podc20240930c

podc20240930c_10q.htm

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2024

☐ 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: 001-41795

PODCASTONE, INC.

(Exact name of registrant as specified in its charter)

Delaware		35-2503373
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

345 North Maple Drive, Suite 295 Beverly Hills, CA		90212
(Address of principal executive offices)		(Zip Code)

(310) 858-0888

(Registrant’s telephone number, including area code)

269 S. Beverly Dr., Suite #1450

Beverly Hills. CA 90212

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, $0.00001 par value per share		PODC		The NASDAQ Capital 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 is 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 ☒

As of November 12, 2024, there were 24,438,160 shares of the registrant’s common stock, $0.00001 par value per share, issued and outstanding.

Table of Contents

PODCASTONE, INC.

TABLE OF CONTENTS

			Page
PART I — FINANCIAL INFORMATION			F-1

	Item 1.	Financial Statements	F-1

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16

	Item 4.	Controls and Procedures	16

PART II — OTHER INFORMATION			18

	Item 1.	Legal Proceedings	18

	Item 1A.	Risk Factors	18

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21

	Item 3.	Defaults Upon Senior Securities	22

	Item 4.	Mine Safety Disclosures	22

	Item 5.	Other Information	22

	Item 6.	Exhibits	23

		Signatures	24

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

	Page
Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and March 31, 2024	F-2

Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2024 and 2023 (unaudited)	F-3

Condensed Consolidated Statement of Stockholders’ Equity for the six months ended September 30, 2024 and 2023 (unaudited)	F-4

Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2024 and 2023 (unaudited)	F-5

Notes to the Condensed Consolidated Financial Statements (unaudited)	F-6 – F-21

F-1

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PODCASTONE, INC.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except share and per share amounts)

	*September 30,*			*March 31,*
	*2024*			*2024*
	(Unaudited)			(Audited)
Assets
Current Assets
Cash and cash equivalents	$	1,355		$	1,445
Accounts receivable, net		6,324			6,023
Prepaid expense and other current assets		661			1,105
Total Current Assets		8,340			8,573
Property and equipment, net		311			309
Goodwill		12,041			12,041
Intangible assets, net		2,146			3,145
Related party receivable		281			57
Total Assets	$	23,119		$	24,125

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities	$	6,658		$	7,383
Related party payable		936			315
Total Current Liabilities		7,594			7,698
Other long-term liabilities		46			86
Total Liabilities		7,640			7,784

Commitments and Contingencies

Stockholders’ Equity
Common stock, $0.00001 par value; 100,000,000 shares authorized; 24,404,187 and 23,608,049 shares issued and outstanding as of September 30, 2024 and March 31, 2024, respectively		-			-
Additional paid in capital		48,125			45,952
Accumulated deficit		(32,646	)		(29,611	)
Total stockholders’ equity		15,479			16,341
Total Liabilities and Stockholders’ Equity	$	23,119		$	24,125

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-2

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PODCASTONE, INC.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except share and per share amounts)

	*Three Months Ended*						*Six Months Ended*
	*September 30,*						*September 30,*
	*2024*			*2023*			*2024*			*2023*

Revenue:	$	12,154		$	10,516		$	25,312		$	21,153

Operating expenses:
Cost of sales		11,142			9,057			22,851			17,279
Sales and marketing		877			1,451			1,724			2,701
Product development		13			28			31			55
General and administrative		1,452			1,215			2,849			2,135
Impairment of intangible assets		-			-			176			-
Amortization of intangible assets		328			191			705			216
Total operating expenses		13,812			11,942			28,336			22,386
(Loss) income from operations		(1,658	)		(1,426	)		(3,024	)		(1,233	)

Other income (expense):
Interest expense, net		-			(654	)		-			(2,247	)
Change in fair value of bifurcated embedded derivatives		-			(8,793	)		-			(7,603	)
Total other (expense) income, net		-			(9,447	)		-			(9,850	)

Loss before provision for income taxes		(1,658	)		(10,873	)		(3,024	)		(11,083	)

Provision for income taxes		11			-			11			-
Net loss	$	(1,669	)	$	(10,873	)	$	(3,035	)	$	(11,083	)

Net loss per share – basic and diluted	$	(0.07	)	$	(0.52	)	$	(0.13	)	$	(0.54	)
Weighted average common shares – basic and diluted		24,162,612			20,714,161			23,991,772			20,357,080

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-3

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PODCASTONE, INC.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited, in thousands, except share and per share amounts)

					*Additional*					*Total*
	*Common Stock*				*Paid in*		*Accumulated*			*Stockholders’*
	*Shares*		*Amount*		*Capital*		*Deficit*			*Equity*
Balance as of March 31, 2024		23,608,049	$	-	$	45,952	$	(29,611	)	$	16,341
Stock-based compensation		-		-		220		-			220
Vested employee restricted stock units		40,625		-		-		-			-
Contribution from parent		-		-		174		-			174
Common stock issued for services		143,093		-		305		-			305
Net loss		-		-		-		(1,366	)		(1,366	)
Balance as of June 30, 2024		23,791,767	$	-	$	46,651	$	(30,977	)	$	15,674
Stock-based compensation		-		-		600		-			600
Vested employee restricted stock units		97,085		-		-		-			-
Contribution from parent		424,000		-		736		-			736
Common stock issued for services		91,335		-		138		-			138
Net loss		-		-		-		(1,669	)		(1,669	)
Balance as of September 30, 2024		24,404,187	$	-	$	48,125	$	(32,646	)	$	15,479

					*Additional*					*Total*
	*Common Stock*				*Paid in*		*Accumulated*			*Stockholders’*
	*Shares*		*Amount*		*Capital*		*Deficit*			*Equity*
Balance as of March 31, 2023		20,000,000	$	-	$	19,785	$	(12,666	)	$	7,119
Stock-based compensation		-		-		84		-			84
Net loss		-		-		-		(210	)		(210	)
Balance as of June 30, 2023		20,000,000	$	-	$	19,869	$	(12,876	)	$	6,993
Stock-based compensation		-		-		842		-			842
Common stock warrants reclassed to equity		-		-		9,116		-			9,116
Bridge loan converted into common stock		2,340,707		-		10,276		-			10,276
Common stock dividend		504,080		-		2,213		(2,213	)		-
Common stock issued for services		6,250		-		12		-			12
Common stock issued for purchase of intangibles		208,800		-		917		-			917
Net loss		-		-		-		(10,873	)		(10,873	)
Balance as of September 30, 2023		23,059,837	$	-	$	43,245	$	(25,962	)	$	17,283

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-4

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PODCASTONE, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	*Six Months Ended*
	*September 30,*
	*2024*			*2023*
Cash Flows from Operating Activities:
Net loss	$	(3,035	)	$	(11,083	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		837			338
Stock-based compensation		1,263			938
Amortization of debt discount		-			1,949
Change in fair value of bifurcated embedded derivatives		-			7,603
Impairment of intangibles		176			-
(Reversal of) Provision for credit losses		(5	)		92
Changes in operating assets and liabilities:
Accounts receivable		(296	)		(2,909	)
Prepaid expenses and other current assets		444			39
Related party receivables/payables		1,305

SEC Form 10-Q filed by PodcastOne Inc.