United States
Securities and Exchange Commission
Washington, D.C. 20549
Form
For the quarterly period ended
OR
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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.
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
☒ |
Smaller reporting company |
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Emerging growth company |
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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 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Class |
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Outstanding at October 31, 2024 |
Class A Common Stock ($0.0001 par value) |
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Class B Common Stock ($0.0001 par value) |
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GAIA, INC.
FORM 10-Q
INDEX
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Item 1. |
3 |
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Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023 |
4 |
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5 |
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6 |
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7 |
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Notes to Interim Condensed Consolidated Financial Statements |
8 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 |
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Item 3. |
16 |
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Item 4. |
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Item 1. |
18 |
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Item 1A. |
18 |
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Item 2. |
18 |
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Item 3. |
18 |
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Item 5. |
18 |
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Item 6. |
19 |
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20 |
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2
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Unaudited Interim Condensed Consolidated Financial Statements
We have prepared our unaudited interim condensed consolidated financial statements included herein pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). While certain information and note disclosures normally included in annual audited financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to these rules and regulations, we believe that the disclosures made are adequate to make the information not misleading. In our opinion, the unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly, in all material respects, our condensed consolidated balance sheets as of September 30, 2024, the interim condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023, the interim condensed consolidated statements of changes in equity for the three and nine months ended September 30, 2024 and 2023, and condensed consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023. Operating results for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results that may be expected for a full year or any future interim period. The Condensed Consolidated Balance Sheets as of December 31, 2023 were derived from our annual audited consolidated financial statements included in our Annual Report on Form 10-K. These interim condensed consolidated financial statements have not been audited. The unaudited interim condensed consolidated financial statements contained herein should be read in conjunction with our annual audited consolidated financial statements, including the notes thereto, for the year ended December 31, 2023.
3
GAIA, INC.
Condensed Consolidated Balance Sheets
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September 30, |
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December 31, |
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(in thousands, except share and per share data) |
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2024 |
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2023 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable |
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Other receivables |
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Prepaid expenses and other current assets |
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Total current assets |
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Media library, net |
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Operating right-of-use asset, net |
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Property and equipment, net |
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Equity method investment |
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— |
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Technology license, net |
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— |
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Investments and other assets, net |
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Goodwill |
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Total assets |
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$ |
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$ |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued and other liabilities |
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Long-term debt, current portion |
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Operating lease liability, current portion |
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Deferred revenue |
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Total current liabilities |
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Long-term debt, net of current portion (Note 4) |
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Operating lease liability, net of current portion |
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Deferred taxes, net |
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Total liabilities |
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Shareholders’ equity: |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Total Gaia, Inc. shareholders’ equity |
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Noncontrolling interests |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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See accompanying notes to the unaudited interim condensed consolidated financial statements.
4
GAIA, INC.
Condensed Consolidated Statements of Operations (unaudited)
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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(in thousands, except per share data) |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenues, net |
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$ |
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$ |
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$ |
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$ |
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Cost of revenues |
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Gross profit |
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Operating Expenses: |
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Selling and operating |
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Corporate, general and administration |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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( |
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( |
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Equity method investment loss |
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— |
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( |
) |
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— |
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( |
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Interest and other expense, net |
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( |
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( |
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( |
) |
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( |
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Loss before income taxes |
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( |
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( |
) |
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( |
) |
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( |
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Provision for income taxes |
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— |
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— |
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— |
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— |
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Net loss |
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( |
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( |
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( |
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( |
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Net (loss) income attributable to noncontrolling interests |
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( |
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( |
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Net loss attributable to common shareholders |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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$ |
( |
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Loss per share: |
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Basic (attributable to common shareholders) |
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$ |
( |
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$ |
( |
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$ |
( |
) |
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$ |
( |
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Diluted (attributable to common shareholders) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Weighted-average shares outstanding: |
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Basic |
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Diluted |
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See accompanying notes to the interim condensed consolidated financial statements.
5
GAIA, INC.
Condensed Consolidated Statements of Changes in Equity (unaudited)
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(in thousands, except shares) |
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Common |
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Accumulated |
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Common |
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Additional |
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Non-controlling interests |
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Total |
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Balance at December 31, 2023 |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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Issuance of Gaia, Inc. common stock for employee stock purchase plan |
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— |
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— |
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— |
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Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation |
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— |
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— |
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— |
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Net (loss) income |
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— |
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( |
) |
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— |
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— |
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( |
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Balance at March 31, 2024 |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation |
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— |
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— |
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— |
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Igniton activity |
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— |
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— |
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— |
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( |
) |
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Net (loss) income |
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— |
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( |
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— |
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— |
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( |
) |
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Balance at June 30, 2024 |
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$ |
( |
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$ |
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$ |
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$ |
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$ |
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Issuance of Gaia, Inc. common stock for employee stock purchase plan |
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— |
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— |
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— |
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Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation |
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— |
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— |
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— |
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Igniton activity |
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— |
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— |
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— |
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( |
) |
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( |
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( |
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Net loss |
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— |
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( |
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— |
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— |
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( |
) |
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( |
) |
Balance at September 30, 2024 |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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(in thousands, except shares) |
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Common |
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Accumulated |
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Common |
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Additional |
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Non-controlling interests |
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Total |
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Balance at December 31, 2022 |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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Issuance of Gaia, Inc. common stock for employee stock purchase plan |
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— |
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— |
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$ |
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— |
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$ |
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Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation |
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— |
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— |
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— |
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Net (loss) income |
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— |
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( |
) |
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— |
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— |
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( |
) |
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Balance at March 31, 2023 |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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Issuance of Gaia, Inc. common stock for media library acquisition |
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— |
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— |
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— |
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Issuance of Gaia, Inc. common stock for employee stock purchase plan |
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— |
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— |
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— |
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Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation |
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— |
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— |
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— |
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Net (loss) income |
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( |
) |
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( |
) |
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Balance at June 30, 2023 |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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Share-based compensation |
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— |
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— |
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— |
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— |
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Net (loss) income |
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— |
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( |
) |
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— |
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— |
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( |
) |
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Balance at September 30, 2023 |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to the interim condensed consolidated financial statements.
6
GAIA, INC.
Condensed Consolidated Statements of Cash Flows (unaudited)
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For the Nine Months Ended September 30, |
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(in thousands) |
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2024 |
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2023 |
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Cash flows from operating activities: |
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Net loss |
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$ |
( |
) |
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$ |
( |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
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Media library amortization |
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Depreciation and amortization |
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Noncash operating lease expense |
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Share-based compensation expense |
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Additions to media library |
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( |
) |
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( |
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Equity method investment losses |
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— |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
) |
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Other receivables |
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( |
) |
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( |
) |
Prepaid expenses and other current assets |
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( |
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( |
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Accounts payable |
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Accrued and other liabilities |
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( |
) |
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( |
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Deferred revenue |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Additions to property and equipment |
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( |
) |
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( |
) |
Purchase of intangible assets |
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( |
) |
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— |
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Net cash used in investing activities |
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( |
) |
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( |
) |
Cash flows from financing activities: |
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Repayment of short-term debt |
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( |
) |
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( |
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Proceeds from short-term borrowings |
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Proceeds from sale of subsidiary common stock, net of transaction costs |
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— |
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Proceeds from the issuance of common stock |
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Net cash provided by (used in) financing activities |
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( |
) |
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Net change in cash and cash equivalents |
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( |
) |
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( |
) |
Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
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$ |
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$ |
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Supplemental disclosure of cash flow information |
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Cash paid for interest |
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$ |
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$ |
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Supplemental schedule of non-cash investing and financing activities |
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Value of shares issued for acquisition of content added to Media Library |
|
$ |
— |
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$ |
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Additions to property and equipment in Accounts payable |
|
$ |
( |
) |
|
$ |
— |
|
Non-cash consideration paid for intangible assets |
|
$ |
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$ |
— |
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|
See accompanying notes to the interim condensed consolidated financial statements.
7
Notes to interim condensed consolidated financial statements
References in this report to “we”, “us”, “our”, the “Company” or “Gaia” refer to Gaia, Inc. and its consolidated subsidiaries, unless we indicate otherwise. All textual currency references are expressed in thousands of U.S. dollars (unless otherwise indicated).
1. Organization, Nature of Operations, and Principles of Consolidation
Gaia, Inc. operates a global digital video subscription service and on-line community that strives to connect a unique and underserved member base. Our digital content library includes over
Our mission is to create a transformational network that empowers a global conscious community. Content on our network is currently organized into
We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with GAAP, and they include our accounts and those of our subsidiaries. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial position, results of operations and cash flows for the interim periods disclosed in this report are not necessarily indicative of future financial results.
Use of Estimates and Reclassifications
The preparation of the interim condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying interim condensed consolidated financial statements and disclosures. Although we base these estimates on our best knowledge of current events and actions that we may undertake in the future, actual results may be different from the estimates. We have made certain reclassifications to prior period amounts to conform to the current period presentations.
As disclosed in our Annual Report on Form 10-K filed March 29, 2024, the Company determined it had the ability to exercise influence over Telomeron, Inc. (“Telomeron”) and, therefore, used the equity method of accounting to account for its equity interest. During the first quarter of 2024, the Company determined it no longer has the ability to exercise significant influence over Telomeron and, as such, the investment was reclassified at its carrying value to an equity security investment. The investment has been reclassed into Investments and other assets, net on our condensed consolidated balance sheets.
Recently Issued Accounting Pronouncements Not Yet Adopted
There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2023. The following recently issued accounting pronouncements are being evaluated but have not yet been adopted.
In October 2023, Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements (“ASU 2023-06”), to clarify or improve disclosure and presentation requirements of a variety of topics and align the requirements in the FASB ASC with the SEC’s regulations. The amendments in ASU 2023-06 will become effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is prohibited. We are currently evaluating the impact of ASU 2023-06 on its consolidated financial statements and disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (ASC Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC Topic 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-07.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (ASC Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2023-09.
8
2. Revenue Recognition
Revenues consist primarily of subscription fees paid by our members. We present revenues net of the taxes that are collected from members and remitted to governmental authorities. Members are billed in advance and revenues are recognized ratably over the subscription term. Deferred revenues consist of subscription fees collected from members that have not been earned and are recognized ratably over the remaining term of the subscription. We recognize revenue on a net basis for relationships where our third-party platform partners (“Partners”) have the primary relationship, including billing and service delivery, with the member. We recognize revenue on a gross basis for members whose primary relationship is with Gaia. Payments made to Partners to assist in promoting our service on their platforms are expensed to marketing expenses in the period incurred. We do not allow access to our service to be provided as part of a bundle by any of our Partners.
3. Equity and Share-Based Compensation
During the three months ended September 30, 2024 and 2023, we recognized approximately $
4. Debt
On September 9, 2020, our wholly owned subsidiary Boulder Road LLC (“Boulder Road”) sold a
On December 28, 2020, Boulder Road and Westside (“Borrower”) entered into a loan agreement with First Interstate Bank, as lender, providing for a mortgage loan in the principal amount of $
On August 25, 2022 (the “Closing Date”), Gaia, as borrower, and certain subsidiaries, as guarantors, entered into a Credit and Security Agreement (the “Credit Agreement”) with KeyBank National Association (“KeyBank”). The Credit Agreement provides for a revolving credit facility in an aggregate amount of up to $
Loans made, or letters of credit issued, under the Credit Agreement mature on
Any advance under the Credit Agreement shall bear interest at the Daily Simple Secured Overnight Financing Rate (“SOFR”) (subject to a floor of
The aggregate outstanding amount of advances under the Credit Agreement is required to be $
The Credit Agreement contains customary affirmative and negative covenants (each with customary exceptions), including limitations on the Company’s ability to incur liens or debt, make investments, pay dividends, enter into transactions with its affiliates and engage in certain fundamental changes. Additionally, the Credit Agreement requires Gaia to maintain a Fixed Charge Coverage Ratio of not less than
9
Maturities on long-term debt, net are:
(in thousands) |
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2024 (remaining) |
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$ |
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2025 |
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$ |
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5. Leases
In connection with the sale of a portion of our corporate campus as further discussed in Note 4,
Because the rate implicit in the lease is not readily determinable, we used our incremental borrowing rate to determine the present value of lease payments. Information related to our right-of-use asset and related lease liability were as follows:
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September 30, |
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December 31, |
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(in thousands) |
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2024 |
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2023 |
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(unaudited) |
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Operating right-of-use asset, net |
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$ |
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$ |
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Operating lease liability, current portion |
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$ |
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$ |
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Operating lease liability, net of current portion |
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$ |
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$ |
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Operating lease expense is recognized on a straight-line basis over the lease term. Our operating lease expense was $
(in thousands) |
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2024 (remaining) |
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$ |
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2025 |
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2026 |
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2027 |
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2028 |
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Thereafter |
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Future lease payments, gross |
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Less: Imputed interest |
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( |
) |
Operating lease liability |
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$ |
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6. Loss Per Share
Basic loss per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted loss per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period (“common stock equivalents”). Common stock equivalents consist of incremental shares issuable upon the assumed exercise of stock options and vesting of restricted stock units utilizing the treasury stock method.
The weighted-average diluted shares outstanding computation is:
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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(in thousands, except per share data) |
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2024 |
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2023 |
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2024 |
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2023 |
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(unaudited) |
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(unaudited) |
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Weighted-average common stock outstanding |
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Weighted-average number of shares |
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10
We excluded the effect of the below elements from our calculation of diluted loss per share, as their inclusion would have been anti-dilutive, as there were no earnings attributable to common shareholders:
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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(in thousands) |
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2024 |
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2023 |
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2024 |
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2023 |
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(unaudited) |
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(unaudited) |
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Common stock equivalents excluded due to net loss |
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Employee stock options and RSUs |
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( |
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( |
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7. Income Taxes
Periodically, we perform assessments of the realization of our net deferred tax assets considering all available evidence, both positive and negative. Based on our historical operating losses, combined with our plans to continue to invest in our revenue growth and content library, we have a full valuation allowance on our deferred tax assets as of September 30, 2024. As of September 30, 2024, our net operating loss carryforwards on a gross basis were $
8. Contingencies
From time to time, we are involved in legal proceedings that we consider to be in the normal course of business. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, that are considered probable of being rendered against us in litigation or arbitration in existence at September 30, 2024, and that can be reasonably estimated, are either reserved against or would not have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
The Company is subject to tax examinations for non-income taxes in foreign jurisdictions where it provides services to consumers residing in foreign jurisdictions. A number of these examinations are ongoing and, in certain cases, have resulted in assessments from foreign tax authorities. An accrual for non-income tax liability is recognized for foreign jurisdictions when it is probable that a liability has been incurred and the non-income tax exposure can be reasonably estimated. For other foreign jurisdictions requiring non-income taxes, the Company has determined that the non-income tax exposure is reasonably possible. However, considering the Company is in early stages of the examination and the Company’s prior experience with foreign tax authorities, the Company is unable to reasonably estimate the amount of non-income tax exposure that may be incurred.
9. Segment and Geographic Information
Our chief operating decision maker reviews operating results on a consolidated basis and has determined that we have one reportable segment. We have members in the United States and over 185 foreign countries. The major geographic territories are the U.S., Canada and Australia based on the billing location of the member.
The following represents geographical data for our operations:
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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(in thousands) |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenue: |
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United States |
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$ |
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$ |
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$ |
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$ |
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International |
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$ |
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$ |
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$ |
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$ |
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11
10. Igniton Transaction
In April 2024, the Company entered into a series of transactions with its subsidiary, Igniton, and a third-party entity to purchase a perpetual license for a total of $
The License Purchase was funded through an equity financing through Igniton which raised $
Technology license, net consists of the following as of September 30, 2024:
(in thousands) |
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September 30, 2024 |
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Technology license |
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$ |
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Accumulated amortization |
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( |
) |
Technology license, net |
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$ |
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The following schedule discloses the effects of changes in the Company’s ownership of Igniton on the Company’s equity, as a result of the Igniton Transaction, for the periods presented:
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Nine Months Ended |
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(in thousands) |
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September 30, 2024 |
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Net income attributable to Gaia, Inc. shareholders |
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$ |
( |
) |
Change in Gaia’s paid-in capital for sale of Igniton Shares, net of issuance costs |
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( |
) |
Net transfers from non-controlling interest |
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( |
) |
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Change from net income attributable to Gaia, Inc. shareholders and transfers from Noncontrolling Interest |
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$ |
( |
) |
On April 18, 2024, Igniton, Inc., a Colorado corporation (“Igniton”), and subsidiary of the Company, closed a sale of
11. Subsequent Events
Management has evaluated and determined there were no subsequent events as of the filing of this Form 10-Q.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward looking statements that involve risks and uncertainties. When used in this discussion, we intend the words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “hope,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “strive,” “target,” “will,” “would” and similar expressions as they relate to us to identify such forward-looking statements. Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of certain factors set forth under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q and under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023. Risks and uncertainties that could cause actual results to differ include, without limitation: our ability to attract new members and retain existing members; our ability to compete effectively, including for customer engagement with different modes of entertainment; maintenance and expansion of device platforms for
12
streaming; fluctuation in customer usage of our service; fluctuations in quarterly operating results; service disruptions; production risks; general economic conditions; future losses; loss of key personnel; price changes; brand reputation; acquisitions; new initiatives we undertake; security and information systems; legal liability for website content; failure of third parties to provide adequate service; future internet-related taxes; our founder’s control of us; litigation; consumer trends; the effect of government regulation and programs; the impact of public health threats; our ability to remediate the material weaknesses in our internal control over financial reporting and technical accounting; and other risks and uncertainties included in our filings with the SEC. We caution you that no forward-looking statement is a guarantee of future performance, and you should not place undue reliance on these forward-looking statements which reflect our views only as of the date of this report. We undertake no obligation to update any forward-looking information.
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this report. This section is designed to provide information that will assist readers in understanding our unaudited consolidated financial statements, changes in certain items in those statements from year to year, the primary factors that caused those changes and how certain accounting principles, policies and estimates affect the consolidated financial statements.
Overview and Outlook
We operate a global digital video subscription service with a library of over 10,000 titles, with live communications and live events with a growing selection of titles available in Spanish, German and French that caters to a unique, underserved member base. Our digital content is available to our members on most internet-connected devices anytime, anywhere, commercial-free. Through our online Gaia subscription service our members have unlimited access to a library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation related content, live events, and more – 88% of which is exclusively available to our members for digital streaming on most internet-connected devices.
Gaia’s position in the streaming video landscape is firmly supported by its wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services. Our original content is developed and produced in-house in our lifestyle campus near Boulder, Colorado. By offering exclusive and unique content through our streaming service, we believe we will be able to significantly expand our target member base.
Our available content is currently focused on yoga, transformation, alternative healing, seeking truth and conscious films. This content is specifically targeted to a unique member base that is interested in alternative content provided by mainstream media. We have grown these content options both organically through our own productions and through strategic acquisitions or licensing. In addition, through our investments in our streaming video technology and our user interface, we have expanded the many ways our subscription member base can access our unique library of media titles.
Our core strategy is to grow our subscription business domestically and internationally by expanding our unique and exclusive content library, enhancing our user interface, extending our streaming service to new internet-connected devices as they are developed and creating a conscious community built around our content.
We are a Colorado corporation. Our principal and executive office is located at 833 West South Boulder Road, Louisville, CO 80027-2452. Our telephone number at that address is (303) 222-3600.
13
Results of Operations
The table below summarizes certain detail of our financial results for the periods indicated:
|
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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(in thousands, except per share data) |
|
2024 |
|
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2023 |
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2024 |
|
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2023 |
|
||||
|
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(unaudited) |
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(unaudited) |
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Revenues, net |
|
$ |
22,156 |
|
|
$ |
20,223 |
|
|
$ |
65,930 |
|
|
$ |
59,709 |
|
Cost of revenues |
|
|
3,101 |
|
|
|
2,983 |
|
|
|
9,684 |
|
|
|
8,595 |
|
Gross profit margin |
|
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86.0 |
% |
|
|
85.2 |
% |
|
|
85.3 |
% |
|
|
85.6 |
% |
Selling and operating |
|
|
18,398 |
|
|
|
16,254 |
|
|
|
54,854 |
|
|
|
49,462 |
|
Corporate, general and administration |
|
|
2,013 |
|
|
|
1,433 |
|
|
|
5,630 |
|
|
|
4,726 |
|
Total operating expenses |
|
|
20,411 |
|
|
|
17,687 |
|
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|
60,484 |
|
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54,188 |
|
Loss from operations |
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|
(1,356 |
) |
|
|
(447 |
) |
|
|
(4,238 |
) |
|
|
(3,074 |
) |
Equity method investment loss |
|
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— |
|
|
|
(125 |
) |
|
|
— |
|
|
|
(375 |
) |
Interest and other expense, net |
|
|
(144 |
) |
|
|
(141 |
) |
|
|
(396 |
) |
|
|
(375 |
) |
Loss before income taxes |
|
|
(1,500 |
) |
|
|
(713 |
) |
|
|
(4,634 |
) |
|
|
(3,824 |
) |
Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
(1,500 |
) |
|
|
(713 |
) |
|
|
(4,634 |
) |
|
|
(3,824 |
) |
Net (loss) income attributable to noncontrolling interests |
|
|
(308 |
) |
|
|
59 |
|
|
|
(204 |
) |
|
|
142 |
|
Net loss attributable to common shareholders |
|
$ |
(1,192 |
) |
|
$ |
(772 |
) |
|
$ |
(4,430 |
) |
|
$ |
(3,966 |
) |
The following table sets forth certain financial data as a percentage of revenues, net for the periods indicated:
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
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(unaudited) |
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|
(unaudited) |
|
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Revenues, net |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of revenues |
|
|
14.0 |
% |
|
|
14.8 |
% |
|
|
14.7 |
% |
|
|
14.4 |
% |
Gross profit margin |
|
|
86.0 |
% |
|
|
85.2 |
% |
|
|
85.3 |
% |
|
|
85.6 |
% |
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and operating |
|
|
83.0 |
% |
|
|
80.4 |
% |
|
|
83.2 |
% |
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