833 WEST SOUTH BOULDER ROAD,

LOUISVILLE, COLORADO 80027

(Address of principal executive offices)

(303) 222-3600

(Registrant’s telephone number, including area code)

Formerly known as GAIAM, Inc.

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 and 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  x☒    NO  ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    YES  x☒    NO  ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

GAIA, INC.

FORM 10-Q

INDEX

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report may contain forward-looking statements that involve risks and uncertainties. The words “anticipate,” “believe,” “plan,” “estimate,” “expect,” “strive,” “future,” “intend” and similar expressions are intended 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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures about Market Risk” and elsewhere in this report. Risks and uncertainties that could cause actual results to differ include, without limitation, legal disputes or arbitration proceedings, history of operating losses, general economic conditions, competition, changing consumer preferences, acquisitions, new initiatives undertaken by us, loss of key personnel, our founder’s control of us, brand reputation, difficulty obtaining financing, dependence on third-party suppliers, reliance on communication networks, reliance on security and information systems, the effect of government regulation, legal liability for website content, fluctuations in quarterly operating results, changing reporting requirements, future results which vary from historical results, reduced opportunities of scale, and other risks and uncertainties included in our filings with the Securities and Exchange Commission. 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 view only as of the date of this report. We undertake no obligation to update any forward-looking information.

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. 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, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, the unaudited interim condensed 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, 2016,March 31, 2017, the interim results of operations for the three and six months ended June 30,March 31, 2017 and 2016, and 2015, and cash flows for the sixthree months ended June 30, 2016March 31, 2017 and 2015.2016. Operating results for the three month period ended March 31, 2017 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, 20152016 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 financial statements, including the notes thereto, for the year ended December 31, 2015.2016.

GAIA, INC.

Condensed consolidated balance sheets

See accompanying notes to the interim condensed consolidated financial statements.

GAIA, INC.

Condensed consolidated statements of operations

See accompanying notes to the interim condensed consolidated financial statements.

GAIA, INC.

Condensed consolidated statements of comprehensive losscash flows

See accompanying notes to the interim condensed consolidated financial statementsstatements.

GAIA, INC.

Condensed consolidated statements of cash flows

See accompanying notes to the interim condensed consolidated financial statements

Notes to interim condensed consolidatedconsolidated financial statements

References in this report to “we”, “us”, “our” or “Gaia” refer to Gaia, Inc. and its consolidated subsidiaries, unless we indicate otherwise.

1. Organization, Nature of Operations, and Principles of Consolidation

Gaia, Inc. (formerly known as Gaiam, Inc.), was incorporated under the laws of the State of Colorado on July 7, 1988. We operatein 1988 and operates a global digital video subscription service and on-line community whichthat caters to a unique and underserved subscriber base. Our digital content library of over 7,900 titles is available to our subscribers on most Internet connectedInternet-connected devices anytime, anywhere commercial free. The subscription also allows ourOur subscribers to download and view files in the library without being actively connected to the internet. Through our online Gaia subscription service, our customers have unlimited access to a vast library of inspiring films, personal growth related content, cutting edge documentaries, interviews, yoga classes, transformation related content, and more – 90% of which is exclusively available to our subscribers for digital streaming.

Our mission is to create a transformational network that empowers a global conscious community. Content on our network is delivered directly to our subscribers through our streaming platform and currently curated into three channels: Yoga, Transformation and Seeking Truth. 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 represents about 80% of total views. We complement our produced and owned content through long term, predominately exclusive, 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.

Divestiture ofThere have been no material changes in the Brand Business, Management Changes, Tender Offer, and Name ChangeCompany’s significant accounting policies as disclosed in the Company’s Annual report on Form 10-K for the year ended December 31, 2016.

On May 4, 2016 and July 1, 2016, we completed the sale of the components of our former Gaiam Brand segment in two separate transactions, which previously represented the majority of our operating revenues and expenses. The terms and implications of the sale are discussed in Note 2. Our current business which remains after the sale primarily consists of our former Gaia segment, and we now have only one business segment. In connection with the sale, we appointed new executive officers, including Jirka Rysavy as Chief Executive Officer and Paul Tarell as Chief Financial Officer. We used a portion of the proceeds from the sale to conduct a tender offer to purchase 9,636,848 shares of our Class A common stock and 842,114 stock options at $7.75 per share. On July 14, 2016, we changed our name from Gaiam, Inc. to Gaia, Inc.

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.

Recent Accounting Pronouncements Adopted in 2017

TheIn March 2016, the Financial Accounting Standards Board has(“FASB”) issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, Standards Update (“ASU”)which amends Topic 718, Compensation – Stock Compensation. ASU No. 2015-17, Income Taxes - Balance Sheet Classification2016-09 simplifies several aspects of Deferred Taxes (Topic 740). The amendments under the new guidance require that deferredaccounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and assets be classified as noncurrent in a classifiedclassification on the statement of financial position. The guidancecash flows. ASU No. 2016-09 is effective for consolidated financial statements issued for annual periodsfiscal years beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period.fiscal years. We adopted this guidance effective AprilJanuary 1, 2017. The adoption impact on the consolidated condensed balance sheet was a cumulative-effect adjustment of $0.2 million, increasing opening retained earnings and decreasing paid-in capital.

Recent Accounting Pronouncements

In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment, to simplify financial reporting by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment.  Under ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the amount of goodwill allocated to that reporting unit.  The new guidance effectively eliminates “Step 2” from the previous goodwill impairment test.  ASU 2017-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019.  Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017.  We have not determined which period we will adopt the new guidance but do not expect the adoption of ASU 2017-04 to have a significant impact on the results of our goodwill impairment testing.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and it dida lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income

statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Based on our preliminary assessment, we do not expect the new standard to have a material impact on our reported financial position or results of operations.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The standard superseded most previous revenue recognition rules, and will become effective for us in the first quarter of 2018. The core principle of the standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. Our revenue transactions typically consist of a single distinct, fixed-price performance obligation that is delivered to the customer at a single point in time, or over a subscription period. We are monitoring the evolving interpretations and implementation guidance. Based on our preliminary assessment, we do not expect the new standard to have a material impact on our reported financial position or results of operations.

2. Discontinued Operations

Sale of the Gaiam Brand Business and Natural Habitat

On May 4, 2016 we sold our 51.4% equity interest in Natural Habitat, Inc. (“Natural Habitat”), our eco-travel subsidiary, in exchange for $12.85$12.9 million in cash, and recognized a gain of $10.3 million as disclosed in our Current Report on Form 8-K filed May 10, 2016.

On July 1, 2016, we sold the assets and liabilities of our Gaiam Brand business in exchange for a gross purchase price of $167.0$167 million, subject to closing expenses and post-closing adjustments, and recognized a preliminary gain of approximately $120.8 million before taxes as disclosed in our Current Reports on Form8-K filed May 10, 2016 and July 8, 2016. Our Gaiam Brand business previously constituted the majority of our consolidated revenues and expenses, and consisted of Gaiam branded yoga, fitness and wellness consumer products, and content. The assets and liabilities, operating results and cash flows of our Gaiam Brand business are classified as held-for-sale as of June 30, 2016.products.

The Gaiam Brand business and our interest in our eco-travel subsidiary constituted all the assets and liabilities of our Gaiam Brand segment.

Discontinued Operations

The assets and liabilities, operating results, and cash flows of our Gaiam Brand business and Natural Habitatsegment are presented as discontinued operations, separate from our continuing operations, for all periods presented in these interim condensed consolidated financial statements and footnotes, unless otherwise indicated.

Discontinued operating results for 2015 also include legal expenses associated with the sale of our DVD distribution business to Cinedigm. We were involved in legal disputes with Cinedigm associated with the sale, which were settled during 2015. The assets and liabilities in the following table as of December 31, 2015 include the Natural Habitat business, and the assets and liabilities as of June 30, 2016 consist of the Gaiam Brand business only.

The major components of assets and liabilities of our discontinued operations were as follows:

The incomeloss from discontinued operations amountsfor the quarter ended March 31, 2016, as reported on our condensed consolidated statements of operations were comprised of the following amounts:

Prior to its divestiture in May 2016, Natural Habitat used derivative instruments to manage a portion of its exposure to changes in currency exchange rates due to payments made to foreign tour operators. The cash flow effects of these derivative contracts during 2016 are included in Net cash used in operating activities—discontinued operations in the Statements of Cash Flows. Realized and unrealized gains and losses on currency derivatives without hedge accounting designation are included in Income from discontinued operations, net of tax in the accompanying statements of operations. For the three and six month periods ended June 30, 2016 the gain recognized was $0.4 million and $1.3 million, respectively. The asset related to the fair value of the hedging instrument was included in Current assets of discontinued operations in the accompanying balance sheet prior to the sale.

3. Credit Facility

In 2015 Boulder Road LLC, a subsidiary of Gaia, entered into a revolving line of credit agreement with a bank in the amount of $5.5 million. The note bears interest at the prime rate plus 3.25%, is guaranteed by us,Equity and is secured by a Deed of Trust filed against the real property on which our principal offices are located. The value of our principal offices is in excess of the amount of the line of credit. During the six months ended June 30, 2016, Boulder Road LLC drew and repaid $3.0 million on the line of credit. No amounts were outstanding under the line of credit as of June 30, 2016.

4. EquityShare-Based Compensation

During the first sixthree months of 2016,2017, we issued 11,000704 shares of our Class A common stock under our 2009 Long-Term Incentive Plan to our independent directors, in lieu of cash compensation, for services rendered in 2016.2017. We valued the shares issued to our independent directors at estimated fair value based on the closing price of our shares on the date the shares were issued, which by policy is the last trading day of each quarter in which the services were rendered.

In June, we issued 50,000 shares of our Class A common stock as a charitable contribution to a local organization. We valued the shares at the closing market price of our shares on the date they were issued and recorded a charitable contribution expense of $0.4 million.

During the first sixthree months of 2017 and 2016, we issued 183,000 shares of our Class A common stock with net proceeds of $1.0 million in connection with option exercises. The following is a reconciliation from December 31, 2015 to June 30, 2016 of the carrying amount of total equity, equity attributable to Gaia, Inc.,recognized $413,000 and equity attributable to the noncontrolling interest.

										Gaia, Inc. Shareholders
(in thousands)		Total				Comprehensive Loss				Accumulated Deficit				Accumulated Other Comprehensive Loss				Class A and Class B Common Stock				Paid-in Capital				Noncontrolling Interest
Balance at December 31, 2015		$	88,793							$	(88,035	)		$	(399	)		$	3			$	172,371			$	4,853
Issuance of Gaia, Inc. common stock for stock option exercises, share-based compensation and charitable contribution			1,847								—				—				—				1,847				—
Elimination of noncontrolling interest resulting from the sale of Natural Habitat			(1,294	)							—				—				—				—				(1,294	)
Dividends paid to noncontrolling interest			(1,944	)							—				—				—				—				(1,944	)
Comprehensive loss:
Net income			(9,754	)			(9,754	)			(10,064	)			—				—				—				310
Foreign currency translation adjustment			59				59				—				31				—				—				28
Comprehensive loss						$	(9,695	)
Balance at June 30, 2016		$	77,707							$	(98,099	)		$	(368	)		$	3			$	174,218			$	1,953

Tender Offer

Effective July 1, 2016, we used a portion of the proceeds from the sale of the Gaiam Brand business to conduct a tender offer to purchase 9,636,848 shares of our Class A common stock and 842,114 stock options at a price of $7.75 per share. In connection with the Gaiam Brand business sale, employee stock options to purchase 189,610 shares received accelerated vesting and were repurchased in the stock option tender amounts above. Subsequent to the Gaiam Brand business sale options to purchase 194,610 shares were cancelled. As a result of the tender offer, our outstanding shares decreased significantly.

5. Share-Based Payments

During the first six months of 2016 and 2015, we extended the term of certain options granted under our 2009 Long-Term Incentive Plan to members of our executive team for an additional three months, and recognized $40,000 and $50,000$140,000, respectively, of associated stock 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 option exercises during the first quarter of 2017.

6.4. Net Income (Loss)Loss per Share

Basic net income (loss)loss per share excludes any dilutive effects of options. We compute basicis computed by dividing the net income (loss) per share usingloss by the weighted averageweighted-average number of shares of common stock outstanding during the period. We compute dilutedDiluted net income (loss)loss per share using the weighted average number ofis computed by giving effect to all potential shares of common stock, including stock options and commonrestricted stock equivalents outstanding duringunits, to the period. We excluded common stock equivalents of 890,000extent dilutive. Basic and 985,000 from the computation of diluted net loss per share were the same for the three months ended June 30,March 31, 2017 and 2016 respectively, as the inclusion of all potential common shares outstanding would have been anti-dilutive.

5. Income Taxes

Periodically, we perform assessments of the realization of our net deferred tax assets considering all available evidence, both positive and 2015, respectively,negative. With the sale of the Gaiam Brand business in 2016, we utilized the majority of our deferred tax assets to offset the associated gains from the sale and 939,000released the valuation allowance we had in place. During 2017, we determined the historical operating losses generated by the business, combined with our plans to continue to invest in our revenue growth and 987,000generate losses for the six months ended June 30, 2016 and 2015, respectively, because their effect was antidilutive.

The following table sets forth the computation of basic and diluted net income (loss) per share:

7. Income Taxes

During 2013, we determined thatnext few years, indicated a full valuation allowance againston our deferred tax assets was necessary due to the cumulative loss incurred over the three-year period ended December 31, 2013. Since that time, we have continued to provide a full valuation allowance against deferred tax assets. As income is generatedappropriate in future periods, the Company expects to reverse the valuation allowance as utilization of the deferred tax assets occurs.2017. As of June 30, 2016,March 31, 2017, our gross net operating lossesloss carryforwards were $94.6$10.1 million and $26.2$0.5 million for federal and state, respectively.

8. Segment Information

Prior to June 30, 2016, we managed our company and aggregated our operational and financial information in two reportable segments, which were aligned based on their products or services.

From July 1, 2016 forward, our chief operating decision maker reviews operating results on a consolidated basis and we therefore

have one reportable segment.

9. Commitments and6. Contingencies

From time to time, we are involved in legal proceedings that we consider to be in the normal course of business. Claimed amounts against us may be substantial but may not bear any reasonable relationship to the merits of the claim or the extent of any real risk of court or arbitral awards. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Although it is not feasible to predict the outcome of these matters with certainty, it is reasonably possible that some legal proceedings may be disposed of or decided unfavorably to us and in excess of the amounts currently accrued. Based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, whichthat are considered probable of being rendered against us in litigation or arbitration in existence at June 30, 2016March 31, 2017 and that can be reasonably estimated are either reserved against or would not have a material adverse effect on our financial condition, results of operations or cash flows.

10. Subsequent Events

On February 26, 2015, our board of directors and the board of directors of our subsidiary Gaia International, Inc. (formerly known as Gaia, Inc.) approved the Long-Term Deferred Equity Plan (the “deferred equity plan”) as an incentive plan for the management of our Gaia segment. In anticipation of the previously contemplated spin-off, our board of directors and the board of directors of our subsidiary Gaia International, Inc. granted restricted stock units (“RSUs”) of Gaia International, Inc.’s Class A common stock under the deferred equity plan to certain of our officers and employees involved in the Gaia segment. As previously authorized by our board of directors, on July 1, 2016 in connection with the closing of the Brand Business sale, the RSU’s granted under the deferred equity plan were exchanged for 348,841 RSU’s under our 2009 Long-Term Incentive Plan. In connection with the exchanges, each recipient entered into an individual restricted stock unit award agreement with the following terms: (i) the recipient is entitled to receive one share of Class A common stock for each RSU upon vesting, and (ii) the RSUs will vest on March 16, 2020, provided that the recipient is still an employee or director of our company on such date. The RSUs will be automatically forfeited and of no further force and effect if either of the vesting conditions are not met.

Forward-Looking Statements

This report contains forward-looking statements that involve risks and uncertainties. When used in this discussion, we intend the words “anticipate,” “believe,” “plan,” “estimate,” “expect,” “strive,” “future,” “intend”, “will” 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,” “Quantitative and Qualitative Disclosures About Market Risk” and elsewhere in this Form 10-Q. Risks and uncertainties that could cause actual results to differ include, without limitation, general economic conditions, ongoing losses, competition, loss of key personnel, pricing, 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, fluctuations in quarterly operating results, consumer trends, the effect of government regulation and programs and other risks and uncertainties included in our filings with the Securities and Exchange Commission. 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 condensed consolidated financial statements and related notes included elsewhere in this document. This section is designed to provide information that will assist in understanding our condensed consolidated financial statements, changes in certain items in those statements from period to period, the primary factors that caused those changes and how certain accounting principles, policies and estimates affect the condensed consolidated financial statements.

Overview and Outlook

We operate a global digital video subscription service with over 7,0007,900 titles whichthat caters to a unique and underserved subscriber base. Our digital content is available to our subscribers on most Internet connectedInternet-connected devices anytime, anywhere commercial free. TheThrough our online Gaia subscription service, our subscribers have unlimited access to a vast library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation related content, and more. A subscription also allows our subscribers to download and view files from our library without being actively connected to the internet. Through our online Gaia subscription service, our customers have unlimited access to a vast library of inspiring films, personal growth related content, cutting edge documentaries, interviews, yoga classes, and more – 90% of which is exclusively available to our subscribers for digital streaming on most Internet connected devices.Internet.

The consumptionConsumption of streaming video is expanding rapidly withas more and more people augmentingaugment their use of, or replacingreplace broadcast television and turningturn to, streaming video to watch their favorite content on services like Netflix, Amazon Prime, Hulu Plus, HBO GoNow and Gaia.

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 state-of-the-art production studios near Boulder, Colorado. Over 90% of our content is exclusively available for streaming to most devices that are connected to the Internet.exclusively on Gaia. By offering exclusive and unique content over a state-of-the-artthrough our streaming service, we believe we will be able to significantly expand our target subscriber base.

Our available content is currently focused on yoga, health and longevity,transformation, seeking truth spiritual growth and conscious films & series.films. This media content is specifically targeted to a unique customer base whichthat is interested in alternatives and supplements to the content provided by mainstream media. We have been able to growgrown these content options both organically through our own productions and through strategic acquisitions. In addition, through our investments in our streaming video technology and our user interface, we have been able to expandexpanded the many ways our subscription customer 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 on our content.

We have reported losses from continuing operations of $7.2$6.2 million and $5.0$4.1 million for the sixthree months ending June 30,ended March 31, 2017 and 2016, and 2015, respectively.

We are a Colorado corporation. Our registered, principal and executive office is located at 833 West South Boulder Road, Suite G, Louisville, CO 80027-2452. Our telephone number at that address is (303) 222-3999.222-3600. We maintain an Internet website at www.gaia.com. The website address has been included only as a textual reference. Our website and the information contained on that website, or connected to that website, are not incorporated by reference into this filing.Form 10-Q.

Sale of the Gaiam Brand Segment

Prior to July 1, 2016, we operated a second business segment called the Gaiam Brand segment which developed and marketed yoga and fitness accessories, apparel, and media. It also included Natural Habitat, our eco-travel business.

On May 4, 2016 we sold all our 51.4% equity interest in Natural Habitat, Inc. (“Natural Habitat”), our eco-travel subsidiary, in exchange for $12.85 million in cash, and recognized a gain of $10.3 million. On July 1, 2016, we sold the assets and liabilities of our Gaiam Brand business in exchange for $167.0 million subject to post-closing adjustments and recognized a preliminary gain of approximately $120.8 million before taxes. The Brand Business consisted of all the remaining assets and liabilities of our Gaiam Brand segment. Our Gaiam Brand business previously constituted the majority of our consolidated revenues and expenses.

The operating results of our Gaiam Brand segment are presented as discontinued operations in the accompanying financial statements and discussions.

Results of Operations

The table below summarizes certain of our results for the periods indicated:

The following table sets forth certain financial data as a percentage of revenue for the periods indicated:

Three months ended June 30, 2016 ComparedMarch 31, 2017 compared to Threethree months ended June 30, 2015March 31, 2016

Net revenue. Net revenue increased $0.9$2.0 million, or 27.8%51.0%, to $4.2$5.8 million during the secondfirst quarter of 2016,2017, compared to $3.3$3.8 million during the secondfirst quarter of 2015.2016. Net revenue from streaming increased $1.0$2.0 million, or 39.7%61.3%, to $3.6$5.2 million during the secondfirst quarter of 20162017 from $2.6$3.2 million during the secondfirst quarter of 2015.2016. The increase in streaming revenues was primarily driven by our growth in subscribers. DVD subscription and other revenue declined $0.1 million or 16.0%, to $0.6 million during the second quarternumber of 2016 from $0.7 million during the second quarter of 2015. The decline was driven by a decline in subscribers due to a shift in focus to streamingpaying subscribers.