Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2020 | Feb. 09, 2021 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | LiveXLive Media, Inc. | |
Entity Central Index Key | 0001491419 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2020 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 75,478,577 | |
Entity File Number | 001-38249 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 17,353 | $ 5,702 |
Restricted cash | 235 | 6,735 |
Accounts receivable, net | 16,210 | 3,889 |
Prepaid expense and other assets | 2,853 | 1,396 |
Inventories | 2,750 | |
Total Current Assets | 39,401 | 17,722 |
Property and equipment, net | 4,229 | 3,397 |
Goodwill | 24,078 | 9,672 |
Intangible assets, net | 22,395 | 23,198 |
Other assets | 1,142 | 127 |
Total Assets | 91,245 | 54,116 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 30,702 | 30,723 |
Accrued royalties | 13,195 | 13,071 |
Notes payable, net | 2,242 | 331 |
Deferred revenue | 1,412 | 949 |
Senior secured convertible debentures, net | 2,720 | |
Total Current Liabilities | 47,551 | 47,794 |
Senior secured convertible debentures, net | 6,505 | |
Unsecured convertible notes, net | 7,280 | 6,794 |
Senior secured convertible notes, net | 12,830 | |
Notes payable, net | 754 | |
Lease liabilities, noncurrent | 813 | |
Other long-term liabilities | 6,483 | 45 |
Deferred income taxes | 108 | 108 |
Total Liabilities | 75,819 | 61,246 |
Stockholders’ Equity (Deficit) | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding | ||
Common stock, $0.001 par value; 500,000,000 shares authorized; 75,265,970 and 58,984,382 shares issued and outstanding, respectively | 75 | 59 |
Additional paid in capital | 169,924 | 120,932 |
Accumulated deficit | (154,573) | (128,121) |
Total stockholders' equity (deficit) | 15,426 | (7,130) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 91,245 | $ 54,116 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Dec. 31, 2020 | Mar. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 75,265,970 | 58,984,382 |
Common stock, outstanding | 75,265,970 | 58,984,382 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||||
Revenue: | $ 19,123 | $ 9,699 | $ 44,189 | $ 28,780 |
Operating expenses: | ||||
Cost of sales | 14,564 | 7,638 | 32,524 | 25,104 |
Sales and marketing | 3,059 | 1,391 | 6,481 | 5,202 |
Product development | 2,534 | 2,754 | 6,908 | 7,682 |
General and administrative | 5,162 | 4,473 | 14,762 | 14,401 |
Amortization of intangible assets | 1,399 | 1,355 | 4,057 | 4,497 |
Total operating expenses | 26,718 | 17,611 | 64,732 | 56,886 |
Loss from operations | (7,595) | (7,912) | (20,543) | (28,106) |
Other income (expense): | ||||
Interest expense, net | (998) | (890) | (4,097) | (2,700) |
Loss on extinguishment of debt | (1,488) | |||
Other income (expense) | (138) | (6) | (320) | 413 |
Total other income (expense), net | (1,136) | (896) | (5,905) | (2,287) |
Loss before provision for income taxes | (8,731) | (8,808) | (26,448) | (30,393) |
Provision for income taxes | 4 | |||
Net loss | $ (8,731) | $ (8,808) | $ (26,452) | $ (30,393) |
Net loss per share - basic and diluted | $ (0.12) | $ (0.15) | $ (0.40) | $ (0.55) |
Weighted average common shares - basic and diluted | 72,356,093 | 57,927,217 | 66,880,417 | 55,390,589 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Mar. 31, 2019 | $ 52 | $ 98,605 | $ (89,194) | $ 9,463 |
Balance, shares at Mar. 31, 2019 | 52,275,236 | |||
Shares issued for services to consultants and vendors | $ 1 | 3,518 | 3,519 | |
Shares issued for services to consultants and vendors, shares | 956,575 | |||
Stock-based compensation | 5,970 | 5,970 | ||
Interest paid in kind | 29 | 29 | ||
Shares issued in the public offering, net of cost | $ 5 | 9,518 | 9,523 | |
Shares issued in the public offering, net of cost, shares | 5,000,000 | |||
Net loss | (30,393) | (30,393) | ||
Balance at Dec. 31, 2019 | $ 58 | 117,640 | (119,587) | (1,889) |
Balance, shares at Dec. 31, 2019 | 58,231,811 | |||
Balance at Sep. 30, 2019 | $ 58 | 114,972 | (110,779) | 4,251 |
Balance, shares at Sep. 30, 2019 | 57,834,822 | |||
Shares issued for services to consultants and vendors | 1,050 | 1,050 | ||
Shares issued for services to consultants and vendors, shares | 396,989 | |||
Stock-based compensation | 1,668 | 1,668 | ||
Offering costs | (50) | (50) | ||
Net loss | (8,808) | (8,808) | ||
Balance at Dec. 31, 2019 | $ 58 | 117,640 | (119,587) | (1,889) |
Balance, shares at Dec. 31, 2019 | 58,231,811 | |||
Balance at Mar. 31, 2020 | $ 59 | 120,932 | (128,121) | (7,130) |
Balance, shares at Mar. 31, 2020 | 58,984,382 | |||
Shares issued for services to consultants and vendors | $ 4 | 11,457 | 11,461 | |
Shares issued for services to consultants and vendors, shares | 3,780,659 | |||
Stock-based compensation | 5,120 | 5,120 | ||
Vested employee restricted stock units | $ 2 | (2) | ||
Vested employee restricted stock units, shares | 1,963,274 | |||
Interest paid in kind | 9 | 9 | ||
Exercise of employee stock options | 481 | 481 | ||
Exercise of employee stock options, shares | 120,001 | |||
Shares issued in the public offering, net of cost | $ 2 | 7,327 | 7,329 | |
Shares issued in the public offering, net of cost, shares | 1,820,000 | |||
Shares issued for PodcastOne acquisition | $ 5 | 14,986 | 14,991 | |
Shares issued for PodcastOne acquisition, shares | 5,566,885 | |||
Shares issued for CPS acquisition | $ 2 | 6,389 | 6,391 | |
Shares issued for CPS acquisition, shares | 2,230,769 | |||
Shares to be issued for CPS acquisition | 1,365 | 1,365 | ||
Shares issued in connection with Senior Secured Convertible Notes | $ 1 | 1,860 | 1,861 | |
Shares issued in connection with Senior Secured Convertible Notes, shares | 800,000 | |||
Net loss | (26,452) | (26,452) | ||
Balance at Dec. 31, 2020 | $ 75 | 169,924 | (154,573) | 15,426 |
Balance, shares at Dec. 31, 2020 | 75,265,970 | |||
Balance at Sep. 30, 2020 | $ 72 | 158,968 | (145,842) | 13,198 |
Balance, shares at Sep. 30, 2020 | 71,689,101 | |||
Shares issued for services to consultants and vendors | 998 | 998 | ||
Shares issued for services to consultants and vendors, shares | 436,629 | |||
Stock-based compensation | 1,568 | 1,568 | ||
Vested employee restricted stock units | $ 1 | (1) | ||
Vested employee restricted stock units, shares | 706,222 | |||
Shares issued in the public offering, net of cost | 198 | 198 | ||
Shares issued in the public offering, net of cost, shares | ||||
Shares issued for PodcastOne acquisition | 439 | 439 | ||
Shares issued for PodcastOne acquisition, shares | 203,249 | |||
Shares issued for CPS acquisition | $ 2 | 6,389 | 6,391 | |
Shares issued for CPS acquisition, shares | 2,230,769 | |||
Shares to be issued for CPS acquisition | 1,365 | 1,365 | ||
Net loss | (8,731) | (8,731) | ||
Balance at Dec. 31, 2020 | $ 75 | $ 169,924 | $ (154,573) | $ 15,426 |
Balance, shares at Dec. 31, 2020 | 75,265,970 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flows used in Operating Activities: | ||
Net loss | $ (26,452) | $ (30,393) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 6,368 | 6,157 |
Common stock issued for services | 3,092 | 3,639 |
Stock-based compensation | 4,908 | 5,501 |
Amortization of debt discount | 1,025 | 522 |
Interest paid in kind | 453 | 29 |
Change in fair value of bifurcated embedded derivatives | (827) | (189) |
Change in fair value of contingent consideration liability | (39) | |
Loss on extinguishment of debt | 1,488 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,218) | 637 |
Prepaid expenses and other current assets | (1,044) | (380) |
Inventories | 5 | |
Deferred revenue | 428 | (31) |
Accounts payable and accrued liabilities | 4,120 | 9,140 |
Other liabilities | (407) | |
Net cash used in operating activities | (9,100) | (5,368) |
Cash Flows from Investing Activities: | ||
Increase in cash from the acquisitions | 2,418 | |
Purchases of property and equipment | (2,229) | (1,755) |
Net cash provided by (used in) investing activities | 189 | (1,755) |
Cash Flows from Financing Activities: | ||
Repayment of senior secured convertible debentures | (10,823) | (1,989) |
Proceeds from senior secured convertible notes | 13,139 | |
Debt issuance costs | (190) | |
Amendment costs of senior secured debentures | (150) | |
Proceeds from issuance of shares of common stock, net | 9,395 | 9,523 |
Proceeds from notes payable | 2,145 | |
Proceeds from exercise of stock options | 481 | |
Payments on capital lease liability | (85) | |
Net cash provided by financing activities | 14,062 | 7,384 |
Net change in cash, cash equivalents and restricted cash | 5,151 | 261 |
Cash, cash equivalents and restricted cash, beginning of period | 12,437 | 13,939 |
Cash, cash equivalents and restricted cash, end of period | 17,588 | 14,200 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | ||
Cash paid for interest | 651 | 1,289 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Fair value of options issued to employees, capitalized as internally developed software | 212 | 469 |
Fair value of 5,566,885 shares of common stock issued in connection with the PodcastOne acquisition | 14,991 | |
Fair value of 2,230,769 shares of common stock issued in connection with the CPS acquisition | 6,391 | |
Non-cash settlement for issuable or prepaid shares | 494 | |
2,679,459 shares of common stock issued to consultants and vendors to settle accounts payable | $ 8,657 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) | 9 Months Ended |
Dec. 31, 2020shares | |
Issuance of shares consultants and vendors to settle accounts payable | 2,679,459 |
PodcastOne acquisition [Member] | |
Common stock, shares | 5,566,885 |
CPS acquisition [Member] | |
Common stock, shares | 2,230,769 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Note 1 — Organization and Basis of Presentation Organization LiveXLive Media, Inc. ("LiveXLive") together with its subsidiaries ("we," "us," "our" or the "Company") is a Delaware corporation headquartered in Beverly Hills, California. The Company is a global platform for livestream and on-demand audio, video and podcast content in music, comedy and pop culture. On December 29, 2017, LiveXLive acquired Slacker, Inc. ("Slacker"), an Internet music and radio streaming service incorporated in the state of Delaware, and it became a wholly owned subsidiary of LiveXLive. On February 5, 2020. The Company acquired (i) React Presents, LLC a Delaware limited liability company ("React Presents"), and it became a wholly owned subsidiary of LiveXLive Events, LLC, a wholly owned subsidiary and (ii) indirectly Spring Awakening, LLC, which is a wholly owned subsidiary of React Presents, a producer, promoter and manager of in person live music festivals and events. On July 1, 2020, the Company through its wholly owned subsidiary, LiveXLive PodcastOne, Inc., acquired 100% of the issued and outstanding equity interests of Courtside Group, Inc. (dba PodcastOne) ("PodcastOne") (see Note 4 – Business Combinations). On December 22, 2020, the Company through its wholly owned subsidiary LiveXLive Merchandising, Inc., acquired 100% of the issued and outstanding equity interests of Custom Personalization Solutions, Inc. ("CPS"). (see Note 4 – Business Combinations). Basis of Presentation The presented financial information includes the financial information and activities of React Presents for the three and nine months ended December 31, 2020 (92 days and 275 days) and the three and nine months ended December 31, 2019 (0 days). The presented financial information includes the financial information and activities of PodcastOne for the three and nine months ended December 31, 2020 (92 days and 184 days) and December 31, 2019 (0 days). The presented financial information includes the financial information and activities of CPS for the three and nine months ended December 31, 2020 (10 days and 10 days) and December 31, 2019 (0 days). The financial activities of CPS from December 22, 2020 through December 31, 2020 are included in the Company's December 31, 2020 financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the Company's audited consolidated financial statements for the fiscal year ended March 31, 2020, and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company's interim unaudited condensed consolidated financial statements for the three months ended December 31, 2020. The results for the three months ended December 31, 2020 are not necessarily indicative of the results expected for the full fiscal year ending March 31, 2021 ("fiscal 2021"). The condensed consolidated balance sheet as of March 31, 2020 has been derived from the Company's audited balance sheet included in the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") on June 26, 2020 (the "2020 Form 10-K"). The interim unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete audited financial statements. Therefore, these financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the 2020 Form 10-K. Going Concern and Liquidity The Company's condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. The Company's principal sources of liquidity have historically been its debt and equity issuances and its cash and cash equivalents (which cash, cash equivalents and restricted cash amounted to $17.6 million as of December 31, 2020). As reflected in its condensed consolidated financial statements included elsewhere herein, the Company has a history of losses, and incurred a net loss of $8.7 million during the quarter ended December 31, 2020 and had a working capital deficiency of $8.2 million as of December 31, 2020. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern within one year from the date that these financial statements are filed. The Company's condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company is currently seeking additional funds, primarily through the issuance of equity and/or debt securities for cash to supplement its operating liquidity for its business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain terms that result in undue restrictions on its operations, in the case of debt financing or cause substantial dilution for its stockholders, in case of equity and/or convertible debt financing. The Company may also have to consider reducing certain overhead costs through the reduction of salaries and other means and settle liabilities through negotiation. There can be no assurance that the Company's attempts at any or all of these endeavors will be successful. The Company's ability to continue as a going concern is dependent on its ability to execute its growth strategy and on its ability to raise additional funds. The continued spread of COVID-19 and uncertain market conditions may limit the Company's ability to access capital, may continue to or further reduce demand for its services, and may negatively impact its ability to retain key personnel. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Acquisitions are included in the Company's condensed consolidated financial statements from the date of the acquisition. The Company uses purchase accounting for its acquisitions, which results in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All intercompany balances and transactions have been eliminated in consolidation. Reclassifications Certain amounts in the Company's previously issued financial statements have been reclassified to conform to the current year presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 — Summary of Significant Accounting Policies COVID-19 In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease ("COVID-19") as a pandemic. The global impact of the COVID-19 pandemic has had a negative effect on the global economy, disrupting the financial markets creating increasing volatility and overall uncertainty. The Company began to experience modest adverse impacts of the COVID-19 pandemic in the fourth quarter of fiscal year ended March 31, 2020 and this impact is expected to continue throughout at least the fiscal year ending March 31, 2021, and possibly longer. The Company's event and programmatic advertising revenues were directly impacted in the 2021 fiscal year with all on-premise in-person live music festivals and events postponed and mixed demand from historical programmatic advertising partners. Further, one of the Company's larger customers also experienced a temporary halt to its production as a result of COVID-19, which in turn could adversely impact the Company's near-term subscriber growth in 2021. During the nine months ended December 31, 2020, the Company enacted several initiatives to counteract these near-term challenges, including salary reductions, obtaining a Paycheck Protection Program loan (see Note 8 - Notes Payable) and pivoting its live music production to 100% digital. The Company began producing, curating, and broadcasting digital music festivals and events across its platform which has resulted in the growth in the number of live events streamed, related sponsorship revenue and overall viewership. The Company also launched a new pay-per-view ("PPV) offering in May 2020, enabling new forms of artist revenue including digital tickets, tipping, digital meet and greet and merchandise sales. However, there is uncertainty as to the duration and overall impact of the COVID-19 pandemic, which could result in an adverse material change in a future period to the Company's results of operations, financial position and liquidity. On March 27, 2020, the CARES Act was enacted in the United States. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property. The Company evaluated the provisions of the CARES Act and does not anticipate the associated impacts, if any, will have a material effect on its provision for income taxes. On December 29, 2020 the Consolidated Appropriations Act ("CAA") was enacted in the United States. The CAA provides numerous tax provisions and most notably for the Company changes the tax treatment of those expenses paid for with a PPP loan from non-deductible to deductible. The Company is in the process of evaluating the provisions of the CAA including second draw Paycheck Protection Program loans and potential eligibility for Employee Retention Credits and does not anticipate the other provisions included will have a material impact on its provision for income taxes. Use of Estimates The preparation of the Company's condensed consolidated financial statements in conformity with the United States of America ("US") generally accepted accounting principles ("GAAP") requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue, allowance for doubtful accounts, the assigned value of acquired assets and assumed and contingent liabilities associated with business combinations and the related purchase price allocation, useful lives and impairment of property and equipment, intangible assets, goodwill and other assets, inventory calculations and reserves, the fair value of the Company's equity-based compensation awards and convertible debt instruments, fair values of derivatives, and contingencies. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. Given the overall uncertainty surrounding the COVID-19 pandemic, there is a reasonable possibility that actual results could differ from those estimates and such differences could be material to the financial position and results of operations, specifically in assessing when the collectability of revenue related consideration is probable, and the impairment assessment of goodwill, indefinite lived assets or long-lived assets that are depreciated or amortized. Revenue Recognition Policy The Company accounts for a contract with a customer when an approved contract exists, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and the collectability of substantially all of the consideration is probable. Revenue is recognized when the Company satisfies its obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company uses the expected value method to estimate the value of variable consideration on advertising and with original equipment manufacturer contracts to include in the transaction price and reflect changes to such estimates in periods in which they occur. Variable consideration for these services is allocated to and recognized over the related time period such advertising and subscription services are rendered as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company's efforts to satisfy its performance obligation. The amount of variable consideration included in revenue is limited to the extent that it is probable that the amount will not be subject to significant reversal when the uncertainty associated with the variable consideration is subsequently resolved. Practical Expedients The Company elected the practical expedient and recognized the incremental costs of obtaining a contract, if any, as an expense when incurred if the amortization period of the asset that would have been recognized is one year or less. Gross Versus Net Revenue Recognition The Company reports revenue on a gross or net basis based on management's assessment of whether the Company acts as a principal or agent in the transaction. To the extent the Company acts as the principal, revenue is reported on a gross basis net of any sales tax from customers, when applicable. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service prior to transfer to the customer. Where applicable, the Company has determined that it acts as the principal in all of its subscription service streams and may act as principal or agent for its ticketing/live events, advertising and licensing revenue streams. The Company's revenue is principally derived from the following services: Subscription Services Subscription services revenue substantially consist of monthly to annual recurring subscription fees, which are primarily paid in advance by credit card or through direct billings arrangements. The Company defers the portions of monthly to annual recurring subscription fees collected in advance and recognizes them in the period earned. Subscription revenue is recognized in the period of services rendered. The Company's subscription revenue consists of performance obligations that are satisfied over time. This has been determined based on the fact that the nature of services offered are subscription based where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services or not. As a result, the Company has concluded that the best measure of progress toward the complete satisfaction of the performance obligation over time is a time-based measure. The Company recognizes subscription revenue straight-line through the subscription period. Subscription Services consist of: Direct subscriber, mobile service provider and mobile app services The Company generates revenue for subscription services on both a direct basis and through subscriptions sold through certain third-party mobile service providers and mobile app services (collectively the "Mobile Providers"). For subscriptions sold through the Mobile Providers, the subscriber executes an on-line agreement with Slacker outlining the terms and conditions between Slacker and the subscriber upon purchase of the subscription. The Mobile Providers promote the Slacker app through their e-store, process payments for subscriptions, and retain a percentage of revenue as a fee. The Company reports this revenue gross of the fee retained by the Mobile Providers, as the subscriber is Slacker's customer in the contract and Slacker controls the service prior to the transfer to the subscriber. Subscription revenues from monthly subscriptions sold directly through Mobile Providers are subject to such Mobile Providers' refund or cancellation terms. Revenues from Mobile Providers are recognized net of any such adjustments for variable consideration, including refunds and other fees. The Company's payment terms vary based on whether the subscription is sold on a direct basis or through Mobile Providers. Subscriptions sold on a direct basis require payment before the services are delivered to the customer. The payment terms for subscriptions sold through Mobile Providers vary, but are generally payable within 30 days. Third-Party Original Equipment Manufacturers The Company generates revenue for subscription services through subscriptions sold through a third-party Original Equipment Manufacturer (the "OEM"). For subscriptions sold through the OEM, the OEM executes an agreement with Slacker outlining the terms and conditions between Slacker and the OEM upon purchase of the subscription. The OEM installs the Slacker app in their equipment and provides the Slacker service to the OEM's customers. The monthly fee charged to the OEM is based upon a fixed rate per vehicle, multiplied by the variable number of total vehicles which have the Slacker application installed. The number of customers, or the variable consideration, is reported by OEMs and resolved on a monthly basis. The Company's payment terms with OEM are up to 30 days. Advertising Revenue Advertising revenue primarily consist of revenues generated from the sale of audio, video, and display advertising space to third-party advertising exchanges. Revenues are recognized based on delivery of impressions over the contract period to the third-party exchanges, either when an ad is placed for listening or viewing by a visitor or when the visitor "clicks through" on the advertisement. The advertising exchange companies report the variable advertising revenue performed on a monthly basis which represents the Company's efforts to satisfy the performance obligation. Additionally, following the acquisition of PodcastOne, the Company began deriving revenue from podcast advertising. PodcastOne earns advertising revenues primarily for fees earned from advertisement placement purchased by the customer during the time the podcast is delivered to the viewing audience, under the terms and conditions as set forth in the applicable podcasting agreement calculated using audience activity. Licensing Revenue Licensing revenue primarily consists of sales of licensing rights to digitally stream its live music services in certain geographies (e.g. China). Licensing revenue is recognized when the Company satisfies its performance obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, which is typically when the live event has aired. Any license fees collected in advance of an event are deferred until the event airs. Sponsorship Revenue Sponsorship revenue primarily consists of sales of sponsorship programs that provide sponsors with opportunities to reach our customers. Sponsorship revenue is recognized as the event airs. Any sponsorship fees collected in advance of the contract term (typically an event) are deferred until the event airs. The Company reports sponsorship revenue on a gross basis as the Company acts as the principal in the underlying transactions. Merchandise Revenue Revenue is recognized upon the transfer of control to the customer. The Company recognizes revenue and measures the transaction price net of taxes collected from customers and remitted to governmental authorities. Sales commissions are expensed as incurred and are recorded in sales and marketing expenses in the condensed consolidated statements of income. The Company's customer contracts do not have a significant financing component due to their short durations, which are typically effective for one year or less and have payment terms that are generally 30-60 days. Wholesale revenue is generally recognized when products are shipped, depending on the applicable contract terms. The Company records a refund liability for expected returns based on prior returns history, recent trends, and projections for returns on sales in the current period. The refund liability at December 31, 2020 was $0.1 million. Ticket/Event Revenue Ticket/Event revenue is primarily from the sale of tickets and promoter fees earned from venues or other co-promoters under one of several formulas, including a fixed guaranteed amount and/or a percentage of ticket sales or event profits. Revenue from the promotion or production of an event is recognized at a point in time when the show occurs. Revenue collected in advance of the event is recorded as deferred revenue until the event occurs. Revenue collected from sponsorship agreements, which is not related to a single event, is classified as deferred revenue and recognized over the term of the agreement or operating season as the benefits are provided to the sponsor. Revenue from the Company's ticketing operations primarily consists of service fees charged at the time a ticket for an event is sold in either the primary or secondary markets, including both online pay-per-view ("PPV") ticket sales as well as tickets physically purchased through a ticket sale vendor. For primary tickets sold to the Company's PPV and festival events the revenue for the associated ticket charges collected in advance of the event is recorded as deferred revenue until the event occurs. Cost of Sales Cost of Sales principally consist of royalties paid for the right to stream video, music and non-music content to the Company's customers and the cost of securing the rights to produce and stream live events from venues and promoters. Royalties are calculated using negotiated and regulatory rates documented in content license agreements and are based on usage measures or revenue earned. Music royalties to record labels, professional rights organizations and music publishers relate to the consumption of music listened to on Slacker's radio services. As of December 31, 2020, and March 31, 2020, the Company accrued $13.2 million and $13.1 million of royalties, respectively, due to artists from use of Slacker's radio services . Cost of sales for the Company's advertising revenue primarily includes PodcastOne direct costs. Cost of sales for the Company's merchandising revenue includes purchase costs and related direct costs. Direct costs include all costs for personalization, production, planning, quality control, fulfillment and inbound freight. Sales and Marketing Sales and Marketing include the direct and indirect costs related to the Company's product and event advertising and marketing. Additionally, sales and marketing includes merchandising advertising and royalty costs. Product Development Product development costs primarily are expenses for research and development, product and content development activities, including internal software development and improvement costs which have not been capitalized by the Company. Stock-Based Compensation Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period, on an accelerated basis. The Company accounts for awards with graded vesting as if each vesting tranche is valued as a separate award. The Company uses the Black-Scholes-Merton option pricing model to determine the grant date fair value of stock options. This model requires the Company to estimate the expected volatility and the expected term of the stock options which are highly complex and subjective variables. The variables take into consideration, among other things, actual and projected employee stock option exercise behavior. The Company uses a predicted volatility of its stock price during the expected life of the options that is based on the historical performance of the Company's stock price as well as including an estimate using guideline companies. The expected term is computed using the simplified method as the Company's best estimate given its lack of actual exercise history. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury securities with a maturity equivalent to the expected term of the stock. Stock-based awards are comprised principally of stock options, restricted stock, restricted stock units ("RSUs"), restricted stock awards ("RSAs") and warrant grants. Forfeitures are recognized as incurred. Stock option awards issued to non-employees are accounted for at grant date fair value determined using the Black-Scholes-Merton option pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. The Company records the fair value of these equity-based awards and expense at their cost ratably over related vesting periods. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Company's Statements of Operations in the period that includes the enactment date. Net Income (Loss) Per Share Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of common shares and the dilutive effect of contingent shares outstanding during the period. Potentially dilutive contingent shares, which primarily consist of stock options issued to employees, directors and consultants, restricted stock units, warrants issued to third parties and accounted for as equity instruments and convertible notes would be excluded from the diluted earnings per share calculation because their effect is anti-dilutive. At December 31, 2020 and 2019, the Company had 167,363 warrants outstanding, 4,423,334 and 4,640,001 stock options outstanding, respectively, 3,943,095 and 3,878,287 restricted stock units outstanding, respectively, 0 restricted stock awards outstanding and 5,613,374 and 3,912,671 shares of common stock issuable, respectively, underlying the Company's convertible notes and senior secured convertible notes. Business Combinations The Company accounts for its business combinations using the acquisition method of accounting where the purchase consideration is allocated to the underlying net tangible and intangible assets acquired, based on their respective fair values. The excess of the purchase consideration over the estimated fair values of the net assets acquired is recorded as goodwill. Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Additionally, any contingent consideration is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interests requires management's judgment and often involves the use of significant estimates and assumptions, including, but not limited to, the selection of appropriate valuation methodology, projected revenue, expenses and cash flows, weighted average cost of capital, discount rates, estimates of customer turnover rates and estimates of terminal values. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities, when purchased, of three months or less. The following table provides amounts included in cash, cash equivalents and restricted cash presented in the Company's condensed consolidated statements of cash flows for the nine months ended December 31, (in thousands): 2020 2019 Cash and cash equivalents $ 17,353 $ 13,965 Restricted cash 235 235 Total cash and cash equivalents and restricted cash $ 17,588 $ 14,200 Restricted Cash and Cash Equivalents The Company maintains certain letters of credit agreements with its banking provider, which are secured by the Company's cash for periods of less than one year. As of December 31, 2020, and March 31, 2020, the Company had restricted cash of $0.2 million and $6.7 million, respectively. The decrease in restricted cash as of December 31, 2020 as compared to March 31, 2020, was a result of the repayment of the senior secured convertible debentures in August 2020 (see Note 10 – Unsecured Convertible Notes). Accounts Receivable and Allowance for Doubtful Accounts The Company evaluates the collectability of its accounts receivable based on a combination of factors. Generally, it records specific reserves to reduce the amounts recorded to what it believes will be collected when a customer's account ages beyond typical collection patterns, or the Company becomes aware of a customer's inability to meet its financial obligations. There were no impairment losses recorded on receivables for the three and nine months ended December 31, 2020 and 2019. The Company believes that the credit risk with respect to trade receivables is limited due to the large and established nature of its largest customers and the nature of its subscription receivables. At December 31, 2020, the Company had two customers that made up approximately 43% and 23% of the total gross accounts receivable balance, respectively. At March 31, 2020, the Company had two customers that made up approximately 57% and 22% of the total gross accounts receivable balance, respectively. The Company's accounts receivable at December 31, 2020 and March 31, 2020 is as follows (in thousands): December 31, March 31, 2020 2020 Accounts receivable, gross $ 16,683 $ 4,109 Less: Allowance for doubtful accounts (473 ) (220 ) Accounts receivable, net $ 16,210 $ 3,889 Inventories Inventories, principally finished goods on hand and partially finished goods awaiting final customization process, are stated at the lower of cost (weighted average) or net realizable value. Inventory valuation requires the Company to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers and liquidations. Property and Equipment Property and equipment are recorded at cost. Costs of improvements that extend the economic life or improve service potential are also capitalized. Capitalized costs are depreciated over their estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred. Depreciation is recorded using the straight-line method over the assets' estimated useful lives, which are generally as follows: buildings and improvements (5 years), furniture and equipment (3 to 5 years) and computer equipment and software (3 to 5 years). Leasehold improvements are depreciated over the shorter of the estimated useful life, based on the estimates above, or the lease term. The Company evaluates the carrying value of its property and equipment if there are indicators of potential impairment. If there are indicators of potential impairment, the Company performs an analysis to determine the recoverability of the asset group carrying value by comparing the expected undiscounted future cash flows to the net book value of the asset group. If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset group, the excess of the net book value over the estimated fair value is recorded in the Company's consolidated statements of operations. Fair value is generally estimated using valuation techniques that consider the discounted cash flows of the asset group using discount and capitalization rates deemed reasonable for the type of assets, as well as prevailing market conditions, appraisals, recent similar transactions in the market and, if appropriate and available, current estimated net sales proceeds from pending offers. Capitalized Internal-Use Software The Company capitalizes certain costs incurred to develop software for internal use. Costs incurred in the preliminary stages of development are expensed as incurred. Once software has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized costs are recorded as part of property and equipment. Costs related to minor enhancements, maintenance and training are expensed as incurred. Capitalized internal-use software costs are amortized on a straight-line basis over their three- to five-year estimated useful lives. The Company evaluates the useful lives of these assets and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. During the nine months ended December 31, 2020 and 2019, the Company capitalized $2.3 million and $2.0 million of internal use software, respectively. Goodwill Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company evaluates goodwill for impairment on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. The Company conducts its annual impairment analysis in the fourth quarter of each fiscal year. Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and an impairment loss is measured by the resulting amount. No impairment losses have been recorded in the three and nine months ended December 31, 2020 and 2019. Intangible Assets with Indefinite Useful Lives The Company's indefinite-lived intangible assets consist of trade names for Slacker. The Company evaluates indefinite-lived intangible assets for impairment on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. The Company conducts its annual impairment analysis in the fourth quarter of each fiscal year. Intangible Assets with Finite Useful Lives The Company has certain finite-lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of Trademarks/Trade Names, Intellectual Property, Customer Relationships, Content Creator Relationships, Wholesale Relationships, Domain Names, Customer List and Capitalized Software Development Costs resulting from business combinations. Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives, which are generally as follows: Intellectual Property (15 years), Customer, Content Creator and Wholesale Relationships (1.5-6 years), Domain Names (5 years), Customer List (5 years) and Software (5 years). The Company reviews all finite-lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, the Company recognizes an impairment loss for the excess carrying value over the fair value in its consolidated statements of operations. No impairment losses have been recorded in the three and nine months ended December 31, 2020 and 2019. Deferred Revenue and Costs Deferred revenue consists substantially of amounts received from customers in advance of the Company's performance service period. Deferred revenue is recognized as revenue on a systematic basis that is proportionate to the period that the underlying services are rendered, which in certain arrangements is straight line over the remaining contractual term of an agreement. In the event the Company receives cash in advance of providing its music services and music streaming services, the Company will defer an amount of such future royalty and costs to 3rd party music labels, publishers and other providers on its balance sheets. Deferred costs are amortized to expense concurrent with the recognition of the related revenue and the expense is included in cost of sales. Fair Value Measurements - Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (i.e., an exit price). The Company uses the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company's own assumptions about the data market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized below: Level Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. Level 3 Valuation is based upon other unobservable inputs that are significant to the fair value measurement. The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to t |
Revenue
Revenue | 9 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 3 — Revenue The following table represents a disaggregation of revenue from contracts with customers for the three and nine months ended December 31, 2020 and 2019 (in thousands): Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue Subscription services $ 8,346 $ 9,115 $ 24,948 $ 26,665 Advertising 7,710 540 13,453 1,814 Sponsorship and licensing 2,087 44 3,466 301 Merchandise 796 - 796 - Ticket/Event 184 - 1,526 - Total Revenue $ 19,123 $ 9,699 $ 44,189 $ 28,780 For some contracts, the Company may invoice up front for services recognized over time or for contracts in which the Company has unsatisfied performance obligations. Payment terms and conditions vary by contract type, although terms generally cover monthly payments. In the circumstances where the timing of invoicing differs from the timing of revenue recognition, the Company has determined its contracts do not include a significant financing component. The Company has elected to apply the optional exemption under ASC 606-10-50-14 and not provide disclosure of the amount and timing of performance obligations as the performance obligations are part of a contract that has an original expected duration of one year or less. The following table summarizes the significant changes in contract liabilities balances during the nine months ended December 31, 2020 (in thousands): Contract Balance as of March 31, 2020 $ 949 Revenue recognized that was included in the contract liability at beginning of period (618 ) Increase due to cash received, excluding amounts recognized as revenue during the period 1,081 Balance as of December 31, 2020 $ 1,412 |
Business Combinations
Business Combinations | 9 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Note 4 — Business Combinations Fiscal 2021 Transactions PodcastOne On July 1, 2020, the Company's wholly owned subsidiary, LiveXLive PodcastOne, Inc., acquired 100% of the equity interests of PodcastOne for net consideration of $16.1 million consisting of 5,363,636 shares of the Company's common stock with a fair value of $14.6 million net of a 24% discount for lack of marketability described below, contingent consideration with a fair value of $1.1 million and an additional true-up of 203,249 shares during the third quarter of fiscal 2021 valued at $0.4 million, net of a 24% discount for lack of marketability described below, that was issued as part of the final purchase price consideration. The total net consideration was 5,566,885 shares of the Company's common stock valued at $15.0 million. The shares of the Company's common stock are subject to a twelve-month lock-up period and sales volume restrictions. Fair Value of Consideration Transferred: Common stock $ 14,991 Contingent consideration 1,100 Total $ 16,091 If, during the period commencing after May 7, 2020 and ending on July 1, 2022, for five consecutive trading days the closing market price of the Company's common stock exceeds $5.00 per share, an additional aggregate payment of $3.0 million in cash shall be paid to the sellers of PodcastOne in accordance with their respective pro rata percentage within five business days of the second anniversary of the closing date (July 1, 2022). The fair value of this contingent consideration liability on the closing date of July 1, 2020 was estimated at $1.1 million using a Monte Carlo simulation and the significant unobservable input included a credit yield of 21.9%. In the future, the fair value of the contingent consideration liability will be remeasured on each balance sheet reported by the Company or on the settlement date of the contingent consideration liability, with changes in fair value reflected in earnings. The contingent consideration liability is classified within Other Long-term Liabilities in the accompanying condensed consolidated balance sheet at December 31, 2020 (see Note 13 - Other Long-term Liabilities). Goodwill resulted from acquisition as it is intended to augment and diversify the Company's single reportable segment. The Company accounted for the acquisition as a business combination. As a result of the acquisition of the stock of PodcastOne, the goodwill is not deductible for tax purposes. The initial accounting for the PodcastOne acquisition is incomplete and subject to change which may be significant. The Company recorded provisional accounts and may allocate additional value to identified intangible assets. The following table summarizes the fair value of the assets assumed in the PodcastOne acquisition (in thousands): Asset Type Weighted Fair Value Cash and cash equivalents $ 1,286 Accounts receivable 3,951 Prepaid expense and other assets 316 Property and equipment 119 Content creator relationships 1.6 772 Trade name 10 1,010 Goodwill 12,042 Accounts payable and accrued liabilities (2,934 ) Deferred tax asset 972 Allowance for deferred tax asset (972 ) Note payable (471 ) Net assets acquired $ 16,091 The fair value of the assets acquired includes accounts receivable of $4.0 million. The gross amount due under contracts is $4.2 million, of which $0.2 million is expected to be uncollectible. The Company did not acquire any other class of receivable as a result of the acquisition of PodcastOne. CPS On December 22, 2020, the Company's wholly owned subsidiary, LiveXLive Merchandising, Inc., acquired 100% of the equity interests of CPS for total consideration of 2,230,769 shares of the Company's restricted common stock with a fair value of $6.4 million net of a 25% discount for lack of marketability described below. The shares of the Company's common stock issued to the sellers are subject to a twelve-month lock-up period from the closing date, such that no such shares can be sold, transferred, assigned, hypothecated, or in any way disposed of, or any right or interest therein, whether voluntarily or by operation of law, or by gift or otherwise prior to the expiration of such period. The Company agreed to also issue up to approximately 437,000 additional shares of its restricted common stock, classified as contingent consideration, if (i) CPS reports GAAP revenue of $20.0 million and $1.0 million of EBITDA for its fiscal year ended December 31, 2020, and (ii) at the closing, CPS' target working capital is $4.0 million (including $0.8 million of cash), with a dollar-for-dollar reduction with respect to each such shortfall with no duplication. Based on their likelihood of achievement, these additional shares were valued at $1.3 million based on the Company's stock price on the date of acquisition, net of a 25% discount for lack of marketability. This amount is included in accounts payable and accrued liabilities on the December 31, 2020 Condensed Consolidated Balance Sheet. The Company further agreed to issue up to approximately 477,000 additional shares of its restricted common stock to the extent CPS' final working capital as determined by the parties exceeds $4.0 million. These additional shares were valued at $1.4 million based on the Company's stock price on the date of acquisition, net of a 25% discount for lack of marketability. This amount is included in additional paid in capital on the December 31, 2020 Condensed Consolidated Balance Sheet. Amounts recorded as consideration for the shares to be issued are provisional and subject to change. Fair Value of Consideration Transferred: Common stock $ 6,391 Additional paid-in capital – common stock to be issued 1,365 Contingent consideration 1,254 Total $ 9,010 Goodwill resulted from acquisition as it is intended to augment and diversify the Company's single reportable segment. The Company accounted for the acquisition as a business combination. As a result of the acquisition of the stock of CPS, the goodwill is not deductible for tax purposes. The initial accounting for the CPS acquisition is incomplete and subject to change, which may be significant. The Company recorded provisional amounts and may allocate additional value to identified intangible assets and inventory. The following table summarizes the fair value of the assets assumed in the CPS acquisition (in thousands): Asset Type Weighted Fair Value Cash and cash equivalents $ 1,132 Accounts receivable 6,153 Inventories 2,756 Prepaid expense 29 Property and equipment 585 Wholesale relationship 6 1,000 Domain name 10 300 Customer list 5 172 Goodwill 2,364 Other assets 53 Right of use asset 1,086 Lease liability (1,086 ) Accounts payable (5,067 ) Other liabilities (467 ) Net assets acquired $ 9,010 Revenue of $7.3 million and $0.8 million was included in the Company's consolidated statements of operations from the date of acquisition for the three months ended December 31, 2020 for PodcastOne and CPS, respectively, and $12.6 million and $0.8 million for the nine months ended December 31,2020 for PodcastOne and CPS, respectively. Net income of $(0.6) million and $(0.1) million was included in the Company's consolidated statements of operations for the three months ended December 31, 2020 for PodcastOne and CPS, respectively, and $(0.1) million and $(0.1) million for the nine months ended December 31, 2020 for PodcastOne and CPS, respectively. The Company incurred $0.1 million in transaction costs associated with the CPS acquisition which were expensed and included in General and Administrative in the condensed consolidated statement of operations for the three and nine months ended December 31, 2020. The Company incurred less than $0.2 million in transaction costs associated with the PodcastOne acquisition which were expensed and included in General and Administrative in the condensed consolidated statement of operations for the nine months ended December 31, 2020. The fair value of the assets acquired includes accounts receivable of $6.2 million. The gross amount due under contracts is $6.5 million, of which $0.3 million is expected to be uncollectible. The Company did not acquire any other class of receivable as a result of the acquisition of CPS. Supplemental Pro Forma Information (Unaudited) The pro forma financial information as presented below is for informational purposes only and is not indicative of operations that would have been achieved from the acquisitions had they taken place at the beginning of the fiscal year ended March 31, 2019. The following table presents the revenues, net loss and earnings per share of the combined company for the three and nine months ended December 31, 2020 and 2019 as if the acquisition of CPS and PodcastOne had been completed on April 1, 2019 (in thousands, except per share data). Three Months Ended 2020 2019 Revenues $ 27,205 $ 29,463 Net loss (7,859 ) (10,586 ) Net loss per share – basic and diluted $ (0.11 ) $ (0.18 ) Nine Months Ended 2020 2019 Revenues $ 66,032 $ 80,775 Net loss (38,970 ) (32,824 ) Net loss per share – basic and diluted $ (0.58 ) $ (0.59 ) The Company's unaudited pro forma supplemental information is based on estimates and assumptions which the Company believes are reasonable and reflect amortization of intangible assets as a result of the acquisition. The pro forma results are not necessarily indicative of the results that would have been realized had the acquisitions been consummated as of the beginning of the periods presented. The pro forma amounts include the historical operating results of the Company, with adjustments directly attributable to the acquisition which included amortization of acquired intangible assets of $0.2 million and $0.6 million in the three and nine months ended December 31, 2019, respectively and transaction costs of $0.1 million included in the three and nine months ended December 31, 2019. Fiscal 2020 Transactions None |
Property and Equipment
Property and Equipment | 9 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 5 — Property and Equipment The Company's property and equipment at December 31, 2020 and March 31, 2020 was as follows (in thousands): December 31, March 31, 2020 2020 Property and equipment, net Production equipment $ 54 $ 54 Computer, machinery, and software equipment 1,165 707 Furniture and fixtures 55 41 Leasehold improvements 255 41 Capitalized internally developed software 8,074 5,617 Total property and equipment 9,603 6,460 Less accumulated depreciation and amortization (5,374 ) (3,063 ) Total property and equipment, net $ 4,229 $ 3,397 Depreciation expense was $0.8 million and $0.6 million for the three months ended December 31, 2020 and 2019, respectively, and was $2.3 million and $1.7 million for the nine months ended December 31, 2020 and 2019, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 6 — Goodwill and Intangible Assets Goodwill The Company currently has one reporting unit. The following table presents the changes in the carrying amount of goodwill for the nine months ended December 31, 2020 (in thousands): Goodwill Balance as of March 31, 2020 $ 9,672 Acquisitions (Note 4 – Business Combinations) 14,406 Balance as of December 31, 2020 $ 24,078 Indefinite-Lived Intangible Assets The following table presents the changes in the carrying amount of indefinite-lived intangible assets, Tradenames, in the Company's reportable segment for the nine months ended December 31, 2020 (in thousands): Tradenames Balance as of March 31, 2020 $ 4,637 Acquisitions - Impairment losses - Balance as of December 31, 2020 $ 4,637 Finite-Lived Intangible Assets The Company's finite-lived intangible assets were as follows as of December 31, 2020 (in thousands): Gross Carrying Value Accumulated Amortization Net Carrying Value Software $ 19,280 $ 11,569 $ 7,711 Intellectual property (patents) 5,366 1,073 4,293 Customer relationships 6,570 5,521 1,049 Content creator relationships 772 252 520 Wholesale relationships 1,000 - 1,000 Domain names 329 18 311 Brand and trade names 2,571 203 2,368 Customer list 172 - 172 Non-compete agreement 250 76 174 Fan database 230 70 160 Total $ 36,540 $ 18,782 $ 17,758 The Company's finite-lived intangible assets were as follows as of March 31, 2020 (in thousands): Gross Carrying Value Accumulated Amortization Net Carrying Value Software $ 19,280 $ 8,674 $ 10,606 Intellectual property (patents) 5,366 805 4,561 Customer relationships 6,570 5,128 1,442 Domain names 29 13 16 Brand names 1,500 17 1,483 Non-compete agreement 250 14 236 Fan database 230 13 217 Total $ 33,225 $ 14,664 $ 18,561 The Company's amortization expense on its finite-lived intangible assets was $1.4 million and $1.4 million for the three months ended December 31, 2020 and 2019, respectively, and was $4.1 million and $4.5 million for the nine months ended December 31, 2020 and 2019, respectively. The Company expects to record amortization of intangible assets for fiscal years ending March 31, 2021 and future fiscal years as follows (in thousands): For Years Ending March 31, 2021 (remaining three months) $ 1,452 2022 5,736 2023 4,211 2024 788 2025 788 Thereafter 4,783 $ 17,758 |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 9 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 7 — Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities (including accrued interest) at December 31, 2020 and March 31, 2020 were as follows (in thousands): December 31, March 31, 2020 2020 Accounts payable $ 17,821 $ 26,703 Accrued liabilities 12,541 3,938 Lease liabilities, current 340 82 $ 30,702 $ 30,723 |
Notes Payable
Notes Payable | 9 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 8 — Notes Payable The Company's notes payable at December 31, 2020 and March 31, 2020 were as follows (in thousands): December 31, March 31, 2020 2020 Senior promissory note $ 346 $ 331 SBA loan 153 - PPP loans 2,497 - 2,996 331 Less: Current portion of Notes payable (2,242 ) (331 ) Notes payable $ 754 $ - Senior Promissory Note On December 31, 2014, the Company converted accounts payable into a Promissory Note (the "Note") in the aggregate principal amount of $0.2 million. The Note bears interest at 6% per annum and interest is payable on a quarterly basis commencing March 31, 2015 or the Company may elect that the amount of such interest be added to the principal sum outstanding under this Note. The payables arose in connection with professional services rendered by attorneys for the Company prior to and through December 31, 2014, and the Note had an original maturity date of December 31, 2015, which was extended to September 30, 2016 or such later date as the lender may agree to in writing. In February 2018, the Note holder filed a claim for collection of the Note (see Note 14 – Commitments and Contingencies). In February 2019, as part of a settlement agreement, the parties agreed to the repayment of the Note on or before June 30, 2019. As of the date of this Quarterly Report, the Note has not been extended and is currently past due. In addition, the holder of the Note obtained a judgement against the Company for nonpayment of the Note in the State of Delaware in August 2019 and a judgement lien against the Company in the State of California in the third fiscal quarter ended December 31, 2019. As of December 31, 2020, and March 31, 2020, the balance due under the Note was $0.3 million and $0.3 million, respectively, which includes $0.1 million and $0.1 million of accrued interest, respectively. SBA Loan On June 17, 2020, the Company received the proceeds from a loan in the amount of less than $0.2 million from the U.S. Small Business Administration (the "SBA"). Installment payments, including principal and interest, begin 12-months from the date of the promissory note. The balance is payable 30-years from the date of the promissory note, and bears interest at a rate of 3.75% per annum. PPP Loans On April 13, 2020, the Company received the proceeds from a loan in the amount of less than $2.0 million, pursuant to the Paycheck Protection Program of the CARES Act ("PPP"). The loan matures on April 13, 2022 and bears interest at a rate of 1% per annum. Commencing in November 2020, the Company is required to pay the lender equal monthly payments of principal and interest as required to fully amortize by the maturity date the principal amount outstanding on the loan as of such date. The loan is evidenced by a promissory note, dated as of April 13, 2020 which contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties. The loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. On July 1, 2020, the Company acquired PodcastOne and the $0.5 million PPP loan originally obtained by PodcastOne is currently outstanding. Monthly payments including principal and interest begin 7 months from the date of the promissory note, April 26, 2020. The balance is payable 2-years from the date of the promissory note, and bears interest at a rate of 1% per annum. All or a portion of these loans may be forgiven by the SBA upon application by the Company before the maturity date of the loan and upon documentation of expenditures in accordance with the SBA requirements. In the event the loans, or any portion thereof, are forgiven pursuant to the PPP, the amount forgiven is applied to outstanding principal. While the Company intends to apply for the forgiveness of the loans, there are no assurances that the Company will obtain forgiveness of the loans in whole or in part. The Company has used the proceeds from the loans for qualifying expenses. The application for these funds requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account its current business activity and its ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan attendant to these funds, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on its future adherence to the forgiveness criteria. |
Senior Secured Convertible Debe
Senior Secured Convertible Debentures | 9 Months Ended |
Dec. 31, 2020 | |
Senior Secured Convertible Debentures [Abstract] | |
Senior Secured Convertible Debentures | Note 9 — Senior Secured Convertible Debentures December 31, March 31, 2020 2020 Senior Secured Convertible Debentures Senior Secured Convertible Debentures $ - $ 10,118 Accrued interest - 101 Fair Value of Embedded Derivatives - 524 Less: Discount - (1,518 ) Net - 9,225 Less: Senior Secured Convertible Debentures, current - (2,720 ) Senior Secured Convertible Debentures, long-term $ - $ 6,505 On June 29, 2018, the Company entered into a Securities Purchase Agreement (the "SPA"), with JGB Partners, LP, JGB Capital, LP and JGB (Cayman) Finlaggan Ltd. (each, a "Purchaser" and collectively, the "Purchasers") pursuant to which the Company sold, in a private placement transaction (the "Financing"), for an aggregate cash purchase price of $10.0 million, $10.64 million in aggregate principal amount, of its 12.75% Original Issue Discount Senior Secured Convertible Debentures due June 29, 2021 (the "June 2018 Debentures"). In conjunction with the Financing, the Company (i) recorded issuance costs of $1.1 million against the liability and (ii) used $3.5 million of the proceeds to pay off 100% of the Company's revolving line of credit. Issuance costs are being amortized to interest expense over the term of the June 2018 Debentures. The June 2018 Debentures were to mature on June 29, 2021, accrued interest at 12.75% per year, and were convertible into shares of common stock of the Company at a conversion price of $10.00 per share at the holder's option, subject to certain customary adjustments such as stock splits, stock dividends and stock combinations (the "Conversion Price"). On February 11, 2019, the Company amended the SPA with the Purchasers to obtain additional financing, increasing the cash purchase price of the Debentures by $3.0 million, $3.2 million in aggregate principal amount, of its 12.75% Original Issue Discount Senior Secured Convertible Debentures due June 29, 2021 (the "February 2019 Debentures" and together with the June 2018 Debentures, the "Debentures"). On August 31, 2020, the Company fully repaid the Debentures issued to its former senior lenders on June 29, 2018, as amended, as provided in such Debentures. In connection with such repayment, all of the agreements among the Company, its subsidiary guarantors and the senior lenders and their collateral agent were terminated, provided, that the Company's indemnification obligations in the Securities Purchase Agreement, dated as of June 20, 2018, as amended, between the Company and the senior lenders shall survive on the terms therein. Additionally, a prepayment penalty of 8% was paid on repayment of the Debentures in the amount of $0.7 million and is included in the total $1.5 million loss on extinguishment of debt in the accompanying condensed consolidated statement of operations. |
Unsecured Convertible Notes
Unsecured Convertible Notes | 9 Months Ended |
Dec. 31, 2020 | |
Long-term Debt, Unclassified [Abstract] | |
Unsecured Convertible Notes | Note 10 — Unsecured Convertible Notes The Company's unsecured convertible notes payable at December 31, 2020 and March 31, 2020 were as follows (in thousands): December 31, March 31, 2020 2020 Unsecured Convertible Notes - Related Party (A) 7.5% Unsecured Convertible Note - Due May 31, 2021 $ 4,322 $ 4,120 (B) 7.5% Unsecured Convertible Notes - Due May 31, 2021 1,086 1,035 Less: Discount (15 ) (41 ) Net 5,393 5,114 Unsecured Convertible Promissory Note $ 2,000 $ 2,000 Accrued Interest 144 24 Less: Discount (287 ) (485 ) Fair Value of Embedded Derivatives 30 141 Net 1,887 1,680 Unsecured Convertible Notes, Net 7,280 6,794 Less: Unsecured Convertible Notes, Current - - Unsecured Convertible Notes, Net, Long-term $ 7,280 $ 6,794 Total principal maturities of the Company's long-term borrowings, including the senior secured convertible notes, unsecured convertible notes, and notes payable are $0.9 million for the year ending March 31, 2021 (remaining three months), $3.7 million for the year ending March 31, 2022 and $19.6 million for the year ending March 31, 2023. Thereafter, the Company's principal maturities are less than $0.1 million per year consisting of obligations to repay the PPP and SBA loans. Unsecured Convertible Notes – Related Party As of December 31, 2020 and March 31, 2020, the Company had outstanding 7.5% (effective as of April 1, 2018, previously 6%) unsecured convertible notes payable (the "Trinad Notes") issued to Trinad Capital Master Fund Ltd. ("Trinad Capital"), a fund controlled by Mr. Ellin, the Company's Chief Executive Officer, Chairman, director and principal stockholder, as follows: (A) The first Trinad Note was issued on February 21, 2017, to convert aggregate principal and interest of $3.6 million under the first senior promissory note and second senior promissory note with Trinad Capital previously issued on December 31, 2014 and April 8, 2015, respectively. The first Trinad Note was due on March 31, 2018 and was extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). At December 31, 2020, the balance due of $4.3 million, which included $0.8 million of accrued interest, was outstanding under the first Trinad Note. At March 31, 2020, the balance due of $4.1 million, which included $0.5 million of accrued interest, was outstanding under the first Trinad Note. (B) Between October 27, 2017 and December 18, 2017, the Company issued six unsecured convertible notes payable to Trinad Capital for aggregate total principal amount of $0.9 million. The notes were due on various dates through December 31, 2018 and were extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). For the nine months ended December 31, 2020, the Company amortized less than $0.1million of discount to interest expense, and the unamortized discount as of December 31, 2020 was less than $0.1 million. As of December 31, 2020, $0.3 million of accrued interest was added to the principal balance. On March 30, 2018, the Company entered into an Amendment of Notes Agreement (the "Amendment Agreement") with Trinad Capital pursuant to which the maturity date of all of the Company's 6% unsecured convertible notes was extended to May 31, 2019. In consideration of the maturity date extension, the interest rate payable under the notes was increased from 6.0% to 7.5% beginning on April 1, 2018, and the aggregate amount of accrued interest due under all of the Trinad Notes as of March 31, 2018 of $0.3 million was paid. The Company evaluated the Amendment Agreement and the modification was not required to be accounted for as an extinguishment as the instruments are not considered substantially different under ASC 470-50, Debt – Modifications and Extinguishment. On March 31, 2019, the Company entered into a further Amendment of Notes Agreement (the "Second Amendment Agreement") with Trinad Capital pursuant to which the maturity dates of all of the Trinad Notes were all extended to May 31, 2021. The Company evaluated the Second Amendment Agreement and the modification was required to be accounted for as Troubled Debt Restructuring under ASC 470-50, Debt – Modifications and Extinguishment On January 11, 2021, the Company entered into an additional Amendment of Notes Agreement (the "Third Amendment Agreement") with Trinad Capital pursuant to which the maturity dates of all of the Trinad Notes were extended to May 31, 2022, and in consideration of such extension, the interest rate payable under such notes increased to 8.5%, and the Company agreed to issue to Trinad Capital 280,000 shares of its common stock. Accordingly, these notes have been classified as long-term as of December 31, 2020 on the Company's balance sheet. The Company may not redeem any of the Trinad Notes prior to May 31, 2022 without Trinad Capital's consent. Unsecured Convertible Promissory Note On February 5, 2020, React Presents issued a two-year $2.0 million Convertible Promissory Note (the "Unsecured Note"), bearing annual interest at 8%. The purpose of the Unsecured Note was to fund the acquisition of React Presents. All unpaid and outstanding principal and any unpaid and accrued interest is due on February 5, 2022. The Unsecured Note is convertible by the holder at any time prior to maturity in part or in whole with the unpaid interest and principal convertible at a conversion price equal to $4.50 per share of the Company's common stock, subject to certain protective adjustments. The Unsecured Note may be prepaid in whole or in part in cash without penalty at any time prior to maturity. Any such prepayment will be applied to accrued interest first and then the principal. The Company has evaluated the Unsecured Note and has determined that it includes two derivative instruments which are bifurcated from the underlying unsecured convertible notes relating to provisions around an event of default and change of control. The Company performed a fair value analysis using a binomial lattice calculation on the event of default derivative instrument using the following assumptions. Coupon Rate: 8.0%, Term: 2.0 years, Volatility: 100.0%, Market Rate: 27.7% and Probability of Default: 33.1%. The Company determined that at issuance, the fair value of the derivative instruments were $0.1 million. The Company has recorded the fair value of the derivatives and corresponding debt discount within the unsecured convertible notes payable on the accompanying condensed consolidated balance sheet. At December 31, 2020, the Company performed a fair value analysis using a binomial lattice calculation on the derivative instruments using the following assumptions: Coupon Rate: 8.0%, Term: 1.1 years, Volatility: 102.7%, Market Rate: 31.2% and Probability of Default: 36.45%. The Company determined that as of the assessment date, the fair value is less than $0.1 million. The change in fair value of $0.1 million is recorded in other income (expense) on the accompanying condensed consolidated statements of operations for the nine months ended December 31, 2020. |
Senior Secured Convertible Note
Senior Secured Convertible Notes | 9 Months Ended |
Dec. 31, 2020 | |
Senior Secured Convertible Notes [Abstract] | |
Senior Secured Convertible Notes | Note 11 — Senior Secured Convertible Notes The Company's senior secured convertible notes at December 31, 2020 and March 31, 2020 were as follows (in thousands): December 31, March 31, 2020 2020 Senior Secured Convertible Notes $ 15,000 $ - Accrued interest 319 - Fair value of embedded derivatives 251 - Less: Discount (2,421 ) - Net 13,119 - Less: Accrued interest (319 ) - Senior Secured Convertible Notes, long-term $ 12,830 $ - On September 15, 2020 (the "Closing Date"), the Company issued two-year senior secured convertible notes in the aggregate principal amount of $15.0 (the "Senior Notes") with Harvest Small Cap Partners, L.P. and Harvest Small Cap Partners, Ltd. (collectively, the "Purchaser"). The Purchaser are funds affiliated with No Street Capital a San Francisco-based investment firm. In connection with the Senior Notes, the Company paid $0.2 million in certain fees, including direct costs of $0.2 million consisting of $90,000 for Purchaser's transaction costs which was subtracted from the $15.0 million disbursement, $75,000 to Purchaser's outside legal counsel as its transaction fees and $25,000 to the Company's outside legal counsel (collectively, the "Issuance Costs"). The sale of the Senior Notes was completed pursuant to the Securities Purchase Agreement, dated as of July 2, 2020, as amended on July 30, 2020 (as amended, the "Senior SPA"), and (ii) issued to the Purchaser 800,000 shares (the "Shares") of the Company's common stock valued at $2.1 million. The Senior Notes and the Shares were issued as restricted securities in a private placement transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The Senior Notes mature on the second anniversary of the Closing Date, accrue interest at 8.5% per year with interest is payable quarterly in cash in arrears, and are convertible into shares of the Company's common stock at a conversion price of $4.50 per share at the applicable Purchaser's option, subject to certain customary adjustments such as stock splits, stock dividends and stock combinations (the "Conversion Price"). The Company does not have the right to prepay any or all of the Senior Notes prior to their maturity. The Company's obligations under the Senior Notes may be accelerated upon the occurrence of certain customary events of default (as defined in the Senior Notes) and are guaranteed under a Subsidiary Guarantee, dated as of the Closing Date (the "Subsidiary Guarantee"), entered into by all of the Company's subsidiaries (the "Guarantors") in favor of the Purchaser. The Company's obligations under the Senior Notes and the Guarantors' obligations under the Subsidiary Guarantee are secured under a Security Agreement, dated as of the Closing Date (the "Security Agreement"), and an Intellectual Property Security Agreement, dated as of the Closing Date (the "IP Security Agreement"), by a lien on all of the Company's and the Guarantors' assets and intellectual property, subject to certain exceptions. The Senior Notes require the Company to maintain aggregate cash deposits of $10.0 million until the Senior Notes are paid in full. The Company and the Purchaser also entered into a Registration Rights Agreement, dated as of the Closing Date (the "RRA"), which grants the Assignees "demand" and "piggyback" registration rights to register the shares of Common Stock issuable upon the conversion of the Notes and the Shares (collectively, the "Registrable Securities") with the SEC for resale or other disposition. Pursuant to the RRA, the Company is required to file with the SEC a resale Registration Statement on Form S-3 (or another suitable form) as soon as reasonably practical after the Closing Date, but in any event within 30 days after the Closing Date (the "Filing Date"), and have such Registration Statement be declared effective by the SEC on the date (the "Effectiveness Date") which is the earlier of (i)(x) in the event that the initial Registration Statement is not subject to a full review by the SEC, 45 calendar days after the Filing Date, or (y) in the event that such initial Registration Statement is subject to a full review by the SEC, 90 calendar days after the Filing Date, and (ii) the fifth Business Day after the date the Company is notified by the SEC that such initial Registration Statement will not be reviewed or will not be subject to further review. Upon the occurrence of certain events (each an "Event"), including, but not limited to, that the initial Registration Statement is not filed prior to the Filing Date or is not declared effective by the SEC prior to the Effectiveness Date, the Company will be required to pay liquidated damages in cash to each of the Assignees in the amount of 2.0% of the purchase price of the Notes paid by such Assignee upon the date of the Event and then monthly thereafter until the Event is cured. In no event shall the aggregate amount of liquidated damages payable to each of the Assignees exceed in the aggregate 15% of the purchase price of the Notes paid by such Assignee. The Company also agreed to keep the initial Registration Statement continuously effective until the earliest to occur of (i) the date on which all of the Registrable Securities registered thereunder have been sold and (ii) the date on which all of the Registrable Securities covered by such Registration Statement may be sold without volume restriction pursuant to Rule 144 under the Securities Act. Subsequent to the quarter ended December 31, 2020, the Company filed such initial Registration Statement (See Note 19 – Subsequent Events). In connection with the SPA, Robert S. Ellin, the Company's CEO, Chairman, director and principal stockholder, agreed not to dispose of any equity securities of the Company owned by Mr. Ellin or any entity of which he is the beneficial owner and not to cease to be the beneficial owner of any other equity securities of the Company of which Mr. Ellin is the beneficial owner as of the Closing Date until the Senior Notes are paid in full (subject to certain customary exceptions), without the Purchaser's prior written consent. The Senior Notes and the Shares were issued in private placement transaction that will not registered under the Securities Act, in reliance upon applicable exemptions from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder. As of December 31, 2020 and March 31, 2020, the Company had unsecured convertible Trinad Notes outstanding which were issued to Trinad Capital as described in Note 10 – Unsecured Convertible Notes. |
Leases
Leases | 9 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 12 — Leases The Company leases a space at a location under a non-cancellable operating lease with a remaining lease term of 1 year, expiring in fiscal year 2022. On December 22, 2020, the Company acquired CPS which included the assumption of an operating lease for a 55,120 square foot light manufacturing facility located in Addison Illinois, expiring June 30, 2024. Rent expense for this operating lease totaled $0.1 million for the three and nine month periods ended December 31, 2020. Remaining lease commitments at December 31, 2020 is $1.4 million. Short term leases Slacker leases its San Diego premises under operating lease which expired on December 31, 2020 and was renewed through December 31, 2021. Rent expense for this operating lease totaled $0.1 million and $0.1 million for the three month periods ending December 31, 2020 and 2019, respectively, and $0.3 million and $0.3 million for the nine month periods ended December 31, 2020 and 2019, respectively. Operating lease costs for the nine months ended December 31, 2020 consisted of the following (in thousands): December 31, Fixed rent cost $ 123 Short term lease cost 341 Total operating lease cost $ 464 Supplemental balance sheet information related to leases was as follows (in thousands): Operating leases December 31, Operating lease right-of-use assets $ 1,154 Total operating lease right-of-use assets 1,154 Operating lease liability, current $ 341 Operating lease liability, noncurrent 813 Total operating lease liabilities $ 1,154 The operating lease right-of-use assets are included in other assets in the December 31, 2020 condensed consolidated balance sheets, and operating lease liabilities are included in accounts payable and accrued liabilities and lease liabilities non-current in the December 31, 2020 condensed consolidated balance sheets. Future maturities of operating lease liabilities as of December 31, 2020 were as follows (in thousands): For Years Ending March 31, 2021 (remaining three months) $ 127 2022 582 2023 358 2024 320 2025 93 Total lease payments 1,480 Less: imputed interest (326 ) Present value of operating lease liabilities $ 1,154 Significant judgments Discount rate – the Company's lease is discounted using the Company's incremental borrowing rate of 8.5% as the rate implicit in the lease is not readily determinable. Options – the lease term is the minimum noncancelable period of the lease. The Company does not include option periods unless the Company determined it is reasonably certain of exercising the option at inception or when a triggering event occurs. Lease and non-lease components – Non lease components were considered and determined not to be material. Month to month arrangements Beginning on August 1, 2017, the Company was given the right to occupy approximately 5,200 square feet of office space in West Hollywood, California. The space was provided to the Company by an unrelated third party and is fully furnished. The Company compensated the landlord in cash at the rate of approximately $38 thousand per month for months that the Company occupies the space. The Company or the third party had the right to terminate the arrangement at any time without prior notice, and the Company terminated this arrangement, effective April 30, 2019. On May 1, 2019, the Company entered into a month-to-month agreement with a third party to lease certain office space in Los Angeles, California for $20 thousand per month. This agreement was subsequently amended on October 1, 2019 to $14 thousand per month with a termination date of December 31, 2019. Effective January 1, 2020, the Company was given the right to occupy approximately 5,200 square feet of office space in West Hollywood, California. The space was provided to the Company by an unrelated third party and is fully furnished. The Company compensated the landlord in cash at the rate of approximately $40 thousand per month for months that the Company occupied the space, provided, that the Company and the temporary trustee of landlord's assets agreed that such payments shall be $22.4 thousand per month for the months of December 2019 and January 2020. The Company or the third party has the right to terminate the arrangement at any time without prior notice. Rent expense for the month to month arrangements totaled less than $0.1 million for the three and nine month periods ended December 31, 2020 and $0.1 million and $0.2 million for the three and nine month periods ended December 31, 2019, respectively. The Company vacated this office space as of December 31, 2020. React Presents leases its Chicago, Illinois premises under a month-to-month operating lease expiring October 9, 2020. Rent expense for the operating leases totaled less than $0.1 million and 0.1 million for the three and nine month periods ended December 31, 2020, respectively. PodcastOne leases its Los Angeles premises under a month-to-month operating lease. Rent expense for the operating lease totaled $0.1 million and $0.2 million for the three and nine month periods ended December 31, 2020, respectively. |
Long-Term Liabilities
Long-Term Liabilities | 9 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Liabilities | Note 13 — Long-Term Liabilities On October 30, 2020, Slacker entered into an amendment to existing agreements with a certain licensor of music content (the "Music Partner") which own and license rights to Slacker to certain sound recordings. Pursuant to this amendment, payment terms on $5.9 million of outstanding balances to the Music Partner were extended over periods between 12 and 24 months, and recorded as other long-term liabilities along with the fair value of the PodcastOne earnout, as follows: December 31, March 31, 2020 2020 Due to Music Partner $ 5,422 $ - Fair value of contingent consideration liability 1,061 - Other long-term liabilities $ 6,483 $ - The Company evaluated the agreements with the Music Partner and it was required to be accounted for as troubled debt restructuring under ASC 470-60, Troubled Debt Restructuring by Debtor. As a result of the evaluation, the Company reclassified the portion of the payable balance due after 12-months to non-current liabilities. The contingent consideration liability resulted from the business combination with PodcastOne (Note 4- Business Combinations) and is carried at fair value (see Note 18- Fair Value Measurements). |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14 — Commitments and Contingencies Promotional Rights Certain of the Company's content acquisition agreements contain minimum guarantees, and require that the Company makes upfront minimum guarantee payments. As of December 31, 2020, the Company has licenses, production and/or distribution agreements to make guaranteed payments as follows: $2.1 million for the fiscal year ending March 31, 2021, $6.8 million for the fiscal year ending March 31, 2022, $5.9 million for the fiscal year ending March 31, 2023 and $4.1 million for the fiscal year ending March 31, 2024. These agreements also provide for a revenue share that ranges between 35% and 50% of net revenues. In addition, there are other licenses, production and/or distribution agreements that provide for a revenue share of 50% on net revenues; however, without a requirement to make future minimum guaranteed payments irrespective to the execution and results of the planned events. Contractual Obligations As of December 31, 2020, the Company is obligated under agreements with Content Providers and other contractual obligations to make guaranteed payments as follows: $0.3 million for the fiscal year ending March 31, 2021, $0.9 million for the fiscal year ending March 31, 2022 and $0.1 million for the fiscal year ending March 31, 2023. On a quarterly basis, the Company records the greater of the cumulative actual content acquisition costs incurred or the cumulative minimum guarantee based on forecasted usage for the minimum guarantee period. The minimum guarantee period is the period of time that the minimum guarantee relates to, as specified in each agreement, which may be annual or a longer period. The cumulative minimum guarantee, based on forecasted usage, considers factors such as listening hours, revenue, subscribers and other terms of each agreement that impact the Company's expected attainment or recoupment of the minimum guarantees based on the relative attribution method. Several of the Company's content acquisition agreements also include provisions related to the royalty payments and structures of those agreements relative to other content licensing arrangements, which, if triggered, could cause the Company's payments under those agreements to escalate. In addition, record labels, publishers and performing rights organizations with whom the Company has entered into direct license agreements have the right to audit the Company's content acquisition payments, and any such audit could result in disputes over whether the Company has paid the proper content acquisition costs. However, as of December 31, 2020, the Company does not believe it is probable that these provisions of its agreements discussed above will, individually or in the aggregate, have a material adverse effect on its business, financial position, results of operations or cash flows. Legal Proceedings On February 8, 2018, Wynn Las Vegas, LLC ("Wynn") filed a claim in the District Court, Clark County, Nevada against LXL Tickets claiming total damages in excess of $0.6 million (the "Wynn Claim Amount") as a result of alleged breach of contract, breach of covenant of good faith and fair dealing and unjust enrichment with respect to that certain Second Amendment and Extension of the Wantickets.com Presale Agreement entered into by and between Wantickets and Wynn on or about December 31, 2016 (the "Wantickets-Wynn Agreement"). In connection with this action, on June 21, 2017, Wynn filed suit in the Eighth Judicial District Court, Clark County, Nevada against RNG Tickets, LLC (d/b/a Wantickets) and Wantickets. That litigation is still pending and active. RNG Tickets has not filed a responsive pleading in the case and Wantickets RDM has defaulted. The Company believes that Wynn's position is that LXL Tickets acquired Wantickets, including Wantickets' obligations under the Wantickets-Wynn Agreement (and not just certain assets and liabilities of Wantickets), and as such LXL Tickets should be liable to Wynn for the Wynn Claim Amount pursuant to the Wantickets-Wynn Agreement. The Company further believes that this action against LXL Tickets is without merit and intends to vigorously defend itself against any obligations or liability to Wynn with respect to such claims. In October 2018, pursuant to the terms of the APA (as defined below), the Company submitted a formal demand to Wantickets, Mr. Schnaier and Danco to indemnify the Company, among other things, for its costs and expenses incurred in connection with this matter. In April 2019, the parties agreed to informally stay the proceeding for the time being and extend discovery deadlines. On March 27, 2020, Wynn filed an amended complaint adding Schnaier, Danco and Gamtix, LLC (parties unrelated to the Company) as additional defendants in this matter. On July 29, 2020, Wynn submitted a written discovery request to LXL Tickets in this matter. Currently, the discovery proceedings are continuing and the Company is cooperating with Wynn's discovery request, subject to standard objections. As of December 31, 2020, the potential range of loss related to this matter was not material. In March 2018, Manatt Phelps & Phillips, LLP ("Manatt") served the Company with a complaint filed on February 22, 2018 in the Supreme Court of the State of California County of Los Angeles against the Company. The complaint alleges, among other things, breach of contract and breach of promissory note. Plaintiff is seeking damages of $0.2 million, plus interest, attorneys' fees and costs and other such relief as the court may award. On April 12, 2018, the Company filed an answer that generally denied all the claims in the complaint. On February 19, 2019, in connection with the settlement of the plaintiff's Delaware action (as discussed below), the parties settled this matter agreeing that the Company would repay this note and accrued interest in full by June 30, 2019. Such settlement was approved by the court on March 4, 2019, and the plaintiff dismissed this action against the Company without prejudice. No additional consideration was paid by the Company to the plaintiff related to this settlement. At December 31, 2020 the promissory note has not been paid and is currently past due. On October 11, 2018, Manatt filed a complaint in the Court of Chancery of the State of Delaware against the Company alleging that we have improperly refused to remove the restrictive legend from the shares of the Company's common stock owned by the plaintiff (the "Manatt DE Action"). Plaintiff is seeking declaratory judgment that all of the statutory prerequisites for removal of the restrictive legend have been met and injunctive relief requiring us to remove such restrictive legend, plus damages and losses suffered by the plaintiff as a result of our alleged conduct, including interest, attorneys' fees and costs and other such relief as the court may award. On February 19, 2019, the parties entered into a settlement agreement and agreed to release each other from all claims and damages relating to this matter, pending the repayment by the Company of the promissory note discussed above by June 30, 2019 and the sale of such shares by Manatt in compliance with such order. The parties further agreed that within three days after the later of (i) Manatt's sale of all of their shares pursuant to the court's order in compliance therewith, and (ii) the note repayment by such due date, Manatt would dismiss this Delaware action and the California action with prejudice. Such settlement was approved by the court on March 4, 2019. Other than the repayment of the note and accrued interest in full, no additional consideration was paid by the Company to the plaintiff related to this settlement. Pursuant to the terms of the settlement agreement, as a result of the note due to Manatt described above having not been paid as of June 30, 2019 and is currently being past due, in August 2019, Manatt obtained a judgement in the Court of Chancery of the State of Delaware against the Company for the amount of $0.3 million, which represents principal and all accrued and unpaid interest on the note through July 5, 2019. The judgement amount will continue to accrue interest at the 6% applicable rate from July 6, 2019 through the date of the judgment's satisfaction in full. In September 2019, Manatt obtained a related sister-state judgement in the Superior Court of California, County of Los Angeles against the Company for the same amount. In December 2019, Manatt obtained a judgement lien with the Secretary of State of California related to such California sister-state judgment. On April 10, 2018, Joseph Schnaier, Danco Enterprises, LLC (an entity solely owned by Mr. Schnaier, "Danco"), Wantmcs Holdings, LLC (Mr. Schnaier is the managing member) and Wantickets (Mr. Schnaier is the 90% beneficial owner) filed a complaint in the Supreme Court of the State of New York, County of New York against each of the Company, LXL Tickets, Robert S. Ellin, Alec Ellin, Blake Indursky and Computershare Trust Company, N.A. ("Computershare"). Plaintiffs subsequently voluntarily dismissed all claims against Alec Ellin, and Blake Indursky and Computershare. The complaint alleged multiple causes of action arising out of Schnaier's investment (through Danco) of $1.3 million into the Company in 2016, the Company's purchase of certain operating assets of Wantickets pursuant to the Asset Purchase Agreement, dated as of May 5, 2017, and Mr. Schnaier's employment with LXL Tickets, including claims for fraudulent inducement, breach of contract, conversion, and defamation. Plaintiffs seek monetary damages and injunctive relief. Plaintiffs have also sued Computershare for negligence and for injunctive relief relating to the refusal to transfer certain restricted shares of the Company's common stock owned by the plaintiffs, which claims have been dismissed. Based on the remaining claims, Plaintiffs are seeking injunctive relief, damages, if any, of approximately $10.0 million as shall be determined at trial, if any, plus interest, attorneys' fees and costs and other such relief as the court may award. The Company has denied plaintiffs' claims. The Company believes that the complaint is an intentional act by the plaintiffs to publicly tarnish the Company's and its senior management's reputations through the public domain in an effort to obtain by threat of litigation certain results for Mr. Schnaier's self-serving and improper purposes. The Company is vigorously defending this lawsuit, and the Company believes that the allegations are without merit and that it has strong defenses. On June 26, 2018, the Company and LXL Tickets, filed counterclaims against the plaintiffs for breach of contract (including under the Asset Purchase Agreement), fraudulent inducement, and other causes of action, seeking injunctive relief, damages, attorneys' fees and expenses and such other relief as the court may award. The parties are currently engaged in pre-trial proceedings, including continuing discovery efforts with the trial not expected to commence, if any, until the Company's fiscal year ending March 31, 2022 (unless further delayed as a result of the COVID-19 pandemic). In October 2018, pursuant to the terms of the APA, the Company submitted a formal demand to Wantickets, Mr. Schnaier and Danco to indemnify the Company, among other things, for its costs and expenses incurred in connection with this matter. As of December 31, 2020, all of plaintiffs' claims other than fraudulent inducement have been dismissed or addressed by the parties or the court, subject to plaintiffs currently appealing the dismissal of the breach of the implied covenant of good faith and fair dealing claims related to Mr. Schnaier's employment agreement with LXL Tickets. On November 10, 2020, the Appellate Division affirmed the dismissal court of appeals of the plaintiffs' claims for granting the Company's motion to dismiss plaintiff's breach of the implied covenant of good faith and fair dealing claims concerning Mr. Schnaier's employment agreement. As of December 31, 2020, all of plaintiffs' claims other than fraudulent inducement and breach of the employment agreement have been dismissed or addressed by the parties or the court. The Company intends to continue to vigorously defend all defendants against any liability to the plaintiffs with respect to the remaining claims. As of December 31, 2020, while the Company has assessed the likelihood of a loss, if any, is not probable, the outcome of this lawsuit is inherently uncertain and the potential range of loss could have a material adverse effect on the Company's business, financial condition and results of operations." On May 6, 2020, Xcellence, Inc. (dba Xact Data Discovery) filed a claim in the Los Angeles Superior Court against us claiming total damages of approximately of $0.6 million as a result of an alleged breach of contract and breach of warranty under the services agreement entered into between Xcellence and the Company. The Company was previously not made aware of this matter and as a result, on October 26, 2020, the court entered a default judgment against the Company in this matter. On November 13, 2020, the Company filed the motion to set aside the default judgement due to the default being improperly entered into as a result of the plaintiff failing to correctly serve the Company and the default was set aside in December 2020. In December, the Company also filed its answer to the complaint. The Company intends to vigorously defend it in this matter. As of December 31, 2020, the potential range of loss related to this matter was not material. During each of the nine months ended December 31, 2020 and 2019, the Company recorded aggregate legal settlement expenses relating to potential claims arising in connection with litigation brought against the Company by certain third-parties of $0.1 million. While the resolution of the above matters cannot be predicted with certainty, other than as set forth above the Company does not believe, based on current knowledge, that the outcome of the currently pending claims or legal proceedings in which the Company is currently involved will have a material adverse effect on the Company's financial statements. From time to time, the Company is involved in legal proceedings and other matters arising in connection with the conduct of its business activities. Many of these proceedings may be at preliminary stages and/or seek an indeterminate amount of damages. The Company regularly evaluates the status of its commitments and contingencies in which it is involved to (i) assess whether a material loss is probable or there is at least a reasonable possibility that a material loss or an additional material loss in excess of a recorded accrual may have been incurred and (ii) determine if financial accruals are required when appropriate. The Company records an expense accrual for any commitments and loss contingency when it determines that a loss is probable and the amount of the loss can be reasonably estimated. If an expense accrual is not appropriate, the Company further evaluates each matter to assess whether an estimate of possible loss or range of loss can be made and whether or not any such matter requires additional disclosure. There can be no assurance that any proceeding against the Company will be resolved in amounts that will not differ from the amounts of estimated exposures. Legal fees and other costs of defending litigation are expensed as incurred. Non-Income Related Taxes In general, the Company has not historically collected state or local sales, use or other similar taxes in any jurisdictions in which the Company does not have a tax nexus, in reliance on court decisions or applicable exemptions that restrict or preclude the imposition of obligations to collect such taxes with respect to online sales of its music subscription services. In addition, the Company has not historically collected state or local sales, use or other similar taxes in certain jurisdictions in which it has a physical presence, in reliance on applicable exemptions. On June 21, 2018, the U.S. Supreme Court decided, in South Dakota v. Wayfair, Inc., that state and local jurisdictions may, at least in certain circumstances, enforce a sales and use tax collection obligation on remote vendors that have no physical presence in such jurisdiction. A number of states have already begun, or have positioned themselves to begin, requiring sales and use tax collection by remote vendors and/or by online marketplaces. The details and effective dates of these collection requirements vary from state to state. The Company evaluated the new requirements, and based upon its assessment determined that its sales tax exposure was not material to the financial results as of December 31, 2020. The Company is in the process of determining how and when its collection practices will need to change in the relevant jurisdictions, including obtaining resale certificates from third party resellers of the Company's music services, as necessary. Following the CPS acquisition, the Company acquired a $0.4 million sales tax accrual. |
Employee Benefit Plan
Employee Benefit Plan | 9 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Note 15 — Employee Benefit Plan Effective March 2019, the Company sponsors a 401(k) plan (the "401(k) Plan") covering all employees. Prior to March 31, 2019, only Slacker employees were eligible to participate in the 401(k) Plan. Employees are eligible to participate in the 401(k) Plan the first day of the calendar month following their date of hire. The Company may make discretionary matching contributions to the 401(k) Plan on behalf of its employees up to a maximum of 100% of the participant's elective deferral up to a maximum of 5% of the employees' annual compensation. The Company made matching contributions of less than $0.1 million and $0.1 million to the 401(k) Plan for the three and nine month periods ended December 31, 2020, respectively, and less than $0.1 million for the three and nine month periods ended December 31, 2019, respectively. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 16 — Stockholders' Equity Issuance of Common Stock in Public Offerings In July 2020, the Company issued directly to a certain institutional investor and another investor a total of 1,820,000 shares of the Company's common stock for net cash consideration of approximately $7.3 million at a price per share of $4.14. The offering of the shares was made pursuant to the Shelf S-3 and a prospectus supplement related to the offering filed with the SEC on July 23, 2020. On July 25, 2019, in a registered direct public offering, the Company entered into securities purchase agreements with certain institutional investors pursuant to which the Company sold a total of 5,000,000 shares of its common stock at a price per share of $2.10. The gross proceeds to the Company were $10.5 million. The net proceeds of the offering to the Company were $9.5 million, after deducting placement agent fees and other offering expenses totaling $1.0 million paid by the Company. The offering of the shares was made pursuant to the Shelf S-3 and a prospectus supplement related to the offering filed with the SEC on July 26, 2019. In August 2020, the Company and Mani Brothers 9200 Sunset (DE), LLC, the landlord of its principal executive offices in West Hollywood, entered into the Occupancy Agreement. Pursuant to the agreement, the Company issued to MBRG Investors, LLC as the designee of the landlord 95,436 shares of the Company's shares of common stock, at a price per share of $4.14, in full satisfaction of the Company's payment obligation of approximately $0.4 million to the landlord, which is included in shares issued to consultants and vendors on the Condensed Consolidated Statement of Stockholders Equity (Deficit). The Company did not receive any cash proceeds from the offering of these shares. The offering of these shares was made pursuant to the Shelf S-3 and prospectus supplement related to the offering filed with the SEC on August 11, 2020. The offering of these shares was made pursuant to the Shelf S-3 and prospectus supplement related to the offering, which was filed with the SEC on August 11, 2020, and the final settlement and issuance of these shares occurred on August 11, 2020. Issuance of Restricted Shares of Common Stock for Services to Consultants and Vendors During the nine months ended December 31, 2020, the Company issued 3,780,659 shares of its common stock valued at $11.5 million to certain Company consultants and vendors which includes the shares issued to MBRG Investors, LLC and the shares issued to a certain music partner. Additionally, the Company incurred $1.0 million in accounts payable and accrued liabilities for stock earned by its consultants, but not yet issued. During the three months and nine months ended December 31, 2020, the Company recorded $1.0 million and $11.5 million, respectively, of expense related to stock issuances to its consultants. The remaining unrecognized compensation cost of $0.2 million is expected to be recorded over the next year as the shares vest. During the nine months ended December 31, 2019, the Company issued 956,575 shares of its restricted common stock valued at $3.5 million to certain Company consultants and vendors. Additionally, the Company had $0.6 million in accounts payable and accrued liabilities for stock earned by its consultants, but not yet issued at December 31, 2019. During the three and nine months ended December 31, 2019, the Company recorded $0.2 million and $0.6 million, respectively, of expense related to stock issuances to its consultants. Warrants The table below summarizes the Company's warrant activities during the nine month's ended December 31, 2020: Number of Weighted Weighted- Balance outstanding, March 31, 2020 167,363 $ 4.01 0.94 Granted - - - Exercised - - - Forfeited/expired - - - Balance outstanding, December 31, 2020 167,363 $ 4.01 0.19 Exercisable, December 31, 2020 167,363 $ 4.01 0.19 At December 31, 2020, the intrinsic value of warrants outstanding and exercisable was $0. Issuance of Common Stock to Certain Music Partner In June 2020, the Company entered into a new two-year license agreement with a certain music partner which owns and license rights to Slacker to certain sound recordings. Pursuant to this agreement, the Company agreed to certain minimum yearly guarantee payments and issued 264,000 shares of its restricted common stock to such music partner in consideration of all payments due to the music partner prior the date of the agreement. In July 2020, the Company issued to a certain music licensor 2,415,459 shares (the "Shares") of its common stock at a price of $4.14 per share, to satisfy the Company's payment obligation in the amount of $10.0 million owed to such music licensor (the "Threshold Amount"). In the event that the value of the Shares as of September 30, 2020 was less than the Threshold Amount, the Company agreed to make an additional cash payment to such music licensor in an amount equal to the difference between (i) the Threshold Amount and (ii) the sum of (x) the net proceeds of any sales of the Shares by the music licensor plus (y) the aggregate value of the Shares not sold by the music licensor as of such date. As of December 31, 2020, the Company accrued $2.1 million related to additional cash payment required. The shares were issued pursuant to the Shelf S-3 and a prospectus supplement related to the offering of these shares filed with the SEC on July 22, 2020. The Company did not receive any cash proceeds from the offering of these shares. 2016 Equity Incentive Plan On September 17, 2020, our stockholders approved the amendment to the 2016 Equity Incentive Plan, as amended to increase the number of shares available for issuance under the plan by 5,000,000 shares. Stock Repurchase Program In December 2020, we announced that our board of directors has authorized the repurchase up to two million shares of our outstanding common stock from time to time. The timing, price, and quantity of purchases under the program will be at the discretion of our management and will depend upon a variety of factors including share price, general and business market conditions, compliance with applicable laws and regulations, corporate and regulatory requirements, and alternative uses of capital. The program may be expanded, suspended, or discontinued by our board of directors at any time. Although our board of directors has authorized this stock repurchase program, there is no guarantee as to the exact number of shares, if any, that will be repurchased by us, and we may discontinue purchases at any time that management determines additional purchases are not warranted. We cannot guarantee that the program will be consummated, fully or all, or that it will enhance long-term stockholder value. The program could affect the trading price of our common stock and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our common stock. In addition, this program could diminish our cash reserves. |
Business Segment and Geographic
Business Segment and Geographic Reporting | 9 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segment and Geographic Reporting | Note 17 — Business Segment and Geographic Reporting Management has determined that the Company has one operating segment. The Company's reporting segment reflects the manner in which its chief operating decision maker reviews results and allocates resources. The Company's reporting segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments. Customers The Company has one external customer that accounts for more than 10% of its revenue. Such original equipment manufacturer (the "OEM") provides premium Slacker service in all of their new vehicles. In the three and nine months ended December 31, 2020 total revenue from the OEM was $5.7 million and $17.0 million, respectively. In the three and nine months ended December 31, 2019 total revenue from the OEM was $6.0 million and $16.6 million, respectively. Geographic Information The Company operates as an internet live music streaming platform and produces, distributes and markets podcasts, based in the United States. All material revenues of the Company are derived from the United States. All long-lived assets of the Company are located in the United States. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 18 — Fair Value Measurements The following table presents the fair value of the Company's financial liabilities that are measured at fair value on a recurring basis (in thousands): December 31, 2020 Fair Hierarchy Level Value Level 1 Level 2 Level 3 Liabilities: Contingent consideration liability from PodcastOne acquisition $ 1,061 $ - $ - $ 1,061 Initial measurement of contingent consideration from CPS acquisition 1,254 - - 1,254 Bifurcated embedded derivative on senior secured convertible notes payable 251 - - 251 Bifurcated embedded derivative on unsecured convertible note payable 30 - - 30 $ 2,596 $ - $ - $ 2,596 March 31, 2020 Fair Hierarchy Level Value Level 1 Level 2 Level 3 Liabilities: Bifurcated embedded derivative on senior secured convertible debentures $ 524 $ - $ - $ 524 Bifurcated embedded derivative on unsecured convertible note payable 141 - - 141 $ 665 $ - $ - $ 665 The following table presents a reconciliation of the Company's financial liabilities that are measured at Level 3 within the fair value hierarchy for the nine month period ended December 31, 2020 (in thousands): Amount Balance as of March 31, 2020 $ 665 Initial measurement of contingent consideration from PodcastOne acquisition on July 1, 2020 1,100 Initial measurement of contingent consideration from CPS acquisition on December 22, 2020 1,254 Initial measurement of embedded derivatives on senior secured convertible notes issued on September 15, 2020 671 Adjustments reported in loss on extinguishment of debt (228 ) Fair value adjustments reported in earnings (866 ) Balance as of December 31, 2020 $ 2,596 The following table presents a reconciliation of the Company's financial liabilities that are measured at Level 3 within the fair value hierarchy for the nine months ended December 31, 2019 (in thousands): Amount Balance as of March 31, 2019 $ 586 Total fair value adjustments reported in earnings (189 ) Balance as of December 31, 2019 $ 397 Bifurcated embedded derivative on senior secured convertible debentures, senior secured convertible notes payable, unsecured convertible notes payable and contingent consideration The fair value of the bifurcated embedded derivatives on senior secured convertible debentures, senior secured convertible notes payable, unsecured convertible notes and contingent consideration was determined using the following significant unobservable inputs: December 31, March 31, 2020 2020 Bifurcated embedded derivative on senior secured convertible debentures Market yield - 27.4 % Bifurcated embedded derivative on senior secured convertible notes payable Market yield 19.1 % - Bifurcated embedded derivative on unsecured convertible note payable Market yield 31.2 % 43.9 % Contingent consideration Market yield 19.1 % - Significant increases or decreases in the inputs noted above in isolation would result in a significantly lower or higher fair value measurement. The Company determined that as of the assessment date, the fair value of the bifurcated embedded derivatives is $0.3 million. The changes in fair value of $(0.3) million and $(0.4) million are recorded in other income (expense) on the Company's consolidated statements of operations for the three-month and nine month periods ended December 31, 2020, respectively. The Company did not elect the fair value measurement option for the following financial assets or liabilities. The fair values of certain financial instruments measured at amortized cost and the hierarchy level the Company used to estimate the fair values are shown below (in thousands): December 31, 2020 Carrying Hierarchy Level Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 17,353 $ 17,353 $ - $ - Restricted cash 235 235 - - Liabilities: Notes payable 2,996 - - 2,996 Senior secured convertible notes payable, net 12,830 - - 17,370 Unsecured convertible notes payable related party, net 5,393 - - 6,485 Unsecured convertible notes, payable net 1,887 - - 1,996 March 31, 2020 Carrying Hierarchy Level Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 5,702 $ 5,702 $ - $ - Restricted cash 6,735 6,735 - - Liabilities: Note payable 331 - - 331 Senior secured convertible debentures, net 8,701 - - 9,254 Unsecured convertible notes payable related party, net 5,114 4,451 Unsecured convertible note payable 1,539 - - 1,338 The fair values of financial instruments not included in these tables are estimated to be equal to their carrying values as of December 31, 2020 and March 31, 2020. The Company's estimates of the fair values were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop the estimated fair values. The fair value of the financial assets and liabilities, where the Company did not elect the fair value measurement option, were determined using the following significant unobservable inputs: December 31, March 31, 2020 2020 Senior secured convertible debentures, net (binomial lattice model): Market yield - 27.4 % Senior secured convertible notes payable, net (binomial lattice model): 19.1 % - Market yield Unsecured convertible notes payable related party, net (yield model with a Black-Scholes-Merton option pricing model): Market yield 31.2 % 41.6 % Unsecured convertible note payable (yield model with a Black-Scholes-Merton option pricing model): Market yield 29.17 % 43.9 % Significant increases or decreases in the inputs noted above in isolation would result in a significantly lower or higher fair value measurement. Cash equivalents and restricted cash equivalents primarily consisted of short-term interest-bearing money market funds with maturities of less than 90 days and time deposits. The estimated fair values were based on available market pricing information of similar financial instruments. Due to their short maturity, the carrying amounts of the Company's accounts receivable, accounts payable, accrued expenses and other long-term liabilities approximated their fair values as of December 31, 2020 and March 31, 2020. The Company's outstanding debt is carried at cost, adjusted for discounts. The Company's note payable is not publicly traded and fair value is estimated to equal carrying value. The Company's senior convertible notes payable and unsecured convertible notes payable with fixed rates are not publicly traded and the Company has estimated fair values using a variety of valuation models and market rate assumptions detailed above. The senior convertible notes payable and unsecured convertible notes payable are valued using a binomial lattice model and a yield model with a Black-Scholes-Merton option pricing model, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 19 — Subsequent Events On January 11, 2021, the Company entered into an Amendment of Notes Agreement (the "Amendment Agreement") with Trinad Capital Master Fund Ltd. ("TCMF"), a related party, pursuant to which the maturity date of all of the Company's Unsecured Convertible Notes issued to TCMF was extended to May 31, 2022, and in consideration of such extension, the interest rate payable under such notes increased to 8.5% and the Company shall issue to TCMF 280,000 shares of its common stock. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
COVID-19 | COVID-19 In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease ("COVID-19") as a pandemic. The global impact of the COVID-19 pandemic has had a negative effect on the global economy, disrupting the financial markets creating increasing volatility and overall uncertainty. The Company began to experience modest adverse impacts of the COVID-19 pandemic in the fourth quarter of fiscal year ended March 31, 2020 and this impact is expected to continue throughout at least the fiscal year ending March 31, 2021, and possibly longer. The Company's event and programmatic advertising revenues were directly impacted in the 2021 fiscal year with all on-premise in-person live music festivals and events postponed and mixed demand from historical programmatic advertising partners. Further, one of the Company's larger customers also experienced a temporary halt to its production as a result of COVID-19, which in turn could adversely impact the Company's near-term subscriber growth in 2021. During the nine months ended December 31, 2020, the Company enacted several initiatives to counteract these near-term challenges, including salary reductions, obtaining a Paycheck Protection Program loan (see Note 8 - Notes Payable) and pivoting its live music production to 100% digital. The Company began producing, curating, and broadcasting digital music festivals and events across its platform which has resulted in the growth in the number of live events streamed, related sponsorship revenue and overall viewership. The Company also launched a new pay-per-view ("PPV) offering in May 2020, enabling new forms of artist revenue including digital tickets, tipping, digital meet and greet and merchandise sales. However, there is uncertainty as to the duration and overall impact of the COVID-19 pandemic, which could result in an adverse material change in a future period to the Company's results of operations, financial position and liquidity. On March 27, 2020, the CARES Act was enacted in the United States. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property. The Company evaluated the provisions of the CARES Act and does not anticipate the associated impacts, if any, will have a material effect on its provision for income taxes. On December 29, 2020 the Consolidated Appropriations Act ("CAA") was enacted in the United States. The CAA provides numerous tax provisions and most notably for the Company changes the tax treatment of those expenses paid for with a PPP loan from non-deductible to deductible. The Company is in the process of evaluating the provisions of the CAA including second draw Paycheck Protection Program loans and potential eligibility for Employee Retention Credits and does not anticipate the other provisions included will have a material impact on its provision for income taxes. |
Use of Estimates | Use of Estimates The preparation of the Company's condensed consolidated financial statements in conformity with the United States of America ("US") generally accepted accounting principles ("GAAP") requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue, allowance for doubtful accounts, the assigned value of acquired assets and assumed and contingent liabilities associated with business combinations and the related purchase price allocation, useful lives and impairment of property and equipment, intangible assets, goodwill and other assets, inventory calculations and reserves, the fair value of the Company's equity-based compensation awards and convertible debt instruments, fair values of derivatives, and contingencies. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. Given the overall uncertainty surrounding the COVID-19 pandemic, there is a reasonable possibility that actual results could differ from those estimates and such differences could be material to the financial position and results of operations, specifically in assessing when the collectability of revenue related consideration is probable, and the impairment assessment of goodwill, indefinite lived assets or long-lived assets that are depreciated or amortized. |
Revenue Recognition Policy | Revenue Recognition Policy The Company accounts for a contract with a customer when an approved contract exists, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and the collectability of substantially all of the consideration is probable. Revenue is recognized when the Company satisfies its obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company uses the expected value method to estimate the value of variable consideration on advertising and with original equipment manufacturer contracts to include in the transaction price and reflect changes to such estimates in periods in which they occur. Variable consideration for these services is allocated to and recognized over the related time period such advertising and subscription services are rendered as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company's efforts to satisfy its performance obligation. The amount of variable consideration included in revenue is limited to the extent that it is probable that the amount will not be subject to significant reversal when the uncertainty associated with the variable consideration is subsequently resolved. Practical Expedients The Company elected the practical expedient and recognized the incremental costs of obtaining a contract, if any, as an expense when incurred if the amortization period of the asset that would have been recognized is one year or less. Gross Versus Net Revenue Recognition The Company reports revenue on a gross or net basis based on management's assessment of whether the Company acts as a principal or agent in the transaction. To the extent the Company acts as the principal, revenue is reported on a gross basis net of any sales tax from customers, when applicable. The determination of whether the Company acts as a principal or an agent in a transaction is based on an evaluation of whether the Company controls the good or service prior to transfer to the customer. Where applicable, the Company has determined that it acts as the principal in all of its subscription service streams and may act as principal or agent for its ticketing/live events, advertising and licensing revenue streams. The Company's revenue is principally derived from the following services: Subscription Services Subscription services revenue substantially consist of monthly to annual recurring subscription fees, which are primarily paid in advance by credit card or through direct billings arrangements. The Company defers the portions of monthly to annual recurring subscription fees collected in advance and recognizes them in the period earned. Subscription revenue is recognized in the period of services rendered. The Company's subscription revenue consists of performance obligations that are satisfied over time. This has been determined based on the fact that the nature of services offered are subscription based where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services or not. As a result, the Company has concluded that the best measure of progress toward the complete satisfaction of the performance obligation over time is a time-based measure. The Company recognizes subscription revenue straight-line through the subscription period. Subscription Services consist of: Direct subscriber, mobile service provider and mobile app services The Company generates revenue for subscription services on both a direct basis and through subscriptions sold through certain third-party mobile service providers and mobile app services (collectively the "Mobile Providers"). For subscriptions sold through the Mobile Providers, the subscriber executes an on-line agreement with Slacker outlining the terms and conditions between Slacker and the subscriber upon purchase of the subscription. The Mobile Providers promote the Slacker app through their e-store, process payments for subscriptions, and retain a percentage of revenue as a fee. The Company reports this revenue gross of the fee retained by the Mobile Providers, as the subscriber is Slacker's customer in the contract and Slacker controls the service prior to the transfer to the subscriber. Subscription revenues from monthly subscriptions sold directly through Mobile Providers are subject to such Mobile Providers' refund or cancellation terms. Revenues from Mobile Providers are recognized net of any such adjustments for variable consideration, including refunds and other fees. The Company's payment terms vary based on whether the subscription is sold on a direct basis or through Mobile Providers. Subscriptions sold on a direct basis require payment before the services are delivered to the customer. The payment terms for subscriptions sold through Mobile Providers vary, but are generally payable within 30 days. Third-Party Original Equipment Manufacturers The Company generates revenue for subscription services through subscriptions sold through a third-party Original Equipment Manufacturer (the "OEM"). For subscriptions sold through the OEM, the OEM executes an agreement with Slacker outlining the terms and conditions between Slacker and the OEM upon purchase of the subscription. The OEM installs the Slacker app in their equipment and provides the Slacker service to the OEM's customers. The monthly fee charged to the OEM is based upon a fixed rate per vehicle, multiplied by the variable number of total vehicles which have the Slacker application installed. The number of customers, or the variable consideration, is reported by OEMs and resolved on a monthly basis. The Company's payment terms with OEM are up to 30 days. Advertising Revenue Advertising revenue primarily consist of revenues generated from the sale of audio, video, and display advertising space to third-party advertising exchanges. Revenues are recognized based on delivery of impressions over the contract period to the third-party exchanges, either when an ad is placed for listening or viewing by a visitor or when the visitor "clicks through" on the advertisement. The advertising exchange companies report the variable advertising revenue performed on a monthly basis which represents the Company's efforts to satisfy the performance obligation. Additionally, following the acquisition of PodcastOne, the Company began deriving revenue from podcast advertising. PodcastOne earns advertising revenues primarily for fees earned from advertisement placement purchased by the customer during the time the podcast is delivered to the viewing audience, under the terms and conditions as set forth in the applicable podcasting agreement calculated using audience activity. Licensing Revenue Licensing revenue primarily consists of sales of licensing rights to digitally stream its live music services in certain geographies (e.g. China). Licensing revenue is recognized when the Company satisfies its performance obligation by transferring control of the goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, which is typically when the live event has aired. Any license fees collected in advance of an event are deferred until the event airs. Sponsorship Revenue Sponsorship revenue primarily consists of sales of sponsorship programs that provide sponsors with opportunities to reach our customers. Sponsorship revenue is recognized as the event airs. Any sponsorship fees collected in advance of the contract term (typically an event) are deferred until the event airs. The Company reports sponsorship revenue on a gross basis as the Company acts as the principal in the underlying transactions. Merchandise Revenue Revenue is recognized upon the transfer of control to the customer. The Company recognizes revenue and measures the transaction price net of taxes collected from customers and remitted to governmental authorities. Sales commissions are expensed as incurred and are recorded in sales and marketing expenses in the condensed consolidated statements of income. The Company's customer contracts do not have a significant financing component due to their short durations, which are typically effective for one year or less and have payment terms that are generally 30-60 days. Wholesale revenue is generally recognized when products are shipped, depending on the applicable contract terms. The Company records a refund liability for expected returns based on prior returns history, recent trends, and projections for returns on sales in the current period. The refund liability at December 31, 2020 was $0.1 million. Ticket/Event Revenue Ticket/Event revenue is primarily from the sale of tickets and promoter fees earned from venues or other co-promoters under one of several formulas, including a fixed guaranteed amount and/or a percentage of ticket sales or event profits. Revenue from the promotion or production of an event is recognized at a point in time when the show occurs. Revenue collected in advance of the event is recorded as deferred revenue until the event occurs. Revenue collected from sponsorship agreements, which is not related to a single event, is classified as deferred revenue and recognized over the term of the agreement or operating season as the benefits are provided to the sponsor. Revenue from the Company's ticketing operations primarily consists of service fees charged at the time a ticket for an event is sold in either the primary or secondary markets, including both online pay-per-view ("PPV") ticket sales as well as tickets physically purchased through a ticket sale vendor. For primary tickets sold to the Company's PPV and festival events the revenue for the associated ticket charges collected in advance of the event is recorded as deferred revenue until the event occurs. |
Cost of Sales | Cost of Sales Cost of Sales principally consist of royalties paid for the right to stream video, music and non-music content to the Company's customers and the cost of securing the rights to produce and stream live events from venues and promoters. Royalties are calculated using negotiated and regulatory rates documented in content license agreements and are based on usage measures or revenue earned. Music royalties to record labels, professional rights organizations and music publishers relate to the consumption of music listened to on Slacker's radio services. As of December 31, 2020, and March 31, 2020, the Company accrued $13.2 million and $13.1 million of royalties, respectively, due to artists from use of Slacker's radio services . Cost of sales for the Company's advertising revenue primarily includes PodcastOne direct costs. Cost of sales for the Company's merchandising revenue includes purchase costs and related direct costs. Direct costs include all costs for personalization, production, planning, quality control, fulfillment and inbound freight. |
Sales and Marketing | Sales and Marketing Sales and Marketing include the direct and indirect costs related to the Company's product and event advertising and marketing. Additionally, sales and marketing includes merchandising advertising and royalty costs. |
Product Development | Product Development Product development costs primarily are expenses for research and development, product and content development activities, including internal software development and improvement costs which have not been capitalized by the Company. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period, on an accelerated basis. The Company accounts for awards with graded vesting as if each vesting tranche is valued as a separate award. The Company uses the Black-Scholes-Merton option pricing model to determine the grant date fair value of stock options. This model requires the Company to estimate the expected volatility and the expected term of the stock options which are highly complex and subjective variables. The variables take into consideration, among other things, actual and projected employee stock option exercise behavior. The Company uses a predicted volatility of its stock price during the expected life of the options that is based on the historical performance of the Company's stock price as well as including an estimate using guideline companies. The expected term is computed using the simplified method as the Company's best estimate given its lack of actual exercise history. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury securities with a maturity equivalent to the expected term of the stock. Stock-based awards are comprised principally of stock options, restricted stock, restricted stock units ("RSUs"), restricted stock awards ("RSAs") and warrant grants. Forfeitures are recognized as incurred. Stock option awards issued to non-employees are accounted for at grant date fair value determined using the Black-Scholes-Merton option pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. The Company records the fair value of these equity-based awards and expense at their cost ratably over related vesting periods. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Company's Statements of Operations in the period that includes the enactment date. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of common shares and the dilutive effect of contingent shares outstanding during the period. Potentially dilutive contingent shares, which primarily consist of stock options issued to employees, directors and consultants, restricted stock units, warrants issued to third parties and accounted for as equity instruments and convertible notes would be excluded from the diluted earnings per share calculation because their effect is anti-dilutive. At December 31, 2020 and 2019, the Company had 167,363 warrants outstanding, 4,423,334 and 4,640,001 stock options outstanding, respectively, 3,943,095 and 3,878,287 restricted stock units outstanding, respectively, 0 restricted stock awards outstanding and 5,613,374 and 3,912,671 shares of common stock issuable, respectively, underlying the Company's convertible notes and senior secured convertible notes. |
Business Combinations | Business Combinations The Company accounts for its business combinations using the acquisition method of accounting where the purchase consideration is allocated to the underlying net tangible and intangible assets acquired, based on their respective fair values. The excess of the purchase consideration over the estimated fair values of the net assets acquired is recorded as goodwill. Identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Additionally, any contingent consideration is recorded at fair value on the acquisition date and classified as a liability. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed and noncontrolling interests requires management's judgment and often involves the use of significant estimates and assumptions, including, but not limited to, the selection of appropriate valuation methodology, projected revenue, expenses and cash flows, weighted average cost of capital, discount rates, estimates of customer turnover rates and estimates of terminal values. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities, when purchased, of three months or less. The following table provides amounts included in cash, cash equivalents and restricted cash presented in the Company's condensed consolidated statements of cash flows for the nine months ended December 31, (in thousands): 2020 2019 Cash and cash equivalents $ 17,353 $ 13,965 Restricted cash 235 235 Total cash and cash equivalents and restricted cash $ 17,588 $ 14,200 |
Restricted Cash and Cash Equivalents | Restricted Cash and Cash Equivalents The Company maintains certain letters of credit agreements with its banking provider, which are secured by the Company's cash for periods of less than one year. As of December 31, 2020, and March 31, 2020, the Company had restricted cash of $0.2 million and $6.7 million, respectively. The decrease in restricted cash as of December 31, 2020 as compared to March 31, 2020, was a result of the repayment of the senior secured convertible debentures in August 2020 (see Note 10 – Unsecured Convertible Notes). |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company evaluates the collectability of its accounts receivable based on a combination of factors. Generally, it records specific reserves to reduce the amounts recorded to what it believes will be collected when a customer's account ages beyond typical collection patterns, or the Company becomes aware of a customer's inability to meet its financial obligations. There were no impairment losses recorded on receivables for the three and nine months ended December 31, 2020 and 2019. The Company believes that the credit risk with respect to trade receivables is limited due to the large and established nature of its largest customers and the nature of its subscription receivables. At December 31, 2020, the Company had two customers that made up approximately 43% and 23% of the total gross accounts receivable balance, respectively. At March 31, 2020, the Company had two customers that made up approximately 57% and 22% of the total gross accounts receivable balance, respectively. The Company's accounts receivable at December 31, 2020 and March 31, 2020 is as follows (in thousands): December 31, March 31, 2020 2020 Accounts receivable, gross $ 16,683 $ 4,109 Less: Allowance for doubtful accounts (473 ) (220 ) Accounts receivable, net $ 16,210 $ 3,889 |
Inventories | Inventories Inventories, principally finished goods on hand and partially finished goods awaiting final customization process, are stated at the lower of cost (weighted average) or net realizable value. Inventory valuation requires the Company to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers and liquidations. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Costs of improvements that extend the economic life or improve service potential are also capitalized. Capitalized costs are depreciated over their estimated useful lives. Costs for normal repairs and maintenance are expensed as incurred. Depreciation is recorded using the straight-line method over the assets' estimated useful lives, which are generally as follows: buildings and improvements (5 years), furniture and equipment (3 to 5 years) and computer equipment and software (3 to 5 years). Leasehold improvements are depreciated over the shorter of the estimated useful life, based on the estimates above, or the lease term. The Company evaluates the carrying value of its property and equipment if there are indicators of potential impairment. If there are indicators of potential impairment, the Company performs an analysis to determine the recoverability of the asset group carrying value by comparing the expected undiscounted future cash flows to the net book value of the asset group. If it is determined that the expected undiscounted future cash flows are less than the net book value of the asset group, the excess of the net book value over the estimated fair value is recorded in the Company's consolidated statements of operations. Fair value is generally estimated using valuation techniques that consider the discounted cash flows of the asset group using discount and capitalization rates deemed reasonable for the type of assets, as well as prevailing market conditions, appraisals, recent similar transactions in the market and, if appropriate and available, current estimated net sales proceeds from pending offers. |
Capitalized Internal-Use Software | Capitalized Internal-Use Software The Company capitalizes certain costs incurred to develop software for internal use. Costs incurred in the preliminary stages of development are expensed as incurred. Once software has reached the development stage, internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized costs are recorded as part of property and equipment. Costs related to minor enhancements, maintenance and training are expensed as incurred. Capitalized internal-use software costs are amortized on a straight-line basis over their three- to five-year estimated useful lives. The Company evaluates the useful lives of these assets and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. During the nine months ended December 31, 2020 and 2019, the Company capitalized $2.3 million and $2.0 million of internal use software, respectively. |
Goodwill | Goodwill Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. The Company evaluates goodwill for impairment on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. The Company conducts its annual impairment analysis in the fourth quarter of each fiscal year. Impairment of goodwill is tested at the reporting unit level by comparing the reporting unit's carrying amount, including goodwill, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and an impairment loss is measured by the resulting amount. No impairment losses have been recorded in the three and nine months ended December 31, 2020 and 2019. |
Intangible Assets with Indefinite Useful Lives | Intangible Assets with Indefinite Useful Lives The Company's indefinite-lived intangible assets consist of trade names for Slacker. The Company evaluates indefinite-lived intangible assets for impairment on an annual basis or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. The Company conducts its annual impairment analysis in the fourth quarter of each fiscal year. |
Intangible Assets with Finite Useful Lives | Intangible Assets with Finite Useful Lives The Company has certain finite-lived intangible assets that were initially recorded at their fair value at the time of acquisition. These intangible assets consist of Trademarks/Trade Names, Intellectual Property, Customer Relationships, Content Creator Relationships, Wholesale Relationships, Domain Names, Customer List and Capitalized Software Development Costs resulting from business combinations. Intangible assets with finite useful lives are amortized using the straight-line method over their respective estimated useful lives, which are generally as follows: Intellectual Property (15 years), Customer, Content Creator and Wholesale Relationships (1.5-6 years), Domain Names (5 years), Customer List (5 years) and Software (5 years). The Company reviews all finite-lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, the Company recognizes an impairment loss for the excess carrying value over the fair value in its consolidated statements of operations. No impairment losses have been recorded in the three and nine months ended December 31, 2020 and 2019. |
Deferred Revenue and Costs | Deferred Revenue and Costs Deferred revenue consists substantially of amounts received from customers in advance of the Company's performance service period. Deferred revenue is recognized as revenue on a systematic basis that is proportionate to the period that the underlying services are rendered, which in certain arrangements is straight line over the remaining contractual term of an agreement. In the event the Company receives cash in advance of providing its music services and music streaming services, the Company will defer an amount of such future royalty and costs to 3rd party music labels, publishers and other providers on its balance sheets. Deferred costs are amortized to expense concurrent with the recognition of the related revenue and the expense is included in cost of sales. |
Fair Value Measurements - Valuation Hierarchy | Fair Value Measurements - Valuation Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (i.e., an exit price). The Company uses the three-level valuation hierarchy for classification of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect the Company's own assumptions about the data market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized below: Level Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. Level 3 Valuation is based upon other unobservable inputs that are significant to the fair value measurement. The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety. Proper classification of fair value measurements within the valuation hierarchy is considered each reporting period. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains cash balances at commercial banks. Cash balances commonly exceed the $250,000 amount insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts, and management believes that the Company is not exposed to any significant credit risk with respect to such cash and cash equivalents. |
Seasonality | Seasonality Our CPS merchandising business is affected by seasonality, which historically has resulted in higher sales volume during our third quarter, which ends December 31. |
Adoption of New Accounting Pronouncements | Adoption of New Accounting Pronouncements None. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. The guidance is effective for fiscal years beginning after December 15, 2022 for SEC filers that are eligible to be smaller reporting companies under the SEC's definition, and interim periods within those fiscal years. The Company is currently evaluating the impact this guidance will have on the Company's condensed consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" as part of its initiative to reduce complexity in the accounting standards. The standard eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have upon its financial position and results of operations, if any. In August 2020, The Financial Accounting Standards Board issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging – Contracts in Entity's Own Equity (Subtopic 815-40). This update simplifies the accounting for convertible debt instruments by removing the beneficial conversion and cash conversion separation models for convertible instruments. Under the update, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives or that do not result in substantial premiums accounted for as paid-in capital. The update also amends the accounting for certain contracts in an entity's own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the computation of diluted EPS. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of cash, cash equivalents and restricted cash | 2020 2019 Cash and cash equivalents $ 17,353 $ 13,965 Restricted cash 235 235 Total cash and cash equivalents and restricted cash $ 17,588 $ 14,200 |
Schedule of accounts receivable | December 31, March 31, 2020 2020 Accounts receivable, gross $ 16,683 $ 4,109 Less: Allowance for doubtful accounts (473 ) (220 ) Accounts receivable, net $ 16,210 $ 3,889 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue Subscription services $ 8,346 $ 9,115 $ 24,948 $ 26,665 Advertising 7,710 540 13,453 1,814 Sponsorship and licensing 2,087 44 3,466 301 Merchandise 796 - 796 - Ticket/Event 184 - 1,526 - Total Revenue $ 19,123 $ 9,699 $ 44,189 $ 28,780 |
Schedule of contract liabilities balances | Contract Balance as of March 31, 2020 $ 949 Revenue recognized that was included in the contract liability at beginning of period (618 ) Increase due to cash received, excluding amounts recognized as revenue during the period 1,081 Balance as of December 31, 2020 $ 1,412 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of fair value of the assets acquired | Asset Type Weighted Fair Value Cash and cash equivalents $ 1,286 Accounts receivable 3,951 Prepaid expense and other assets 316 Property and equipment 119 Content creator relationships 1.6 772 Trade name 10 1,010 Goodwill 12,042 Accounts payable and accrued liabilities (2,934 ) Deferred tax asset 972 Allowance for deferred tax asset (972 ) Note payable (471 ) Net assets acquired $ 16,091 Asset Type Weighted Fair Value Cash and cash equivalents $ 1,132 Accounts receivable 6,153 Inventories 2,756 Prepaid expense 29 Property and equipment 585 Wholesale relationship 6 1,000 Domain name 10 300 Customer list 5 172 Goodwill 2,364 Other assets 53 Right of use asset 1,086 Lease liability (1,086 ) Accounts payable (5,067 ) Other liabilities (467 ) Net assets acquired $ 9,010 |
Schedule of revenues and net loss | Three Months Ended 2020 2019 Revenues $ 27,205 $ 29,463 Net loss (7,859 ) (10,586 ) Net loss per share – basic and diluted $ (0.11 ) $ (0.18 ) Nine Months Ended 2020 2019 Revenues $ 66,032 $ 80,775 Net loss (38,970 ) (32,824 ) Net loss per share – basic and diluted $ (0.58 ) $ (0.59 ) |
Schedule of consideration of common stock | Fair Value of Consideration Transferred: Common stock $ 14,991 Contingent consideration 1,100 Total $ 16,091 Fair Value of Consideration Transferred: Common stock $ 6,391 Additional paid-in capital – common stock to be issued 1,365 Contingent consideration 1,254 Total $ 9,010 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | December 31, March 31, 2020 2020 Property and equipment, net Production equipment $ 54 $ 54 Computer, machinery, and software equipment 1,165 707 Furniture and fixtures 55 41 Leasehold improvements 255 41 Capitalized internally developed software 8,074 5,617 Total property and equipment 9,603 6,460 Less accumulated depreciation and amortization (5,374 ) (3,063 ) Total property and equipment, net $ 4,229 $ 3,397 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill | Goodwill Balance as of March 31, 2020 $ 9,672 Acquisitions (Note 4 – Business Combinations) 14,406 Balance as of December 31, 2020 $ 24,078 |
Schedule of changes in carrying amount of indefinite-lived intangible assets | Tradenames Balance as of March 31, 2020 $ 4,637 Acquisitions - Impairment losses - Balance as of December 31, 2020 $ 4,637 |
Schedule of finite-lived intangible assets | The Company's finite-lived intangible assets were as follows as of December 31, 2020 (in thousands): Gross Carrying Value Accumulated Amortization Net Carrying Value Software $ 19,280 $ 11,569 $ 7,711 Intellectual property (patents) 5,366 1,073 4,293 Customer relationships 6,570 5,521 1,049 Content creator relationships 772 252 520 Wholesale relationships 1,000 - 1,000 Domain names 329 18 311 Brand and trade names 2,571 203 2,368 Customer list 172 - 172 Non-compete agreement 250 76 174 Fan database 230 70 160 Total $ 36,540 $ 18,782 $ 17,758 The Company's finite-lived intangible assets were as follows as of March 31, 2020 (in thousands): Gross Carrying Value Accumulated Amortization Net Carrying Value Software $ 19,280 $ 8,674 $ 10,606 Intellectual property (patents) 5,366 805 4,561 Customer relationships 6,570 5,128 1,442 Domain names 29 13 16 Brand names 1,500 17 1,483 Non-compete agreement 250 14 236 Fan database 230 13 217 Total $ 33,225 $ 14,664 $ 18,561 |
Schedule of estimated future amortization expense | For Years Ending March 31, 2021 (remaining three months) $ 1,452 2022 5,736 2023 4,211 2024 788 2025 788 Thereafter 4,783 $ 17,758 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | December 31, March 31, 2020 2020 Accounts payable $ 17,821 $ 26,703 Accrued liabilities 12,541 3,938 Lease liabilities, current 340 82 $ 30,702 $ 30,723 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | December 31, March 31, 2020 2020 Senior promissory note $ 346 $ 331 SBA loan 153 - PPP loans 2,497 - 2,996 331 Less: Current portion of Notes payable (2,242 ) (331 ) Notes payable $ 754 $ - |
Senior Secured Convertible De_2
Senior Secured Convertible Debentures (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Senior Secured Convertible Debentures [Abstract] | |
Schedule of senior secured convertible debentures | December 31, March 31, 2020 2020 Senior Secured Convertible Debentures Senior Secured Convertible Debentures $ - $ 10,118 Accrued interest - 101 Fair Value of Embedded Derivatives - 524 Less: Discount - (1,518 ) Net - 9,225 Less: Senior Secured Convertible Debentures, current - (2,720 ) Senior Secured Convertible Debentures, long-term $ - $ 6,505 |
Unsecured Convertible Notes (Ta
Unsecured Convertible Notes (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of unsecured convertible notes payable | December 31, March 31, 2020 2020 Unsecured Convertible Notes - Related Party (A) 7.5% Unsecured Convertible Note - Due May 31, 2021 $ 4,322 $ 4,120 (B) 7.5% Unsecured Convertible Notes - Due May 31, 2021 1,086 1,035 Less: Discount (15 ) (41 ) Net 5,393 5,114 Unsecured Convertible Promissory Note $ 2,000 $ 2,000 Accrued Interest 144 24 Less: Discount (287 ) (485 ) Fair Value of Embedded Derivatives 30 141 Net 1,887 1,680 Unsecured Convertible Notes, Net 7,280 6,794 Less: Unsecured Convertible Notes, Current - - Unsecured Convertible Notes, Net, Long-term $ 7,280 $ 6,794 |
Senior Secured Convertible No_2
Senior Secured Convertible Notes (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Senior Secured Convertible Debentures [Abstract] | |
Schedule of senior secured convertible notes | December 31, March 31, 2020 2020 Senior Secured Convertible Notes $ 15,000 $ - Accrued interest 319 - Fair value of embedded derivatives 251 - Less: Discount (2,421 ) - Net 13,119 - Less: Accrued interest (319 ) - Senior Secured Convertible Notes, long-term $ 12,830 $ - |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of operating lease costs | December 31, Fixed rent cost $ 123 Short term lease cost 341 Total operating lease cost $ 464 |
Schedule of supplemental balance sheet information related to leases | Operating leases December 31, Operating lease right-of-use assets $ 1,154 Total operating lease right-of-use assets 1,154 Operating lease liability, current $ 341 Operating lease liability, noncurrent 813 Total operating lease liabilities $ 1,154 |
Schedule of maturities of operating lease liabilities | For Years Ending March 31, 2021 (remaining three months) $ 127 2022 582 2023 358 2024 320 2025 93 Total lease payments 1,480 Less: imputed interest (326 ) Present value of operating lease liabilities $ 1,154 |
Long-Term Liabilities (Tables)
Long-Term Liabilities (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long term liabilities | December 31, March 31, 2020 2020 Due to Music Partner $ 5,422 $ - Fair value of contingent consideration liability 1,061 - Other long-term liabilities $ 6,483 $ - |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of warrant activities | Number of Weighted Weighted- Balance outstanding, March 31, 2020 167,363 $ 4.01 0.94 Granted - - - Exercised - - - Forfeited/expired - - - Balance outstanding, December 31, 2020 167,363 $ 4.01 0.19 Exercisable, December 31, 2020 167,363 $ 4.01 0.19 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial liabilities are measured at fair value on a recurring basis | December 31, 2020 Fair Hierarchy Level Value Level 1 Level 2 Level 3 Liabilities: Contingent consideration liability from PodcastOne acquisition $ 1,061 $ - $ - $ 1,061 Initial measurement of contingent consideration from CPS acquisition 1,254 - - 1,254 Bifurcated embedded derivative on senior secured convertible notes payable 251 - - 251 Bifurcated embedded derivative on unsecured convertible note payable 30 - - 30 $ 2,596 $ - $ - $ 2,596 March 31, 2020 Fair Hierarchy Level Value Level 1 Level 2 Level 3 Liabilities: Bifurcated embedded derivative on senior secured convertible debentures $ 524 $ - $ - $ 524 Bifurcated embedded derivative on unsecured convertible note payable 141 - - 141 $ 665 $ - $ - $ 665 |
Schedule of financial liabilities | Amount Balance as of March 31, 2020 $ 665 Initial measurement of contingent consideration from PodcastOne acquisition on July 1, 2020 1,100 Initial measurement of contingent consideration from CPS acquisition on December 22, 2020 1,254 Initial measurement of embedded derivatives on senior secured convertible notes issued on September 15, 2020 671 Adjustments reported in loss on extinguishment of debt (228 ) Fair value adjustments reported in earnings (866 ) Balance as of December 31, 2020 $ 2,596 The following table presents a reconciliation of the Company's financial liabilities that are measured at Level 3 within the fair value hierarchy for the nine months ended December 31, 2019 (in thousands): Amount Balance as of March 31, 2019 $ 586 Total fair value adjustments reported in earnings (189 ) Balance as of December 31, 2019 $ 397 |
Schedule of derivatives on senior secured convertible debentures | December 31, March 31, 2020 2020 Bifurcated embedded derivative on senior secured convertible debentures Market yield - 27.4 % Bifurcated embedded derivative on senior secured convertible notes payable Market yield 19.1 % - Bifurcated embedded derivative on unsecured convertible note payable Market yield 31.2 % 43.9 % Contingent consideration Market yield 19.1 % - |
Schedule of fair value measurement option for financial assets or liabilities | December 31, 2020 Carrying Hierarchy Level Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 17,353 $ 17,353 $ - $ - Restricted cash 235 235 - - Liabilities: Notes payable 2,996 - - 2,996 Senior secured convertible notes payable, net 12,830 - - 17,370 Unsecured convertible notes payable related party, net 5,393 - - 6,485 Unsecured convertible notes, payable net 1,887 - - 1,996 March 31, 2020 Carrying Hierarchy Level Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 5,702 $ 5,702 $ - $ - Restricted cash 6,735 6,735 - - Liabilities: Note payable 331 - - 331 Senior secured convertible debentures, net 8,701 - - 9,254 Unsecured convertible notes payable related party, net 5,114 4,451 Unsecured convertible note payable 1,539 - - 1,338 |
Schedule of fair value of each of the debentures and unsecured convertible | December 31, March 31, 2020 2020 Senior secured convertible debentures, net (binomial lattice model): Market yield - 27.4 % Senior secured convertible notes payable, net (binomial lattice model): 19.1 % - Market yield Unsecured convertible notes payable related party, net (yield model with a Black-Scholes-Merton option pricing model): Market yield 31.2 % 41.6 % Unsecured convertible note payable (yield model with a Black-Scholes-Merton option pricing model): Market yield 29.17 % 43.9 % |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Jul. 25, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 22, 2020 | Jul. 02, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Organization and Basis of Presentation (Textual) | |||||||||
Outstanding equity interest, percentage | 100.00% | ||||||||
Description of financial information | The presented financial information includes the financial information and activities of React Presents for the three and nine months ended December 31, 2020 (92 days and 275 days) and the three and nine months ended December 31, 2019 (0 days). The presented financial information includes the financial information and activities of PodcastOne for the three and nine months ended December 31, 2020 (92 days and 184 days) and December 31, 2019 (0 days). The presented financial information includes the financial information and activities of CPS for the three and nine months ended December 31, 2020 (10 days and 10 days) and December 31, 2019 (0 days). | ||||||||
Cash, cash equivalents and restricted cash | $ 17,588 | $ 14,200 | $ 17,588 | $ 14,200 | $ 12,437 | $ 13,939 | |||
Net loss | (8,731) | $ (8,808) | (26,452) | $ (30,393) | |||||
Working capital deficiency | $ 8,200 | $ 8,200 | |||||||
Cash from sale of stock | $ 9,500 | ||||||||
Custom Personalization Solutions Inc [Member] | |||||||||
Organization and Basis of Presentation (Textual) | |||||||||
Outstanding equity interest, percentage | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Cash and cash equivalents | $ 17,353 | $ 5,702 | ||
Restricted cash | 235 | 6,735 | ||
Total cash and cash equivalents and restricted cash | 17,588 | $ 12,437 | $ 14,200 | $ 13,939 |
Cash and Cash Equivalents [Member] | ||||
Cash and cash equivalents | 17,353 | 13,965 | ||
Restricted cash | 235 | 235 | ||
Total cash and cash equivalents and restricted cash | $ 17,588 | $ 14,200 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Accounting Policies [Abstract] | ||
Accounts receivable, gross | $ 16,683 | $ 4,109 |
Less: Allowance for doubtful accounts | (473) | (220) |
Accounts receivable, net | $ 16,210 | $ 3,889 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)Customershares | Dec. 31, 2019USD ($)shares | |
Summary of Significant Accounting Policies (Textual) | |||
Royalties due to artists | $ 13,100 | $ 13,200 | |
Warrants outstanding | shares | 167,363 | 167,363 | |
Stock options outstanding | shares | 4,423,334 | 4,640,001 | |
Common stock issuance | shares | 5,613,374 | 3,912,671 | |
Restricted cash | $ 6,700 | $ 200 | |
Amount insured by federal deposit insurance corporation | $ 250 | ||
Number of customer | Customer | 2 | ||
Capitalized internal use software, description | Straight-line basis over their three- to five-year estimated useful lives. | ||
Capitalized internal use software | $ 2,300 | $ 2,000 | |
Restricted stock units outstanding | 3,943,095 | 3,878,287 | |
Restricted stock awards | 0 | $ 0 | |
Refund liability | $ 100 | ||
Accounts Receivable [Member] | Customer One [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 57.00% | 43.00% | |
Accounts Receivable [Member] | Customer Two [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Concentration risk, percentage | 22.00% | 23.00% | |
Software [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Intangible assets finite useful lives | 5 years | ||
Customer List [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Intangible assets finite useful lives | 5 years | ||
Domain Names [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Intangible assets finite useful lives | 5 years | ||
Intellectual Property [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Intangible assets finite useful lives | 15 years | ||
Maximum [Member] | Customer and Content Creator Relationships [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Intangible assets finite useful lives | 6 years | ||
Minimum [Member] | Customer and Content Creator Relationships [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Intangible assets finite useful lives | 1 year 6 months | ||
Buildings and Improvements [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment estimated useful lives | 5 years | ||
Furniture and Equipment [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment estimated useful lives | 5 years | ||
Furniture and Equipment [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment estimated useful lives | 3 years | ||
Computer Equipment and Software [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment estimated useful lives | 5 years | ||
Computer Equipment and Software [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment estimated useful lives | 3 years |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | ||||
Subscription services | $ 8,346 | $ 9,115 | $ 24,948 | $ 26,665 |
Advertising | 7,710 | 540 | 13,453 | 1,814 |
Sponsorship and licensing | 2,087 | 44 | 3,466 | 301 |
Merchandise | 796 | 796 | ||
Ticket/Event | 184 | 1,526 | ||
Total Revenue | $ 19,123 | $ 9,699 | $ 44,189 | $ 28,780 |
Revenue (Details 1)
Revenue (Details 1) $ in Thousands | 9 Months Ended |
Dec. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Balance as of March 31, 2020 | $ 949 |
Revenue recognized that was included in the contract liability at beginning of period | (618) |
Increase due to cash received, excluding amounts recognized as revenue during the period | 1,081 |
Balance as of December 31, 2020 | $ 1,412 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Dec. 22, 2020 | Jul. 02, 2020 | Dec. 31, 2020 | |
Podcast One [Member] | |||
Asset Type | |||
Accounts receivable | $ 4,000 | ||
Podcast One [Member] | Content creator relationships [Member] | |||
Asset Type | |||
Weighted Average Amortization Period (Years) | 1 year 7 months 6 days | ||
Podcast One [Member] | Trade name [Member] | |||
Asset Type | |||
Weighted Average Amortization Period (Years) | 10 years | ||
CPS [Member] | Wholesale relationship [Member] | |||
Asset Type | |||
Weighted Average Amortization Period (Years) | 6 years | ||
CPS [Member] | Domain Names [Member] | |||
Asset Type | |||
Weighted Average Amortization Period (Years) | 10 years | ||
CPS [Member] | Customer List [Member] | |||
Asset Type | |||
Weighted Average Amortization Period (Years) | 5 years | ||
Fair Value [Member] | Podcast One [Member] | |||
Asset Type | |||
Cash and cash equivalents | $ 1,286 | ||
Accounts receivable | 3,951 | ||
Prepaid expense and other assets | 316 | ||
Property and equipment | 119 | ||
Content creator relationships | 772 | ||
Trade name | 1,010 | ||
Goodwill | 12,042 | ||
Accounts payable and accrued liabilities | (2,934) | ||
Deferred tax asset | 972 | ||
Allowance for deferred tax asset | (972) | ||
Note payable | (471) | ||
Net assets acquired | $ 16,091 | ||
Fair Value [Member] | CPS [Member] | |||
Asset Type | |||
Cash and cash equivalents | $ 1,132 | ||
Accounts receivable | 6,153 | ||
Inventories | 2,756 | ||
Prepaid expense and other assets | 29 | ||
Property and equipment | 585 | ||
Other assets | 53 | ||
Wholesale relationship | 1,000 | ||
Domain name | 300 | ||
Customer list | 172 | ||
Goodwill | 2,364 | ||
Right of use asset | 1,086 | ||
Lease liability | (1,086) | ||
Accounts payable and accrued liabilities | (5,067) | ||
Other liabilities | (467) | ||
Net assets acquired | $ 9,010 |
Business Combinations (Details
Business Combinations (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Combinations Details 1Abstract | ||||
Revenues | $ 27,205 | $ 29,463 | $ 66,032 | $ 80,775 |
Net loss | $ (7,859) | $ (10,586) | $ (38,970) | $ (32,824) |
Net loss per share – basic and diluted | $ (0.11) | $ (0.18) | $ (0.58) | $ (0.59) |
Business Combinations (Detail_2
Business Combinations (Details 2) - Fair Value Hedging [Member] - USD ($) $ in Thousands | Dec. 22, 2020 | Jul. 02, 2020 |
Podcast One [Member] | ||
Fair Value of Consideration Transferred: | ||
Common stock | $ 14,991 | |
Contingent consideration | 1,100 | |
Total | $ 16,091 | |
Custom Personalization Solutions Inc [Member] | ||
Fair Value of Consideration Transferred: | ||
Common stock | $ 6,391 | |
Additional paid-in capital – common stock to be issued | 1,365 | |
Contingent consideration | 1,254 | |
Total | $ 9,010 |
Business Combinations (Detail_3
Business Combinations (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Jul. 03, 2020 | Dec. 22, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 02, 2020 |
Business Combinations (Textual) | ||||||||
Podcastone for net consideration | $ 16,100 | |||||||
Common stock, shares | 5,363,636 | 5,566,885 | ||||||
Common stock fair value | $ 14,600 | $ 15,000 | ||||||
Podcastone's liabilities | $ 3,000 | |||||||
Common stock exceeds | $ 5 | |||||||
Aggregate payment | $ 3,000 | |||||||
Fair-valued | $ 1,100 | |||||||
Amount of revenue | $ 27,205 | $ 29,463 | 66,032 | $ 80,775 | ||||
Net income | (7,859) | (10,586) | (38,970) | (32,824) | ||||
Additional value of common stock | $ 400 | 439 | $ 14,991 | |||||
Additional shares of common stock | 203,249 | |||||||
Credit yield, percentage | 21.90% | |||||||
Lack of marketability, percentage | 24.00% | |||||||
Purchase price consideration | $ 2,000 | |||||||
Equity interests, percentage | 100.00% | |||||||
Contingent fair value | $ 1,100 | |||||||
Amortization of acquired intangible assets | 200 | 600 | ||||||
Transaction cost | $ 100 | $ 100 | ||||||
Description of business combination | The Company incurred $0.1 million in transaction costs associated with the CPS acquisition which were expensed and included in General and Administrative in the condensed consolidated statement of operations for the three and nine months ended December 31, 2020. The Company incurred less than $0.2 million in transaction costs associated with the PodcastOne acquisition which were expensed and included in General and Administrative in the condensed consolidated statement of operations for the nine months ended December 31, 2020. | |||||||
Common Stock [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Additional value of common stock | $ 5 | |||||||
Additional shares of common stock | 203,249 | 5,566,885 | ||||||
Common Stock [Member] | Subsequent Event [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Additional value of common stock | $ 400 | |||||||
Additional shares of common stock | 203,249 | |||||||
CPS [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Amount of revenue | $ 800 | $ 800 | ||||||
Net income | (100) | (100) | ||||||
Additional value of common stock | $ 1,400 | |||||||
Lack of marketability, percentage | 25.00% | |||||||
Equity interests, percentage | 100.00% | |||||||
Restricted values | $ 640 | |||||||
Restricted shares | 2,230,769 | |||||||
Description of business combination | The Company agreed to also issue up to approximately 437,000 additional shares of its restricted common stock, classified as contingent consideration, if (i) CPS reports GAAP revenue of $20.0 million and $1.0 million of EBITDA for its fiscal year ended December 31, 2020, and (ii) at the closing, CPS' target working capital is $4.0 million (including $0.8 million of cash), with a dollar-for-dollar reduction with respect to each such shortfall with no duplication. Based on their likelihood of achievement, these additional shares were valued at $1.3 million based on the Company's stock price on the date of acquisition, net of a 25% discount for lack of marketability. This amount is included in accounts payable and accrued liabilities on the December 31, 2020 Condensed Consolidated Balance Sheet. The Company further agreed to issue up to approximately 477,000 additional shares of its restricted common stock to the extent CPS' final working capital as determined by the parties exceeds $4.0 million. | |||||||
CPS [Member] | Fair Value Hedging [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Accounts receivable | $ 6,153 | |||||||
Gross amount due under contracts | 6,500 | |||||||
Expected to uncollectible | $ 300 | |||||||
CPS [Member] | Restricted Stock [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Additional shares of common stock | 437,000 | |||||||
PodcastOne [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Amount of revenue | 7,300 | 12,600 | ||||||
Net income | (600) | (100) | ||||||
Accounts receivable | 4,000 | 4,000 | ||||||
Gross amount due under contracts | 4,200 | 4,200 | ||||||
Expected to uncollectible | $ 200 | $ 200 | ||||||
PodcastOne [Member] | Fair Value Hedging [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Accounts receivable | $ 3,951 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 9,603 | $ 6,460 |
Less accumulated depreciation and amortization | (5,374) | (3,063) |
Total property and equipment, net | 4,229 | 3,397 |
Production equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 54 | 54 |
Computer, machinery, and software equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,165 | 707 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 55 | 41 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 255 | 41 |
Capitalized internally developed software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 8,074 | $ 5,617 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment (Textual) | ||||
Depreciation and amortization expense | $ 800 | $ 600 | $ 2,300 | $ 1,700 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2020USD ($) | |
Beginning Balance | $ 9,672 |
Ending Balance | 24,078 |
Goodwill [Member] | |
Beginning Balance | 9,672 |
Acquisitions (Note 4 – Business Combinations) | 14,406 |
Ending Balance | $ 24,078 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - Trade Names [Member] $ in Thousands | 9 Months Ended |
Dec. 31, 2020USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | |
Beginning Balance | $ 4,637 |
Acquisitions | |
Impairment losses | |
Ending Balance | $ 4,637 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 36,540 | $ 33,225 |
Accumulated Amortization | 18,782 | 14,664 |
Net Carrying Value | 17,758 | 18,561 |
Software [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 19,280 | 19,280 |
Accumulated Amortization | 11,569 | 8,674 |
Net Carrying Value | 7,711 | 10,606 |
Intellectual property (patents) [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 5,366 | 5,366 |
Accumulated Amortization | 1,073 | 805 |
Net Carrying Value | 4,293 | 4,561 |
Customer relationships [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 6,570 | 6,570 |
Accumulated Amortization | 5,521 | 5,128 |
Net Carrying Value | 1,049 | 1,442 |
Content creator relationships [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 772 | |
Accumulated Amortization | 252 | |
Net Carrying Value | 520 | |
Wholesale relationship [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 1,000 | |
Accumulated Amortization | ||
Net Carrying Value | 1,000 | |
Domain names [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 329 | 29 |
Accumulated Amortization | 18 | 13 |
Net Carrying Value | 311 | 16 |
Brand and trade names [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 2,571 | 1,500 |
Accumulated Amortization | 203 | 17 |
Net Carrying Value | 2,368 | 1,483 |
Customer List [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 172 | |
Accumulated Amortization | ||
Net Carrying Value | 172 | |
Non-compete agreement [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 250 | 250 |
Accumulated Amortization | 76 | 14 |
Net Carrying Value | 174 | 236 |
Fan Database [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 230 | 230 |
Accumulated Amortization | 70 | 13 |
Net Carrying Value | $ 160 | $ 217 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets (Details 3) $ in Thousands | Dec. 31, 2020USD ($) |
For Years Ending March 31, | |
2021 (remaining three months) | $ 1,452 |
2022 | 5,736 |
2023 | 4,211 |
2024 | 788 |
2025 | 788 |
Thereafter | 4,783 |
Total | $ 17,758 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets (Textual) | ||||
Amortization expense on its finite-lived intangible assets | $ 1,400 | $ 1,400 | $ 4,100 | $ 4,500 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 17,821 | $ 26,703 |
Accrued liabilities | 12,541 | 3,938 |
Lease liabilities, current | 340 | 82 |
Accounts payable and accrued liabilities, Total | $ 30,702 | $ 30,723 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Notes payable, Total | $ 2,996 | $ 331 |
Less: Current portion of Notes payable | (2,242) | (331) |
Notes Payable | 754 | |
Senior promissory note [Member] | ||
Notes payable, Total | 346 | 331 |
SBA loan [Member] | ||
Notes payable, Total | 153 | |
PPP loans [Member] | ||
Notes payable, Total | $ 2,497 |
Notes Payable (Details Textual)
Notes Payable (Details Textual) - USD ($) $ in Thousands | Jul. 03, 2020 | Apr. 13, 2020 | Sep. 15, 2020 | Jun. 17, 2020 | Dec. 31, 2020 | Jul. 02, 2020 | Mar. 31, 2020 | Mar. 31, 2015 | Dec. 31, 2014 |
Note Payable (Textual) | |||||||||
Bears interest | 1.00% | ||||||||
Debt, description | The Company issued two-year senior secured convertible notes in the aggregate principal amount of $15.0 (the "Senior Notes") with Harvest Small Cap Partners, L.P. and Harvest Small Cap Partners, Ltd. (collectively, the "Purchaser"). | In connection with the Senior Notes, the Company paid $0.2 million in certain fees, including direct costs of $0.2 million consisting of $90,000 for Purchaser's transaction costs which was subtracted from the $15.0 million disbursement, $75,000 to Purchaser's outside legal counsel as its transaction fees and $25,000 to the Company's outside legal counsel (collectively, the "Issuance Costs"). | |||||||
Balance is payable years | 2 years | ||||||||
Acquired cost | $ 500 | ||||||||
Loan matures | Apr. 26, 2020 | ||||||||
Convertible Notes Payable [Member] | |||||||||
Note Payable (Textual) | |||||||||
Aggregate principal amount | $ 300 | $ 300 | $ 200 | ||||||
Bears interest | 6.00% | ||||||||
Accrued interest | $ 100 | $ 100 | |||||||
Debt, description | The payables arose in connection with professional services rendered by attorneys for the Company prior to and through December 31, 2014, and the Note had an original maturity date of December 31, 2015, which was extended to September 30, 2016 or such later date as the lender may agree to in writing. | ||||||||
Proceeds from a loan | $ 200 | $ 200 | |||||||
Interest at a rate | 1.00% | 3.75% | |||||||
Balance is payable years | 30 years | ||||||||
Loan matures | Apr. 13, 2022 |
Senior Secured Convertible De_3
Senior Secured Convertible Debentures (Details) - Senior Secured Convertible Debentures [Member] - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Senior Secured Convertible Debentures | $ 10,118 | |
Accrued interest | 101 | |
Fair Value of Embedded Derivatives | 524 | |
Less: Discount | (1,518) | |
Net | 9,225 | |
Less: Senior Secured Convertible Debentures, current | (2,720) | |
Senior Secured Convertible Debentures, long-term | $ 6,505 |
Senior Secured Convertible De_4
Senior Secured Convertible Debentures (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Feb. 11, 2019 | Sep. 15, 2020 | Jul. 25, 2019 | Jun. 29, 2018 | Jun. 20, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Senior Secured Convertible Debentures (Textual) | |||||||||
Conversion price | $ 4.50 | $ 4.50 | |||||||
Debt, description | The Company issued two-year senior secured convertible notes in the aggregate principal amount of $15.0 (the "Senior Notes") with Harvest Small Cap Partners, L.P. and Harvest Small Cap Partners, Ltd. (collectively, the "Purchaser"). | In connection with the Senior Notes, the Company paid $0.2 million in certain fees, including direct costs of $0.2 million consisting of $90,000 for Purchaser's transaction costs which was subtracted from the $15.0 million disbursement, $75,000 to Purchaser's outside legal counsel as its transaction fees and $25,000 to the Company's outside legal counsel (collectively, the "Issuance Costs"). | |||||||
Selling shares of common stock | 5,000,000 | ||||||||
Gross proceeds | $ 10,500 | ||||||||
Proceeds from Issuance Initial Public Offering | $ 9,395 | $ 9,523 | |||||||
Percentage of repayment penalty | 8.00% | ||||||||
Debt interest expense | $ 700 | ||||||||
Loss on extinguishment of debt | $ 1,500 | $ (1,488) | |||||||
Securities Purchase Agreement [Member] | |||||||||
Senior Secured Convertible Debentures (Textual) | |||||||||
Debt conversion, description | (i) recorded issuance costs of $1.1 million against the liability and (ii) used $3.5 million of the proceeds to pay off 100% of the Company’s revolving line of credit. Issuance costs are being amortized to interest expense over the term of the June 2018 Debentures. | ||||||||
Accrued interest percentage | 12.75% | ||||||||
Debenture mature date | Jun. 29, 2021 | ||||||||
Conversion price | $ 10 | ||||||||
Debt, description | The sale of the Senior Notes was completed pursuant to the Securities Purchase Agreement, dated as of July 2, 2020, as amended on July 30, 2020 (as amended, the "Senior SPA"), and (ii) issued to the Purchaser 800,000 shares (the "Shares") of the Company's common stock valued at $2.1 million. | ||||||||
Monthly allowance, description | The Company amended the SPA with the Purchasers to obtain additional financing, increasing the cash purchase price of the Debentures by $3.0 million, $3.2 million in aggregate principal amount, of its 12.75% Original Issue Discount Senior Secured Convertible Debentures due June 29, 2021 (the “February 2019 Debentures” and together with the June 2018 Debentures, the “Debentures”). | An aggregate cash purchase price of $10.0 million, $10.64 million in aggregate principal amount, of its 12.75% Original Issue Discount Senior Secured Convertible Debentures due June 29, 2021 (the “June 2018 Debentures”). |
Unsecured Convertible Notes (De
Unsecured Convertible Notes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | |||
Unsecured Convertible Notes - Related Party | $ 2,242 | $ 331 | |
7.5% Unsecured Convertible Note [Member] | |||
Debt Instrument [Line Items] | |||
Unsecured Convertible Notes - Related Party | [1] | 4,322 | 4,120 |
7.5% Unsecured Convertible Notes [Member] | |||
Debt Instrument [Line Items] | |||
Unsecured Convertible Notes - Related Party | [2] | 1,086 | 1,035 |
Unsecured Convertible Notes - Related Party [Member] | |||
Debt Instrument [Line Items] | |||
Less: Discount | (15) | (41) | |
Net | 5,393 | 5,114 | |
Unsecured Convertible Promissory Note [Member] | |||
Debt Instrument [Line Items] | |||
Unsecured Convertible Promissory Note | 2,000 | 2,000 | |
Accrued Interest | 144 | 24 | |
Less: Discount | (287) | (485) | |
Fair Value of Embedded Derivatives | 30 | 141 | |
Net | 1,887 | 1,680 | |
Unsecured Convertible Notes, Net | 7,280 | 6,794 | |
Less: Unsecured Convertible Notes, Current | |||
Unsecured Convertible Notes, Net, Long-term | $ 7,280 | $ 6,794 | |
[1] | The first Trinad Note was issued on February 21, 2017, to convert aggregate principal and interest of $3.6 million under the first senior promissory note and second senior promissory note with Trinad Capital previously issued on December 31, 2014 and April 8, 2015, respectively. The first Trinad Note was due on March 31, 2018 and was extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). At June 30, 2020, the balance due of $4.2 million, which included $0.6 million of accrued interest, was outstanding under the first Trinad Note. At March 31, 2020, the balance due of $4.1 million, which included $0.5 million of accrued interest, was outstanding under the first Trinad Note. | ||
[2] | Between October 27, 2017 and December 18, 2017, the Company issued six unsecured convertible notes payable to Trinad Capital for aggregate total principal amount of $0.9 million. The notes were due on various dates through December 31, 2018 and were extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). For the three months ended June 30, 2020, the Company amortized less than $0.1 million of discount to interest expense, and the unamortized discount as of June 30, 2020 was less than $0.1 million. As of June 30, 2020, $0.1 million of accrued interest was added to the principal balance. |
Unsecured Convertible Notes (_2
Unsecured Convertible Notes (Details Textual) - USD ($) $ in Thousands | Jan. 11, 2021 | Feb. 05, 2020 | Mar. 30, 2018 | Dec. 31, 2020 | Mar. 31, 2020 |
Unsecured Convertible Notes (Textual) | |||||
Unsecured convertible notes payable outstanding, description | As of December 31,2020 and March 31, 2020, the Company had outstanding 7.5% (effective as of April 1, 2018, previously 6%) unsecured convertible notes payable (the "Trinad Notes") issued to Trinad Capital Master Fund Ltd. ("Trinad Capital"), a fund controlled by Mr. Ellin, the Company's Chief Executive Officer, Chairman, director and principal stockholder, as follows: (A) The first Trinad Note was issued on February 21, 2017, to convert aggregate principal and interest of $3.6 million under the first senior promissory note and second senior promissory note with Trinad Capital previously issued on December 31, 2014 and April 8, 2015, respectively. The first Trinad Note was due on March 31, 2018 and was extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). At December 31, 2020, the balance due of $4.3 million, which included $0.8 million of accrued interest, was outstanding under the first Trinad Note. At March 31, 2020, the balance due of $4.1 million, which included $0.5 million of accrued interest, was outstanding under the first Trinad Note. (B) Between October 27, 2017 and December 18, 2017, the Company issued six unsecured convertible notes payable to Trinad Capital for aggregate total principal amount of $0.9 million. The notes were due on various dates through December 31, 2018 and were extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). For the nine months ended December 31, 2020, the Company amortized less than $0.1 million of discount to interest expense, and the unamortized discount as of December 31, 2020 was less than $0.1 million. As of December 31, 2020, $0.3 million of accrued interest was added to the principal balance. | As of December 31,2020 and March 31, 2020, the Company had outstanding 7.5% (effective as of April 1, 2018, previously 6%) unsecured convertible notes payable (the "Trinad Notes") issued to Trinad Capital Master Fund Ltd. ("Trinad Capital"), a fund controlled by Mr. Ellin, the Company's Chief Executive Officer, Chairman, director and principal stockholder, as follows: (A) The first Trinad Note was issued on February 21, 2017, to convert aggregate principal and interest of $3.6 million under the first senior promissory note and second senior promissory note with Trinad Capital previously issued on December 31, 2014 and April 8, 2015, respectively. The first Trinad Note was due on March 31, 2018 and was extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). At December 31, 2020, the balance due of $4.3 million, which included $0.8 million of accrued interest, was outstanding under the first Trinad Note. At March 31, 2020, the balance due of $4.1 million, which included $0.5 million of accrued interest, was outstanding under the first Trinad Note. (B) Between October 27, 2017 and December 18, 2017, the Company issued six unsecured convertible notes payable to Trinad Capital for aggregate total principal amount of $0.9 million. The notes were due on various dates through December 31, 2018 and were extended to May 31, 2019 and further extended to May 31, 2021 (as discussed below). For the nine months ended December 31, 2020, the Company amortized less than $0.1 million of discount to interest expense, and the unamortized discount as of December 31, 2020 was less than $0.1 million. As of December 31, 2020, $0.3 million of accrued interest was added to the principal balance. | |||
Issuance of common stock | 2,679,459 | ||||
Subsequent Event [Member] | |||||
Unsecured Convertible Notes (Textual) | |||||
Interest rate payable, percentage | 8.50% | ||||
Issuance of common stock | 280,000 | ||||
Unsecured Convertible Promissory Note [Member] | |||||
Unsecured Convertible Notes (Textual) | |||||
Interest rate payable, description | The Company performed a fair value analysis using a binomial lattice calculation on the event of default derivative instrument using the following assumptions. Coupon Rate: 8.0%, Term: 2.0 years, Volatility: 100.0%, Market Rate: 27.7% and Probability of Default: 33.1%. The Company determined that at issuance, the fair value of the derivative instruments were $0.1 million. The Company has recorded the fair value of the derivatives and corresponding debt discount within the unsecured convertible notes payable on the accompanying condensed consolidated balance sheet. | The Company performed a fair value analysis using a binomial lattice calculation on the derivative instruments using the following assumptions: Coupon Rate: 8.0%, Term: 1.1 years, Volatility: 102.7%, Market Rate: 31.2% and Probability of Default: 36.45%. The Company determined that as of the assessment date, the fair value is less than $0.1 million. The change in fair value of $0.1 million is recorded in other income (expense) on the accompanying condensed consolidated statements of operations for the nine months ended December 31, 2020. | |||
Unsecured convertible promissory note, description | React Presents issued a two-year $2.0 million Convertible Promissory Note (the "Unsecured Note"), bearing annual interest at 8%. The purpose of the Unsecured Note was to fund the acquisition of React Presents. All unpaid and outstanding principal and any unpaid and accrued interest is due on February 5, 2022. The Unsecured Note is convertible by the holder at any time prior to maturity in part or in whole with the unpaid interest and principal convertible at a conversion price equal to $4.50 per share of the Company's common stock, subject to certain protective adjustments. The Unsecured Note may be prepaid in whole or in part in cash without penalty at any time prior to maturity. Any such prepayment will be applied to accrued interest first and then the principal. | ||||
Unsecured Debt [Member] | |||||
Unsecured Convertible Notes (Textual) | |||||
Total principal maturities of long-term borrowings for the year ended March 31, 2021 | $ 900 | ||||
Total principal maturities of long-term borrowings for the year ended March 31, 2022 | 3,700 | ||||
Total principal maturities of long-term borrowings for the year ended March 31, 2023 | 19,600 | ||||
Obligations to repay the PPP and SBA loans | $ 100 | ||||
Convertible Notes Payable B [Member] | |||||
Unsecured Convertible Notes (Textual) | |||||
Interest rate payable, description | The Company entered into an Amendment of Notes Agreement (the "Amendment Agreement") with Trinad Capital pursuant to which the maturity date of all of the Company's 6% unsecured convertible notes was extended to May 31, 2019. In consideration of the maturity date extension, the interest rate payable under the notes was increased from 6.0% to 7.5% beginning on April 1, 2018, and the aggregate amount of accrued interest due under all of the Trinad Notes as of March 31, 2018 of $0.3 million was paid. |
Senior Secured Convertible No_3
Senior Secured Convertible Notes (Details) - Senior Secured Convertible Notes [Member] - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Senior Secured Convertible Notes | $ 15,000 | |
Accrued interest | 319 | |
Fair value of embedded derivatives | 251 | |
Less: Discount | (2,421) | |
Net | 13,119 | |
Less: Accrued interest | (319) | |
Senior Secured Convertible Notes, long-term | $ 12,830 |
Senior Secured Convertible No_4
Senior Secured Convertible Notes (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | |
Sep. 15, 2020 | Dec. 31, 2020 | Jun. 29, 2018 | |
Senior Secured Convertible Notes (Textual) | |||
Debt, description | The Company issued two-year senior secured convertible notes in the aggregate principal amount of $15.0 (the "Senior Notes") with Harvest Small Cap Partners, L.P. and Harvest Small Cap Partners, Ltd. (collectively, the "Purchaser"). | In connection with the Senior Notes, the Company paid $0.2 million in certain fees, including direct costs of $0.2 million consisting of $90,000 for Purchaser's transaction costs which was subtracted from the $15.0 million disbursement, $75,000 to Purchaser's outside legal counsel as its transaction fees and $25,000 to the Company's outside legal counsel (collectively, the "Issuance Costs"). | |
Certain fees including direct costs | $ 200 | ||
Legal costs | $ 200 | ||
Accrue interest percentage | 8.50% | ||
Conversion price of per share | $ 4.50 | ||
Aggregate cash deposits | $ 10,000 | ||
Securities Purchase Agreement [Member] | |||
Senior Secured Convertible Notes (Textual) | |||
Debt, description | The sale of the Senior Notes was completed pursuant to the Securities Purchase Agreement, dated as of July 2, 2020, as amended on July 30, 2020 (as amended, the "Senior SPA"), and (ii) issued to the Purchaser 800,000 shares (the "Shares") of the Company's common stock valued at $2.1 million. | ||
Conversion price of per share | $ 10 | ||
Registration Rights Agreement [Member] | |||
Senior Secured Convertible Notes (Textual) | |||
Debt, description | The Company is required to file with the SEC a resale Registration Statement on Form S-3 (or another suitable form) as soon as reasonably practical after the Closing Date, but in any event within 30 days after the Closing Date (the “Filing Date”), and have such Registration Statement be declared effective by the SEC on the date (the “Effectiveness Date”) which is the earlier of (i)(x) in the event that the initial Registration Statement is not subject to a full review by the SEC, 45 calendar days after the Filing Date, or (y) in the event that such initial Registration Statement is subject to a full review by the SEC, 90 calendar days after the Filing Date, and (ii) the fifth Business Day after the date the Company is notified by the SEC that such initial Registration Statement will not be reviewed or will not be subject to further review. Upon the occurrence of certain events (each an “Event”), including, but not limited to, that the initial Registration Statement is not filed prior to the Filing Date or is not declared effective by the SEC prior to the Effectiveness Date, the Company will be required to pay liquidated damages in cash to each of the Assignees in the amount of 2.0% of the purchase price of the Notes paid by such Assignee upon the date of the Event and then monthly thereafter until the Event is cured. In no event shall the aggregate amount of liquidated damages payable to each of the Assignees exceed in the aggregate 15% of the purchase price of the Notes paid by such Assignee. |
Leases (Details)
Leases (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2020USD ($) | |
Leases [Abstract] | |
Fixed rent cost | $ 123 |
Short term lease cost | 341 |
Total operating lease cost | $ 464 |
Leases (Details 1)
Leases (Details 1) - Leases [Member] $ in Thousands | Dec. 31, 2020USD ($) |
Operating lease right-of-use assets | $ 1,154 |
Total operating lease right-of-use assets | 1,154 |
Operating lease liability, current | 341 |
Operating lease liability, noncurrent | 813 |
Total operating lease liabilities | $ 1,154 |
Leases (Details 2)
Leases (Details 2) $ in Thousands | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
2021 (remaining three months) | $ 127 |
2022 | 582 |
2023 | 358 |
2024 | 320 |
2025 | 93 |
Total lease payments | 1,480 |
Less: imputed interest | (326) |
Present value of operating lease liabilities | $ 1,154 |
Leases (Details Textual)
Leases (Details Textual) $ in Thousands | May 01, 2019USD ($) | Dec. 31, 2020USD ($)ft² | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($)ft² | Dec. 31, 2019USD ($) |
Leases (Textual) | |||||
Lease agreement expires date | Mar. 31, 2022 | ||||
Rental expense for operating leases | $ 200 | $ 100 | |||
Lease commitments | $ 1,400 | ||||
Borrowing rate | 8.50% | 8.50% | |||
Operating lease rental expenses, description | The Company compensates the landlord in cash at the rate of approximately $40 thousand per month for months that the Company occupies the space, provided, that the Company and the temporary trustee of landlord's assets agreed that such payments shall be $22.4 thousand per month for the months of December 2019 and January 2020. The Company or the third party has the right to terminate the arrangement at any time without prior notice. Rent expense for the month to month arrangements totaled less than $0.1 million for the three and nine month periods ended December 31, 2020 and $0.1 million and $0.2 million for the three and nine month periods ended December 31, 2019, respectively. | ||||
Office space | ft² | 5,200 | 5,200 | |||
Monthly rent | $ 20 | $ 38 | $ 14 | ||
Operating lease expiring term | 1 year | 1 year | |||
Leases, description | On December 22, 2020, the Company acquired CPS which included the assumption of an operating lease for a 55,120 square foot light manufacturing facility located in Addison Illinois, expiring June 30, 2024. | ||||
Description of office space rental arrangements | Beginning on August 1, 2017, the Company was given the right to occupy approximately 5,200 square feet of office space in West Hollywood, California. The space was provided to the Company by an unrelated third party and is fully furnished. | ||||
Slacker leases [Member] | |||||
Leases (Textual) | |||||
Lease agreement expires date | Dec. 31, 2020 | ||||
Rental expense for operating leases | $ 100 | $ 100 | $ 300 | $ 300 | |
Short term leases, description | Operating lease which expired on December 31, 2020 and was renewed through December 31, 2021. | ||||
React Presents [Member] | |||||
Leases (Textual) | |||||
Lease agreement expires date | Oct. 9, 2020 | ||||
Rental expense for operating leases | 100 | $ 100 | |||
PodcastOne Leases [Member] | |||||
Leases (Textual) | |||||
Rental expense for operating leases | $ 100 | $ 100 |
Long-Term Liabilities (Details)
Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Debt Disclosure [Abstract] | ||
Due to Music Partner | $ 5,422 | |
Fair value of contingent consideration liability | 1,061 | |
Other long-term liabilities | $ 6,483 | $ 45 |
Long-Term Liabilities (Details
Long-Term Liabilities (Details Textual) $ in Thousands | 1 Months Ended |
Oct. 30, 2020USD ($) | |
Long-Term Liabilities (Textual) | |
Other long-term liabilities | $ 5,900 |
Payment terms | Extended over periods between 12 and 24 months. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | May 06, 2020 | Feb. 22, 2018 | Feb. 08, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | Apr. 10, 2018 |
Commitments and Contingencies (Textual) | |||||||
Business acquisition, description | The Company incurred $0.1 million in transaction costs associated with the CPS acquisition which were expensed and included in General and Administrative in the condensed consolidated statement of operations for the three and nine months ended December 31, 2020. The Company incurred less than $0.2 million in transaction costs associated with the PodcastOne acquisition which were expensed and included in General and Administrative in the condensed consolidated statement of operations for the nine months ended December 31, 2020. | ||||||
Plaintiffs seeking damages | $ 200 | ||||||
Contractual obligation for the fiscal year ended March 31, 2021 | $ 300 | ||||||
Contractual obligation for the fiscal year March 31, 2022 | 900 | ||||||
Contractual obligation for the fiscal year March 31, 2023 | $ 100 | ||||||
Description of settlement agreement | Pursuant to the terms of the settlement agreement, as a result of the note due to Manatt described above having not been paid as of June 30, 2019 and is currently being past due, in August 2019, Manatt obtained a judgement in the Court of Chancery of the State of Delaware against the Company for the amount of $0.3 million, which represents principal and all accrued and unpaid interest on the note through July 5, 2019. The judgement amount will continue to accrue interest at the 6% applicable rate from July 6, 2019 through the date of the judgment’s satisfaction in full. | ||||||
Sales tax accrual | $ 400 | ||||||
Joseph Schnaier [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Plaintiffs seeking damages | 10,000 | ||||||
Ownership percentage | 90.00% | ||||||
Third Parties [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Legal settlement expenses | $ 0 | $ 0 | |||||
Xcellence, Inc. [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Total damages claim amount | $ 600 | ||||||
Acquisition Agreements [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Business acquisition, description | The Company has licenses, production and/or distribution agreements to make guaranteed payments as follows: $2.1 million for the fiscal year ending March 31, 2021, $6.8 million for the fiscal year ending March 31, 2022, $5.9 million for the fiscal year ending March 31, 2023 and $4.1 million for the fiscal year ending March 31, 2024. These agreements also provide for a revenue share that ranges between 35% and 50% of net revenues. In addition, there are other licenses, production and/or distribution agreements that provide for a revenue share of 50% on net revenues; however, without a requirement to make future minimum guaranteed payments irrespective to the execution and results of the planned events. | ||||||
Employment Agreements [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Total damages claim amount | $ 600 | ||||||
Prepaid minimum guarantees | $ 1,300 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) | 9 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plan (Textual) | |
Employee benefit plan, description | The Company may make discretionary matching contributions to the 401(k) Plan on behalf of its employees up to a maximum of 100% of the participant's elective deferral up to a maximum of 5% of the employees' annual compensation. The Company made matching contributions of less than $0.1 million and $0.1 million to the 401(k) Plan for the three and nine month periods ended December 31, 2020, respectively, and less than $0.1 million for the three and nine month periods ended December 31, 2019, respectively. |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Warrant [Member] | 9 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Option Indexed to Issuer's Equity [Line Items] | |
Number of Warrants, Balance outstanding | shares | 167,363 |
Number of Warrants, Granted | shares | |
Number of Warrants, Exercised | shares | |
Number of Warrants,Forfeited/expired | shares | |
Number of Warrants, Balance outstanding | shares | 167,363 |
Number of Warrants, Exercisable | shares | 167,363 |
Weighted Average Exercise Price, Balance outstanding | $ / shares | $ 4.01 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Forfeited/expired | $ / shares | |
Weighted Average Exercise Price, Balance outstanding | $ / shares | 4.01 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.01 |
Weighted Average Remaining Contractual Life (in Years), Balance outstanding | 11 months 8 days |
Weighted Average Remaining Contractual Life (in Years), Balance outstanding | 2 months 8 days |
Weighted Average Remaining Contractual Life (in Years), Exercisable | 2 months 8 days |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 17, 2020 | Sep. 15, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Jul. 30, 2020 | Jun. 30, 2020 | Jul. 25, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders' Equity (Textual) | |||||||||||
Sale of common stock shares | 5,000,000 | ||||||||||
Common stock price per share | $ 2.10 | ||||||||||
Common stock gross proceeds | $ 10,500 | ||||||||||
Common stock net proceeds | 9,500 | ||||||||||
Common stock offering costs | $ 1,000 | ||||||||||
Debt, description | The Company issued two-year senior secured convertible notes in the aggregate principal amount of $15.0 (the "Senior Notes") with Harvest Small Cap Partners, L.P. and Harvest Small Cap Partners, Ltd. (collectively, the "Purchaser"). | In connection with the Senior Notes, the Company paid $0.2 million in certain fees, including direct costs of $0.2 million consisting of $90,000 for Purchaser's transaction costs which was subtracted from the $15.0 million disbursement, $75,000 to Purchaser's outside legal counsel as its transaction fees and $25,000 to the Company's outside legal counsel (collectively, the "Issuance Costs"). | |||||||||
2016 Equity Incentive Plan [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Number of shares issuance increase under the plan | 5,000,000 | ||||||||||
Warrant [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Intrinsic value of warrants outstanding and exercisable | $ 0 | $ 0 | |||||||||
Occupancy Agreement [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Debt, description | Pursuant to the agreement, the Company issued to MBRG Investors, LLC as the designee of the landlord 95,436 shares of the Company's shares of common stock, at a price per share of $4.14, in full satisfaction of the Company's payment obligation of approximately $0.4 million to the landlord. | ||||||||||
Consultants [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Common restricted stock issued for services, value | $ 11,500 | $ 3,500 | |||||||||
Common restricted stock issued for services, shares | 3,780,659 | 956,575 | |||||||||
Expense related to restricted stock issuances | 1,000 | $ 200 | $ 11,500 | $ 600 | |||||||
Unrecognized compensation cost | 200 | 200 | |||||||||
Accounts payable and accrued liabilities | 1,000 | $ 600 | 1,000 | $ 600 | |||||||
Music licensor [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Accounts payable and accrued liabilities | $ 3,100 | $ 3,100 | |||||||||
Guarantee payments and issued shares of common stock | 264,000 | ||||||||||
Debt, description | The Company issued to a certain music licensor 2,415,459 shares (the "Shares") of its common stock at a price of $4.14 per share, to satisfy the Company's payment obligation in the amount of $10.0 million owed to such music licensor (the "Threshold Amount"). | ||||||||||
Investor [Member] | |||||||||||
Stockholders' Equity (Textual) | |||||||||||
Debt, description | The Company issued directly to a certain institutional investor and another investor a total of 1,820,000 shares of the Company's common stock for net cash consideration of approximately $7.1 million at a price per share of $4.14. |
Business Segment and Geograph_2
Business Segment and Geographic Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Segment and Geographic Reporting (Textual) | ||||
Total revenues | $ 19,123 | $ 9,699 | $ 44,189 | $ 28,780 |
One External Customer [Member] | Sales Revenue, Net [Member] | ||||
Business Segment and Geographic Reporting (Textual) | ||||
Concentration risk, percentage | 10.00% | |||
OEM [Member] | ||||
Business Segment and Geographic Reporting (Textual) | ||||
Total revenues | $ 5,700 | $ 6,000 | $ 17,000 | $ 16,600 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Level 1 [Member] | ||
Liabilities: | ||
Contingent consideration liability from PodcastOne acquisition | ||
Initial measurement of contingent consideration from CPS acquisition | ||
Bifurcated embedded derivative on senior secured convertible notes payable | ||
Bifurcated embedded derivative on unsecured convertible note payable | ||
Total | ||
Level 2 [Member] | ||
Liabilities: | ||
Contingent consideration liability from PodcastOne acquisition | ||
Initial measurement of contingent consideration from CPS acquisition | ||
Bifurcated embedded derivative on senior secured convertible notes payable | ||
Bifurcated embedded derivative on unsecured convertible note payable | ||
Total | ||
Level 3 [Member] | ||
Liabilities: | ||
Contingent consideration liability from PodcastOne acquisition | 1,061 | |
Initial measurement of contingent consideration from CPS acquisition | 1,254 | |
Bifurcated embedded derivative on senior secured convertible notes payable | 251 | 524 |
Bifurcated embedded derivative on unsecured convertible note payable | 30 | 141 |
Total | 2,596 | 665 |
Fair Value [Member] | ||
Liabilities: | ||
Contingent consideration liability from PodcastOne acquisition | 1,061 | |
Initial measurement of contingent consideration from CPS acquisition | 1,254 | |
Bifurcated embedded derivative on senior secured convertible notes payable | 251 | 524 |
Bifurcated embedded derivative on unsecured convertible note payable | 30 | 141 |
Total | $ 2,596 | $ 665 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 1) - Fair Value [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Balance beginning | $ 665 | $ 586 |
Initial measurement of contingent consideration from PodcastOne acquisition on July 1, 2020 | 1,100 | |
Initial measurement of contingent consideration from CPS acquisition on December 22, 2020 | 1,254 | |
Initial measurement of embedded derivatives on senior secured convertible notes issued on September 15, 2020 | 671 | |
Adjustments reported in loss on extinguishment of debt | (228) | |
Fair value adjustments reported in earnings | (866) | 189 |
Balance ending | $ 2,596 | $ 397 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details 2) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Bifurcated embedded derivative on senior secured convertible debentures Market yield | 27.40% | |
Bifurcated embedded derivative on senior secured convertible notes payable Market yield | 19.10% | |
Bifurcated embedded derivative on unsecured convertible note payable Market yield | 31.20% | 43.90% |
Contingent consideration Market yield | 19.10% |
Fair Value Measurements (Deta_4
Fair Value Measurements (Details 3) - USD ($) $ in Thousands | Dec. 31, 2020 | Mar. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 17,353 | $ 5,702 |
Restricted cash | 235 | 6,735 |
Level 1 [Member] | ||
Assets: | ||
Cash and cash equivalents | 17,353 | 5,702 |
Restricted cash | 235 | 6,735 |
Liabilities: | ||
Notes payable | ||
Senior secured convertible notes payable, net | ||
Unsecured convertible notes payable related party, net | ||
Unsecured convertible notes, payable net | ||
Level 2 [Member] | ||
Assets: | ||
Cash and cash equivalents | ||
Restricted cash | ||
Liabilities: | ||
Notes payable | ||
Senior secured convertible notes payable, net | ||
Unsecured convertible notes payable related party, net | ||
Unsecured convertible notes, payable net | ||
Level 3 [Member] | ||
Assets: | ||
Cash and cash equivalents | ||
Restricted cash | ||
Liabilities: | ||
Notes payable | 2,996 | 331 |
Senior secured convertible notes payable, net | 17,370 | 9,254 |
Unsecured convertible notes payable related party, net | 6,485 | 4,451 |
Unsecured convertible notes, payable net | 1,996 | 1,338 |
Carrying Value [Member] | ||
Assets: | ||
Cash and cash equivalents | 17,353 | 5,702 |
Restricted cash | 235 | 6,735 |
Liabilities: | ||
Notes payable | 2,996 | 331 |
Senior secured convertible notes payable, net | 12,830 | 8,701 |
Unsecured convertible notes payable related party, net | 5,393 | 5,114 |
Unsecured convertible notes, payable net | $ 1,887 | $ 1,539 |
Fair Value Measurements (Deta_5
Fair Value Measurements (Details 4) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Market yield | 27.40% | |
Senior secured convertible notes payable, net (binomial lattice model): | ||
Market yield | 19.10% | |
Unsecured convertible notes payable related party, net (yield model with a Black-Scholes-Merton option pricing model): | ||
Market yield | 31.20% | 41.60% |
Unsecured convertible note payable (yield model with a Black-Scholes-Merton option pricing model): | ||
Market yield | 31.20% | 43.90% |
Fair Value Measurements (Deta_6
Fair Value Measurements (Details Textual) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Fair Value Measurements (Textual) | ||
Fair value of other income (expense) | $ 300 | $ 400 |
Fair value of derivative instrument on convertible debentures | $ 300 | $ 300 |
Subsequent Events (Details)
Subsequent Events (Details) - shares | Jan. 11, 2021 | Dec. 31, 2020 |
Subsequent Events [Textual] | ||
Issuance of common stock | 2,679,459 | |
Subsequent Event [Member] | ||
Subsequent Events [Textual] | ||
Issuance of common stock | 280,000 | |
Interest rate payable, percentage | 8.50% |