10-Q 1 gaia-20230630.htm 10-Q 10-Q
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United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-27517

 

img882781_0.jpg 

 

GAIA, INC.

(Exact name of registrant as specified in its charter)

 

 

COLORADO

 

84-1113527

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

833 WEST SOUTH BOULDER ROAD,

LOUISVILLE, COLORADO 80027

(Address of principal executive offices)

(303) 222-3600

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock

GAIA

NASDAQ Global Market

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. Yes No

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). Yes No

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

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided 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

 

Outstanding at July 28, 2023

Class A Common Stock ($0.0001 par value)

 

15,754,425

Class B Common Stock ($0.0001 par value)

 

5,400,000

 

 


 

GAIA, INC.

FORM 10-Q

INDEX

 

PART I—FINANCIAL INFORMATION

 

 

 

Item 1.

Financial Statements (Unaudited):

3

 

 

 

 

Condensed Consolidated Balance Sheets at June 30, 2023 and December 31, 2022

4

 

 

 

 

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022

5

 

 

 

 

Condensed Consolidated Statements of Changes in Shareholders’ Equity for the six months ended June 30, 2023 and 2022

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

7

 

 

 

 

Notes to interim condensed consolidated financial statements

8

 

 

 

Item 2.

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

13

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

16

 

 

 

Item 4.

Controls and Procedures

16

 

 

 

PART II—OTHER INFORMATION

17

 

 

Item 1.

Legal Proceedings

17

 

 

 

Item 1A.

Risk Factors

17

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

17

 

 

 

Item 3.

Defaults Upon Senior Securities

17

 

 

 

Item 4.

Mine Safety Disclosures

17

 

 

 

Item 5.

Other Information

17

 

 

 

Item 6.

Exhibits

18

 

 

 

 

SIGNATURES

19

 

 

 

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 Securities and Exchange Commission. While certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States 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 interim condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly, in all material respects, our consolidated financial position as of June 30, 2023, the interim results of operations for the three and six months ended June 30, 2023 and 2022, and cash flows for the six months ended June 30, 2023 and 2022. Operating results for the three and six months ended June 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for a full year or any future interim period. These interim statements have not been audited. The balance sheet as of December 31, 2022 was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K. The interim condensed consolidated financial statements contained herein should be read in conjunction with our audited consolidated financial statements, including the notes thereto, for the year ended December 31, 2022.

3


 

GAIA, INC.

Condensed Consolidated Balance Sheets

 

 

June 30,

 

 

December 31,

 

(in thousands, except share and per share data)

 

2023

 

 

2022

 

 

 

(unaudited)

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$

10,879

 

 

$

11,562

 

Accounts receivable

 

 

3,620

 

 

 

2,955

 

Prepaid expenses and other current assets

 

 

2,730

 

 

 

2,656

 

Total current assets

 

 

17,229

 

 

 

17,173

 

Media library, software and equipment, net

 

 

51,198

 

 

 

51,115

 

Right-of-use lease asset, net

 

 

6,694

 

 

 

7,093

 

Real estate, investment and other assets, net

 

 

30,569

 

 

 

30,979

 

Goodwill

 

 

31,943

 

 

 

31,943

 

Total assets

 

$

137,633

 

 

$

138,303

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable, accrued and other liabilities

 

$

12,384

 

 

$

12,355

 

Short-term debt and lease liability

 

 

911

 

 

 

894

 

Deferred revenue

 

 

15,476

 

 

 

14,124

 

Total current liabilities

 

 

28,771

 

 

 

27,373

 

Long-term debt, net

 

 

14,881

 

 

 

14,958

 

Long-term lease liability

 

 

6,105

 

 

 

6,489

 

Deferred taxes

 

 

499

 

 

 

499

 

Total liabilities

 

 

50,256

 

 

 

49,319

 

Shareholders' equity:

 

 

 

 

 

 

Class A common stock, $0.0001 par value, 150,000,000 shares
   authorized,
15,754,425 and 15,406,186 shares issued and outstanding
   at June 30, 2023 and December 31, 2022, respectively

 

 

1

 

 

 

1

 

Class B common stock, $0.0001 par value, 50,000,000 shares
   authorized,
5,400,000 shares issued and outstanding
   at June 30, 2023 and December 31, 2022

 

 

1

 

 

 

1

 

Additional paid-in capital

 

 

165,434

 

 

 

164,180

 

Accumulated deficit

 

 

(78,059

)

 

 

(75,198

)

Total shareholders' equity

 

 

87,377

 

 

 

88,984

 

Total liabilities and shareholders' equity

 

$

137,633

 

 

$

138,303

 

The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. See accompanying notes to the interim condensed consolidated financial statements.

4


 

GAIA, INC.

Condensed Consolidated Statements of Operations

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

(in thousands, except per share data)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

Revenues, net

 

$

19,839

 

 

$

20,720

 

 

$

39,486

 

 

$

42,551

 

Cost of revenues

 

 

2,839

 

 

 

2,759

 

 

 

5,612

 

 

 

5,664

 

Gross profit

 

 

17,000

 

 

 

17,961

 

 

 

33,874

 

 

 

36,887

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling and operating

 

 

17,085

 

 

 

15,869

 

 

 

33,208

 

 

 

32,654

 

Corporate, general and administration

 

 

1,520

 

 

 

1,794

 

 

 

3,293

 

 

 

3,579

 

Acquisition costs

 

 

 

 

 

 

 

 

 

 

 

49

 

Total operating expenses

 

 

18,605

 

 

 

17,663

 

 

 

36,501

 

 

 

36,282

 

Income (loss) from operations

 

 

(1,605

)

 

 

298

 

 

 

(2,627

)

 

 

605

 

Interest and other expense, net

 

 

(113

)

 

 

(50

)

 

 

(234

)

 

 

(110

)

Income (loss) before income taxes

 

 

(1,718

)

 

 

248

 

 

 

(2,861

)

 

 

495

 

Provision for (benefit from) income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

 

(1,718

)

 

 

248

 

 

 

(2,861

)

 

 

495

 

Income (loss) from discontinued operations

 

 

 

 

 

(132

)

 

 

 

 

 

(293

)

Net income (loss)

 

$

(1,718

)

 

$

116

 

 

$

(2,861

)

 

$

202

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.08

)

 

$

0.01

 

 

$

(0.14

)

 

$

0.02

 

Discontinued operations

 

$

 

 

$

(0.01

)

 

$

 

 

$

(0.01

)

Basic earnings (loss) per share

 

$

(0.08

)

 

$

 

 

$

(0.14

)

 

$

0.01

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.08

)

 

$

0.01

 

 

$

(0.14

)

 

$

0.02

 

Discontinued operations

 

$

 

 

$

(0.01

)

 

$

 

 

$

(0.01

)

Diluted earnings (loss) per share

 

$

(0.08

)

 

$

 

 

$

(0.14

)

 

$

0.01

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

20,874

 

 

 

20,788

 

 

 

20,850

 

 

 

20,627

 

Diluted

 

 

20,874

 

 

 

20,795

 

 

 

20,850

 

 

 

20,795

 

See accompanying notes to the interim condensed consolidated financial statements.

5


 

GAIA, INC.

Condensed Consolidated Statements of Changes in Shareholders’ Equity

 

 

(unaudited)

 

(in thousands, except shares)

 

Total Shareholders'
Equity

 

 

Accumulated
Deficit

 

 

Common
Stock
Amount

 

 

Additional
Paid-in
Capital

 

 

Common
Stock
Shares

 

Balance at January 1, 2022

 

$

90,215

 

 

$

(72,103

)

 

$

2

 

 

$

162,316

 

 

 

20,461,337

 

'Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation

 

 

540

 

 

 

 

 

 

 

 

 

540

 

 

 

313,823

 

Net income

 

 

86

 

 

 

86

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2022

 

$

90,841

 

 

$

(72,017

)

 

$

2

 

 

$

162,856

 

 

 

20,775,160

 

Issuance of Gaia, Inc. common stock for RSU releases, employee stock purchase plan, stock option exercises and share-based compensation

 

 

433

 

 

 

 

 

 

 

 

 

433

 

 

 

31,026

 

Net Income

 

 

116

 

 

 

116

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2022

 

$

91,390

 

 

$

(71,901

)

 

$

2

 

 

$

163,289

 

 

 

20,806,186

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2023

 

$

88,984

 

 

$

(75,198

)

 

$

2

 

 

$

164,180

 

 

 

20,806,186

 

Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation

 

 

104

 

 

 

 

 

 

 

 

 

104

 

 

 

19,606

 

Net loss

 

 

(1,143

)

 

 

(1,143

)

 

 

 

 

 

 

 

 

 

Balance at March 31, 2023

 

$

87,945

 

 

$

(76,341

)

 

$

2

 

 

$

164,284

 

 

 

20,825,792

 

Issuance of Gaia, Inc. common stock for media library acquisition

 

 

669

 

 

 

 

 

 

 

 

 

669

 

 

 

272,980

 

Issuance of Gaia, Inc. common stock for RSU releases, employee stock purchase plan, and share-based compensation

 

 

481

 

 

 

 

 

 

 

 

 

481

 

 

 

55,653

 

Net loss

 

 

(1,718

)

 

 

(1,718

)

 

 

 

 

 

 

 

 

 

Balance at June 30, 2023

 

$

87,377

 

 

$

(78,059

)

 

$

2

 

 

$

165,434

 

 

 

21,154,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the interim condensed consolidated financial statements.

6


 

GAIA, INC.

Condensed Consolidated Statements of Cash Flows

 

 

 

For the Six Months Ended June 30,

 

(in thousands)

 

2023

 

 

2022

 

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

(2,861

)

 

$

202

 

Loss from discontinued operations

 

 

 

 

 

293

 

Income (loss) from continuing operations

 

 

(2,861

)

 

 

495

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

8,374

 

 

 

7,904

 

Share-based compensation expense

 

 

543

 

 

 

930

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(665

)

 

 

(244

)

Prepaid expenses and other assets

 

 

(333

)

 

 

(292

)

Accounts payable and accrued liabilities

 

 

70

 

 

 

(2,476

)

Deferred revenue

 

 

1,352

 

 

 

371

 

Net cash provided by operating activities - continuing operations

 

 

6,480

 

 

 

6,688

 

Net cash provided by (used in) operating activities - discontinued operations

 

 

 

 

 

(293

)

Net cash provided by operating activities

 

 

6,480

 

 

 

6,395

 

Investing activities:

 

 

 

 

 

 

Additions to media library, software and equipment

 

 

(7,119

)

 

 

(9,572

)

Acquisitions, net of cash acquired, and purchase of intangible assets

 

 

 

 

 

(847

)

Net cash used in investing activities

 

 

(7,119

)

 

 

(10,419

)

Financing activities:

 

 

 

 

 

 

Repayment of debt

 

 

(12,686

)

 

 

(93

)

Proceeds from short-term borrowings

 

 

12,600

 

 

 

 

Proceeds from the issuance of common stock

 

 

42

 

 

 

43

 

Net cash used in financing activities

 

 

(44

)

 

 

(50

)

Net change in cash

 

 

(683

)

 

 

(4,074

)

Cash at beginning of period

 

 

11,562

 

 

 

10,269

 

Cash at end of period

 

$

10,879

 

 

$

6,195

 

Supplemental cash flow information

 

 

 

 

 

 

Interest paid

 

$

253

 

 

$

129

 

Value of shares issued for acquisition of content added to Media Library

 

$

669

 

 

 

 

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” 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. (“Gaia,” “we” or “us”) operates a global digital video subscription service and on-line community that caters to a unique and underserved member base. Our digital content library includes over 10,000 titles, with a growing selection of titles available in Spanish, German and French. Our members have unlimited access to this vast library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation-related content and more – 88% of which is exclusively available to our members for digital streaming on most internet-connected devices anytime, anywhere, commercial free.

Our mission is to create a transformational network that empowers a global conscious community. Content on our network is currently organized into four primary channels—Yoga, Transformation, Alternative Healing, and Seeking Truth—and delivered directly to our members through our streaming platform. We curate programming for these channels by producing content in our in-house production studios with a staff of media professionals. This produced and owned content currently comprises approximately 75% of our members' viewing time. We complement our produced and owned content through long term licensing agreements.

We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“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.

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, 2022.

Use of Estimates and Reclassifications

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying 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.

Discontinued Operations

Yoga International historically had a line of business focused on one-time transactional course sales. With the launch of a premium membership tier that includes this content, this line of business was discontinued in 2022 as the contractual commitments related to this line of business lapsed. There are no other assets or liabilities associated with this revenue stream. As this represents a strategic shift with a major effect on our operations and financial results, we have presented the results of operations related to winding up this line of business as discontinued operations on the accompanying condensed consolidated statement of operations in 2022.

2. Revenue Recognition

Revenues consist primarily of subscription fees paid by our members. We present revenues net of taxes collected from members. Members are billed in advance and revenues are recognized ratably over the subscription term. Deferred revenue consists of subscription fees collected from members that have not been earned and is recognized ratably over the remaining term of the subscription. We recognize revenue on a net basis for relationships where our partners have the primary relationship, including billing and service delivery, with the member. Payments made to partners to assist in promoting our service on their platforms are expensed as 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 first six months of 2023 and 2022, we recognized approximately $543 and $930, respectively, of share-based compensation expense. Total share-based compensation expense is reported in selling and operating expenses and corporate, general and administration expenses on our condensed consolidated statements of operations. There were no options exercised during the first six months of 2023 or 2022.

4. Goodwill and Other Intangible Assets

There were no changes in goodwill for the period from December 31, 2022 through June 30, 2023.

8


 

The following table represents our other intangible assets by major asset class as of the dates indicated, which are included in Real estate, investment and other assets, net on the accompanying condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022.

(in thousands)

 

June 30, 2023

 

 

December 31, 2022

 

Amortizable Intangible Assets

 

 

 

 

 

 

Customer relationships

 

$

2,000

 

 

$

2,000

 

Tradenames

 

 

270

 

 

 

270

 

Accumulated amortization

 

 

(863

)

 

 

(579

)

 

 

$

1,407

 

 

$

1,691

 

 

 

 

 

 

 

 

Unamortized Intangible Assets

 

 

 

 

 

 

Domain names

 

$

563

 

 

$

563

 

Our amortizable assets are expected to be amortized on a straight-line basis over 48 months. Amortization expense was $142 for the three months ended June 30, 2023 and 2022 and $284 for the six months ended June 30, 2023 and 2022. Future amortization of our amortizable intangible assets as of June 30, 2023 is expected to be as follows:

(in thousands)

 

 

 

2023 (remaining)

 

$

283

 

2024

 

 

568

 

2025

 

 

556

 

 

 

$

1,407

 

 

5. Debt

On September 9, 2020, Boulder Road sold a 50% undivided interest in a portion of our corporate campus to Westside Boulder, LLC (“Westside”). Boulder Road retained a 50% undivided interest in the property as well as full ownership of our studio and production facilities. Boulder Road received consideration of $13.2 million in the transaction.

On December 28, 2020, Boulder Road and Westside entered into a loan agreement with First Interstate Bank, as lender, providing for a mortgage loan in the principal amount of $13.0 million. The mortgage bears interest at a fixed rate of 3.75% per annum, matures on December 28, 2025, is secured by a deed of trust on our corporate campus, a portion of which is owned by Boulder Road and Westside as tenants-in-common and the remainder of which is owned by Boulder Road. Westside and Boulder Road each received 50% of the loan proceeds and are each responsible for 50% of the monthly installments. Gaia guaranteed payment of the mortgage. The mortgage is subject to certain financial covenants related to the underlying property.

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 $10.0 million with a sublimit of $1 million available for issuances of letters of credit. Borrowings under the Credit Agreement are available for working capital and general corporate purposes, but not to fund any permitted acquisitions or other investments. On March 31, 2023, $9.0 million was drawn under the Credit Agreement, which is included in Long-term debt, net on the accompanying condensed consolidated balance sheets as of March 31, 2023.

Loans made, or letters of credit issued, under the Credit Agreement mature on August 25, 2025 and are secured (subject to permitted liens and other exceptions) by a first priority lien on all business assets, including intellectual property, of Gaia and the subsidiary guarantors.

Any advance under the Credit Agreement shall bear interest at the Daily Simple SOFR rate (subject to a floor of 0.00%), plus, the SOFR Index Adjustment of 0.10%, plus a margin of 2.00%; provided, that, during the existence of a Benchmark Unavailability Period or a SOFR Unavailability Period, advances shall bear interest at the Base Rate, which is a fluctuating interest rate per annum equal to the highest of (i) the Federal Funds Rate plus 0.50%, (ii) KeyBank’s “prime rate,” (iii) SOFR and (iv) 3.00%, plus, in each instance, a margin of 1.00%.

The aggregate outstanding amount of advances under the Credit Agreement is required to be $0 for at least 30 consecutive days during the period commencing on the 12-month anniversary of the Closing Date and ending on the 24-month anniversary of the Closing Date.

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 1.20 to 1.00 and to not permit the Leverage Ratio to exceed 1.50 to 1.00 for any computation period.

9


 

Maturities on long-term debt, net are:

(in thousands)

 

 

 

2023 (remaining)

 

$

75

 

2024

 

 

156

 

2025

 

 

14,801

 

 

 

$

15,032

 

 

6. Leases

In connection with the sale of a portion of our corporate campus as further discussed in Note 5, we leased the property pursuant to a master lease for an initial term extending through September 30, 2030, with two five-year extensions. We record the right to use the underlying asset for the operating lease term as an asset and our obligation to make lease payments as a liability, based on the present value of the lease payments over the initial lease term. On commencement of the lease, we recorded a right-of-use asset and operating lease liability of $8,800.

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:

 

 

 

 

June 30,

 

 

December 31,

 

(in thousands)

 

Balance Sheet Classification

 

2023

 

 

2022

 

Right-of-use asset

 

 Right-of-use lease asset, net

 

$

6,694

 

 

$

7,093

 

 

 

 

 

 

 

 

 

 

Operating lease liability (current)

 

Accounts payable, accrued and other liabilities

 

$

760

 

 

$

745

 

Operating lease liability (non-current)

 

Long-term lease liability

 

 

6,105

 

 

 

6,489

 

 

 

 

$

6,865

 

 

$

7,234

 

 

 

 

For the Three Months Ended June 30,

 

(in thousands)

 

2023

 

 

2022

 

Cash paid for operating lease liabilities

 

$

250

 

 

$

250

 

 

 

For the Six Months Ended June 30,

 

(in thousands)

 

2023

 

 

2022

 

Cash paid for operating lease liabilities

 

$

500

 

 

$

500

 

Operating lease expense is recognized on a straight-line basis over the lease term. Future amortization of our lease liability as of June 30, 2023 is expected to be:

(in thousands)