requiring the consent of third parties in connection with the Spin-Out. If these consents are not obtained, we may be unable to consummate the Spin-Out and/or enjoy the benefit of these agreements in the future.

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Our listing differs significantly from an underwritten initial public offering.

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Our stock price may be volatile, and could decline significantly and rapidly.

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The trading price of our common stock, upon listing on the Nasdaq Capital Market, may have little or no relationship to the historical sales prices of our capital stock in private transactions, and there have not been any private transactions in the recent past.

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An active, liquid, and orderly market for our common stock may not develop or be sustained. You may be unable to sell your shares of our common stock at or above the price at which you purchased them.

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LiveOne as our principal stockholders will have the ability to influence the outcome of director elections and other matters requiring stockholder approval.

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LiveOne’s majority ownership of our common stock will have the effect of concentrating voting control with it and its affiliates, which will limit your ability to influence the outcome of important transactions and to influence corporate governance matters, such as electing directors, and to approve material mergers, acquisitions, or other business combination transactions that may not be aligned with your interests.

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Other than our executive officers, none of LiveOne’s stockholders are party to any contractual lock-up agreement or other contractual restrictions on transfer. Following our listing, sales of substantial amounts of our common stock in the public markets, or the perception that sales might occur, could cause the trading price of our common stock to decline.

Implications of Being an Emerging Growth Company

As a company with less than $1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include that:

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we are only required to include two years of audited consolidated financial statements in this prospectus in addition to any required interim financial statements, and correspondingly only required to provide reduced disclosure in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;

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we are not required to engage an auditor to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”);

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we are not required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,”“say-on-frequency,” and “say-on-golden parachutes”; and

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we are not required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to our median employee compensation.

We may take advantage of these provisions until the last day of the fiscal year during which the fifth anniversary of this listing occurs or such earlier time that we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of: (i) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (ii) the last day of the fiscal year during which the fifth anniversary of this listing occurs; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Under the JOBS Act, emerging growth companies also can delay adopting new or revised accounting standards until such time as those standards would otherwise apply to private companies. We currently intend to take advantage of this exemption.

For risks related to our status as an emerging growth company, see “Risk Factors — Risks Related to Ownership of Our Common Stock — We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.”

Channels for Disclosure of Information

Investors, the media, and others should note that, following the effectiveness of the registration statement of which this prospectus forms a part, we intend to announce material information to the public through filings with the SEC, the investor relations page on our website (www.podcastone.com), blog posts on our website, press releases, public conference calls, webcasts, our Twitter feed (@PodcastOne), our Instagram page, our Facebook page and our LinkedIn page. Information contained on or accessible through our website is not incorporated by reference into this prospectus, and inclusion of our website address, Twitter feed, Instagram page, Facebook page and LinkedIn page in this prospectus are inactive textual references only. You should not consider information contained on our website or our social media pages to be part of this prospectus or in deciding whether to purchase shares of our common stock.

The information disclosed by the foregoing channels could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels.

Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.

Corporate Information

We were incorporated in Delaware on February 5, 2014. On July 1, 2020, we were acquired by LiveOne and became its wholly owned subsidiary. As a result of the Direct Listing, we will become LiveOne’s majority owned subsidiary. Our principal executive offices are located at 335 North Maple Drive, Suite 127, Beverly Hills, CA 90210. Our main corporate website address is www.podcastone.com. We make available on or through our website our periodic reports that we file with the SEC. This information is available on our website free of charge as soon as reasonably practicable after we electronically file the information with or furnish it to the SEC. The contents of our website are not incorporated by reference into this document and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

QUESTIONS AND ANSWERS ABOUT THE SPIN-OUT

The following questions and answers briefly address some commonly asked questions about the Spin-Out. They may not include all the information that is important to you. We encourage you to read carefully this entire prospectus and the other documents to which we have referred you. We have included references in certain parts of this section to direct you to a more detailed discussion of each topic presented in this section.

Q:	*What is the Spin-Out?*

The Spin-Out is the method by which we will separate from LiveOne. In the Distribution, LiveOne will distribute to holders of LiveOne’s common stock, $0.001 par value per share (“LiveOne common stock”), between five to ten percent of the outstanding shares of our common stock held by LiveOne as of the Record Date (the Distribution), and in connection with the Distribution, we will complete the Direct Listing. Following the Spin-Out, we will be an independent publicly-traded company, however, we will remain a majority owned subsidiary of LiveOne.

Q:	*Will the number of LiveOne’s shares of common stock I own change as a result of the Spin-Out?*

A:	No, the number of shares of LiveOne common stock you own will not change as a result of the Spin-Out.

Q:	*What are the reasons for the Spin-Out?*

A:	The LiveOne board of directors considered the following potential benefits in deciding to pursue the Spin-Out:

	●	The opportunities and challenges we expect to arise in the immediate future of the LiveOne media business differ markedly from those of our business.

	●	We believe the Spin-Out will enhance and keep in place our management team while unlocking value for our stockholders and enhance the ability of our Company and LiveOne to focus on their respective strategies.

	●	Our near-term goals for our business include the expansion of both the scale and the scope of our business model and also pursuing growth opportunities more broadly in and specifically for the podcast sector, including by enhancing and expanding our roster of podcast talent. Achieving these goals may require acquisitions or mergers funded, in part, with capital raises and strategic alliances with other podcasting companies. Our business will be separate and distinct from LiveOne’s business and, accordingly, we believe that pursuing such growth opportunities will be greatly facilitated with a capital structure that is specifically tailored for our needs, separate from those of LiveOne.

	●	The Spin-Out will establish our Company as a separate publicly traded corporation, which we believe will meaningfully enhance our industry market perception and provide us with access to capital markets, thereby providing greater growth opportunities for us than our consolidated operation as a division of LiveOne.

	●	The Spin-Out will enable our Company to utilize our equity to incentivize our podcasters and other talent to bring them under the PodcastOne umbrella and make them stakeholders in our Company.

Q:	*Why is the separation of our Company structured as a Spin-Out?*

A:	LiveOne believes that the Distribution of a portion of our common stock and the Direct Listing is the best way to separate our business from LiveOne and to benefit LiveOne’s stockholders in a manner that will achieve the above benefits.

Q:	*What will I receive in the Distribution?*

As a holder of LiveOne common stock, LiveOne’s stockholders who hold their shares both on the Record Date and the Distribution Date (each as defined below) will receive a special dividend of an aggregate of between five to ten percent of the outstanding shares of our common stock held by LiveOne as of the Record Date pro rata in proportion of the number of shares of LiveOne common stock held by them as of the Record Date. Each ______ shares of LiveOne common stock outstanding as of 5:00pm New York City, on the Record Date will entitle the holder thereof to receive one share of our common stock (the “Distribution Ratio”), with any holder of less than ______ shares of LiveOne common stock receiving one share of our common stock as result of rounding up of any fractional shares of our common stock. The distribution agent will distribute only whole shares of our common stock in the Distribution. See “Questions and Answers About the Distribution — How will fractional shares be treated in the Distribution?” for more information on the treatment of the fractional share you may be entitled to receive in the Distribution. Your proportionate interest in LiveOne will not change as a result of the Spin-Out. For a more detailed description, see “The Spin-Out.”

Q:	*What is being distributed to holders of LiveOne common stock in the Distribution?*

LiveOne will in aggregate distribute approximately 1,260,000 outstanding shares of our common stock in the Distribution out of the 20,000,000 shares of our common stock held by LiveOne as of the Record Date, consisting of (i) 1,240,000 Distribution Shares to be distributed as a special dividend in the Distribution and (ii) an additional 20,000 Distribution Shares to the extent that any Distribution Shares to be issued to LiveOne’s stockholders of record in the Distribution are required to be rounded up. The actual number of shares of our common stock that LiveOne will distribute may change and will depend on the number of shares of LiveOne common stock outstanding on the Record Date. The Distribution Shares that LiveOne distributes and the remaining shares of our common stock owned by LiveOne constitute all of the issued and outstanding shares of our common stock immediately prior to the Spin-Out. For more information on the shares being distributed in the Distribution, see “Description of Our Capital Stock — Common Stock.”

Q:	*What is the Record Date for the Distribution?*

A:	LiveOne has designated the close of business as of 5:00pm, New York City time, on January 15, 2023, which we refer to in this prospectus as the “Record Date”, as the record ownership date for the Distribution.

Q:	*What is the Distribution Date for the Distribution?*

A:	LiveOne has designated the close of business as of 5:00pm, New York City time, on ______, 2023, which we refer to in this prospectus as the “Distribution Date”. Such date shall be determined in the future by Nasdaq and our Company and shall be close to the date of when this registration statement is declared effective by the SEC. If you hold shares of LiveOne common stock as of the Record Date but sell such shares on or prior to the Distribution Date or after, you will not receive the portion of the Distribution Shares that you may be entitled to.

Q:	*When will the Distribution to holders of LiveOne common stock occur?*

The Distribution will be effective as of the Distribution Date. On or shortly after the Distribution Date, the whole shares of our common stock will be credited in book-entry accounts for LiveOne’s stockholders entitled to receive those shares in the Distribution. See “Questions and Answers About the Spin-Out — How will LiveOne distribute shares of our common stock?” for more information on how to access your book-entry account or your bank, brokerage or other account holding LiveOne common stock you will receive in the Distribution.

Q:	*What do I have to do to participate in the Distribution?*

Other than holding your shares of LiveOne common stock as of both the Record Date and the Distribution Date, you are not required to take any action, but we urge you to read this prospectus carefully. Holders of LiveOne common stock on the Record Date will not need to pay any cash or deliver any other consideration, including any shares of LiveOne common stock, in order to receive shares of our common stock in the Distribution. No stockholder approval of the Spin-Our or the Distribution is required. We are not asking you for a vote, and we request that you do not send us a proxy card.

Q:	*If I sell my shares of LiveOne common stock on or before the Distribution Date, will I still be entitled to receive shares of the common stock in the Distribution?*

If you hold shares of LiveOne common stock on the Record Date and decide to sell them on or before the Distribution Date, you may lose your entitlement to our common stock in the Distribution. Your bank, broker or other nominee may allow you to choose to sell your LiveOne common stock with or without your entitlement to our common stock in the Distribution. You should discuss these alternatives with your bank, broker or other nominee. See “The Distribution — Trading Prior to the Distribution Date” for more information.

Q:	*How will LiveOne distribute shares of our common stock?*

Registered stockholders: If you are a registered stockholder (meaning you own your shares of LiveOne common stock directly through LiveOne’s transfer agent, Vstock Transfer, LLC), our distribution agent and transfer agent (Vstock Transfer, LLC) will credit the whole shares of our common stock you receive in the Distribution to a new book-entry account with the transfer agent on or shortly after the Distribution Date. Our distribution agent will mail you a book-entry account statement that reflects the number of whole shares of our common stock you own. You will be able to access information regarding your book-entry account holding our common stock at Vstock Transfer, LLC.

“Street name” or beneficial stockholders: If you own your shares of LiveOne common stock beneficially through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of our common stock you receive in the Distribution on or shortly after the Distribution Date. Please contact your bank, broker or other nominee for further information about your account.

We will not issue any physical stock certificates to any stockholders, even if requested. See “The Spin-Out —When and how you will you receive shares of our common stock” for a more detailed explanation.

Q:	*How will fractional shares be treated in the Distribution?*

The distribution agent will not distribute any fractional shares of our common stock in connection with the Distribution. The distribution agent will round up any fractional shares resulting from the Distribution to the nearest whole share, and each LiveOne stockholder who otherwise would be entitled to a fractional share shall receive, in lieu of a fractional share, a whole new share of our common stock at no additional cost.

Q:	*What are the U.S. federal income tax consequences to me of the Distribution?*

For U.S. federal income tax purposes, no gain or loss should be recognized by, or be includible in the income of, a U.S. Holder (as defined in “Material U.S. Federal Income Tax Consequences of the Distribution”) as a result of the Distribution. In addition, the aggregate tax basis of LiveOne common stock and our common stock held by each U.S. Holder immediately after the Distribution will be the same as the aggregate tax basis of LiveOne common stock held by the U.S. Holder immediately before the Distribution, allocated between LiveOne common stock and our common stock in proportion to their relative fair market values on the Distribution Date (subject to certain adjustments). See “Material U.S. Federal Income Tax Consequences of the Distribution” for more information regarding the potential tax consequences to you of the Distribution.

Q:	*Do we intend to pay cash dividends?*

A:	Following the Spin-Out, we do not anticipate paying any dividends on our common stock in the foreseeable future. See “Dividend Policy” for more information.

Q:	*How will our common stock trade?*

Currently, there is no public market for our common stock. We have applied to list our common stock on the Nasdaq Capital Market under the symbol “PODC.” We expect our common stock to begin trading on or about ______, 2023.

We anticipate that trading in our common stock may begin on a “when-issued” basis as early as two trading days prior to the Distribution Date for the Distribution and will continue up to and including the Distribution Date. “When-issued” trading in the context of a Distribution refers to a sale or purchase made conditionally on or before the Distribution Date because the securities to be distribution in the Distribution have not yet been distributed. “When-issued” trades generally settle within four trading days after the Distribution Date. On the first trading day following the Distribution Date, any “when-issued” trading of our common stock will end and “regular-way” trading will begin. Regular-way trading refers to trading after the security has been distributed and typically involves a trade that settles on the third full trading day following the date of the trade. See “The Spin-Out — Trading Prior to the Distribution Date” for more information. We cannot predict the trading prices for our common stock before, on or after the Distribution Date.

We will publicly announce the Distribution Date once it is determined in the future by Nasdaq and our Company, which we anticipate shall be close to the date of when this registration statement is declared effective by the SEC

Q:	*Will the Spin-Out affect the trading price of shares of my LiveOne common stock?*

We expect the trading price of shares of LiveOne common stock immediately following the Spin-Out to be equal to or higher than immediately prior to the Spin-Out because we expect that the trading price will reflect the value of Courtside Group, Inc. and its subsidiaries as an independent publicly-traded company. Furthermore, until the market has fully analyzed the value of LiveOne and the Spin-Out, the trading price of shares of LiveOne common stock may fluctuate. However, we cannot assure you that, following the Spin-Out, the trading price of LiveOne common stock and our common stock will equal or exceed what the trading price of LiveOne common stock will be equal to or higher than immediately prior to the Spin-Out. Furthermore, we cannot assure you that, following the Spin-Out, the combined trading prices of LiveOne common stock and our common stock will equal or exceed what the trading price of LiveOne common stock would have been in the absence of the Spin-Out. It is possible that after the Spin-Out, the combined equity value of LiveOne and our Company will be less than LiveOne’s equity value before the Spin-Out.

Q:	*Do I have appraisal rights in connection with the Spin-Out?*

A:	No. Holders of LiveOne common stock are not entitled to appraisal rights in connection with the Spin-Out.

Q:	*Who is the Distribution Agent and the transfer agent and registrar for our common stock?*

A:	Vstock Transfer, LLC is the Distribution Agent for the Distribution and the transfer agent and registrar for our common stock.

Q:	*Are there risks associated with owning shares of our common stock?*

Yes. Our business faces both general and specific risks and uncertainties. Our business also faces risks relating to the Spin-Out. Following the Spin-Out, we will also face risks associated with being an independent publicly-traded company. Accordingly, you should read carefully the information set forth in the section titled “Risk Factors” in this prospectus.

Q:	*Are there any conditions to completing the Spin-Out?*

Yes. The Spin-Out is conditional upon a number of matters, including the authorization and approval of the board of directors of LiveOne, the consent of the senior lenders of LiveOne under its existing senior secured debt agreements, approval of the listing of our common stock on the Nasdaq Capital Market and the declaration of effectiveness of our Registration Statement on Form S-1, of which this prospectus is a part, by the SEC. See “The Spin-Out — Conditions to the Spin-Out” for a more detailed explanation of the conditions to completing the Spin-Out.

Q:	*Where can I get more information?*

A:	Before the Spin-Out, if you have any questions relating to the Spin-Out, you should contact:

LiveOne

Investor Relations

ir@liveone.com

(310) 601-2505

After the Spin-Out, if you have any questions relating to the Company, you should contact:

Investor Relations

PodcastOne

335 N. Maple Drive, Suite 127

Beverly Hills, CA 90210

ir@podcastone.com

(310) 858-0888

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING INFORMATION

The following tables summarize our consolidated financial data. The summary consolidated statements of operations and cash flows information for the years ended March 31, 2022 and March 31, 2021 (except the pro forma net loss per share and pro forma share information) have been derived from our audited consolidated financial statements appearing elsewhere in this prospectus. The summary consolidated statements of operations and cash flows information for the six months ended September 30, 2022 and September 30, 2021 (except the pro forma net loss per share and pro forma share information) and the summary consolidated balance sheet information as of September 30, 2022 have been derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus (except the pro forma balance sheet information). The unaudited interim consolidated financial statements were prepared on a basis consistent with our audited consolidated financial statements and include, in management’s opinion, all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair statement of the financial information set forth in those statements. Our historical results are not necessarily indicative of the results that may be expected for any period in the future and our interim results are not necessarily indicative of our expected results for the year ending March 31, 2023. You should read the following summary consolidated financial data together with the section titled “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.

	Year Ended March 31, 2022			July 1, 2020 to March 31, 2021			April 1, 2020 to June 30, 2020			Six Months Ended September 30,
	(Successor)			(Successor)			(Predecessor)			2022		2021
										(Unaudited)
	*(in thousands, except share and per share data)*
Consolidated Statements of Operations Information:
Revenue	$	32,348		$	19,675		$	4,165		$	17,213	$	16,035

Operating expenses:
Cost of sales⁽¹⁾		26,271			15,368			2,911			12,909		13,544
Sales and marketing ⁽¹⁾		5,155			3,077			915			2,816		2,178
Product development⁽¹⁾		251			495			149			108		166
General and administrative⁽¹⁾		4,871			2,359			1,354			1,612		2,395
Amortization of intangible assets		502			448			-			51		287

Total operating expenses		37,050			21,747			5,329			17,496		18,570

Other income (expense), net		556			(1,350	)		(1	)		1,502		22

Income (loss) before provision for income taxes		(4,146	)		(3,422	)		(1,165	)		1,219		(2,513	)
Provision (benefit) for income taxes		-			(4	)		4			-		-

Net income (loss)	$	(4,146	)	$	(3,418	)	$	(1,169	)	$	1,219	$	(2,513	)

Net loss per share attributable to common stockholders, basic and diluted⁽²⁾	$	(0.03	)	$	(0.02	)	$	(0.01	)	$	0.01	$	(0.02	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted⁽²⁾		147,984,230			147,984,230			147,984,230			147,984,230		147,984,230
Pro forma net income (loss) per share attributable to common stockholders, basic and diluted (unaudited)⁽³⁾	$	(0.18	)	$	(0.15	)	$	(0.05	)	$	0.05	$	(0.11	)
Pro forma weighted-average shares used in computing pro forma net income (loss) per share attributable to common stockholders, basic and diluted (unaudited)⁽³⁾		23,069,664			23,069,664			23,069,664			23,069,664		23,069,664

(1)	Includes stock-based compensation expense as follows:

	Year Ended March 31, 2022		July 1, 2020 to March 31, 2021		April 1, 2020 to June 30, 2020		Six Months Ended September 30,
	(Successor)		(Successor)		(Predecessor)		2022		2021
							(Unaudited)
	*(in thousands)*
Cost of sales	$	500	$	82	$	-	$	151	$	294
Product development		8		-		-		-		8
Sales and marketing		477		82		-		136		277
General and administrative		1,541		3		38		298		740

Total stock-based compensation	$	2,526	$	167	$	38	$	585	$	1,319

(2)

See Note 2 of each of the notes to our consolidated financial statements included elsewhere in this prospectus for an explanation of the calculations of our net income (loss) per share, basic and diluted, for the years ended March 31, 2022, period from July 1, 2020 to March 31, 2021, period from April 1, 2020 to June 30, 2020 and for the six months ended September 30, 2022 and 2021.

(3)

Unaudited pro forma net income (loss) per share attributable to common stockholders, basic and diluted, for the year ended March 31, 2022, period from July 1, 2020 to March 31, 2021, period from April 1, 2020 to June 30, 2020 and for the six months ended September 30, 2022 is calculated giving effect to the Bridge Notes Conversion of 3,069,664 shares of our common stock as if occurred as of April 1, 2020. In addition, the pro forma share outstanding accounts for the cancellation of 127,984,230 shares of our common stock which was approved by the board of directors on December 12, 2022.

The following table summarizes our unaudited pro forma net loss per share for the year ended March 31, 2022 and the six months ended September 30, 2022:

	Year Ended March 31, 2022			Six Months Ended September 30, 2022
	*(Unaudited)*
	*(in thousands, except per share data)*
Numerator
Net income (loss)	$	(4,146	)	$	1,219

Pro forma net income (loss), basic and diluted	$	(0.18	)	$	0.05

Denominator
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders, basic and diluted		147,984,230			147,984,230
Pro forma adjustment to reflect assumed conversion of the Bridge Loan		3,069,664			3,069,664
Pro forma adjustment to reflect the cancellation of shares		(127,984,230	)		(127,984,230	)
Pro forma weighted-average shares used in computing pro forma net income (loss) per share attributable to common stockholders, basic and diluted		23,069,664			23,069,664

Pro forma net loss per share attributable to common stockholders, basic and diluted	$	(0.18	)	$	0.05

	Year Ended March 31, 2022			July 1, 2020 to March 31, 2021		April 1, 2020 to June 30, 2020			Six Months Ended September 30,
	(Successor)			(Successor)		(Predecessor)			2022			2021
									(Unaudited)
	*(in thousands)*
Consolidated Statements of Cash Flows Information:
Net cash provided by (used in) operating activities	$	(1,988	)	$	286	$	(436	)	$	(3,816	)	$	(2,017	)
Net cash provided by (used in) investing activities	$	(283	)	$	1,198	$	-		$	(108	)	$	(161	)
Net cash provided by financing activities	$	-		$	604	$	471		$	6,950		$	-

	As of September 30, 2022
	Actual			Pro Forma⁽¹⁾
	(Unaudited)
	(in thousands)
Consolidated Balance Sheet Information:
Cash and cash equivalents	$	4,129		$	4,129
Working capital (deficit)⁽²⁾		(6,187	)		1,530
Total assets		30,566			30,566
Total liabilities		18,149			10,432
Redeemable convertible preferred stock		-			-
Additional paid-in capital		18,762			25,067
Accumulated deficit		(6,345	)		(9,498	)
Total stockholders’ equity	$	12,417		$	15,569

(1)

The pro forma consolidated balance sheet data above gives effect to (i) the Bridge Notes Conversion of $4,274,000; (ii) the cancellation of the derivatives associated with the Bridge Notes of $3,443,000; (iii) interest expense acceleration related to the remaining accretion of the Bridge Loan debt discount of $4,565,000; and (iv) the cancellation of 127,984,230 shares of our common stock due to the filing and effectiveness of our Amended and Restated Certificate of Incorporation and the adoption of our Amended and Restated Bylaws, each of which will occur in connection with the effectiveness of the registration statement of which this prospectus forms a part.

(2)	We define working capital as current assets less current liabilities. See our consolidated financial statements and related notes included elsewhere in this prospectus for further details regarding our current assets and current liabilities as of September 30, 2022.

Non-GAAP Financial Measures

The following tables present certain financial measures not in accordance with accounting principles generally accepted in the United States of America (“GAAP”) (non-GAAP financial measures), along with the most directly comparable GAAP measure, for each period presented below. In addition to our results determined in accordance with GAAP, we believe these non-GAAP financial measures are useful in evaluating our operating performance.

The following table sets forth the reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure for the year ended March 31, 2022, period from July 1, 2020 to March 31, 2021, period from April 1, 2020 to June 30, 2020 and the six months ended September 30, 2022 and 2021 (in thousands):

	Net Income (Loss)			Depreciation and Amortization		Stock-Based Compensation		Non- Recurring Acquisition and Realignment Costs		Other (Income) Expense			(Benefit) Provision for Taxes			Adjusted EBITDA
Period Ended
Year Ended March 31, 2022 (Successor)	$	(4,146	)	$	634	$	2,526	$	-	$	(556	)	$	-		$	(1,542	)
July 1, 2020 to March 31, 2021 (Successor)	$	(3,418	)	$	560	$	167	$	371	$	1,350		$	(4	)	$	(974	)
April 1, 2020 to June 30, 2020 (Predecessor)	$	(1,169	)	$	26	$	38	$	-	$	1		$	4		$	(1,100	)
Six Months Ended
September 30, 2022	$	1,219		$	156	$	585	$	-	$	(1,502	)		-		$	458
September 30, 2021	$	(2,513	)	$	341	$	1,319	$	-	$	(21	)		-		$	(874	)

The following table sets forth reconciliation of Contribution Margin to Revenue, the most comparable GAAP financial measure for the year ended March 31, 2022, period from July 1, 2020 to March 31, 2021, period from April 1, 2020 to June 30, 2020 and the six months ended September 30, 2022 and 2021 (in thousands):

	Year Ended March 31, 2022			July 1, 2020 to March 31, 2021			April 1, 2020 to June 30, 2020			Six Months Ended September 30,
	(Successor)			(Successor)			(Predecessor)			2022			2021
										(Unaudited)
	*(in thousands)*
Revenue	$	32,348		$	19,675		$	4,165		$	17,213		$	16,035
Less:
Cost of sales		(26,271	)		(15,368	)		(2,911	)		(12,909	)		(13,544	)
Amortization of developed technology		(110	)		(9	)		-			(97	)		(97	)
Gross profit		5,967			4,298			1,254			4,207			2,394

Add back amortization of developed technology		110			9			-			97			97
Contribution Margin	$	6,077		$	4,307		$	1,254		$	4,304		$	2,491

For additional information about these non-GAAP financial measures and reconciliations of the non-GAAP financial measures to the most directly comparable financial measures stated in accordance with U.S. GAAP, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Non-GAAP Financial Measures.”

Investing in our common stock involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties described below, as well as other information included in this prospectus, including our consolidated financial statements and related notes appearing elsewhere in this prospectus, before making an investment decision. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially adversely affect our business, financial condition, or results of operations. In such case, the trading price of our common stock could decline, and you may lose some or all of your original investment. The risks discussed below are not the only risks we face. Additional risks or uncertainties not currently known to us, or that we currently deem immaterial, may also have a material adverse effect on our business, financial condition, prospects, results of operations, or cash flows. We cannot assure you that any of the events discussed in the risk factors below will not occur.

We have incurred significant operating and net losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.

As reflected in our consolidated financial statements included elsewhere herein, we have a history of losses, incurred significant operating and net losses in each year since our inception, including net losses of $4.1 million and $3.4 million for the fiscal years ended March 31, 2022 and period from July 1, 2020 to March 31, 2021, respectively, and (cash used)/provided by in operating activities of $(2.0) million and $0.2 million for the fiscal years ended March 31, 2022 and period from July 1, 2020 to March 31, 2021, respectively. We incurred net income of $1.2 million and a net loss of $2.5 million for the six months ended September 30, 2022 and 2021, respectively, and had cash used in operating activities of $3.8 million and $2.0 million for the six months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, we had an accumulated deficit of $6.3 million and net current liabilities of $18.1 million. We anticipate incurring additional losses until such time that we can generate significant increases to our revenues, and/or reduce our operating costs and losses. To date, we have financed our operations exclusively through the sale of equity securities (including convertible securities), and after our acquisition by LiveOne on July 1, 2020, through LiveOne’s sale of its and our equity and/or 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 significantly grow our business and increase our revenues. We expect to continue to incur substantial and increased expenses as we grow our business. We also expect an 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 ability to meet our total liabilities of $18.1 million as of September 30, 2022, and to continue as a going concern, is dependent on our ability to increase revenue, reduce costs, achieve a satisfactory level of profitable operations, obtain additional sources of suitable and adequate financing and further develop and execute on our business plan. We may never achieve profitability, and even if we do, we may not be able to sustain being profitable. As a result of the going concern uncertainty, 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.

Historically, we have funded our business operations and capital expenditures primarily through the issuance and sale of our and/or LiveOne’s equity and/or debt issuances (including convertible securities). To support our growing business, we must have sufficient capital to continue to make significant investments in our platform and product offerings. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to those of our common stock, and our existing stockholders may experience dilution. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. Any refinancing of our indebtedness could be at significantly higher interest rates, require additional restrictive financial and operational covenants, or require us to incur significant transaction fees, issue warrants or other equity securities, or issue convertible securities. These restrictions and covenants may restrict our ability to finance our operations and engage in, expand, or otherwise pursue our business activities and strategies. Our ability to comply with these covenants and restrictions may be affected by events beyond our control, and breaches of these covenants and restrictions could result in a default and an acceleration of our obligations under a debt agreement. If we raise additional funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or our solutions under development, or grant licenses on terms that are not favorable to us, which could lower the economic value of those programs to us.

We evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our development efforts, business plans and operating performance and the condition of the capital markets at the time we seek financing and to an extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot be certain that additional financing will be available to us on favorable terms, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited, and our business, financial condition and results of operations could be adversely affected.

The senior credit facility and the Harvest Notes contain provisions that limit our operating activities, including covenant relating to the requirement to maintain a certain amount cash (as provided in the senior credit facility loan agreement) and of Free Cash (as defined in the Harvest Notes). If an event of default occurs and is continuing, the lenders may among other things, terminate their obligations thereunder, accelerate their debt and require LiveOne and/or us to repay all amounts thereunder. For example, on October 13, 2022, a judgement was entered in favor of SoundExchange, Inc. (“SX”) against us and Slacker in the United States District Court Central District of California in the amount of approximately $9.8 million. On October 19, 2022, we filed an ex parte application with the court to either (i) set aside the default and vacate such default judgment, or (ii) shorten time to hear our motion to set aside such default and vacate such default judgment and stay the consent order, and to convene a status and mandatory settlement conference. On October 25, 2022, SX filed an opposition to such application. On November 16, 2022, the court denied our application in its entirety. While we are continuing our business and operations as usual and are in continuing discussions with SX to settle this matter and remove or discharge such judgement, our debt agreements with the holders of the Harvest Notes contains a covenant that if a judgment not covered by insurance in excess of $250,000 is entered against us and, within 60 days after entry thereof, such judgment is not discharged or satisfied or execution thereof stayed pending appeal, or within 60 days after the expiration of any such stay, such judgment is not discharged or satisfied, such event would constitute an event of default under such debt agreements and allow the lenders at their option to immediately accelerate their debt and require us to repay all outstanding amounts owed thereunder. Our debt agreements with the provider of the senior credit facility contains a covenant that if a material adverse change occurs in our financial condition, or such lender reasonably believes the prospect of payment or performance of their loan is materially impaired, the lender at its option may immediately accelerate their debt and require us to repay all outstanding amounts owed thereunder. As of September 30, 2022, we were in full compliance with these covenants.

To support our growing business, we must have sufficient capital to continue to make significant investments in our platform and product offerings. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to those of our common stock, and our existing stockholders may experience dilution. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. Any refinancing of our indebtedness could be at significantly higher interest rates, require additional restrictive financial and operational covenants, or require us to incur significant transaction fees, issue warrants or other equity securities, or issue convertible securities. These restrictions and covenants may restrict our ability to finance our operations and engage in, expand, or otherwise pursue our business activities and strategies. Our ability to comply with these covenants and restrictions may be affected by events beyond our control, and breaches of these covenants and restrictions could result in a default and an acceleration of our obligations under a debt agreement. If we raise additional funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our technologies or our solutions under development, or grant licenses on terms that are not favorable to us, which could lower the economic value of those programs to us.

We face and will continue to face competition for ad-supported listening time.

We compete with providers of podcasts that offer an on-demand catalog of podcast content that is similar to ours. We face increasing competition from a growing variety of podcast providers that seek to differentiate their service by content offering and product features, and they may be more successful than us in predicting listener preferences, providing popular content, and innovating new features.

Our competitors include providers of internet radio, terrestrial radio, and satellite radio. Internet radio providers may offer more extensive content libraries than we offer and some may be offered internationally more broadly than our PodcastOne service. In addition, internet radio providers may leverage their existing infrastructure and content libraries, as well as their brand recognition and listener base, to augment their services by offering competing on-demand podcast features to provide listeners with more comprehensive podcast service delivery choices. Terrestrial radio providers often offer their content for free, are well-established and accessible to consumers, and offer media content that we currently do not offer. In addition, many terrestrial radio stations have begun broadcasting digital signals, which provide high-quality audio transmission. Satellite radio providers, such as SiriusXM and iHeartRadio, may offer extensive and exclusive news, comedy, sports and talk content, and national signal coverage.

We believe that companies with a combination of technical expertise, brand recognition, financial resources, and digital media experience also pose a significant threat of developing competing on-demand audio distribution technologies. In particular, if known incumbents in the digital media space such as Facebook choose to offer competing services, they may devote greater resources than we have available, have a more accelerated time frame for deployment, and leverage their existing listener base and proprietary technologies to provide services that our listeners and advertisers may view as superior. Furthermore, Amazon Music, Apple Podcasts, Spotify, iHeartMusic and others have competing podcast services, which may negatively impact our business, operating results, and financial condition. Our current and future competitors may have higher brand recognition, more established relationships with content licensors and mobile device manufacturers, greater financial, technical, and other resources, more sophisticated technologies, and/or more experience in the markets in which we compete. Our current and future competitors may also engage in mergers or acquisitions with each other, as SiriusXM and Pandora have done, or to acquire smaller podcasting services, such as Spotify has done, to combine and leverage their audiences. Our current and future competitors may innovate new features or introduce new ways of consuming or engaging with content that cause our listeners, especially the younger demographic, to switch to another product, which would negatively affect our listener retention, growth, and engagement. In addition, Apple and Google also own application store platforms and are charging in-application purchase fees, which are not being levied on their own applications, thus creating a competitive advantage for themselves against us. If other competitors that own application store platforms and competitive services adopt similar practices, we may be similarly impacted. As the market for on-demand audio on the internet and mobile and connected devices increases, new competitors, business models, and solutions are likely to emerge.

We also compete for listeners based on our presence and visibility as compared with other businesses and platforms that deliver audio content through the internet and connected devices. We face significant competition for listeners from companies promoting their own digital audio content online or through application stores, including several large, well-funded, and seasoned participants in the digital media market. Device application stores often offer listeners the ability to browse applications by various criteria, such as the number of downloads in a given time period, the length of time since an application was released or updated, or the category in which the application is placed. The websites and applications of our competitors may rank higher than our website and our PodcastOne application, and our application may be difficult to locate in device application stores, which could draw potential listeners away from our service and toward those of our competitors. If we are unable to compete successfully for listeners against other digital media providers by maintaining and increasing our presence, ease of use, and visibility online, on devices, and in application stores, our number of premium subscribers, ad-supported users, and the amount of content streamed on our service may fail to increase or may decline and our subscription fees and advertising sales may suffer.

We compete for a share of advertisers’ overall marketing budgets with other content providers on a variety of factors, including perceived return on investment, effectiveness and relevance of our advertising products, pricing structure, and ability to deliver large volumes or precise types of advertisements to targeted listener demographic pools. We also compete for advertisers with a range of internet companies, including major internet portals, search engine companies, social media sites, and mobile applications, as well as traditional advertising channels such as terrestrial radio and television.

Large internet companies with strong brand recognition, such as Facebook, Google, Amazon, and Twitter, have significant numbers of sales personnel, substantial advertising inventory, proprietary advertising technology solutions, and traffic across web, mobile, and connected devices that provide a significant competitive advantage and have a significant impact on pricing for reaching these listener bases. Failure to compete successfully against our current or future competitors could result in the loss of current or potential advertisers, a reduced share of our advertisers’ overall marketing budget, the loss of existing or potential listeners, or diminished brand strength, which could adversely affect our pricing and margins, lower our revenue, increase our research and development and marketing expenses, and prevent us from achieving or maintaining profitability.

Our business is dependent upon the performance of the podcasts and their talent.

We independently contract with podcasts and talent with significant loyal audiences in their respective markets. Although we have entered into long-term agreements with some of our key podcast hosts to protect our interests in those relationships, we can give no assurance that all or any of these persons will remain with us, will be able to continue to provide podcasting services, will retain their audiences or will continue to be profitable. Competition for these podcasts and talent is intense and certain of these talent and podcasts are under no legal obligation to remain with us after the expiration of their podcast license agreements. Our competitors may choose to extend offers to any of these podcasts and/or talent on terms which we may be unwilling to meet. Furthermore, the popularity and audience loyalty of our key podcasts is highly sensitive to rapidly changing public tastes. A loss of such popularity or audience loyalty is beyond our control and could have a material adverse effect on our ability to attract local and/or national advertisers and on our revenue and/or ratings, and could result in increased expenses.

Certain of our podcast license agreements contain significant up-front and/or require that we make minimum guarantee payments (“MGs”). In addition, in order to secure top podcasts and/or renew top performing podcasts, we may be required to fund significant MGs payment requirements. While some MGs are recoupable by us as a direct cost before we share any revenue with the underlying partners, some MGs related to our content acquisition costs are not always tied to our revenue and/or audience growth forecasts (e.g., number of listeners, downloads, YouTube viewers, social media followers), or the number of podcasts distributed our service. We may also be subject to MGs to rights holders with respect to certain strategic partnerships we enter into that may not produce all of the expected benefits. Accordingly, our ability to achieve and sustain profitability and operating leverage on our service in part depends on our ability to increase our revenue through increased advertising sales on terms that maintain an adequate gross margin. The duration of our license agreements for podcast content that contain MGs is frequently between one and two years. If our forecasts of user acquisition or retention do not meet our expectations or advertising sales decline significantly during the term of our license agreements, our margins may be materially and adversely affected. To the extent our advertising sales do not meet our expectations, our business, operating results, and financial condition could also be adversely affected as a result of such MGs. In addition, the fixed cost nature of these MGs may limit our flexibility in planning for, or reacting to, changes in our business and the market segments in which we operate.

We rely on estimates of the market share of streamed and/or downloaded content by the provider, as well as our own user growth and forecasted advertising revenue, to forecast whether such MGs could be recouped against our actual content acquisition costs incurred over the duration of the license agreement. To the extent that this revenue and/or market share estimates underperform relative to our expectations, leading to content acquisition costs that do not exceed such MGs, our margins may be materially and adversely affected.

If we fail to increase the number of listeners consuming our podcast content, our business, financial condition and results of operations may be adversely affected.

The size of our listener base consuming our podcast content is critical to our success, and we will need to develop and grow our listener base to be successful. We currently generate substantially all of our revenue from advertising and sponsorship, which is dependent on the number of listeners consuming our podcast content that we attract. For example, if we are unable to retain and attract listeners consuming our podcast content, we may be unable to maintain or increase the frequency of listeners’ engagement with our platform and our podcasts. In addition, if listeners do not perceive our content as original, entertaining or engaging, we may not be able to attract advertising and sponsorship opportunities and/or increase the resulting frequency of listeners’ engagement with our platform and content. If we are unable to retain and attract listeners, our network and services could also be less attractive to potential new advertisers, sponsors and listeners, as well as to podcasts and podcasting talent, which could have a material and adverse impact on our business, financial condition and results of operations.

Our business depends on the overall demand for advertising and on the economic health of our current and prospective advertisers. If advertisers reduce their overall advertising spending, our revenue and results of operations are directly affected. Many advertisers devote a disproportionate amount of their advertising budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing, and buyers may spend more in the fourth quarter for budget reasons. As a result, if any events occur to reduce the amount of advertising spending during the fourth quarter, or reduce the amount of inventory available to advertisers during that period, it could have a disproportionate adverse effect on our revenue and operating results for that fiscal year. Economic downturns or instability in political or market conditions generally may cause current or new advertisers to reduce their advertising budgets. Adverse economic conditions and general uncertainty about economic prospects in the future are likely to affect our business prospects. In particular, uncertainty regarding the general business conditions in the United States and globally and if such economies deteriorate or become volatile could cause advertisers to delay, decrease or cancel ad purchases. Moreover, any changes in the favorable tax treatment of advertising expenses and the deductibility thereof would likely cause a reduction in advertising demand. In addition, continued geopolitical turmoil in many parts of the world have and may continue to put pressure on global economic conditions, which could lead to reduced spending on advertising.

Expansion of our operations to deliver additional podcasts subjects us to increased business, legal, financial, reputational, and competitive risks.

Expansion of our operations to deliver additional podcasts and other non-music content involves numerous risks and challenges, including increased capital requirements, new competitors, and the need to develop new strategic relationships. Growth in these areas may require additional changes to our existing business model and cost structure, modifications to our infrastructure, and exposure to new regulatory, legal and reputational risks, including infringement liability, any of which may require additional expertise that we currently do not have. There is no guarantee that we will be able to generate sufficient revenue from podcasts or other non-music content to offset the costs of creating or acquiring this content. Failure to successfully monetize and generate revenues from such content, including failure to obtain or retain rights to podcasts or other non-music content on acceptable terms, or at all, or to effectively manage the numerous risks and challenges associated with such expansion could adversely affect our business, operating results, and financial condition.

In addition, we enter into multi-year commitments for original content that we produce or commission. Given the multiple-year duration and largely fixed cost nature of such commitments, if our user growth and retention do not meet our expectations, our margins may be adversely impacted. Payment terms for certain content that we produce or commission will typically require more upfront cash payments than other content licenses or arrangements whereby we may not pay for the production of such content. To the extent our user and/or revenue growth do not meet our expectations, our liquidity and results of operations could be adversely affected as a result of such content commitments. The long-term and fixed cost nature of certain content commitments may also limit our flexibility in planning for or reacting to changes in our business, as well as our ability to adjust our content offering if our users do not react favorably to the content we produce. Any such event could adversely impact our business, operating results, and financial condition.

We depend upon podcast content creators to continuously provide a large variety of high-quality content on our platform, which is a key factor of engaging and satisfactory user experience that ensures long-term user stickiness. We compete with other audio platforms for active, popular or celebrity content creators. To attract and retain top content creators and maintain the high level of content quality, we enter into contracts with our podcast content creators under which such creators are usually paid a certain percentage of the ad sales and other revenue that we generate related to their podcast. The compensation to a top podcast content creator may increase as the competition intensifies. If our content creators become too costly, we will not be able to produce high quality content at commercially acceptable costs. If our competitors’ platforms offer higher revenue sharing percentage with an intent to attract our popular podcast content creators, costs to retain such content creators may increase. Furthermore, as our business and user base further expand, we may have to devote more resources in encouraging our podcast content creators to produce content that meets the evolving interests of a diverse user base, which would increase the costs of content on our platform. If we are unable to generate sufficient revenues that outpace our increased costs in relation to content creators, our business, financial condition and results of operations may be materially and adversely affected.

Our business depends upon services provided by, and relationships with, third parties. We currently engage third-party service providers in certain areas of our operations such as monitoring of its podcasts. If such third-party service providers fail to detect the illegal or inappropriate activities or content in our podcasts, we may be subject to regulator’s disapproval or penalties as well as adverse media exposure which could materially and adversely affect our business, financial condition and results of operations. In addition, some third-party software we use in our operations is currently publicly available without charge. If the owner of any such software decides to make claims against us, charge users, or no longer makes the software publicly available, we may need to enter into settlement with such owners, incur significant cost to license the software, find replacement software or develop it on our own. If we are unable to find or develop replacement software at a reasonable cost, or at all, our business and operations may be adversely affected.

Our overall network relies on bandwidth connections provided by third-party operators and we expect this dependence on third parties to continue. The networks maintained and services provided by such third parties are vulnerable to damage or interruption, which could impact our business, financial condition and results of operations.

We also depend on the third-party online payment systems for sales of our products and services. If any of these third-party online payment systems suffer from security breaches, users may lose confidence in such payment systems and refrain from purchasing our virtual gifts online, in which case our results of operations would be negatively impacted.

We exercise no control over the third-parties with whom we have business arrangements. For some of services and technologies such as online payment systems, we rely on a limited number of third-party providers with limited access to alternative networks or services in the event of disruptions, failures or other problems. If such third-parties increase their prices, fail to provide their services effectively, terminate their service or agreements or discontinue their relationships with us, we could suffer service interruptions, reduced revenues or increased costs, any of which may have a material adverse effect on our business, financial condition and results of operations.

Our revenue model also depends in part on high impression volumes, the growth of which may not be sustained.

We generate revenue by charging a CPM based on the volume of purchased digital ads that we measure on behalf of these customers. If the volume of impressions we measure does not continue to grow or decreases for any reason, our business will suffer. For example, if digital ad spending remains constant and our advertiser customers transition to higher CPM ad inventory, overall impression volumes may decrease, which may result in fewer impressions for us to verify and a corresponding decline in our revenues. We cannot assure you that growth in volume of impressions will be sustained. If our customers adjust their buying patterns or alter their preference to higher CPM ad inventory, our business, financial condition, and results of operations may be harmed.

Our advertising sales depend on how our listener data is collected and how advertisers select their ad listener targeting in the future.

Our advertising sales depend on how our listener data is collected and how advertisers select their ad listener targeting in the future. Advertiser spending varies based on their desire to target certain categories of listeners and supporting listener data. If our advertisers determine to target different listeners or shift their ad spending towards different listener categories, our business, financial condition, and results of operations may be harmed.

The COVID-19 virus has adversely impacted, and is expected to continue to adversely impact, our business, results of operations and financial position.

In 2020, COVID-19 was declared a pandemic and both the pandemic and measures taken in response have had a significant impact, both direct and indirect, on our businesses and the economy generally, as supply chains have been disrupted, facilities and production had been suspended, and advertiser spend on our podcasts had fallen. As of the date of this prospectus, the U.S. and world economy has emerged from the impact of the COVID-19 virus. As a result of the COVID-19 virus variants, we have experienced and may continue to experience disruptions that may adversely impacted our business, results of operations and financial position. The extent of future disruptions will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be predicted, and could result in significantly more severe impacts in the future, including:

These disruptions negatively impacted our revenue, results of operations and financial position for the years ended March 31, 2022 and 2021 and these disruptions may continue to have a negative impact through 2023 fiscal year.

The COVID-19 virus continues to evolve. The extent to which the pandemic continues to impact our business, liquidity and financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the pandemic, impact of variants, travel restrictions and social distancing throughout the United States, the duration and extent of business closures or business disruptions, the availability, adoption and effectiveness of vaccines and treatments and the effectiveness of actions taken to contain the disease. If we or our customers again experience prolonged shutdowns or other business disruptions beyond current expectations, our ability to conduct our business in the manner and within planned timelines could be materially and adversely impacted, and our business, liquidity and financial results will be adversely affected. Additionally, concerns over the economic impact of the COVID-19 pandemic have caused extreme volatility in financial and other capital markets, which has adversely affected our stock price and credit rating and could impact our ability to access the capital markets in the future.

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

Our ability to attract and retain audiences is highly sensitive to rapidly changing public tastes in content providers and technology and is dependent on our ability to maintain the attractiveness of our platform, content, technology and reputation as a place where quality original content can be accessed and distributed. We will rely on the popularity of our Content Providers and the quality of their respective content to retain audiences, secure sponsorships and to facilitate growth in revenue from advertising. Maintaining the popularity of our content will be challenging, and our relationship with listeners and viewers could be harmed for many reasons, including the quality and diversity of our online content. 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 content and/or increase the frequency of users’ engagement with our talent and programs. A There is no guarantee that we will not experience a similar erosion of our user base. If our platform or content becomes less popular with 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:

If we are unable to attract and retain new audiences and/or ensure that our user acquisition cost does not exceed our user life-time value, any of these factors could adversely affect our business, financial condition and results of operations.

Emerging industry trends in digital advertising may pose challenges for our ability to forecast or optimize our advertising inventory, which may adversely impact our ad-supported revenue.

The digital advertising industry is introducing new ways to measure and price advertising inventory. For example, a significant portion of advertisers are in the process of moving from purchasing advertisement impressions based on the number of advertisements served by the applicable ad server to a new “attribution-based, data driven model (based on tracking pixels) for select products and brand awareness. In the absence of a uniform industry standard, agencies and advertisers have adopted several different measurement methodologies and standards. In addition, measurement services may require technological integrations, which are still being evaluated by the advertising industry without an agreed-upon industry standard metric. As these trends in the industry continue to evolve, our advertising revenue may be adversely affected by the availability, accuracy, and utility of the available analytics and measurement technologies as well as our ability to successfully implement and operationalize such technologies and standards.

Further, the digital advertising industry is shifting to data-driven technologies and advertising products, such as automated buying. These data-driven advertising products and automated buying technologies allow publishers and advertisers to use data to target advertising toward specific groups of listeners who are more likely to be interested in the advertising message delivered to them. These advertising products and programmatic technologies are currently more developed in terms of advertising technology and industry adoption on the web than they are on mobile or on other software applications, and may not integrate with our desktop software version of the ad-supported services. Because the majority of our ad-supported listener hours occur on mobile devices, if we are unable to deploy effective solutions to monetize the mobile device usage by our ad-supported listener base, our ability to attract advertising spend, and ultimately our advertising revenue, may be adversely affected by this shift. In addition, we rely on third-party advertising technology platforms to participate in automated buying, and if these platforms cease to operate or experience instability in their business models, it also may adversely affect our ability to capture advertising spend.

We are a party to many content acquisition and other license agreements that are complex and impose numerous obligations upon us which may make it difficult to operate our business, and a breach of such agreements could adversely affect our business, operating results and financial condition.

Many of our content acquisition and other license agreements are complex and impose numerous obligations on us, including obligations to, among other things:

Some of our content acquisition and other license agreements grant the licensor the right to audit our compliance with the terms and conditions of such agreements. In addition, some of our content acquisition and other license agreements require consent to undertake certain business initiatives and without such consent, our ability to undertake new business initiatives may be limited. This could hurt our competitive position.

If we materially breach any of these obligations or any other obligations set forth in any of our content acquisition and other license agreements, or if we use content in ways that are found to exceed the scope of such agreements, we could be subject to monetary penalties and our rights under such license agreements could be terminated, either of which could have a material adverse effect on our business, operating results and financial condition. We may enter into settlement agreements in the future requiring us to make substantial payments as a result of claims that we are in breach of certain provisions in, or have exceeded the scope of, our content acquisition and other license agreements.

The market for entertainment video and radio content is intensively competitive and subject to rapid change. We compete against other entertainment video and radio 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, and (iv) 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 content providers 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 impact our business, financial condition and results of operations.

The podcast streaming industry is highly competitive. The podcast 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 podcasts, 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 podcast 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 Content Providers and that have a history of being able to book such guests or secure the rights to stream their content. 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.

Our new platform features, services and initiatives, changes to existing features, services and initiatives could fail to attract users, content partners, advertisers and platform partners or generate revenue.

Our new platform features, services and initiatives and changes to existing features, services and initiatives could fail to attract users, content partners, advertisers and platform partners or generate revenue. Our industry is subject to rapid and frequent changes in technology, evolving customer needs and the frequent introduction by our competitors of new and enhanced offerings. We must constantly assess the playing field and determine whether we need to improve or re-allocate resources amongst our existing platform features and services or create new products (independently or in conjunction with third parties). Our ability to increase the size and engagement of our user base, attract content partners, advertisers and platform partners and generate revenue will depend on those decisions. We may introduce significant changes to our existing platform and services or develop and introduce new and unproven products and services, including technologies with which we have little or no prior development or operating experience. If new or enhanced platform features or services fail to engage users, content partners and advertisers, we may fail to attract or retain users or to generate sufficient revenue or operating profit to justify our investments, and our business and operating results could be adversely affected.

We face significant competition for advertiser spend. Substantially all of our revenue to date is generated through advertising within our podcast episodes. We compete against online and mobile businesses, including those referenced above, and radio, for advertising budgets. We also compete with advertising networks, exchanges, demand side platforms and other platforms, such as Google AdSense, DoubleClick Ad Exchange, Oath advertising platform and Microsoft Media Network, for marketing budgets and in the development of the tools and systems for managing and optimizing advertising campaigns. PodcastOne competes with platforms, such as Apple Podcasts, Spotify, SiriusXM Satellite Radio, YouTube, and Amazon Prime that provide interactive on-demand audio content and pre-recorded entertainment. 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.

The third-party services and software that we use are highly technical and may contain undetected software bugs or vulnerabilities, which could manifest in ways that could seriously harm our reputation and our business.

The third-party services and software that we use are highly technical and complex. The tech solutions that we use or may introduce in the future, may contain undetected software bugs, hardware errors, and other vulnerabilities. These bugs and errors can manifest in any number of ways in our products, including through diminished performance, security vulnerabilities, malfunctions, or even permanently disabled products. Our tech providers have a practice of updating their tech solutions and software and some errors in their technology and software may be discovered only after a product has been used by listeners, and may in some cases be detected only under certain circumstances or after extended use. Any errors, bugs or other vulnerabilities discovered in the underlying code or backend after release could damage our reputation, drive away listeners, allow third parties to manipulate or exploit our software, lower revenue and expose us to claims for damages, any of which could seriously harm our business. Additionally, errors, bugs, or other vulnerabilities may—either directly or if exploited by third parties—affect our ability to make accurate royalty payments.

We also could face claims for product liability, tort or breach of warranty. Defending a lawsuit, regardless of its merit, is costly and may divert management’s attention and seriously harm our reputation and our business. In addition, if our liability insurance coverage proves inadequate or future coverage is unavailable on acceptable terms or at all, our business could be seriously harmed.

We rely upon the Amazon Web Services (“AWS”) to operate certain aspects of our business and to store certain data, and any disruption of or interference with our use of the AWS could have a material adverse effect on our business, operating results, and financial condition.

AWS provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a cloud computing service. We rely upon the AWS to operate certain aspects of our business and to store certain data. We may not be able to easily switch our AWS operations to another cloud provider, and any disruption of, or interference with, our use of AWS could have a material adverse effect on our business, operating results, and financial condition.

Interruptions, delays or discontinuations in service arising from our own systems or from third parties could impair the delivery of our services and harm our business.

We rely on systems housed in our own facilities and upon third parties, including bandwidth providers and third-party “cloud” data storage services, to enable our users to receive our content in a dependable, timely, and efficient manner. We have experienced and may in the future experience periodic service interruptions and delays involving our own systems and those of third parties that we work with. Both our own facilities and those of third parties are vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures, and similar events. They also are subject to break-ins, sabotage, intentional acts of vandalism, the failure of physical, administrative, technical, and cyber security measures, terrorist acts, natural disasters, human error, the financial insolvency of third parties that we work with, and other unanticipated problems or events. The occurrence of any of these events could result in interruptions in our services and to unauthorized access to, or alteration of, the content and data contained on our systems and that these third parties store and deliver on our behalf.

Any disruption in the services provided by these third parties could materially adversely impact our business reputation, customer relations, and operating results. Upon expiration or termination of any of our agreements with third parties, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one third party to another could subject us to operational delays and inefficiencies until the transition is complete.

We rely upon the Google Cloud Platform to operate certain aspects of our business and to store certain data, and any disruption of or interference with our use of the Google Cloud Platform could have a material adverse effect on our business, operating results, and financial condition.

Google Cloud Platform (“GCP”) provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a cloud computing service. We have designed our software and computer systems to utilize data processing, storage capabilities, and other services provided by GCP. Currently, we are in the process of transitioning all of our data storage (including personal data of users and content data licensed from rights holders) and computing from our own servers to GCP. We cannot easily switch our GCP operations to another cloud provider, and any disruption of, or interference with, our use of GCP could have a material adverse effect on our business, operating results, and financial condition. While the consumer side of Google competes with us, we do not believe that Google will use the GCP operation in such a manner as to gain competitive advantage against our Service. Subsequent to year end, we entered into a new service agreement with Google for the use of GCP.

If we are unable to increase revenue from our services on mobile devices, such as smartphones, our results of operations may be materially adversely affected.

Our business model with respect to monetization of our services on mobile and connected devices is still evolving. As users migrate away from personal computers, there is increasing pressure to monetize mobile. In all markets, we offer our ad-supported services on mobile, from which we generate advertising revenue. If we are unable to effectively monetize our services on mobile and connected devices, our business, operating results and financial condition may suffer.

We receive important media coverage across the United States. Unfavorable publicity regarding, for example, payments to talent, publishers, artists and other copyright owners, our privacy practices, terms of service, service changes, service quality, litigation or regulatory activity, government surveillance, the actions of our advertisers, the actions of our developers whose services are integrated with our services, the use of our services for illicit, objectionable or illegal ends, the quality and integrity of content streamed on our services or the actions of other companies that provide similar services to us, could materially adversely affect our reputation. Such negative publicity also could have an adverse effect on the size, engagement and loyalty of our listener base and result in decreased revenue, which could materially adversely affect our business, operating results and financial condition.

Our business depends on a strong brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our base of ad-supported users, premium subscribers and advertisers.

We have developed a strong “PodcastOne” brand that we believe contributes and will contribute significantly to the success of our business. Maintaining, protecting and enhancing the “PodcastOne” brand is critical to expanding our listener base and advertisers, and will depend largely on our ability to continue to develop and provide an innovative and high-quality experience for our listeners and to attract advertisers, content owners, mobile device manufacturers, and other consumer electronic product manufacturers to work with us, which we may not do successfully. If we do not successfully maintain a strong brand, our business could be harmed.

Our brand may be impaired by a number of other factors, including any failure to keep pace with technological advances on our platform or with our services, slower load times for our services, a decline in the quality or quantity of the content available on our services, a failure to protect our intellectual property rights or any alleged violations of law, regulations, or public policy. Additionally, the actions of our developers, advertisers, and content partners may affect our brand if listeners do not have a positive experience using third-party applications or websites integrated with us or that make use of our content. Further, if our partners fail to maintain high standards for products that are integrated into our services, fail to display our trademarks on their products in breach of our agreements with them, or use our trademarks incorrectly or in an unauthorized manner, or if we partner with manufacturers of products that our listeners reject, the strength of our brand could be adversely affected.

We have historically been required to spend significant resources to establish and maintain our brand. If we are unable to maintain the growth rate in the number of our listener base, we may be required to expend greater resources on advertising, marketing and other brand-building efforts to preserve and grow consumer awareness of our brand, which would adversely affect our operating results and may not be effective.

Our trademarks, trade dress and other designations of origin are important elements of our brand. We have registered “PodcastOne” as a trademark in the United States. Nevertheless, competitors or other companies may adopt marks similar to ours, or use our marks and confusingly similar terms as keywords in Internet search engine advertising programs, thereby impeding our ability to build brand identity and possibly leading to confusion among our listeners. We cannot assure you that our trademark applications, even for key marks, will be approved. We may face opposition from third parties to our applications to register key trademarks in foreign jurisdictions in which we have expanded or may expand our presence. If we are unsuccessful in defending against these oppositions, our trademark applications may be denied. Whether or not our trademark applications are denied, third parties may claim that our trademarks infringe upon their rights. As a result, we could be forced to pay significant settlement costs or cease the use of these trademarks and associated elements of our brand in those or other jurisdictions. Doing so could harm our brand or brand recognition and adversely affect our business, financial condition and results of operation.

We anticipate that our securities will be listed on Nasdaq, a national securities exchange, upon consummation of the Direct Listing. Although, at the time of the Direct Listing we expect to meet Nasdaq’s minimum initial listing standards, which generally only require that we meet certain requirements relating to stockholders’ equity, market capitalization, aggregate market value of publicly held shares and distribution requirements, we cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future. However, we cannot assure you that we will be able to meet those initial listing requirements at that time.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our shares of common stock will be listed on Nasdaq, our shares of common stock will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. If we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our ordinary shares and penny stock trading.

If our common stock is listed on the Nasdaq Capital Market and if we fail to satisfy the applicable continued listing requirements, Nasdaq may commence delisting procedures against our Company (during which we may have additional time of up to six months to appeal and correct our non-compliance). If our ordinary shares are ultimately delisted from Nasdaq, our ordinary shares would likely then trade only in the over-the-counter market and the market liquidity of our ordinary shares could be adversely affected and their market price could decrease. If our ordinary shares were to trade on the over-the-counter market, selling our ordinary shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity with respect to our securities; a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; a reduced amount of news and analyst coverage for our Company; and a decreased ability to issue additional securities or obtain additional financing in the future. These factors could result in lower prices and larger spreads in the bid and ask prices for our ordinary shares and would substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer development opportunities for us.

In addition to the foregoing, if our ordinary shares are ultimately delisted from Nasdaq and they trade on the over-the-counter market, the application of the “penny stock” rules could adversely affect the market price of our ordinary shares and increase the transaction costs to sell those shares. The SEC has adopted regulations which generally define a “penny stock” as an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. If our ordinary shares are ultimately delisted from Nasdaq and then trade on the over-the-counter market at a price of less than $5.00 per share, our ordinary shares would be considered a penny stock. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock occurs, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our ordinary shares and may affect the ability of investors to sell their shares, until our ordinary shares no longer is considered a penny stock.

Our business emphasizes rapid innovation and prioritizes long-term user engagement over short-term financial condition or results of operations. That strategy may yield results that sometimes do not align with the market’s expectations. If that happens, our stock price may be negatively affected.

As our business grows and becomes more complex, our success will depend on our ability to quickly develop and launch new and innovative products. We believe our culture fosters this goal. Our focus on complexity and quick reactions could result in unintended outcomes or decisions that are poorly received by our users, advertisers, or partners. Our culture also prioritizes our long-term user engagement over short-term financial condition or results of operations. We frequently make decisions that may reduce our short-term revenue or profitability if we believe that the decisions benefit the aggregate user experience and will thereby improve our financial performance over the long-term. These decisions may not produce the long-term benefits that we expect, in which case, our user growth and engagement, our relationships with advertisers and partners, as well as our business, operating results, and financial condition could be seriously harmed.

Podcast streaming depends on effectively working with third-party platforms, operating systems, online platforms, hardware, networks, regulations, and standards we do not control. Changes in our services or those operating systems, hardware, networks, regulations, or standards, and our limitations on our ability to access those platforms, operating systems, hardware or networks may seriously harm our business.

Our services require high-bandwidth data capabilities. If the costs of data usage increase or access to data networks is limited, our business may be seriously harmed. Additionally, to deliver high-quality audio, video, and other content over networks, our services must work well with a range of technologies, systems, networks, regulations and standards that we do not control. In addition, the adoption of any laws or regulations that adversely affect the growth, popularity, or use of the Internet, including laws governing Internet neutrality, could decrease the demand for our Service and increase our cost of doing business. Previously, Federal Communications Commission (the “FCC”) “open Internet rules” prohibited mobile providers in the United States from impeding access to most content, or otherwise unfairly discriminating against Content Providers like us. These rules also prohibited mobile providers from entering into arrangements with specific Content Providers for faster or better access over their data networks. However, on December 14, 2017, the FCC voted to repeal the “open Internet rules” and as a result, broadband services are now subject to less U.S. federal regulation. A number of parties have already stated they would appeal this order, and it is possible United States Congress may adopt legislation restoring some of the “open Internet rules.” If, as a result of the repeal of “open Internet rules,” broadband providers in the United States decrease access to certain content, start entering into arrangements with specific Content Providers for faster or better access over their data networks, or otherwise unfairly discriminate against Content Providers like us, this could increase our cost of doing business and put us at a competitive disadvantage relative to larger competitors. Additionally, mobile providers may be able to limit our users’ ability to access our platforms or make them a less attractive alternative to our competitors’ applications. If that occurs, our business, operating results and financial condition would be seriously harmed.

The European Union (the “EU”) currently requires equal access to Internet content. Additionally, as part of its Digital Single Market initiative, the EU may impose network security, disability access, or 911-like obligations on “over-the-top” services such as those provided by us, which could increase our costs. If the EU or the courts modify these open Internet rules, mobile providers may be able to limit our users’ ability to access our platforms or make them a less attractive alternative to our competitors’ applications. If that occurs, our business, operating results and financial condition would be seriously harmed.

We rely on a variety of operating systems, online platforms, hardware, and networks to reach our customers. These platforms range from desktop and mobile operating systems and application stores to wearables and intelligent voice assistants. The owners or operators of these platforms may not share our interests and may restrict our access to them or place conditions on access that would materially affect our ability to access those platforms. In particular, where the owner of a platform also is our direct competitor, the platform may attempt to use this position to affect our access to customers and ability to compete. For example, an online platform might arbitrarily remove our services from its platform, deprive us of access to business-critical data, or engage in other harmful practices. Online platforms also may unilaterally impose certain requirements that negatively affect our ability to convert users to the premium service, such as conditions that limit our freedom to communicate promotions and offers to our users. Similarly, online platforms may force us to use the platform’s payment processing systems which may be inferior to and more costly than other payment processing services available in the market.

Online platforms frequently change the rules and requirements for services like ours to access the platform, and such changes may adversely affect the success or desirability of our services. Online platforms may limit our access to information about users, limiting our ability to convert and retain them. Online platforms also may deny access to application programming interfaces (“API”) or documentation, limiting functionality of our services on the platform.

There can be no assurance that we will be able to comply with the requirements of those operating systems, online platforms, hardware, networks, regulations and standards on which our services depend, and failure to do so could result in serious harm to our business.

If our security systems are breached, we may face civil liability, and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract and retain, ad-supported users, advertisers, Content Providers and other business partners.

Techniques used to gain unauthorized access to data and software are constantly evolving, and we may be unable to anticipate or prevent unauthorized access to data pertaining to our users, including credit card and debit card information and other personal data about our Users, business partners, and employees. Like all Internet services, our services, which are supported by our own systems and those of third parties that we work with, is vulnerable to software bugs, computer viruses, Internet worms, break-ins, phishing attacks, attempts to overload servers with denial-of-service, or other attacks and similar disruptions from unauthorized use of our and third-party computer systems, any of which could lead to system interruptions, delays, or shutdowns, causing loss of critical data or the unauthorized access to personal data. Computer malware, viruses, and computer hacking and phishing attacks have become more prevalent in our industry, have occurred on our systems in the past, and may occur on our systems in the future. As our business and brand reputation grow, we may become a particularly attractive target for such attacks. Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security, and availability of our products and technical infrastructure to the satisfaction of our users may harm our reputation and our ability to retain existing users and attract new users. Although we have developed systems and processes that are designed to protect our data and user data, to prevent data loss, to disable undesirable accounts and activities on our platform, and to prevent or detect security breaches, we cannot assure you that such measures will provide absolute security, and we may incur significant costs in protecting against or remediating cyber-attacks.

In addition, if an actual or perceived breach of security occurs to our systems or a third party’s systems, we may face regulatory or civil liability and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract and retain Users, which in turn would harm our efforts to attract and retain advertisers, Content Providers and other business partners. We also would be required to expend significant resources to mitigate the breach of security and to address matters related to any such breach. We also may be required to notify regulators about any actual or perceived personal data breach (including the EU Lead Data Protection Authority) as well as the individuals who are affected by the incident within strict time periods.

Any failure, or perceived failure, by us to maintain the security of data relating to our users, to comply with our posted privacy policy, laws and regulations, rules of self-regulatory organizations, industry standards, and contractual provisions to which we 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, and revenues. In Europe, European Data Protection Authorities could impose fines and penalties of up to 4% of annual global turnover or €20 million, whichever is higher, for a personal data breach.

We are at risk of attempts at unauthorized access to our services, and failure to effectively prevent and remediate such attempts could have an adverse impact on our business, operating results, and financial condition. Unauthorized access to our services may cause us to misstate key performance indicators, which once discovered, corrected, and disclosed, could undermine investor confidence in the integrity of our key performance indicators and could cause our stock price to drop significantly.

We have in the past been, and continue to be, impacted by attempts by third parties to manipulate and exploit our software for the purpose of gaining unauthorized access to our service. For example, we have detected instances of third parties seeking to provide mobile device users a means to suppress advertisements without payment and gain access to features only available to the ad-supported services. If in the future we fail to successfully detect and address such issues, it may have artificial effects on our key performance indicators, such as content hours, content hours per listener, which underlie, among other things, our contractual obligations with advertisers, as well as harm our relationship with them. This may impact our results of operations, particularly with respect to margins on our ad-supported segment, by increasing our ad-supported cost of sales without a corresponding increase to our ad-supported revenue, which could seriously harm our business.

We are at risk of artificial manipulation of stream and download counts and failure to effectively manage and remediate such fraudulent streams could have an adverse impact on our business, operating results and financial condition. Fraudulent streams may cause us to overstate key performance indicators, which once discovered, corrected and disclosed, could undermine investor confidence in the integrity of our key performance indicators and could cause our stock price to drop significantly.

We have in the past been, and continue to be, impacted by attempts by third parties to artificially manipulate stream counts. Such attempts may, for example, be designed to influence placement of content on PodcastOne podcasts. For example, an individual might generate fake listeners to listen to podcasts, thereby increasing their visibility on our or third-party charts. We use a combination of algorithms and manual review by employees to detect fraudulent streams. However, we may not be successful in detecting, removing and addressing all fraudulent streams (and any related user accounts). If in the future we fail to successfully detect, remove and address fraudulent streams and fake listeners, it may result in the manipulation of our data, including the key performance indicators which underlie, among other things, our contractual obligations with advertisers (which could expose us to the risk of litigation), as well as harm our relationships with advertisers and rights holders. In addition, once we detect, correct and disclose fraudulent streams and fake listeners and the key performance indicators they affect, investor confidence in the integrity of our key performance indicators could be undermined. These could have a material adverse impact on our business, operating results and financial condition.

Our listener metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may seriously harm and negatively affect our reputation and our business.

We regularly review key metrics related to the operation of our business to evaluate growth trends, measure our performance and make strategic decisions. These metrics are calculated using internal company data and have not been validated by an independent third party. While these numbers are based on what we believe to be reasonable estimates of our listener base for the applicable period of measurement, there are inherent challenges in measuring how our services are used across large populations globally. Errors or inaccuracies in our metrics or data could result in incorrect business decisions and inefficiencies.

In addition, advertisers generally rely on third-party measurement services to calculate our metrics, and these third-party measurement services may not reflect our true audience. Some of our demographic data also may be incomplete or inaccurate because listeners self-report their names and dates of birth. Consequently, the personal data we have may differ from our listeners’ actual names and ages. If advertisers, partners, or investors do not perceive our listener, geographic or other demographic metrics to be accurate representations of our listener base, or if we discover material inaccuracies in our listener, geographic or other demographic metrics, our reputation may be seriously harmed, which could have an adverse impact on our business, operating results, and financial condition.

Our business is subject to a variety of laws around the world. Government regulation of the Internet is evolving and any changes in government regulations relating to the Internet or other areas of our business or other unfavorable developments may adversely affect our business, operating result, and financial condition.

We are a U.S.-based company that is registered under the laws of the State of Delaware, and with operations in certain countries and territories around the world. As a result of the scope of our operations, we are subject to a variety of laws in different countries. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting. It also is likely that if our business grows and evolves and our solutions are used more globally, we will become subject to laws and regulations in additional jurisdictions. It is difficult to predict how existing laws will be applied to our business and the new laws to which we may become subject.

We are subject to general business regulations and laws, as well as regulations and laws specific to the Internet. Such laws and regulations include, but are not limited to, labor, advertising and marketing, real estate, taxation, user privacy, data collection and protection, intellectual property, anti-corruption, anti-money laundering, foreign exchange controls, antitrust and competition, electronic contracts, telecommunications, sales procedures, automatic subscription renewals, credit card processing procedures, consumer protections, broadband Internet access and content restrictions. We cannot guarantee that we have been or will be fully compliant in every jurisdiction in which we are subject to regulation, as existing laws and regulations governing issues such as intellectual property, privacy, taxation, and consumer protection, among others, are constantly changing. The adoption or modification of laws or regulations relating to the Internet or other areas of our business could limit or otherwise adversely affect the manner in which we currently conduct our business. For example, certain jurisdictions have implemented or are contemplating implementing laws which may negatively impact our automatic renewal structure or our free or discounted trial incentives. Further, compliance with laws, regulations, and other requirements imposed upon our business may be onerous and expensive, and they may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and doing business.

Moreover, as Internet commerce continues to evolve, increasing regulation by U.S. federal and state agencies and other international regulators becomes more likely and may lead to more stringent consumer protection laws, which may impose additional burdens on us. The adoption of any laws or regulations that adversely affect the popularity or growth in use of the Internet, including laws limiting Internet neutrality, could decrease user demand for our services and increase our cost of doing business. Future regulations, or changes in laws and regulations or their existing interpretations or applications, also could hinder our operational flexibility, raise compliance costs, and result in additional historical or future liabilities for us, resulting in material adverse impacts on our business, operating results and financial condition.

We intend to expand the international presence of our platform into various jurisdictions abroad by offering our platform directly to international users, as well as through joint ventures and partnerships. Accordingly, we expect to face additional risks in the case of our future international operations, including:

As we hope to expand into new markets these risks will be intensified and will have the potential to impact a greater percentage of our business and operating results. Our ability to expand our operations into new international jurisdictions will depend, in significant part, on our ability to identify potential acquisition candidates, joint venture or other partners, and enter into arrangements with these parties on favorable terms, as well as our ability to make continued investments to maintain and grow existing international operations. If the revenue generated by international operations is insufficient to offset expenses incurred in connection with the maintenance and growth of these operations, our business, financial condition and results of operations could be materially and adversely affected. In addition, in an effort to make international operations in one or more given jurisdictions profitable over the long term, significant additional investments that are not profitable over the short term could be required over a prolonged period.

In foreign countries in which we operate, a risk exists that our employees, contractors or agents could, in contravention of our policies, engage in business practices prohibited by applicable United States laws and regulations, such as the United States Foreign Corrupt Practices Act, as well as the laws and regulations of other countries prohibiting corrupt payments to government officials such as the United Kingdom Bribery Act 2010. We maintain policies prohibiting such business practices. Nevertheless, the risk remains that one or more of our employees, contractors or agents, including those based in or from countries where practices that violate such United States laws and regulations or the laws and regulations of other countries may be customary, as well as those associated with newly-acquired businesses, will engage in business practices that are prohibited by our policies, circumvent our compliance programs and, by doing so, violate such laws and regulations. Any such violations, even if prohibited by our internal policies, could result in fines, criminal sanctions against us and/or our employees, prohibitions on the conduct of our business and damage to our reputation, which could adversely affect 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 advertising sales and sponsorship spending, as well as the financial results of sponsors of our 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 and advertising 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.

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 regulations or decisions by the FCC 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 adversely impact our business” below. 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 EU. 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.

We depend upon third-party licenses for sound recordings and an adverse change to, loss of, or claim that we do not hold any necessary licenses may materially adversely affect our business, operating results and financial condition.

With respect to podcasts and other non-music content, we produce or commission the content itself or obtain distribution rights directly from rights holders. In the former scenario, we employ various business models to create original content. In the latter scenario, we negotiate licenses directly with individuals that enable creators to post content directly to our service after agreeing to comply with the applicable terms and conditions. We are dependent on those who provide content on its service complying with the terms and conditions of its license agreements as well as the PodcastOne Terms and Conditions of Use (the “Terms and Conditions of Use”). However, we cannot guarantee that rights holders or content providers will comply with their obligations, and such failure to do so may materially impact its business, operating results, and financial condition.

There is also no guarantee that we have all of the licenses it needs to stream content, as the process of obtaining such licenses involves many rights holders, some of whom are unknown, and myriad complex legal issues across many jurisdictions, including open questions of law as to when and whether particular licenses are needed. Additionally, there is a risk that rights holders, creators, performers, writers and their agents, or societies, unions, guilds, or legislative or regulatory bodies will create or attempt to create new rights or regulations that could require PodcastOne to enter into license agreements with, and pay royalties to, newly defined groups of rights holders, some of which may be difficult or impossible to identify.

Even when we are able to enter into license agreements with rights holders, it cannot guarantee that such agreements will continue to be renewed indefinitely. For example, from time to time, our license agreements with certain rights holders and/or their agents expire while we negotiate their renewals and, per industry custom and practice, we may enter into brief (for example, month-, week-, or even days-long) extensions of those agreements or provisional licenses and/or continue to operate on an at will basis as if the license agreement had been extended, including by our continuing to make content available. During these periods, we may not have assurance of long-term access to such rights holders’ content, which could have a material adverse effect on its business and could lead to potential copyright infringement claims.

It is also possible that such agreements will never be renewed at all. The lack of renewal, or termination, of one or more of our license agreements, or the renewal of a license agreement on less favorable terms, could have a material adverse effect on its business, financial condition, and results of operations.

We cannot predict the impact of the COVID-19 virus on our customers and other business partners, and the full effects of the COVID-19 virus are highly uncertain and cannot be predicted.

The COVID-19 virus is partially affecting our revenue, sponsorship and advertiser partners and other business partners, and we are not able to assess the full extent of the current impact nor predict the ultimate consequences that will result therefrom. For example, during our 2022 and 2021 fiscal years, as a result of the COVID-19 pandemic, certain of our advertising and sponsor partners were forced to reduce their marketing budgets. If our revenue and/or sales channels are substantially impaired for an extended period of time, our revenues will be materially reduced.

We are continuously monitoring our own operations and intend to take appropriate actions to mitigate the risks arising from the COVID-19 pandemic to the best of our abilities, but there can be no assurances that we will be successful in doing so. To the extent we are able to obtain information about and maintain communications with our revenue, sponsorship and advertiser partners, vendors and other business partners, we will seek to minimize disruptions to our revenue, content and distribution channels, but many circumstances will be beyond our control. Governmental action and/or regional quarantines may further result in labor shortages and work stoppages. All of these factors may have far reaching direct and indirect impacts on our business, operations, and financial results and condition. The ultimate extent of the effects of the COVID-19 pandemic on our Company is highly uncertain and will depend on future developments which cannot be predicted. Even after the COVID-19 outbreak has subsided, we may continue to experience material adverse impact on our business as a result of its global economic impact, including any related recession, as well as lingering impact on demand for our services, our customers, suppliers, vendors and other business partners.

Government proposed COVID-19 vaccine mandates could have a material adverse impact on our business and results of operations.

On November 5, 2021, the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”) issued an Emergency Temporary Standard (“ETS”) requiring that most employers with at least 100 employees ensure that their employees are fully vaccinated for COVID-19 or require employees to obtain a negative COVID-19 test at least once a week. On January 25, 2022, OSHA withdrew the ETS, although the agency did not withdraw the ETS as a proposed rule. OSHA clarified that it is prioritizing its resources to focus on finalizing a permanent COVID-19 Healthcare Standard. If the ETS is reissued or a new COVID-19 Healthcare Standard or similar standard is issued by OSHA, as a company with more than 100 employees, such standard(s) would require us to mandate COVID-19 vaccination of our workforce or have our unvaccinated employees undergo required weekly COVID-19 testing, which could be difficult and costly. Further, additional vaccine and testing mandates may be announced in jurisdictions in which we operate our business, and there could be potential conflict with actions by certain states that are in conflict with the federal mandate, the impacts of which remain uncertain. Requirements to mandate COVID-19 vaccination of our workforce or require our unvaccinated employees to be tested weekly could result in labor disruptions, employee attrition and difficulty securing future labor needs, and could have a material adverse effect on our revenues, costs, financial condition and results of operations.

We will incur significant increased costs if and when we become a public company.

Should we become a public company, we will incur significant legal, accounting and other expenses. Following the Direct Listing, we will be subject to mandatory reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. We will continue to incur costs associated with the preparation and filing of these SEC reports. Furthermore, we will be subject to additional corporate governance and other compliance requirements if our shares of common stock are listed on the Nasdaq Capital Market. 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 the Nasdaq Capital Market 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. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.

As a result of being a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock.

We are required pursuant to Section 404 of the Sarbanes-Oxley Act (“Section 404”) to furnish a report on internal control over financial reporting issued by management on, among other things, the effectiveness of our internal control over financial reporting on an annual basis. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Such a report is provided as part of the consolidated financial statements included in this Direct Listing. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

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 remain in compliance with Section 404, 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.

For the years ended March 31, 2022 and 2021, our management concluded that our disclosure controls and procedures and our internal control over financial reporting were not effective due to the existence of material weaknesses in our internal control over financial reporting during such periods. If we are unable to establish and maintain effective disclosure controls and internal controls over financial reporting, our ability to produce accurate financial statements on a timely basis or prevent fraud could be impaired, and the market price of our securities may be negatively affected.

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, 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. For our fiscal years ended March 31, 2022 and 2021, our management conducted an assessment of our disclosure controls and procedures and our internal control over financial reporting and concluded that they were ineffective for each of such periods, due to the existence of certain material weaknesses in our internal control over financial reporting. See Item 9A. Controls and Procedures. A material weakness is a deficiency, or 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 and corrected on a timely basis.

In connection with the preparation of our consolidated financial statements for the year ended March 31, 2022, management identified material weaknesses in the following: (i) management’s identification of and accounting for significant and unusual transactions; specifically over measurement period adjustments related to business combinations and the accounting for modifications of complex debt instruments, including review of valuation reports and key underlying assumptions; and (ii) revenue recognition and accounting for royalties, including the identification and testing of certain application controls within its information systems around the provisioning of accounts and tracking of related revenue and royalty expense, as well as the completeness and accuracy of key revenue and royalty reports used in the operation of certain control activities.

In connection with the preparation of our consolidated financial statements for the year ended March 31, 2021, management identified material weakness in the following: (i) our controls related to the preparation of the financial statements were not adequately designed to ensure the accuracy and completeness of amounts and disclosures and the classification between current and noncurrent liabilities, resulting in errors; (ii) our controls relating to proper evaluation and accounting of certain features embedded in complex debt and equity instruments. Specifically, we did not have sufficient technical resources to appropriately identify and evaluate certain features that require instruments or features to be accounted for as liabilities remeasured at fair value; (iii) our controls were not adequately designed to allow management to identify errors in the accounting for business combinations. Specifically, these deficiencies resulted in errors related to the determination of purchase consideration, the classification of earnouts, and identification of income tax assets and liabilities resulting from business combinations; and (iv) our automated application controls and manual controls relating to revenue and inventory of our recently acquired subsidiary, including the posting of these transactions, sales returns, inventory overhead allocations, and inventory cutoff were not adequately designed, which could have resulted in a material misstatement.

For the fiscal year ended March 31, 2022 we failed to remediate any of the material weaknesses identified during the fiscal year ended March 31, 2021. We may need to expend significant financial resources to remediate these material weaknesses. Beyond fiscal year ended March 31, 2022, we may not be able to remediate any current or future material weaknesses.

If we are unable to establish and maintain proper and effective disclosure controls and procedures and internal control over financial reporting, we may not be able to produce timely and accurate financial statements.

If in the future we identify new 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 and when applicable, 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.

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 Content Providers 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 may incur substantially more debt or take other actions that would intensify the risks discussed in this prospectus regarding our and/or LiveOne/s indebtedness.

In addition to LiveOne’s current outstanding debt and notes and our Bridge Notes, we and our subsidiaries may incur substantial additional debt, subject to restrictions contained in LiveOne’s and our existing and future debt instruments, some or all of which may be secured debt. The Harvest Notes and the senior credit facility contain certain restrictive covenants that limit our ability to merge with other companies or consummate certain changes of control, make certain investments, pay dividends or repurchase shares of our common stock, transfer or dispose of assets or enter into various specified transactions. We therefore may not be able to engage in any of the foregoing transactions unless we obtain the consents of our senior lenders or terminate our existing debt agreements. The Harvest Notes and the senior credit facility also contain certain covenants, including maintaining a minimum free cash amount at all times and are secured by substantially all of our and our subsidiaries’ assets. Please see more under “Risks Related to Our Relationship with LiveOne and its Indebtedness.”

We may not have sufficient cash flow from our business operations to make payments on our indebtedness.

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness depends on our performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt and/or obtaining additional equity capital on terms that may be onerous or highly dilutive. In the event of an acceleration of amounts due under our debt instruments as a result of an event of default, including upon the occurrence of an event that would reasonably be expected to have a material adverse effect on our business, operations, properties, assets or condition or a failure to pay any amount due, we may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments. There is no guarantee that we will be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal and interest under our debt agreements or to satisfy all of the financial covenants. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. Capital markets have been volatile in the recent past; a downturn could negatively impact our ability to access capital should the need arise. As a result, the inability to meet our debt obligations could cause us to default on those obligations. Any such defaults could materially harm our financial condition and liquidity.

We rely on key members of our management 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 Kit Gray, our President, Robert Ellin, our Executive Chairman, Aaron Sullivan, our Interim Chief Financial Officer, and Sue McNamara, our Head of Sales. Mr. Gray has extensive knowledge about our business and our operations, and the loss of Mr. Gray, Mr. Ellin, Mr. Sullivan or Ms. McNamara or any other key member of our senior 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. Gray or any other member of our management. Our executive team’s expertise and experience in acquiring, integrating and growing businesses, particularly those focused on podcasts and Content Providers, 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.

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 such 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. For example, please see more under “⸺ If LiveOne does not comply with the provisions of the senior credit facility and the Harvest Notes, its lenders may terminate their obligations to it and require LiveOne and/or us to repay all outstanding amounts owed thereunder.” 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 quarterly operating results may be volatile and are difficult to predict in the future, and our stock price may decline if we fail to meet the expectations of securities analysts or investors.

Our revenue, margins and other operating results could vary significantly in the future from quarter-to-quarter and year-to-year and may fail to match our past performance due to a variety of factors, including many factors that are outside of our control, including, our holding, promoting and managing our podcasting. Factors that may contribute to the variability of our operating results and cause the market price of our common stock to fluctuate include:

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 may face particular challenges in recruiting and retaining personnel who have experience in talent acquisition, marketing, sales, production, development, operations and other technical expertise, in the podcast industry, 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.

We engage a number of consultants to work for us. If the consultants that we utilize are characterized as employees and 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 believe that the consultants that we utilize in our business, as is customary to do so in our business, are properly characterized as independent contractors, tax or other regulatory authorities may in the future challenge our characterization of independent contractors. We are aware of a number of judicial decisions and legislative proposals that could bring about major reforms in worker classification, including the California legislature’s recent passage of California Assembly Bill 5 (“AB 5”). AB 5 purports to codify a new test for determining worker classification that is widely viewed as expanding the scope of employee relationships and narrowing the scope of independent contractor relationships. Given AB 5’s recent passage, there is no guidance from the regulatory authorities charged with its enforcement, and there is a significant degree of uncertainty regarding its application. In addition, AB 5 has been the subject of widespread national discussion and it is possible that other jurisdictions, including New York, may enact similar laws. If such regulatory authorities or state, federal or foreign courts were to determine that our recording artists and songwriters are employees, and not independent contractors, we would be required to withhold income taxes, to withhold and pay Social Security, Medicare and similar taxes and to pay unemployment and other related payroll taxes. We would also be liable for unpaid past taxes and subject to penalties. As a result, any determination that our consultants are our employees could have a material adverse effect on our business, financial condition and results of operations. 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.

Rising inflation may adversely affect us by increasing costs of labor, equipment and other costs beyond what we can recover through price increases.

Inflation can adversely affect us by increasing the costs of labor, technology, equipment and other costs required to operate and grow our business. The United States is experiencing high levels of inflation, which may depress consumer demand for our services and reduce our profitability if we are unable to raise prices enough to keep up with increases in our costs. Inflationary pressures have resulted in increases in salaries and the cost of certain equipment and technology necessary for the production of our services, and such increases may continue to impact us in the future. Accordingly, we are exposed to risks associated with significant levels of cost inflation. If we are unable to increase our prices to offset the effects of inflation, our business, operating results, and financial condition could be materially and adversely affected.

Our corporate culture has contributed to our success, and if we cannot successfully maintain our culture as we assimilate new employees, we could lose the innovation, creativity and teamwork fostered by our culture.

We are undergoing growth in our business, including in our employee headcount. A significant portion of our management team has been with us since inception. We expect that significant additional hiring will be necessary to support our strategic plans. This rapid influx of new team members from different business backgrounds may make it difficult for us to maintain our corporate culture. We believe our culture has contributed significantly to our ability to attract and retain talent, to acquire podcast content and to innovate and grow successfully. If our culture is negatively affected, our ability to support our growth and innovation may diminish.

LiveOne has a significant amount of indebtedness. Its total outstanding consolidated indebtedness as of September 30, 2022 was $29.1 million, net of fees and discounts. LiveOne’s existing debt agreements with senior facility lender and the holders of the Harvest Notes contain certain restrictive covenants that limit LiveOne’s and our ability to merge with other companies or consummate certain changes of control, make certain investments, pay dividends or repurchase shares of our common stock, transfer or dispose of assets, or enter into various specified transactions. Therefore we may not be able to engage in any of the foregoing transactions we obtain the consent of the holders of the Harvest Notes or terminate LiveOne’s existing debt agreements. LiveOne’s debt agreements also contain certain financial covenants, including maintaining a minimum cash amount at all times and achieving certain financial covenants and are secured by substantially all of our assets. There is no guarantee that LiveOne and/or our Company will be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal and interest under LiveOne’s debt agreements or to satisfy all of the financial covenants. LiveOne and/or our Company could in the future incur additional indebtedness beyond such amount that may further restrict our flexibility.

LiveOne’s substantial debt combined with our other financial obligations and contractual commitments could have other significant adverse consequences, including:

LiveOne intends to satisfy its current and future debt service obligations with its and our existing cash and cash equivalents and marketable securities and funds from external sources, including equity and/or debt financing. However, LiveOne and/or our Company may not have sufficient funds or may be unable to arrange for additional financing to pay the amounts due under LiveOne’s existing debt. Funds from external sources may not be available on acceptable terms, if at all. In the event of an acceleration of amounts due under our debt instruments as a result of an event of default, including upon the occurrence of an event that would reasonably be expected to have a material adverse effect on our business, operations, properties, assets or condition or a failure to pay any amount due, we may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments.

LiveOne may not have the ability to repay the amounts then due under the senior credit facility, Harvest Notes and/or convertible notes at maturity.

At maturity, the entire outstanding principal amount of the senior secured notes, Harvest Notes and convertible notes will become due and payable by us. As of September 30, 2022, $12,000 of LiveOne’s total indebtedness (excluding interest and unamortized debt discount and debt issuance costs) is due in fiscal 2023, and $26.6 million thereafter. LiveOne’s failure to repay any outstanding then due under its senior credit facility, Harvest Notes and/or convertible notes at maturity would constitute a default under such indentures. A default would increase the interest rate to the default rate under the Harvest Notes or the maximum rate permitted by applicable law until such amount is paid in full. A default under the Harvest Notes or the fundamental change itself could also lead to a default under agreements governing our future indebtedness. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, LiveOne may not have sufficient funds to repay its senior credit facility, Harvest Notes and/or convertible notes at maturity or make cash payments thereon. Furthermore, upon the occurrence and during the continuation of any event of default, the senior credit facility provider and the holders of the Harvest Notes, shall have the right to, among other things, take possession of our assets and property constituting the collateral thereunder and the right to assign, sell, lease or otherwise dispose of all or any part of the collateral. Please also see above under the risk factor captioned “⸺ If LiveOne does not comply with the provisions of the senior credit facility and the Harvest Notes, its lenders may terminate their obligations to it and require LiveOne and/or us to repay all outstanding amounts owed thereunder,” for potential consequences if an event of default is triggered as a result of LiveOne’s litigation with SX.

We may have conflicts of interest with LiveOne and, because of (i) certain provisions in our Amended and Restated Certificate of Incorporation relating to related person transactions and corporate opportunities, (ii) agreements we have and will enter into with LiveOne in connection with the Direct Listing, and (iii) LiveOne’s controlling beneficial ownership interest in our Company, we may not be able to resolve such conflicts on terms favorable to us.

Conflicts of interest may arise between LiveOne and us in a number of areas relating to our ongoing relationship. Potential conflicts of interest that we have identified include the following:

We rely on integrations with advertising platforms, demand-side platforms (“DSPs”), proprietary platforms and ad servers, over which we exercise very little control.

Our business depends on our ability to integrate our content with a variety of third-party advertising platforms, DSPs, proprietary platforms and ad services. We are able to make our podcasts available on other popular podcasting platforms such as Apple, Amazon, Spotify and wherever podcasts are heard, allowing our listeners to utilize such platforms to listen to our podcasts. We have also formed partnerships with advertising platforms to integrate our podcasts with their software and product offerings, allowing our advertisers to utilize our solutions wherever they purchase or place an ad. For example, we rely on integration with Apple and Spotify in order to provide our podcasts through their platforms. Apple or Spotify may determine to only host shows that are proprietary to them, which would have a significant effect on our ability to offer our podcasts to larger group of listeners and would materially adversely affect our business, results of operations and financial condition. Some of these integration partners have significant market share in the segment in which they operate. To date, we have relied on written contracts and other arrangements to govern our relationships with these partners. However, these are subject to change by such providers from time to time and in many instances the provider may choose to terminate these contracts without cause and with short notice periods. Many of these agreements are short term with automatic renewal provisions, and there can be no assurances that such providers will agree to renew their agreements with us. Moreover, such providers may choose to stop integrating with our podcasts and may unilaterally stop providing us with data necessary to our business if they acquire a competitor which provides podcasting services similar to ours or if they begin to deliver podcasts similar to ours on their own. We cannot assure you that our existing podcast partners and integration partners will continue to, or that potential new podcast partners or integration partners will agree to, integrate our podcasts into their podcast offerings or services. Such integrations may not be replaceable, and so loss of any such integrations could materially impact our business and our results of operations and we may lose listeners.

Our business and revenues could also be affected by social issues or disruptions. For example, if there is public disapproval or boycotting of a specific podcasting platform, such as Spotify or other podcasting platform, our ability to optimize ad placement or to forecast listener metrics may be impacted based on unforeseen trends or events.

We rely heavily on technology to distribute 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 substantially depends on advertising revenue and is supported by our PodcastOne App which offers users access to our podcasts on their favorite device. We cannot be sure that the PodcastOne App or any enhancements or other modifications we make in the future to such apps 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 distribution of podcasts 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.

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, 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 currently own the www.podcastone.com domain name. Internet regulatory bodies generally regulate domain names. If we lose the ability to use a domain name in a particular country, we would be forced either to incur significant additional expenses to market our services within that country or, in extreme cases, to elect not to offer our services in that country. Either result could harm our business, operating results, and financial condition. The regulation of domain names in the United States and in foreign countries is subject to change. Regulatory bodies could establish additional top-level domains, appoint additional domain name registrars, or modify the requirements for holding domain names. As a result, we may not be able to acquire or maintain the domain names that utilize our brand names in the United States or other countries in which we may conduct business in the future.

Litigation or proceedings before governmental authorities and administrative bodies may be necessary in the future to enforce our intellectual property rights, to protect our patent rights, trademarks, trade secrets, and domain names and to determine the validity and scope of the proprietary rights of others. Our efforts to enforce or protect our proprietary rights may be ineffective and could result in substantial costs and diversion of resources and management time, each of which could substantially harm our operating results. Additionally, changes in law may be implemented, or changes in interpretation of such laws may occur, that may affect our ability to protect and enforce our patents and other intellectual property.

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.

In addition, Internet, technology, and media companies are frequently subject to litigation based on allegations of infringement, misappropriation, or other violations of intellectual property rights. Many companies in these industries, including many of our competitors, have substantially larger patent and intellectual property portfolios than we do, which could make us a target for litigation as we may not be able to assert counterclaims against parties that sue us for patent, or other intellectual property infringement. In addition, various “non-practicing entities” that own patents and other intellectual property rights often attempt to aggressively assert claims in order to extract value from technology companies. Further, from time to time we may introduce new products and services, including in territories where we currently do not have an offering, which could increase our exposure to patent and other intellectual property claims from competitors and non-practicing entities. It is difficult to predict whether assertions of third-party intellectual property rights or any infringement or misappropriation claims arising from such assertions will substantially harm our business, operating results, and financial condition. If we are forced to defend against any infringement or misappropriation claims, whether they are with or without merit, are settled out of court, or are determined in our favor, we may be required to expend significant time and financial resources on the defense of such claims. Furthermore, an adverse outcome of a dispute may require us to pay significant damages, which may be even greater if we are found to have willfully infringed upon a party’s intellectual property; cease exploiting copyrighted content that we have previously had the ability to exploit; cease using solutions that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to redesign our solutions; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies, content, or materials; indemnify our partners and other third parties; and/or take other actions that may have material effects on our business, operating results, and financial condition.

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. 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. 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.

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, Wi-Fi 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, Wi-Fi 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 consumer 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 user 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.

Our reputation and relationships with subscribers would be harmed if our premium 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.

Due to the nature of such businesses, 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 or may purchase in the future our services and products electronically through their individual websites or otherwise register on the website for access to our 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 services and products that we believe enhance the user 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 EU, 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.

Although we intend to develop systems and processes that are designed to protect customer and employee information and to prevent security breaches or incidents (which could result in data loss or other harm or loss), such measures cannot provide absolute security or certainty. It is possible that advances in computer and hacker capabilities, new variants of malware, the development of new penetration methods and tools, inadvertent violations of company policies or procedures or other developments could result in a compromise of customer or employee information or a breach of the technology and security processes that are used to protect customer and employee information. The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems may change frequently and as a result, may be difficult for our business to detect for long periods of time. In addition, despite our best efforts, we may be unable to anticipate these techniques or implement adequate preventative measures. We may need to expend in the future significant capital and other resources to protect against and remedy such potential security breaches, incidents and their consequences, including the establishment of a dedicated cybersecurity organization within our larger technology environment.

We also face risks associated with security breaches and incidents affecting third parties with which we are affiliated or with which we otherwise conduct business. Consumers are generally concerned with the security and privacy of the Internet, and any publicized security problems affecting our businesses and/or third parties may discourage consumers from doing business with us, which could have an adverse effect on our business, financial condition and results of operations.

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 EU, 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.

The laws in this area are complex and developing rapidly. For instance, on April 14, 2016, the EU General Data Protection Regulation (the “GDPR”) became effective within Europe on May 25, 2018. The primary objectives of the GDPR are to give citizens of the EU back the control of their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU. We have not yet assessed the full effect of the GDPR. Failure to comply with the GDPR may result in significant monetary penalties. As we expand our operations into new jurisdictions, the costs associated with compliance with applicable local data privacy laws and regulations increases. It is possible that government or industry regulation in these markets will require us to deviate from our standard processes and/or make changes to our products, services and operations, which will increase operational cost and risk. 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.

We can give no assurances as to when we will consummate any future acquisitions or whether we will consummate any of them at all.

We may build our business through one or more strategic acquisitions and to possibly use our remaining cash to fund any cash portion of the consideration we will pay in connection with those acquisitions. However, such additional acquisitions, may 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 any future acquisition, it could 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 quickly and materially increase the number of additional podcasts available on our network, produce and/or participate in the planned 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.

In addition, 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 in integrating the operations of any businesses we may acquire in the future, 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.

Further, we expect that future target companies may have material weaknesses in internal controls relating to the proper application of accrual-based accounting under GAAP prior to our acquiring them. The Public Company Accounting Oversight Board 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 podcasts and podcasting networks has brought increased media attention, and a number of companies and investors have been making acquisitions of such podcasts and/or 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:

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 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. For example, see “Item 3. Legal Proceedings” regarding our ongoing litigation with Wantickets and its principal. 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.

The Distribution could result in significant tax liability to LiveOne and its stockholders.

The Distribution will not be determined to qualify for non-recognition of gain and loss, and therefore, U.S. Holders will be subject to tax. Each U.S. Holder who receives our common stock in the Distribution would generally be treated as receiving a distribution in an amount equal to the fair market value of our common stock received, which would generally result in (i) a taxable dividend to the U.S. Holder to the extent of that U.S. Holder’s pro rata share of LiveOne’s current and accumulated earnings and profits; (ii) a reduction in the U.S. Holder’s basis (but not below zero) in LiveOne common stock to the extent the amount received exceeds the stockholder’s share of LiveOne’s earnings and profits; and (iii) a taxable gain from the exchange LiveOne common stock to the extent the amount received exceeds the sum of the U.S. Holder’s share of LiveOne’s earnings and profits and the U.S. Holder’s basis in its LiveOne common stock.

LiveOne will also recognize gain in an amount up to the fair market value of our common stock held by LiveOne immediately before the Distribution. See below and “Material U.S. Federal Income Tax Consequences of the Distribution” for more information.

We may be unable to achieve some or all of the benefits that we expect to achieve from the Spin-Out.

We believe that, as an independent publicly-traded company, we will be able to, among other things, better focus our financial and operational resources on our specific business, implement and maintain a capital structure designed to meet our specific needs, design and implement corporate strategies and policies that are targeted to our business, more effectively respond to industry dynamics and create effective incentives for our management and employees that are more closely tied to our business performance. However, by separating from LiveOne, we may be more susceptible to market fluctuations and have less leverage with suppliers, and we may experience other adverse events. In addition, we may be unable to achieve some or all of the benefits that we expect to achieve as an independent company in the time we expect, if at all. The completion of the Spin-Out will also require significant amounts of our management’s time and effort, which may divert management’s attention from operating and growing our business.

We may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent publicly-traded company, and we may experience increased costs after the Spin-Out.

LiveOne has provided us with various corporate services. Following the Spin-Out, LiveOne will have no obligation to provide us with assistance other than the transition services described under “Certain Relationships and Related Party Transactions—Agreements with LiveOne.” These services do not include every service that we have received from LiveOne in the past, and LiveOne is only obligated to provide these services for limited periods from the date of the Spin-Out. Accordingly, following the Spin-Out, we will need to provide internally or obtain from unaffiliated third parties the services we currently receive from LiveOne. We may be unable to replace these services in a timely manner or on terms and conditions as favorable as those we receive from LiveOne. We may be unable to successfully establish the infrastructure or implement the changes necessary to operate independently or may incur additional costs. If we fail to obtain the services necessary to operate effectively or if we incur greater costs in obtaining these services, our business, financial condition and results of operations may be adversely affected.

We derived the historical financial information included in this prospectus from LiveOne’s consolidated financial statements, and this information does not necessarily reflect the results of operations and financial position we would have achieved as an independent publicly-traded company during the periods presented or those that we will achieve in the future. This is primarily because of the following factors:

Following the Spin-Out, we will also be responsible for the additional costs associated with being an independent publicly-traded company, including costs related to corporate governance, investor and public relations and public reporting. In addition, certain costs incurred by LiveOne, including executive oversight, accounting, treasury, tax, legal, human resources, occupancy, procurement, information technology and other shared services, have historically been allocated to us by LiveOne; but these allocations may not reflect the future level of these costs to us as we begin to provide these services ourselves. Therefore, our historical financial statements may not be indicative of our future performance as an independent publicly-traded company. We cannot assure you that our operating results will continue at a similar level when we are an independent publicly-traded company. For additional information about our past financial performance and the basis of presentation of our financial statements, see “Selected Historical Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical financial statements and the notes thereto included elsewhere in this prospectus.

We may not be able to access the credit and capital markets at the times and in the amounts needed on acceptable terms.

From time to time we may need to access the long-term and short-term capital markets to obtain financing. Although we believe that the public markets sources of capital in place at the time of the Spin-Out will permit us to finance our operations for the foreseeable future on acceptable terms and conditions, we have not previously accessed the capital markets as an independent public company, and our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including our financial performance, our credit ratings or absence thereof, the liquidity of the overall capital markets and the state of the economy. We cannot assure you that we will have access to the capital markets at the times and in the amounts needed or on terms acceptable to us.

Certain of LiveOne’s and our agreements contain provisions that require the consent of third parties to the Spin-Out. In particular, LiveOne and our Company are required to (i) obtain the consents of LiveOne’s senior lenders under its existing senior secured debt agreements, (ii) obtain approval of the listing of our common stock on the Nasdaq Capital Market and (iii) have the SEC declare the effectiveness of our Registration Statement on Form S-1, of which this prospectus is a part. If we fail to obtain such consents on commercially reasonable and satisfactory terms or at all, we may be unable to consummate the Spin-Out and/or such consents may impair our entitlement to the benefit of these contracts in the future.

We may have been able to receive better terms from unaffiliated third parties than the terms we receive in our agreements with LiveOne.

We will negotiate agreements with LiveOne related to our separation from LiveOne, including the Separation Agreement, Transition Services Agreement and Employee Matters Agreement, while we are still part of LiveOne. Accordingly, these agreements may not reflect terms that would have resulted from arms-length negotiations between unaffiliated parties. The terms of the agreements being negotiated relate to, among other things, allocations of assets, liabilities, rights, indemnifications and other obligations between LiveOne and us. We may have received better terms from third parties because third parties may have competed with each other to win our business. See “Certain Relationships and Related Party Transactions” for more information.

Our listing differs significantly from an underwritten initial public offering.

Prior to the opening of trading on the Nasdaq Capital Market, there will be no book building process and no price at which underwriters initially sell shares to the public to help inform efficient and sufficient price discovery with respect to the opening trades on the Nasdaq Capital Market. This listing of our common stock on the Nasdaq Capital Market differs from an underwritten initial public offering in several significant ways, which include, but are not limited to, the following:

Such differences from an underwritten initial public offering could result in a volatile trading price for our common stock and uncertain trading volume, which may adversely affect your ability to sell any common stock that you may purchase.

We have agreed to indemnify certain of the Registered Stockholders for certain claims arising in connection with sales under this prospectus. Large indemnity payments would materially adversely affect our business, financial condition, and results of operations.

Our stock price may be volatile, and could decline significantly and rapidly.

The listing of our common stock and the registration of the Registered Stockholders’ shares of common stock is a novel process that is not an underwritten initial public offering. We have engaged Joseph Gunnar to serve as our financial advisors. There will be no book building process and no price at which underwriters initially sell shares to the public to help inform efficient and sufficient price discovery with respect to the opening trades on the Nasdaq Capital Market. Pursuant to Nasdaq’s rules, once Joseph Gunnar, in its capacity as our designated financial advisor to perform the functions under Nasdaq Rule 4120(c)(8), has notified Nasdaq that our shares of common stock are ready to trade, Nasdaq will calculate the Current Reference Price for our shares of common stock, in accordance with Nasdaq’s rules. If Joseph Gunnar then approves proceeding at the Current Reference Price, Nasdaq will conduct a price validation test in accordance with Nasdaq Rule 4120(c)(8). As part of conducting such price validation test, Nasdaq may consult with Joseph Gunnar, if the price bands need to be modified, to select the new price bands for purposes of applying such test iteratively until the validation tests yield a price within such bands. Upon completion of such price validation checks, the applicable orders that have been entered will then be executed at such price and regular trading of our shares of common stock on the Nasdaq Capital Market will commence. Under Nasdaq’s rules, the “Current Reference Price” means: (i) the single price at which the maximum number of orders to buy or sell our shares of common stock can be matched; (ii) if more than one price exists under clause (i), then the price that minimizes the number of our shares of common stock for which orders cannot be matched; (iii) if more than one price exists under clause (ii), then the entered price (i.e. the specified price entered in an order by a customer to buy or sell) at which our shares of common stock will remain unmatched (i.e. will not be bought or sold); and (iv) if more than one price exists under clause (iii), a price determined by Nasdaq after consultation with Joseph Gunnar in its capacity as financial advisor. Joseph Gunnar will exercise any consultation rights only to the extent that it may do so consistent with the anti-manipulation provisions of the federal securities laws, including Regulation M (to the extent applicable), or applicable relief granted thereunder. Joseph Gunnar will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on consideration of volume, timing, and price. In particular, Joseph Gunnar will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. If Joseph Gunnar does not approve proceeding at the Current Reference Price (for example, due to the absence of adequate pre-opening buy and sell interest), Joseph Gunnar will request that Nasdaq delay the open until such a time that sufficient price discovery has been made to ensure a reasonable amount of volume crosses on the opening trade. The length of such delay could vary greatly, from a short period of time such as one day, to a decision to not list our shares on the Nasdaq Capital Market at all. As a result, the absence of sufficient price discovery may result in delays in the opening of trading and, volatile prices and supply once trading commences. The opening public price may bear no relationship to the market price for our common stock after our listing, and thus may decline below the opening public price.

Moreover, prior to the opening trade, there will not be a price at which underwriters initially sell shares of common stock to the public as there would be in an underwritten initial public offering. The absence of a predetermined initial public offering price could impact the range of buy and sell orders collected by Nasdaq from various broker-dealers. Consequently, upon listing on the Nasdaq Capital Market, the trading price of our common stock may be more volatile than in an underwritten initial public offering and could decline significantly and rapidly.

Further, if the trading price of our common stock is above the level that investors determine is reasonable for our common stock , some investors may attempt to short our common stock after trading begins, which would create additional downward pressure on the trading price of our common stock, and there will be more ability for such investors to short our common stock in early trading than is typical for an underwritten public offering given the lack of contractual lock-up agreements or other restrictions on transfer.

The trading price of our common stock following the listing also could be subject to wide fluctuations in response to numerous factors in addition to the ones described in the preceding risk factors, many of which are beyond our control, including:

In addition, stock markets with respect to newly public companies, particularly companies in the technology industry, have experienced significant price and volume fluctuations that have affected and continue to affect the stock prices of these companies. Stock prices of many companies, including technology companies, have fluctuated in a manner often unrelated to the operating performance of those companies. These fluctuations may be even more pronounced in the trading market for our common stock shortly following the listing of our common stock on the Nasdaq Capital Market as a result of the supply and demand forces described above. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our management’s attention.

Prior to the listing of our common stock on the Nasdaq Capital Market, there has been no public market for our capital stock. There has been limited trading of our capital stock historically in private transactions. In the section titled “Sale Price History of our Capital Stock,” we have provided the historical sales prices of our capital stock in private transactions. Given the limited history of sales, this information may have little or no relation to broader market demand for our common stock and thus the initial trading price of our common stock on the Nasdaq Capital Market once trading begins. As a result, you should not place undue reliance on these historical sales prices as they may differ materially from the opening trading prices and subsequent trading prices of our common stock on the Nasdaq Capital Market. For more information about how the initial listing price on the Nasdaq Capital Market will be determined, see “Plan of Distribution.”

An active, liquid, and orderly market for our common stock may not develop or be sustained. You may be unable to sell your shares of common stock at or above the price at which you purchased them.

We currently expect our common stock to be listed and traded on the Nasdaq Capital Market. Prior to listing on the Nasdaq Capital Market, there has been no public market for our common stock. Moreover, consistent with Regulation M and other federal securities laws applicable to our listing, we have not consulted with Registered Stockholders or other existing stockholders regarding their desire or plans to sell shares in the public market following the listing or discussed with potential investors their intentions to buy our common stock in the open market. While our common stock may be sold after our listing on the Nasdaq Capital Market by the Registered Stockholders pursuant to this prospectus or by our other existing stockholders in accordance with Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), unlike an underwritten initial public offering, there can be no assurance that any Registered Stockholders or other existing stockholders will sell any of their shares of common stock, and there may initially be a lack of supply of, or demand for, common stock on the Nasdaq Capital Market. Conversely, there can be no assurance that the Registered Stockholders and other existing stockholders will not sell all of their shares of our common stock, resulting in an oversupply of our common stock on the Nasdaq Capital Market. In the case of a lack of supply of our common stock, the trading price of our common stock may rise to an unsustainable level. Further, institutional investors may be discouraged from purchasing our common stock if they are unable to purchase a block of our common stock in the open market in a sufficient size for their investment objectives due to a potential unwillingness of our existing stockholders to sell a sufficient amount of our common stock at the price offered by such institutional investors and the greater influence individual investors have in setting the trading price. If institutional investors are unable to purchase our common stock in a sufficient amount for their investment objectives, the market for our common stock may be more volatile without the influence of long-term institutional investors holding significant amounts of our common stock. In the case of a lack of demand for our common stock, the trading price of our common stock could decline significantly and rapidly after our listing. Therefore, an active, liquid, and orderly trading market for our common stock may not initially develop or be sustained, which could significantly depress the trading price of our common stock and/or result in significant volatility, which could affect your ability to sell your shares of common stock.

LiveOne owns majority percentage of our common stock and voting power and will be able to exert significant control over matters subject to stockholder approval. In addition, our Executive Chairman, Robert Ellin, and stockholders affiliated with him own a significant percentage of LiveOne common stock and will be able to exert significant control over matters subject to stockholder approval.

Prior to the completion of the Spin-Out, LiveOne owns all of the shares of our outstanding common stock and voting power and will be able to exert significant control over matters subject to stockholder approval. In addition, Robert Ellin, our Executive Chairman, and his affiliates beneficially own approximately 19.4% of shares of LiveOne’s common stock issued and outstanding as of December 15, 2022. In addition, pursuant to the Distribution, Robert Ellin, our Executive Chairman, and his affiliates shall receive approximately 239,500 shares of our common stock, which is approximately 1.0% of shares of our common stock issued and outstanding upon completion of the Spin-Out (after giving effect to the Bridge Notes Conversion). Therefore, LiveOne and Mr. Ellin and stockholders affiliated with him may have the ability to influence us through their ownership positions. LiveOne and Mr. Ellin and these stockholders may be able to determine or significantly influence all matters requiring stockholder approval. For example, LiveOne and 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.

Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to an 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. 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 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. 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. If our board of directors elects to issue additional shares of our common stock, stock options, restricted stock units and/or other equity-based awards under an equity incentive plan, our stockholders may experience additional dilution, which could cause our stock price to fall.

Sales of a substantial number of shares of our common stock in the public market by certain of our 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 holders of the Bridge Notes that restrict such stockholders’ ability to transfer shares of our common stock for up to six months from the completion of the Direct Listing. Subject to certain limitations, all of our outstanding shares held by our directors, executive officers and entities affiliated with our directors prior to the Direct Listing, and the other shares subject to lock-up periods described above, will become eligible for sale upon expiration of the applicable 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.

Furthermore, our business profile and market capitalization may not fit the investment objectives of some LiveOne stockholders and, as a result, these LiveOne stockholders may sell their shares of our common stock after the Spin-Out. See risk factor below captioned “— Substantial sales of our common stock may occur in connection with the Spin-Out, which could cause our stock price to decline.” Low trading volume for our common stock, which may occur if an active trading market does not develop, among other reasons, would amplify the effect of the above factors on our stock price volatility.

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could adversely affect the trading price of our common stock.

Substantial sales of our common stock may occur in connection with the Spin-Out, which could cause our stock price to decline.

LiveOne stockholders receiving shares of our common stock in the Distribution (other than our officers and directors) generally may sell those shares immediately in the public market. Although we have no actual knowledge of any plan or intention of any significant stockholder to sell our common stock following the Spin-Out, it is likely that some LiveOne stockholders, possibly including some of its larger stockholders, will sell their shares received in the Distribution if, for reasons such as our business profile or market capitalization as an independent company, we do not fit their investment objectives, or, in the case of index funds, we are not a participant in the index in which they are investing. The sales of significant amounts of our common stock or the perception in the market that this will occur may decrease the market price of our common stock.

In addition, following the effectiveness of the registration statement of which this prospectus forms a part, we intend to file a registration statement to register all shares subject to awards outstanding or reserved for future issuance under our equity compensation plan. Accordingly, these shares will be able to be freely sold in the public market upon issuance, subject to applicable vesting requirements and compliance by affiliates with Rule 144.

Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise will dilute all other stockholders.

We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors, and consultants under our equity incentive plan. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.

Provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, as they will be in effect immediately following the effectiveness of the registration statement of which this prospectus forms a part, may have the effect of delaying or preventing a change of control or changes in our management. Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws will include provisions that:

These provisions may discourage, delay 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, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”), which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. In addition, these provisions may frustrate, discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control of our Company, including unsolicited takeover attempts, even though the transaction may offer our stockholders the opportunity to sell their common stock at a price above the prevailing market price. Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that you would receive a premium for your shares of our common stock in an acquisition.

Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, as they will be in effect immediately following the effectiveness of the registration statement of which this prospectus forms a part, will provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. In addition, as permitted by Section 145 of the DGCL, our Amended and Restated Bylaws and indemnification agreements that we have entered or intend to enter into with our directors and officers will provide that:

While we have procured directors’ and officers’ liability insurance policies, such insurance policies may not be available to us in the future at a reasonable rate, may not cover all potential claims for indemnification, and may not be adequate to indemnify us for all liability that may be imposed.

Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws will provide for an exclusive forum in the Court of Chancery of the State of Delaware for certain disputes between us and our stockholders, and that the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act.

Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws will provide that: (i) unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for: (A) any derivative action or proceeding brought on our behalf, (B) any action asserting a claim for or based on a breach of a fiduciary duty owed by any of our current or former directors, officers, other employees, agents, or stockholders to us or our stockholders, including, without limitation, a claim alleging the aiding and abetting of such a breach of fiduciary duty, (C) any action asserting a claim against us or any of our current or former directors, officers, other employees, agents, or stockholders arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (D) any action asserting a claim related to or involving us that is governed by the internal affairs doctrine; (ii) unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act and the rules and regulations promulgated thereunder; (iii) the exclusive forum provisions are intended to benefit and may be enforced by us, our officers and directors, the financial advisors to any offering giving rise to such complaint, and any other professional or entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering; and (iv) any person or entity purchasing or otherwise acquiring or holding any interest in our shares of capital stock will be deemed to have notice of and consented to these provisions. Nothing in our current certificate of incorporation or bylaws or our restated certificate of incorporation or amended and restated bylaws precludes stockholders that assert claims under the Exchange Act from bringing such claims in federal court, to the extent that the Exchange Act confers exclusive federal jurisdiction over such claims, subject to applicable law.

We believe these provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums, and protection against the burdens of multi-forum litigation. If a court were to find the choice of forum provision that will be contained in our restated certificate of incorporation or our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition, and results of operations.

FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

The Financial Industry Regulatory Authority (“FINRA”) has adopted rules requiring that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a high probability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements are applicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect on the market for and price of our common stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.

The trading market for our shares of common stock will be influenced by the research and reports that securities or industry analysts publish about us. Securities and industry analysts currently provide publish limited research focused on our Company. If the current securities or industry analysts do not provide extensive coverage or commence coverage of our Company, the price and trading volume of our shares of common stock could be negatively impacted. If other securities or industry analysts initiate coverage and one or more of the analysts who cover us downgrade our shares of common stock or publish inaccurate or unfavorable research about our Company, the price of our shares of common stock would likely decline. Furthermore, if one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, demand for our shares of common stock could decrease, which might cause the price of our shares of common stock and trading volume to decline.

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.

Because the market value of our common stock held by non-affiliates was less than $250 million as of the last business day of our fiscal year ended March 31, 2022, we are considered to be a “smaller reporting company” as defined by the SEC’s revised rules. 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 our 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 if we have either (i) a public float of less than $250 million held by non-affiliates as of the last business day of the second quarter of our then current fiscal year or (ii) annual revenues of less than $100 million during such recently completed fiscal year with less than $700 million in public float as of the last business day of the second quarter of such fiscal year.

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

Section 382 and 383 (“Section 382 and 383”) 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 these Section 382 and 383 limitations, any ownership changes as defined by Section 382 and 383 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.

We are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act (Section 404), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors. In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new or revised accounting standards.

We will remain an emerging growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of the listing of our common stock on the Nasdaq Capital Market; (2) the last day of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (3) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (4) the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates.

We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. For example, if we do not adopt a new or revised accounting standard, our future results of operations may not be comparable to the results of operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

The risks above do not necessarily comprise of all those associated with an investment in our Company. This registration statement contains forward looking statements that involve unknown risks, uncertainties and other factors that may cause our actual results, financial condition, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Factors that might cause such a difference include, but are not limited to, those set out above.

This prospectus contains forward-looking statements. All statements contained in this prospectus other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and our objectives for future operations, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions are intended to identify such forward-looking statements.

Forward-looking statements contained in this prospectus include, but are not limited to, statements about:

The forward-looking statements in this prospectus are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We believe that these factors include, but are not limited to, adverse changes in general economic or market conditions and other one-time events and other important factors set forth under “Risk Factors.” Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.

These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus forms a part with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

The estimates and forward-looking statements contained in this prospectus speak only as of the date of this prospectus. Except as required by applicable law, we undertake no obligation to publicly update or revise any estimates or forward-looking statements whether as a result of new information, future events or otherwise, or to reflect the occurrence of unanticipated events.

This prospectus contains estimates and forecasts concerning our industry, our current and anticipated future solutions, that are based on industry publications and reports or other publicly available information as well as our internal estimates and expectations. This information involves a number of assumptions and limitations, and is subject to significant uncertainty, and you are cautioned not to give undue weight to these estimates. Industry surveys and publications generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy and completeness of the included information. We have not independently verified this third-party information. Similarly, our internal estimates and forecasts are based on a variety of assumptions, including assumptions regarding market acceptance of podcasts and the manner in which this new and rapidly evolving market will develop. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in this prospectus.

The source of certain statistical data, estimates, and forecasts contained in this prospectus are the following independent industry publications or reports:

We own or otherwise have rights to the trademarks, service marks, and copyrights, including those mentioned in this prospectus, used in conjunction with the operation of our business. This prospectus includes our own trademarks, which are protected under applicable intellectual property laws, as well as trademarks, service marks, copyrights, and tradenames of other companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights, or tradenames to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Solely for convenience, trademarks and tradenames referred to in this prospectus may appear without the ^®, ^™, or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames.

On July 15, 2022, LiveOne announced plans for the spin-out of our Company as a separate public company and LiveOne’s plan to dividend a portion of shares of our common stock to LiveOne’s stockholders as of a future record date. LiveOne has now determined to distribute five to ten percent of LiveOne’s equity interest in us to LiveOne’s eligible stockholders, with the exact terms of such dividend and the condition of eligibility of LiveOne’s stockholders to receive such dividend to be announced at a future date, prior to the registration statement of which this prospectus is a part being declared effective by the SEC. We refer to such dividend distribution in this prospectus as the Distribution. Following the Spin-Out, LiveOne, the holders of the Bridge Notes (on as converted basis) and our management will own the remaining outstanding shares of our common stock, and we will operate independently from LiveOne (other than our Company continuing to be LiveOne’s majority owned subsidiary). No approval of LiveOne common stock holders is required in connection with the Spin-Out, and LiveOne common stock holders will not have any appraisal rights in connection with the Spin-Out.

The completion of the Spin-Out is subject to the satisfaction of a number of conditions. In addition, LiveOne has the right not to complete the Distribution and/or terminate the Direct Listing process prior to its completion if, at any time, LiveOne’s board of directors determines, in its sole and absolute discretion, that the Distribution and/or the Direct Listing is not in the best interests of LiveOne or its stockholders or is otherwise not advisable. For a more detailed description, see “The Spin-Out — Conditions to the Spin-Out.”

LiveOne’s board of directors considered the following potential benefits in deciding to pursue the Spin-Out:

LiveOne will distribute to its eligible stockholders of record as of the Record Date a special dividend of five to ten percent of LiveOne’s equity interest in us, which in aggregate amounts to 1,260,000 shares of our common stock, consisting of (i) 1,240,000 Distribution Shares to be distributed as a special dividend in the Distribution and (ii) an additional 20,000 Distribution Shares to the extent that any Distribution Shares to be issued to LiveOne’s stockholders of record in the Distribution are required to be rounded up. The exact terms of such dividend and the condition of eligibility of LiveOne’s stockholders to receive such dividend to be announced at a future date, prior to the registration statement of which this prospectus is a part being declared effective by the SEC

Prior to the Spin-Out, LiveOne will deliver all of the Distribution Shares to the distribution agent. Vstock Transfer, LLC (“Vstock”), will serve as distribution agent in connection with the Distribution and as transfer agent and registrar for our common stock.

If you own shares of LiveOne common stock as of the close of business on both the Record Date and the Distribution Date, the shares of our common stock that you may be entitled to receive in the Distribution will be issued to your account as follows:

Commencing on or shortly after the Distribution Date, the distribution agent will mail to you an account statement that indicates the number of whole shares of our common stock that have been registered in book-entry form in your name. We expect it will take the distribution agent up to two weeks after the Distribution Date to complete the distribution of the shares of our common stock and mail statements of holding to all registered stockholders.

If you sell any of your shares of LiveOne common stock on or before the Distribution Date, the buyer of those shares may in some circumstances be entitled to receive the shares of our common stock to be distributed in respect of the LiveOne shares you sold. Therefore, you must hold your shares of LiveOne common stock as of both the Record Date and the Distribution Date, to be eligible to receive the portion of the Distribution Shares that you may be entitled to receive in the Distribution. See “The Spin-Out — Trading Prior to the Distribution Date” for more information.

We are not asking LiveOne stockholders to take any action in connection with the Spin-Out. No approval of the holders of LiveOne common stock is required for the Spin-Out. We are not asking you for a proxy and request that you not send us a proxy. We are also not asking you to make any payment or surrender or exchange any of your shares of LiveOne common stock for shares of our common stock. The number of outstanding shares of LiveOne common stock will not change as a result of the Spin-Out.

On the Distribution Date, you will be entitled to receive one share of our common stock for each ______ shares of LiveOne common stock you hold on the Record Date.

The distribution agent will not distribute any fractional shares of our common stock as part of the Distribution. The distribution agent will round up any fractional shares resulting from the Distribution to the nearest whole share, and each LiveOne stockholder who otherwise would be entitled to a fractional share shall receive, in lieu of a fractional share, a whole new share of our common stock at no additional cost. The distribution agent is not an affiliate of either LiveOne or us.

The distribution agent will reflect for each registered holder of LiveOne common stock one whole share of our common stock that have been registered in book-entry form in your name in lieu of that holder’s fractional share as soon as practicable following the Distribution Date. We expect it will take the distribution agent up to two weeks after the Distribution Date to complete the distribution of the shares of our common stock and mail statements of holding to all registered stockholders.

If you hold your shares of LiveOne common stock through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with one whole share of our common stock that you receive in the Distribution in lieu of your fractional share as soon as practicable following the Distribution Date.

After the Spin-Out, we will be an independent publicly-traded company. Immediately following the Spin-Out, we expect to have approximately ______ holders of shares of our common stock and approximately 23.1 million shares of our common stock outstanding, based on the number of LiveOne stockholders and shares of LiveOne common stock outstanding on the Record Date. The actual number of shares of our common stock LiveOne will distribute in the Distribution will depend on the actual number of shares of LiveOne common stock outstanding on the Record Date, which will reflect any issuance of new shares or exercises of outstanding options pursuant to LiveOne’s equity plans, and any repurchase of LiveOne shares by LiveOne under its common stock repurchase program, on or prior to the Record Date. The Spin-Out will not affect the number of outstanding shares of LiveOne common stock or any rights of LiveOne stockholders, although the trading price of shares of LiveOne common stock immediately following the Distribution may be lower than immediately prior to the Distribution because the trading price of LiveOne common stock will no longer reflect the partial value of the Distribution Shares. Furthermore, until the market has fully analyzed the value of LiveOne without the Company, the trading price of shares of LiveOne common stock may fluctuate.

Before our separation from LiveOne, we intend to enter into a Separation Agreement and several other agreements with LiveOne related to the Spin-Out. These agreements will govern the relationship between us and LiveOne up to and after completion of the Spin-Out and allocate between us and LiveOne various assets, liabilities, rights and obligations, including employee benefits, intellectual property and tax-related assets and liabilities. We describe these arrangements in greater detail under “Certain Relationships and Related Party Transactions — Agreements with LiveOne.”

As of the date of this prospectus, we are a wholly owned subsidiary of LiveOne. Accordingly, no public market for our common stock currently exists, although a “when-issued” market in our common stock may develop prior to the Spin-Out. See “The Spin-Out — Trading Prior to the Distribution Date” below for an explanation of a “when-issued” market. We intend to list our common stock on the Nasdaq Capital Market under the symbol “PODC.” Following the Spin-Out, LiveOne common stock will continue to trade on the Nasdaq Capital Market under the symbol “LVO.”

Neither we nor LiveOne can assure you that our common stock will begin trading on the Nasdaq Capital Market. In addition, neither we nor LiveOne can assure you as to the trading price of LiveOne common stock or our common stock after the Spin-Out, or as to whether the combined trading prices of our common stock and the LiveOne common stock after the Spin-Out will be less than, equal to or greater than the trading prices of LiveOne common stock prior to the Spin-Out. The trading price of our common stock may fluctuate significantly following the Spin-Out. See “Risk Factors — Risks Relating to Our Common Stock and the Securities Market” for more detail.

The shares of our common stock distributed to LiveOne stockholders will be freely transferable, except for shares received by individuals who are LiveOne’s and/or our affiliates. Individuals who may be considered our affiliates after the Spin-Out include individuals who control, are controlled by or are under common control with us, as those terms generally are interpreted for federal securities law purposes. These individuals may include some or all of LiveOne’s and/or our directors and executive officers. Individuals who are LiveOne’s and/or our affiliates will be permitted to sell their shares of our common stock only pursuant to an effective registration statement under the Securities Act, or an exemption from the registration requirements of the Securities Act, such as those afforded by Section 4(1) of the Securities Act or Rule 144 thereunder.

We anticipate that trading in our common stock may begin on a “when-issued” basis as early as two trading days prior to the Distribution Date and continue up to and including the Distribution Date. “When-issued” trading in the context of a Distribution refers to a sale or purchase made conditionally on or before the Distribution Date because the securities of the spun-off entity have not yet been distributed. If you own shares of LiveOne common stock at the close of business on both the Record Date and the Distribution Date, you will be entitled to receive shares of our common stock in the Distribution. You may trade this entitlement to receive shares of our common stock, without the shares of LiveOne common stock you own, on the “when-issued” market. We expect “when-issued” trades of our common stock to settle within four trading days after the Distribution Date. On the first trading day following the Distribution Date, we expect that “when-issued” trading of our common stock will end and “regular-way” trading will begin.

We also anticipate that, as early as two trading days prior to the Record Date and continuing up to and including the Distribution Date, there will be two markets in LiveOne common stock: a “regular-way” market and an “ex-distribution” market. Shares of LiveOne common stock that trade on the regular-way market will trade with an entitlement to receive shares of our common stock in the Distribution. Shares that trade on the ex-distribution market will trade without an entitlement to receive shares of our common stock in the Distribution. Therefore, if you sell shares of LiveOne common stock in the regular-way market up to and including the Distribution Date, you will be selling your right to receive shares of our common stock in the Distribution. However, if you own shares of LiveOne common stock at the close of business on both the Record Date and the Distribution Date and sell those shares on the ex-distribution market up to and including the Distribution Date, you will still receive the shares of our common stock that you would otherwise be entitled to receive in the Distribution.

We have applied to list our common stock on the Nasdaq Capital Market. Following the Distribution Date, we expect shares of our common stock to be listed on the Nasdaq Capital Market under the trading symbol “PODC.” If “when-issued” trading occurs, the listing for our common stock is expected to be under a trading symbol different from our regular-way trading symbol. We will announce our “when-issued” trading symbol when and if it becomes available. If the Spin-Out does not occur, all “when-issued” trading will be null and void.

We expect that the Distribution will be effective on or about the Distribution Date in connection with the consummation of the Direct Listing, which we expect to be effective on or about ______, 2023, provided that the following conditions shall have been satisfied:

We are furnishing this prospectus solely to provide information to LiveOne’s stockholders who will receive shares of our common stock in the Distribution. You should not construe this prospectus as an inducement or encouragement to buy, hold or sell any of our securities or any securities of LiveOne. We believe that the information contained in this prospectus is accurate as of the date set forth on the cover. Changes to the information contained in this prospectus may occur after that date, and neither we nor LiveOne undertakes any obligation to update the information except in the normal course of our and LiveOne’s public disclosure obligations and practices and except as required by applicable law.

The following is a summary of the material U.S. federal income tax consequences to holders of LiveOne common stock in connection with the Distribution. This summary is based on the Code, the Treasury Regulations promulgated under the Code and judicial and administrative interpretations of those laws, in each case as in effect and available as of the date of this prospectus and all of which are subject to change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below.

This summary is limited to holders of LiveOne common stock that are U.S. Holders, as defined immediately below, that hold their LiveOne common stock as a capital asset. A “U.S. Holder” is a beneficial owner of LiveOne common stock that is, for U.S. federal income tax purposes:

This summary does not discuss all tax considerations that may be relevant to stockholders in light of their particular circumstances, nor does it address the consequences to stockholders subject to special treatment under the U.S. federal income tax laws, such as:

This summary does not address any U.S. state or local or foreign tax consequences or any estate, gift or other non-income tax consequences.

If a partnership, or any other entity treated as a partnership for U.S. federal income tax purposes, holds LiveOne common stock, the tax treatment of a partner in that partnership will generally depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to its tax consequences.

YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL AND FOREIGN TAX CONSEQUENCES OF THE DISTRIBUTION.

Subject to the qualifications and limitations set forth herein, we believe that for U.S. federal income tax purposes:

U.S. Holders that have acquired different blocks of LiveOne common stock at different times or at different prices should consult their tax advisors regarding the allocation of their aggregate adjusted tax basis among, and the holding period of, shares of our common stock distributed with respect to such blocks of LiveOne common stock.

The opinions above do not address any U.S. state or local or foreign tax consequences of the Distribution. The opinions assume that the Distribution will be completed according to the terms of the Separation Agreement and rely on the facts as stated in the Separation Agreement, the other ancillary agreements, this prospectus and a number of other documents. In addition, the opinions above are based on certain representations as to factual matters from, and certain covenants by, LiveOne and us. The opinions cannot be relied on if any of the assumptions, representations or covenants are incorrect, incomplete or inaccurate or are violated in any material respect.

The conclusions set forth above are not binding on the Internal Revenue Service (“IRS”) or the courts, and we cannot assure you that the IRS or a court will not take a contrary position.

Treasury Regulations require each LiveOne stockholder that, immediately before the Distribution, owned 5% or more (by vote or value) of the total outstanding stock of LiveOne to attach to such stockholder’s U.S. federal income tax return for the year in which the Distribution occurs a statement setting forth certain information related to the Distribution.

The following is a summary of the material U.S. federal income tax consequences to LiveOne in connection with the Distribution that may be relevant to holders of LiveOne common stock.

Subject to the qualifications and limitations set forth herein, we believe that the Distribution will not qualify for non-recognition of gain and loss under Section 355 of the Code for U.S. federal income tax purposes, and LiveOne will need to recognize gain in an amount up to the fair market value of our common stock held by it immediately before the Distribution.

The statements set forth above are subject to the same qualifications and limitations as are set forth above in relation to the consequences of the Distribution to U.S. Holders.

Registered Stockholders may, or may not, elect to sell or distribution, as applicable, shares of our common stock covered by this prospectus. To the extent any Registered Stockholder chooses to sell or distribution, as applicable, shares of our common stock covered by this prospectus, we will not receive any proceeds from any such sales of our common stock. See “Principal and Registered Stockholders.”

We have never declared or paid any cash dividends on our capital stock. We do not currently anticipate paying dividends on our common stock. Any declaration and payment of future dividends to holders of our common stock will be at the discretion of our board of directors and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends, the provisions of Delaware law affecting the payment of dividends and distributions to stockholders, and other considerations that our board of directors deems relevant. In addition, future agreements governing our indebtedness may limit our ability to pay dividends. See “Risk Factors — Risks Related to Ownership of Our Common Stock — We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.”

The following table sets forth our cash and cash equivalents, and our capitalization as of September 30, 2022 as follows:

You should read this information in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus and the “Summary Consolidated Financial and Operating Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of this prospectus.

The number of shares of our common stock common stock outstanding as of September 30, 2022 excludes the following:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the “Summary Consolidated Financial and Operating Information” section of this prospectus and the consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the “Risk Factors” section of this prospectus. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Our fiscal year end is March 31, and references throughout this prospectus to a given fiscal year are to the 12 months ended on that date.

We were incorporated in the State of Delaware on February 5, 2014 and are a leading podcast platform and publisher that makes our content available to audiences via all podcasting distribution platforms, including our website (www.podcastone.com), our PodcastOne app, Apple Podcasts, Spotify, Amazon Music and more. We were recently ranked #14 on the list of Top Podcast Publishers by the podcast metric company Podtrac.

We are currently a wholly owned subsidiary of LiveOne, a Nasdaq listed company, and will be a majority owned subsidiary of LiveOne and a standalone publicly traded company after the completion of the Spin-Out. We intend to mitigate risk by acquiring multiple assets over time and across a broad spectrum of podcast related media and companies. We intend to develop these assets to provide returns via organic growth, revenue production, out-licensing, sale or spin out.

We also produce vodcasts (video podcasts), branded podcasts, merchandise, and live events on behalf of our talent and clients. With a proven 360-degree advertiser solution for multiplatform integration opportunities and hyper-targeting, we deliver millions of monthly impressions, 4.8+ million monthly unique listeners, and 20+ million IAB monthly downloads. With content covering all verticals (i.e. sports, entertainment, true-crime, business, audio dramas, self-growth, etc.), we provide a platform for brands to reach their most sought after targeted audiences.

Our operating model is focused on offering white glove service to our shows, talent, and advertising clients. With an in-house sales, production, marketing, and tech team, we believe PodcastOne delivers more to clients and talent than any other publisher in the marketplace. This allows us to scale our operations while attracting talent who bring in brand advertisers and revenue. We earn revenue through the sale of embedded host read ads, dynamic ads (host read and otherwise), segment sponsorships, and programmatic monetization channels. We also provide the opportunity for clients to have 100% share of voice with branded podcast episodes or series as well as live tours, merch, and IP ownership for original programming.

In addition to our core business, we also built, own and operate a solution for the growing number of independent podcasters, Launchpad One. Launchpad One is a self-publishing podcast platform, created to provide a low or no cost tool for independent podcasters without access to parent podcasting networks or state of the art equipment to create shows. Launchpad One serves as a talent pool for us to find new podcasts and talent.

We have experienced significant growth in recent years driven by increased advertising activity. For the years ended March 31, 2022, the period July 1, 2020 to March 31, 2021 and April 1, 2020 to June 30, 2020, our revenue was $32.3 million, $19.7 million and $4.2 million, respectively, representing year-over-year growth of 36%. Our revenue was $17.1 million and $16.0 million, respectively, for the six months ended September 30, 2022 and 2021, respectively, representing year-over-year growth of 7%. For the years ended March 31, 2022, the period July 1, 2020 to March 31, 2021 and April 1, 2020 to June 30, 2020 and six months ended September 30, 2022 and 2021, our net income (loss) was $(4.1) million, $(3.4) million, $(1.2) million, $1.2 million, and $(2.5) million, respectively. For the years ended March 31, 2022 the period July 1, 2020 to March 31, 2021 and April 1, 2020 to June 30, 2020 and six months ended September 30, 2022 and 2021, our net cash provided by (used in) operating activities was $(2.0) million, $0.3 million, $(0.4) million, $3.8 million, and $2.0 million, respectively.

We believe that the growth and future success of our business depends on many factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations.

The digital advertising industry is introducing new ways to measure and price advertising inventory. For example, a significant portion of advertisers are in the process of moving from purchasing advertisement impressions based on the number of advertisements served by the applicable ad server to a new “viewable” impression standard (based on number of pixels in view and duration) for select products. In the absence of a uniform industry standard, agencies and advertisers have adopted several different measurement methodologies and standards. In addition, measurement services may require technological integrations, which are still being evaluated by the advertising industry without an agreed-upon industry standard metric. As these trends in the industry continue to evolve, our advertising revenue may be adversely affected by the availability, accuracy, and utility of the available analytics and measurement technologies as well as our ability to successfully implement and operationalize such technologies and standards.

Further, the digital advertising industry is shifting to data-driven technologies and advertising products, such as automated buying. These data-driven advertising products and automated buying technologies allow publishers and advertisers to use data to target advertising toward specific groups of users who are more likely to be interested in the advertising message delivered to them. These advertising products and programmatic technologies are currently more developed in terms of advertising technology and industry adoption on the web than they are on mobile or on other software applications, and may not integrate with our desktop software version of the ad-supported services. Because the majority of our ad-supported user hours occur on mobile devices, if we are unable to deploy effective solutions to monetize the mobile device usage by our ad-supported user base, our ability to attract advertising spend, and ultimately our advertising revenue, may be adversely affected by this shift. In addition, we rely on third-party advertising technology platforms to participate in automated buying, and if these platforms cease to operate or experience instability in their business models, it also may adversely affect our ability to capture advertising spend.

We generate revenue by charging a cost per thousand impressions (“CPM”) based on the volume of purchased digital ads that we measure on behalf of these customers. If the volume of impressions we measure does not continue to grow or decreases for any reason, our business will suffer. For example, if digital ad spending remains constant and our advertiser customers transition to higher CPM ad inventory, overall impression volumes may decrease, which may result in fewer impressions for us to verify and a corresponding decline in our revenues.

Our podcasts are available to users online alongside our digital Internet radio. Our users are able to listen to a variety of podcasts, from music, radio personalities, news, entertainment, comedy and sports. The podcasts are available on the LiveOne platforms and also on other leading podcast listening platforms such as Apple Music, Spotify, and Amazon. Similar to our digital Internet radio fee structure, we monetize podcasts through (i) paid advertising or (ii) paid premium membership services. We own one of the largest networks of podcast content in North America, which has over 300 exclusive podcast shows that produces over 300 episodes per week and has generated over 2.48 billion downloads during the year ended March 31, 2022. In April 2021, we announced an agreement with Samsung for all PodcastOne distributed content to be available via the Listen tab on Samsung TV.

In addition to PodcastOne’s core business, it also built, owns and operates a solution for the growing number of independent podcasters, LaunchPadOne. LaunchPadOne is a self-publishing podcast platform, created to provide a low or no cost tool for independent podcasters without access to parent podcasting networks or state of the art equipment to create shows. LaunchPadOne serves as a talent pool for us to find new podcasts and talent.

We review a number of operating and financial metrics, including the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. We are not aware of any uniform standards for calculating these key metrics, which may hinder comparability with other companies who may calculate similarly-titled metrics in a different way.

While the COVID-19 pandemic has had an adverse effect on the global economy, including the businesses of many of our customers and prospective customers and did, in the early stages of the pandemic, result in increased attrition from our smaller customers and those customers in the most impacted industries such as travel and entertainment, overall, the COVID-19 pandemic has resulted in favorable trends for our business and the businesses of those customers who have been able to leverage digital optimization of their products as sales increasingly shifted online. For example, during the second quarter of fiscal year 2020, the average customer’s event utilization rate, which is the percent of contracted event volume a customer consumes, increased to over 100% signaling early upsell opportunities.

Although we believe the COVID-19 pandemic has largely resulted in favorable trends for our business, we have experienced business disruptions, particularly at our San Francisco headquarters due to shelter-in-place orders and restrictions on our ability to travel to customers. Moreover, our existing and prospective customers have experienced and may continue to experience slowdowns in their businesses, including due to ongoing worldwide supply chain disruptions, which in turn has and may result in reduced demand for our platform, lengthening of sales cycles, loss of customers, and difficulties in collections. In addition, the pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, which could limit our ability to access capital on favorable terms or at all. The ongoing impact of the pandemic on our future business, financial condition, and results of operations depends on the pandemic’s duration and severity, which are difficult to assess or predict. See “Risk Factors” for further discussion of the impact of the COVID-19 pandemic on our business.

The following table presents certain non-GAAP financial measures, along with the most directly comparable U.S. GAAP measure, for each period presented below. In addition to our results determined in accordance with U.S. GAAP, we believe these non-GAAP financial measures are useful in evaluating our operating performance. See below for a description of the non-GAAP financial measures and their limitations as an analytical tool. A reconciliation is also provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP.

Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) before (a) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (b) legal, accounting and other professional fees directly attributable to acquisition activity, (c) employee severance payments and third party professional fees directly attributable to acquisition or corporate realignment activities, (d) certain non-recurring expenses associated with legal settlements or reserves for legal settlements in the period that pertain to historical matters that existed at acquired companies prior to their purchase date, (e) depreciation and amortization (including goodwill and intangible asset impairment, if any), and (f) certain stock-based compensation expense. We use Adjusted EBITDA to evaluate the performance of our operating segment. We believe that information about Adjusted EBITDA assists investors by allowing them to evaluate changes in the operating results of our business separate from non-operational factors that affect net income (loss), thus providing insights into both operations and the other factors that affect reported results. Adjusted EBITDA is not calculated or presented in accordance with GAAP. A limitation of the use of Adjusted EBITDA as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in our business. Accordingly, Adjusted EBITDA should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.

Adjusted EBITDA Margin is a non-GAAP financial measure that we define as the ratio of Adjusted EBITDA to Revenue.

Non-GAAP financial measures are presented for supplemental informational purposes only. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under U.S. GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under U.S. GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. In addition, free cash flow does not reflect our future contractual commitments and the total increase or decrease of our cash balance for a given period. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures and to not rely on any single financial measure to evaluate our business.

We generate revenue primarily consist of revenues generated from the sale of audio, video, and display advertising space to third-party advertising exchanges. Revenues are recognized based on delivery of impressions over the contract period to the third-party exchanges, either when an ad is placed for listening or viewing by a visitor or when the visitor “clicks through” on the advertisement. The advertising exchange companies report the variable advertising revenue performed on a monthly basis which represents the Company’s efforts to satisfy the performance obligation. The Company earns advertising revenues primarily for fees earned from advertisement placement purchased by the customer during the time the podcast is delivered to the viewing audience, under the terms and conditions as set forth in the applicable podcasting agreement calculated using impressions.

Cost of sales consists of direct costs comprised of revenue sharing expenses owed to content creators and commissions.

Our operating expenses consist of cost of sales, product development, sales and marketing, and general and administrative expenses. Personnel-related expenses are the most significant component of operating expenses and consist of salaries, benefits, stock-based compensation expense, and, in the case of sales and marketing expenses, sales commissions. Operating expenses also include an allocation of overhead costs for facilities and shared IT-related expenses. As we continue to invest in our business, we expect our operating expenses to continue to increase in dollar amount, and although we believe our operating expenses as a percentage of revenue will decrease over the longer term, we expect operating expenses as a percentage of revenue will increase in the short term as we invest in product innovation and sales growth and incur additional professional services and compliance costs as we operate as a public company.

Sales and Marketing include direct and indirect costs related to the Company’s event advertising and marketing. Additionally, sales and marketing include merchandising advertising and royalty costs. Advertising expenses to promote the Company’s services are expensed as incurred.

Product development costs not capitalized are primarily expenses for research and development, product and content development activities, including internal software development and improvement costs which have not been capitalized by the Company.

Sales and Marketing include the direct and indirect costs related to the Company’s product and event advertising and marketing. Additionally, sales and marketing include merchandising advertising and royalty costs. Advertising expenses to promote the Company’s services are expensed as incurred.

General and administrative expenses consist primarily of personnel-related expenses for our finance, human resources, information technology, and legal organizations. These expenses also include non-personnel costs, such as outside legal, accounting, and other professional fees, software subscriptions, as well as certain tax, license, and insurance-related expenses, and allocated overhead costs.

We also expect to recognize certain expenses as part of our transition to a publicly-traded company, consisting of professional fees and other expenses. In the quarters leading up to the listing of our common stock, we expect to incur professional fees and expenses, and in the quarter of our listing we expect to incur fees paid to our financial advisors in addition to other professional fees and expenses related to such listing. Following the listing of our common stock, we expect to continue to incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a U.S. securities exchange and costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC. In addition, as a public company, we expect to incur additional costs associated with accounting, compliance, insurance, and investor relations. As a result, we expect our general and administrative expenses to continue to increase in dollar amount for the foreseeable future but to generally decrease as a percentage of our revenue over the longer term, although the percentage may fluctuate from period to period depending on the timing and amount of our general and administrative expenses, including in the short term as we expect to incur increased compliance and professional service costs.

Other income (expense), net consists primarily of interest expense, gain/losses on derivatives, forgiveness on PPP loans and changes in fair value of contingent consideration.

The following tables set forth our results of operations for the periods presented and as a percentage of our revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.

The following table sets forth the components of our statements of operations data, for each of the periods presented, as a percentage of revenue.

Comparison of Six Months Ended September 30, 2022 to Six Months Ended September 30, 2021

Revenue increased $1.2 million, or 7%, during the six months ended September 30, 2022 compared to the six months ended September 30, 2021. The increase in revenue was primarily due to growth in advertising inventory.

Cost of sales decreased $0.6 million, or 5%, during the six months ended September 30, 2022 compared to the six months ended September 30, 2021. The decrease was primarily due to improved revenue share splits with content creators resulting in lower content cost.

Sales and marketing expenses increased $0.6 million, or 29%, during the six months ended September 30, 2022 compared to the six months ended September 30, 2021. The increase was primarily due to an increase in advertising to generate sales.

Product development expenses decreased $0.1 million, or 35%, during the six months ended September 30, 2022 compared to the six months ended September 30, 2021. The decrease was due to additional project costs being capitalized.

General and administrative expenses decreased by $0.8 million, or 33%, during the six months ended September 30, 2022 compared to the six months ended September 30, 2021. The decrease was primarily due to the reduction of headcount.

Amortization of intangible asset expenses decreased by $0.2 million, or 82%, during the six months ended September 30, 2022 compared to the six months ended September 30, 2021. The decrease was primarily due to the content creator relationship asset being fully amortized in the prior period.

Other income (expense), net increased $1.5 million, or 6,727%, during the six months ended September 30, 2022 compared to the six months ended September 30, 2020. The increase is primarily due to income earned on the earnout settlement of $2.2 million and increase in change in fair value of derivative of $0.9 million which was offset by an increase in interest expense of $1.4 million as a result of accretion of the debt discount on our Bridge Loan.

Revenue increased $8.5 million, or 36%, for fiscal 2022 compared to fiscal 2021. The increase in revenue was primarily due to the increase in advertising inventory.

Cost of sales increased $8.0 million, or 44%, for fiscal 2022 compared to fiscal 2021. The increase was primarily due to an increase revenue noted above.

Sales and marketing expenses increased 1.2 million, or 29%, for fiscal 2022 compared to fiscal 2021. The increase was primarily due to an increase in advertising spend.

Product development decreased $0.4 million, or 61%, for fiscal 2022 compared to fiscal 2021. The decrease was primarily due to a decrease in project activity.

General and administrative expenses increased $1.1 million, or 31%, for fiscal 2022 compared to fiscal 2021. The increase was primarily due to an increase in stock-based compensation.

Other income (expense), net decreased $1.9 million, or 141%, for fiscal 2022 compared to fiscal 2021. The decrease is primarily due to income of $1.1 million as a result of forgiveness on our PPP loans in addition to a reduction of $0.8 million due to the change in fair value of contingent consideration.

As of September 30, 2022, our principal sources of liquidity were our cash and cash equivalents in the amount of $4.1 million, which primarily are invested in cash in banking institutions in the U.S. The vast majority of our cash proceeds were received as a result of our operations, a bridge loan and intercompany loans from our parent. As of September 30, 2022, we had a bridge loan of $4.3 million, a derivative liability of $3.4 million and a related party payable balance of $4.4 million. Our parent is required to maintain minimum cash balances as a result of debt covenants on their debt. As a result it may be necessary for us to maintain cash balances to support the consolidated minimum requirement, thus impacting cash available to support our liquidity in the future.

As reflected in our consolidated financial statements included elsewhere in this prospectus, we have a history of losses used cash of $3.8 million in operating activities for the six months ended September 30, 2022 and had a working capital deficiency of $6.2 million as of September 30, 2022. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year from the date that the financial statements are issued. In addition, our independent registered public accounting firm in their audit report to our financial statements for the fiscal year ended March 31, 2022 expressed substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to execute our strategy and on our ability to raise additional funds through the sale of equity and/or debt securities via public and/or private offerings.

Our long-term ability to continue as a going concern is dependent upon our ability to increase revenue, reduce costs, achieve a satisfactory level of profitable operations, and obtain additional sources of suitable and adequate financing. Our ability to continue as a going concern is also dependent its ability to further develop and execute on our business plan. We may also have to reduce certain overhead costs through the reduction of salaries and other means and settle liabilities through negotiation. There can be no assurance that management’s attempts at any or all of these endeavors will be successful.

The following table shows a summary of our cash flows for the periods presented:

Our largest source of operating cash is cash collection from sales of advertising. Our primary uses of cash from operating activities are for revenue share payments to content creators, personnel-related expenses, marketing expenses and software expenses. In the last several years, we have generated negative cash flows from operating activities and have supplemented working capital requirements through net proceeds from contributions from our parent company.

Net cash used in operating activities of $3.8 million for the six months ended September 30, 2022 reflects our net income of 1.2 million, adjusted by non-cash items such as depreciation and amortization, stock-based compensation, accretion of our debt discount and change in fair value of contingent consideration and derivatives of $1.1 million as well as net cash used from changes in our operating assets and liabilities of $3.9 million. The net cash provided by changes in operating assets and liabilities primarily consisted of a $0.9 million decrease in accounts receivable, increase of $0.1 million in prepaid expenses, offset by an increase of $3.8 million on related party receivable/payables, $0.8 million decrease in accrued expenses and accounts payable, resulting primarily from increases in accrued professional services, marketing, accrued payroll, and benefits due to an increase in the size of our operations.

Net cash used in operating activities of $2.0 million for the six months ended September 30, 2021 reflects our net loss of $2.5 million, adjusted by non-cash items such as depreciation and amortization, stock-based compensation, forgiveness on our PPP loans and change in fair value of contingent consideration of $1.6 million as well as net cash used from changes in our operating assets and liabilities of $1.1 million. The net cash provided by changes in operating assets and liabilities primarily consisted of a $3.4 million increase in accounts receivable, increase of $0.1 million in prepaid expenses, offset by an increase of $0.9 million in related party receivable/payable, $2.3 million increase in accrued expenses and accounts payable, resulting primarily from increases in accrued professional services, marketing, accrued payroll, and benefits due to an increase in the size of our operations.

Net cash used in operating activities of $2.0 million for fiscal 2022 reflects our net loss of $4.6 million, adjusted by non-cash items such as depreciation and amortization, stock-based compensation, forgiveness on our PPP loans and change in fair value of contingent consideration of $2.7 million as well as net cash used from changes in our operating assets and liabilities of $0.5 million. The net cash used by changes in operating assets and liabilities primarily consisted of a $4.1 million increase in accounts receivable, increase of $0.3 million in prepaid expenses, offset by an increase of $2.0 million increase in related party receivables/payables, $1.8 million increase in accrued expenses and accounts payable, resulting primarily from increases in accrued professional services, marketing, accrued payroll, and benefits due to an increase in the size of our operations.

Net cash used in operating activities of $0.2 million for fiscal 2021 reflects our net loss of $4.1 million, adjusted by non-cash items such as depreciation and amortization, stock-based compensation, forgiveness on our PPP loans and change in fair value of contingent consideration of $2.2 million as well as net cash provided from changes in our operating assets and liabilities of $2.3 million. The net cash provided by changes in operating assets and liabilities primarily consisted of a $0.2 million decrease in accounts receivable, decrease of $0.7 million in prepaid expenses and a decrease of $1.0 million in deferred revenue, offset by an increase of $0.7 million increase in related party receivables/payables, $ $1.6 million increase in accrued expenses and accounts payable, resulting primarily from increases in accrued professional services, marketing, accrued payroll, and benefits due to an increase in the size of our operations.

Net cash used in investing activities of $0.1 million for the six months ended September 30, 2022 consisted of $0.1 million of capitalized internal-use software development costs and in purchases of property and equipment.

Net cash used in investing activities of $0.2 million for the six months ended September 30, 2021 consisted of $1.3 million in cash received from the PodcastOne acquisition and $0.2 million of capitalized internal-use software development costs.

Net cash used in investing activities of $0.1 million for fiscal 2022 consisted of $0.1 million of capitalized internal-use software development costs and in purchases of property and equipment.

Net cash provided by investing activities of $1.2 million for fiscal 2021 consisted of $1.3 million in cash received from the PodcastOne acquisition and $0.1 million of capitalized internal-use software development costs.

Net cash provided by financing activities of $7.0 million for the six months ended September 30, 2022 primarily consisted of approximately $7.4 million in net proceeds from the sale and issuance of convertible notes and warrants.

Net cash provided by financing activities of $1.1 million for fiscal 2021 primarily consisted of $1.1 million in net proceeds from notes payable.

As of March 31, 2022, the contractual commitment amounts in the table below are associated with agreements that are enforceable and legally binding. Purchase orders issued in the ordinary course of business are not included in the table below, as our purchase orders represent authorizations to purchase rather than binding agreements.

In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties. Additionally, in connection with the listing of our common stock, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon us to provide indemnification under such agreements, and there are no claims that we are aware of that could have a material effect on our financial position, results of operations, or cash flows.

For all periods presented, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Our cash and cash equivalents consists of cash on hand. As of September 30, 2022, we had cash and cash equivalents of $4.1 million. We do not have any marketable securities and we do not enter into investments for trading or speculative purposes. Our investments are exposed to market risk due to fluctuations in interest rates, which may affect our interest income on cash and cash equivalents. However, an immediate 10% increase or decrease in interest rates would not have a material effect on the fair value of our portfolio. We therefore do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates.

We do not believe that inflation has had a material effect on our business, results of operations, or financial condition. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, results of operations, or financial condition.

We generate revenue primarily from sales of advertising. Revenue is recognized when, or as, the related performance obligation is satisfied by transferring the control of the promised service to a customer. The amount of revenue recognized reflects the consideration that we expect to be entitled to receive in exchange for these services.

We account for revenue contracts with customers by applying the requirements of ASC 606, which includes the following steps:

Advertising revenue primarily consist of revenues generated from the sale of audio, video, and display advertising space to third-party advertising exchanges. Revenues are recognized based on delivery of impressions over the contract period to the third-party exchanges, either when an ad is placed for listening or viewing by a visitor or when the visitor “clicks through” on the advertisement. The advertising exchange companies report the variable advertising revenue performed on a monthly basis which represents the Company’s efforts to satisfy the performance obligation. The Company earns advertising revenues primarily for fees earned from advertisement placement purchased by the customer during the time the podcast is delivered to the viewing audience, under the terms and conditions as set forth in the applicable podcasting agreement calculated using impressions.

From time to time the Company enters into barter transactions involving advertising provided in exchange for goods and services. Revenue from barter transactions is recognized based on delivery of impressions and in the same manner as described above. Services received are charged to expense when received or utilized. If services are received prior to the delivery of impressions, a liability is recorded. If delivery of impressions has occurred before the receipt of goods or services, a receivable is recorded.

See Note 2 to our consolidated financial statements included elsewhere in this prospectus for more information regarding recent accounting pronouncements.

We are an emerging growth company, as defined in the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

PodcastOne (the “Company,” “PodcastOne,” “we,” “us” or “our”) is a leading podcast platform and publisher that makes its content available to audiences via all podcasting distribution platforms, including PodcastOne’s website (www.podcastone.com), Apple Podcasts, Spotify, Amazon Music and more. We are a majority owned subsidiary of LiveOne, Inc., a Delaware corporation and a Nasdaq-listed company (“LiveOne”). We have recently been recently ranked #14 on the list of Top Podcast Publishers by the podcast metric company,

Delaware		7370		35-2503373
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

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ABOUT THIS PROSPECTUS	ii
PROSPECTUS SUMMARY	1
QUESTIONS AND ANSWERS ABOUT THE SPIN-OUT	16
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING INFORMATION	20
RISK FACTORS	23
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	68
INDUSTRY, MARKET AND OTHER DATA	69
TRADEMARKS, SERVICE MARKS, COPYRIGHTS AND TRADENAMES	70
THE SPIN-OUT	70
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION	74
USE OF PROCEEDS	76
DIVIDEND POLICY	77
CAPITALIZATION	77
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	78
BUSINESS	91
MANAGEMENT	104
EXECUTIVE COMPENSATION	111
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	119
PRINCIPAL AND REGISTERED STOCKHOLDERS	124
DESCRIPTION OF CAPITAL STOCK	130
SHARES ELIGIBLE FOR FUTURE SALE	136
SALE PRICE HISTORY OF OUR CAPITAL STOCK	137
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS	137
PLAN OF DISTRIBUTION	141
LEGAL MATTERS	143
EXPERTS	143
WHERE YOU CAN FIND ADDITIONAL INFORMATION	144
INDEX TO FINANCIAL STATEMENTS	F-1

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(in thousands)
Purchase commitments	$	2,579	$	2,483	$	96	$	—	$	—

Total contractual obligations	$	2,579	$	2,483	$	96	$	—	$	—

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☒

	●	reduced ad budgets and spend, order cancellations and increased competition for advertising revenue;

	●	the effect of the pandemic on our customers and other business partners and vendors;

	●	changes in how we conduct operations, including our events;

	●	increased competition with alternative media platforms and technologies;

	●	the inability of customers to pay amounts owed to our Company, or delays in collections of such amounts;

	●	additional goodwill or other impairment charges;

	●	limitations on our employee resources, including because of work-from-home, stay-at-home and shelter-in-place orders from federal or state governments, employee furloughs, or sickness of employees or their families;

	●	diversion of management resources to focus on mitigating the impacts of the COVID-19 virus;

	●	reduced capital expenditures; and

	●	impacts from prolonged remote work arrangements, including increased cybersecurity risks.

	●	the popularity, usefulness, ease of use, performance and reliability of our podcasts, compared to those of our competitors;

	●	our ability to attract new listeners and YouTube viewers;

	●	the timing and market acceptance of our podcasts, platform and services, which includes the PodcastOne distribution network.

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

	●	our ability to establish and maintain relationships with our podcasters to provide new content for our network;

	●	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;

	●	retain and motivate talented employees, particularly engineers, producers and platform 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 arrangements;

	●	investments in new products, features, and functionality;

	●	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;

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

	●	general administration, including legal, accounting, and other expenses; and

	●	awareness of our reputation and the brand on a global basis; strength relative to our competitors.

	●	Ability to cross-promote internally, by leveraging our network of podcasts, and externally, due to our in-depth relationship, with competitors.

	●	Utilize talent booking to enable cross platform promotion through guest appearances.

	●	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.

	●	prior to the Spin-Out, we operated as part of LiveOne’s broader corporate organization, and LiveOne performed various corporate functions for us. Our historical financial information reflects allocations of corporate expenses from LiveOne for these and similar functions. These allocations may not reflect the costs we will incur for similar services in the future as an independent publicly-traded company;

	●	we will enter into transactions with LiveOne that did not exist prior to the Spin-Out or modify our existing agreements with LiveOne, such as LiveOne’s provision of transition services, which will cause us to incur new costs; and

	●	Our historical financial information does not reflect changes that we expect to experience in the future as a result of our separation from LiveOne, including changes in our cost structure, personnel needs, tax structure, financing and business operations. As part of LiveOne, we enjoyed certain benefits from LiveOne’s operating diversity, size, borrowing leverage and available capital for investments, and we will lose these benefits after the Spin-Out. As an independent entity, we may be unable to purchase services and technologies, such as insurance and health care benefits and computer software licenses or access capital markets on terms as favorable to us as those we obtained as part of LiveOne prior to the Spin-Out.

	●	There are no underwriters. Therefore, buy and sell orders submitted prior to and at the opening of trading of our common stock on the Nasdaq Capital Market will not have the benefit of being informed by a published price range or a price at which the underwriters initially sell shares to the public, as would be the case in an underwritten initial public offering. Moreover, there will be no underwriters assuming risk in connection with the initial resale of shares of our common stock. Unlike in a traditional underwritten offering, this registration statement does not include the registration of additional shares that may be used at the option of the underwriters in connection with overallotment activity. Moreover, we will not engage in, and have not and will not, directly or indirectly, request the financial advisors to engage in, any special selling efforts or stabilization or price support activities in connection with any sales made pursuant to this registration statement. In an underwritten initial public offering, the underwriters may engage in “covered” short sales in an amount of shares representing the underwriters’ option to purchase additional shares. To close a covered short position, the underwriters purchase shares in the open market or exercise the underwriters’ option to purchase additional shares. In determining the source of shares to close the covered short position, the underwriters typically consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the underwriters’ option to purchase additional shares. Purchases in the open market to cover short positions, as well as other purchases underwriters may undertake for their own accounts, may have the effect of preventing a decline in the trading price of shares of our common stock. Given that there will be no underwriters’ option to purchase additional shares and no underwriters engaging in stabilizing transactions with respect to the trading of our common stock on the Nasdaq Capital Market, there could be greater volatility in the trading price of our common stock during the period immediately following the listing. See also — “Our stock price may be volatile, and could decline significantly and rapidly.”

	●	There is not a fixed or determined number of shares of common stock available for sale in connection with the registration and the listing, except we expect approximately 1,277,718 shares of our common stock to be sold on our first trading day in order to fund the tax withholding and remittance obligations arising in connection with the RSUs that will vest and settle upon that day (based on an assumed 49.32% tax withholding rate). Therefore, there can be no assurance that any Registered Stockholders or other existing stockholders will sell any of their shares of common stock, and there may initially be a lack of supply of, or demand for, shares of common stock on the Nasdaq Capital Market. Alternatively, we may have a large number of Registered Stockholders or other existing stockholders who choose to sell their shares of common stock in the near term, resulting in potential oversupply of our common stock, which could adversely impact the trading price of our common stock once listed on the Nasdaq Capital Market and thereafter.

	●	Our future shareholders who will receive the Distribution Shares have not entered into contractual lock-up agreements or have any other restrictions on transfer (other than those shareholders who are our affiliates). LiveOne has not entered into any contractual lock-up agreement and is not subject to any other restrictions on transfer (other than with respect to the shares of our common stock underlying the Bridge Notes and Bridge Warrants owned by LiveOne). LiveOne and our other Registered Stockholders have entered into lock-up agreements with our Company pursuant which they agreed not to sell any shares of our common stock beneficially owned by them underlying the Bridge Notes and Bridge Warrants, and certain of our officers and directors have entered into lock-up agreements with our Company pursuant which they agreed not to sell any shares of our common stock beneficially owned by them or securities convertible, exchangeable or exercisable into, shares of our common stock beneficially owned, until the earliest to occur, if any (the “Restriction Period”), of (i) the termination of the underwriting agreement with respect to the Qualified Financing before the sale of any securities to the underwriters of the Qualified Financing, (ii) the termination of the Qualified Financing or Qualified Event, as applicable and (iii) with respect to the Purchasers, three months from the date of the consummation of the Qualified Financing or Qualified Event, as applicable, and with respect to our officers and directors, six months from the date of the consummation of the Qualified Financing or Qualified Event, as applicable, subject to certain exceptions as set forth below. have entered into contractual lock-up agreements. In an underwritten initial public offering, it is customary for an issuer’s officers, directors, and most or all of its other stockholders to enter into a 180-day contractual lock-up arrangement with the underwriters to help promote orderly trading immediately after such initial public offering. Consequently, any of LiveOne’s stockholders who receive the Distribution Shares, excluding our directors and officers who own our common stock, may sell any or all of their shares at any time, including immediately upon listing. Our stockholders receiving shares of our common stock as a result of the conversion of their Bridge Notes or exercise of their Bridge Warrants may sell any or all of their shares at any time after the expiration of the Restriction Period. If such sales were to occur in a significant volume in a short period of time following the listing, it may result in an oversupply of our common stock in the market, which could adversely impact the trading price of our common stock. See also “—Substantial sales of our common stock may occur in connection with the Spin-Out, which could cause our stock price to decline. Following our listing, sales of substantial amounts of our common stock in the public markets, or the perception that sales might occur, could cause the trading price of our common stock to decline.” In the event that the following conditions are both met at any time following the conclusion of the Measuring Period as defined below, the Restriction Period shall immediately terminate: (a) the closing price of our common stock reflects a price per share equal to or greater than 25% of the price per share (or unit, if units are offered in the Qualified Financing) at which the Qualified Financing or Qualified Event, as applicable, is made and (b) our common stock trades at a volume greater than $1,000,000 per trading day for five consecutive trading days. For purposes hereof, the term “Measuring Period” means the earlier of (i) 45 days from the closing of the Qualified Financing or Qualified Event, as applicable, or (ii) the full delivery of the over-allotment to the Company by the underwriter in the Qualified Financing.

	●	We will not conduct a traditional “roadshow” with underwriters prior to the opening of trading of our common stock on the Nasdaq Capital Market. Instead, we will host an investor day on September 14, 2021 and are engaging in certain other investor education meetings. On September 2, 2021, we announced the date for this investor day over financial news outlets in a manner consistent with typical corporate outreach to investors. We will prepare an electronic presentation for this investor day, which will include content similar to a traditional roadshow presentation. We will make a version of the presentation publicly available, without restrictions, on our website. There can be no guarantee that the investor day and other investor education meetings will be as effective a method of investor education as a traditional “roadshow” conducted in connection with an underwritten initial public offering. As a result, there may not be efficient or sufficient price discovery with respect to our common stock or sufficient demand among potential investors immediately after our listing, which could result in a more volatile trading price of our common stock.

	●	actual or anticipated fluctuations in our financial condition, results of operations, or operating metrics and those of our competitors;

	●	the number of shares of our common stock made available for trading;

	●	issuance of our and/or LiveOne’s equity or debt securities, or disclosure or announcements relating thereto;

	●	our convertible debt securities being converted into equity or the anticipation of such conversion;

	●	failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or variance in our financial performance from expectations of securities analysts;

	●	changes in laws or regulations applicable to our Company;

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

	●	lawsuits threatened or filed against us and/or LiveOne;

	●	future sales of our common stock by LiveOne, us or our stockholders or the anticipation of such sales;

	●	changes in our board of directors, senior management or key personnel;

	●	the trading volume of our common stock;

	●	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;

	●	changes in the anticipated future size and growth rate of our market;

	●	significant data breaches, disruptions to, or other incidents involving our platform;

	●	general economic and market conditions;

	●	other events or factors, including those resulting from war, incidents of terrorism, pandemics (including the COVID-19 pandemic), elections, or responses to these events; and

	●	whether investors or securities analysts view our stock structure unfavorably, particularly our dual-class structure and the concentrated voting control of our executive officers, directors, and their affiliates.

	●	authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock;

	●	specify that special meetings of our stockholders can be called only by our board of directors;

	●	establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; and

	●	provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum.

	●	we will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful;

	●	we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;

	●	we are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;

	●	the rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees, and agents and to obtain insurance to indemnify such persons; and

	●	we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees, and agents.

	●	future business, social, goals and measures;

	●	our anticipated growth prospects and trends in markets and industries relevant to our business;

	●	business and investment plans;

	●	expectations about our ability to maintain or enhance our leadership position in the markets in which we participate;

	●	future consumer demand and behavior;

	●	future products and technology, and the expected availability and benefits of such products and technology;

	●	development of regulatory frameworks for current and future technology;

	●	projected cost and pricing trends;

	●	potential future benefits and competitive advantages associated with our technologies; the future use and availability of services and technologies supplied by third parties;

	●	uncertain events or assumptions, including statements relating to market opportunity, potential podcast listener numbers and other characterizations of future events or circumstances; expected completion of the Spin-Out;

	●	future responses to and effects of the COVID-19 pandemic;

	●	availability, uses, sufficiency and cost of capital and capital resources, including expected returns to stockholders such as dividends, and the expected timing of future dividends;

	●	other statements described in this prospectus under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”

	●	https://www.podcastawards.com

	●	http://www.edisonresearch.com/wp-content/uploads/2022/02/Super-Listeners-from-Edison-Research-and-Ad-Results-Media-2-16-22.pdf

	●	Podtrac

	●	https://www.iab.com/insights/u-s-podcast-advertising-revenue-report-fy-2021-results-2022-2024-growth-projections

	●	Edison Research – “Share of Ear” Q3-Q4 2017 vs Q32021

	●	https://www.edisonresearch.com/the-spoken-word-audio-report-2022-from-npr-and-edison-research/

	●	eMarketer, Feb 2021

	●	https://www.insideradio.com/free/emarketer-forecast-podcast-ad-revenue-to-climb-29-this-year/article_b059daaa-d741-11ec-a248-2b06e48f20f9.html

	●	https://www.buzzsprout.com/blog/podcast-statistics

	●	https://www.insideradio.com/podcastnewsdaily/to-be-discovered-edison-s-tom-webster-says-podcasters-need-to-reach-into-new-places/article_c8b7e27a-f60c-11eb-8ed0-7fab7c703dd4.html

	As of September 30, 2022
	Actual			Pro Forma
	(Unaudited)
	(in thousands, except share and per share data)
Cash and cash equivalents	$	4,129		$	4,129
Debt:
Bridge loan		4,274			—
Derivative liabilities		3,443			—
Stockholders’ equity (deficit):
Preferred stock, par value $0.00001 per share; no shares authorized, actual; 10,000,000 shares authorized, pro forma; no shares issued and outstanding, actual; and no shares issued and outstanding, pro forma		—			—
Common stock, par value $0.00001 per share; 200,000,000 shares authorized, actual; 100,000,000 shares authorized, pro forma; 147,984,230 shares issued and outstanding, actual; and 23,069,664 shares issued and outstanding, pro forma		—			—
Additional paid-in capital		18,762			25,067
Accumulated deficit		(6,345	)		(9,498	)
Total stockholders’ equity (deficit)		12,417			15,569

Total capitalization	$	20,134		$	15,569

	Year Ended March 31,							Six Months Ended September 30,
	2022		2021		YoY Growth			2022		2021		YoY Growth
Number of podcast downloads		590,412,840		439,193,924		34	%		357,889,526		247,445,860		45	%

	Net Income (Loss)			Depreciation and Amortization		Stock-Based Compensation		Non- Recurring Acquisition and Realignment Costs		Other (Income) Expense			(Benefit) Provision for Taxes			Adjusted EBITDA
Period Ended
Year Ended March 31, 2022 (Successor)	$	(4,146	)	$	634	$	2,526	$	-	$	(556	)	$	-		$	(1,542	)
July 1, 2020 to March 31, 2021 (Successor)	$	(3,418	)	$	560	$	167	$	371	$	1,350		$	(4	)	$	(974	)
April 1, 2020 to June 30, 2020 (Predecessor)	$	(1,169	)	$	26	$	38	$	-	$	1		$	4		$	(1,100	)
Six Months Ended
September 30, 2022	$	1,219		$	156	$	585	$	-	$	(1,502	)		-		$	458
September 30, 2021	$	(2,513	)	$	341	$	1,319	$	-	$	(21	)		-		$	(874	)

	Year Ended March 31,			July 1, 2020 to March 31, 2021			April 1, 2020 to June 30, 2020			Six Months Ended September 30,
	2022			(Successor)			(Predecessor)			2022			2021
										(Unaudited)
	*(in thousands)*
Revenue	$	32,348		$	19,675		$	4,165		$	17,213		$	16,035
Less:
Cost of sales		(26,271	)		(15,368	)		(2,911	)		(12,909	)		(13,544	)
Amortization of developed technology		(110	)		(9	)		-			(97	)		(97	)
Gross profit		5,967			4,298			1,254			4,207			2,394

Add back amortization of developed technology		110			9			-			97			97
Contribution Margin	$	6,077		$	4,307		$	1,254		$	4,304		$	2,491

	Year Ended March 31, 2022			July 1, 2020 to March 31, 2021			April 1, 2020 to June 30, 2020			Six Months Ended September 30,
	(Successor)			(Successor)			(Predecessor)			2022		2021
										(Unaudited)
	*(in thousands)*
Consolidated Statements of Operations Information:
Revenue	$	32,348		$	19,675		$	4,165		$	17,213	$	16,035

Operating expenses:
Cost of sales⁽¹⁾		26,271			15,368			2,911			12,909		13,544
Sales and marketing ⁽¹⁾		5,155			3,077			915			2,816		2,178
Product development⁽¹⁾		251			495			149			108		166
General and administrative⁽¹⁾		4,871			2,359			1,354			1,612		2,395
Amortization of intangible assets		502			448			-			51		287

Total operating expenses		37,050			21,747			5,329			17,496		18,570

Other income (expense), net		556			(1,350	)		(1	)		1,502		22

Income (loss) before provision for income taxes		(4,146	)		(3,422	)		(1,165	)		1,219		(2,513	)
Provision (benefit) for income taxes		-			(4	)		4			-		-

Net income (loss)	$	(4,146	)	$	(3,418	)	$	(1,169	)	$	1,219	$	(2,513	)

	Year Ended March 31, 2022		July 1, 2020 to March 31, 2021		April 1, 2020 to June 30, 2020		Six Months Ended September 30,
	(Successor)		(Successor)		(Predecessor)		2022		2021
							(Unaudited)
	(in thousands)
Cost of sales	$	500	$	82	$	-	$	151	$	294
Product development		8		-		-		-		8
Sales and marketing		477		82		-		136		277
General and administrative		1,541		3		38		298		740

Total stock-based compensation	$	2,526	$	167	$	38	$	585	$	1,319