LiveOne (LVO) risk factors, FY2025 10-K

Other

1. 01There is substantial doubt about our ability to continue as a going concern
2. 02Our business is partially dependent on our ability to secure music streaming rights from Content Providers and to stream their live music and music-related video content on our platform, and we may not be able to secure such content on commercially reasonable terms or at all
3. 03We face intense competition from competitors, and we may not be able to increase our revenues, which could adversely impact our business, financial condition and results of operations

Risks Related to Our Company

1. 04We heavily depend on relationships with our Content Providers and other Industry Stakeholders and adverse changes in these relationships, could adversely affect our business, financial condition and results of operations
2. 05Our debt agreements contain restrictive and financial covenants that may limit our operating flexibility and our substantial indebtedness may limit cash flow available to invest in the ongoing needs of our business
3. 06If we do not comply with the provisions of our senior Debentures, the holders of the Debentures may accelerate our obligations to them and require us to repay all outstanding amounts owed thereunder
4. 47We may not have the ability to repay the amounts then due under our Debentures at maturity
5. 48If we do not comply with the provisions of the Debentures financing agreements, the Capchase Loan and/or the SX Settlement, such parties may terminate their obligations to us, accelerate our debt and/or require us to repay all outstanding amounts owed thereunder
6. 49Our debt agreements contain restrictive and financial covenants that may limit our operating flexibility, and our substantial indebtedness may limit cash flow available to invest in the ongoing needs of our business
7. 50placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options
8. 51We will continue to incur significant increased costs as a result of operating as a public company
9. 52We depend upon third-party licenses for sound recordings and musical compositions and other content and an adverse change to, loss of, or claim that we do not hold any necessary licenses may materially adversely affect our business, operating results and financial condition
10. 53Rising inflation may adversely affect us by increasing costs of labor, equipment and other costs beyond what we can recover through price increases
11. 54We may incur substantially more debt or take other actions that would intensify the risks discussed above
12. 55We may not have sufficient cash flow from our business operations to make payments on our indebtedness
13. 56We may not have the ability to pay the cash dividends or other amounts then due to the holders of our Series A Preferred Stock
14. 57Our quarterly operating results may be volatile and are difficult to predict in the future, and our stock price may decline if we fail to meet the expectations of securities analysts or investors
15. 58an increase in costs associated with protecting our intellectual property, defending against third-party intellectual property infringement allegations or procuring rights to third-party intellectual property
16. 59We may not be able to attract qualified personnel
17. 60We engage certain consultants to work for us. If the consultants that we utilize are characterized as employees and if we are deemed to be delinquent in our payroll taxes or incur other employment-related liabilities with respect to those consultants, we and our management team could incur significant liabilities
18. 61We are subject to cybersecurity risks to our systems, infrastructure, and technology, and data processed by us or third-party vendors
19. 62Costs associated with, and our ability to obtain adequate insurance, could adversely affect our financial condition and profitability
20. 63Our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment

Risks Related to the Ownership of Our Common Stock

1. 07The market price of our common stock may be highly volatile
2. 08We cannot guarantee that our stock repurchase program will be consummated, fully or all, or that it will enhance long-term shareholder value. Stock repurchases could also increase the volatility of the trading price of our stock and could diminish our cash reserves
3. 09We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock
4. 104Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plan and any acquisition or financing agreement, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall
5. 105Conversion of our Series A Preferred Stock and/or Debentures will dilute the ownership interest of our existing stockholders, including holders who had previously converted their convertible notes, and sales of any such converted shares may otherwise depress the price of our common stock
6. 106other events or factors, including those resulting from impact of war or incidents of terrorism, other epidemics, or responses to these events
7. 107Our Chairman and Chief Executive Officer and stockholders affiliated with him own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval
8. 108Sales of a substantial number of shares of our common stock in the public market by certain of our stockholders could cause our stock price to fall
9. 109FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock
10. 110If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline
11. 111If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price could decline
12. 112Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
13. 113These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management
14. 114This provision could have the effect of delaying or preventing a change of control, whether or not it is desired by or beneficial to our stockholders

Risks Related to Our Business and Industry

1. 10We rely on our largest OEM customer for a substantial percentage of our revenue. The loss of our largest OEM customer or the significant reduction of business or growth of business from such customer could significantly adversely affect our business, financial condition and results of operations
2. 11Our business is dependent, and we believe that it will continue to depend, on our customer relationship with Tesla, which accounted for 45% of our consolidated revenue for the year ended March 31, 2025 and 51% of our consolidated revenue for the year ended March 31, 2024
3. 12We have incurred significant operating and net losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future
4. 13We may require additional capital, including to fund our current debt obligations and to fund potential acquisitions and capital expenditures, which may not be available on terms acceptable to us or at all and which depends on many factors beyond our control
5. 14There is substantial doubt about our ability to continue as a going concern
6. 15Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our common stock and penny stock trading
7. 16If we fail to increase the number of users consuming our music and music-related video content on our platform, and/or the number of members to Slacker, our business, financial condition and results of operations may be adversely affected
8. 17Our ability to attract and retain users and/or the number of members to Slacker is highly sensitive to rapidly changing public tastes in music and technology
9. 18In addition to attracting and retaining users and members, we will need to minimize user and member churn and attract lapsed users and members back to our platform and services, while ensuring that our user and member acquisition cost does not exceed user and member life-time value
10. 19Our ability to increase the number of our listeners (including members) depends in part on our ability to establish and maintain relationships with automakers, automotive suppliers and consumer electronics manufacturers with products that integrate our service
11. 20We are a party to many content acquisition and other license agreements that are complex and impose numerous obligations upon us which may make it difficult to operate our business, and a breach of such agreements could adversely affect our business, operating results and financial condition
12. 21comply with certain security and technical specifications
13. 22We may be unsuccessful in developing our original content
14. 23We face competition for users’ attention and time
15. 24Our new platform features, services and initiatives, changes to existing features, services and initiatives and our plan to continue to increase the number of live events that we produce could fail to attract users and members, content partners, advertisers and platform partners or generate revenue
16. 25Expansion of our content beyond live events and pre-recorded music, such as podcasts, subjects us to additional business, legal, financial and competitive risks
17. 26We face significant competition for advertiser and sponsorship spend
18. 27Emerging industry trends in digital advertising may pose challenges for our ability to forecast or optimize our advertising inventory, which may adversely impact our ad-supported revenue
19. 28Our services and software are highly technical and may contain undetected software bugs or vulnerabilities, which could manifest in ways that could seriously harm our reputation and our business
20. 29Interruptions, delays or discontinuations in service arising from our own systems or from third parties could impair the delivery of our services and harm our business
21. 30We rely upon the Google Cloud Platform (“GCP”) and Amazon Web Services (“AWS”) to operate certain aspects of our business and to store certain data, and any disruption of or interference with our use of the GCP and AWS could have a material adverse effect on our business, operating results, and financial condition
22. 31If we fail to accurately predict, recommend, and stream and play music that our users enjoy, we may fail to retain existing users and attract new users in sufficient numbers to meet investor expectations for growth or to operate our business profitably
23. 32If we are unable to increase revenue from our services on mobile devices, such as smartphones, our results of operations may be materially adversely affected
24. 33Negative media coverage could adversely affect our business
25. 34Our business depends on a strong brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our base of ad-supported users, paid members and advertisers
26. 35We are subject to a number of risks related to credit card and debit card payments we accept
27. 36We are subject to a number of risks related to other payment solution providers
28. 37If our security systems are breached, we may face civil liability, and public perception of our security measures could be diminished, either of which would negatively affect our ability to attract and retain paid members, ad-supported users, advertisers, Content Providers and other business partners
29. 38Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may seriously harm and negatively affect our reputation and our business
30. 39lower levels of internet usage, credit card usage and consumer spending in comparison to those in the United States; and
31. 40Taxing authorities may successfully assert that we should have collected, or in the future should collect sales and use or similar taxes, and we could be subject to liability with respect to past or future tax, which could adversely affect our business, financial condition and results of operations
32. 41Our success depends, in significant part, on discretionary consumer and corporate spending on entertainment and factors adversely affecting such spending could have a material adverse effect on our business, financial condition and results of operations
33. 42We may be subject to risks associated with artificial intelligence and machine learning technology
34. 43Advancements in AI technology may adversely affect our business model and competitive position
35. 44Our headquarters and a significant portion of our operations are located in Los Angeles, a region prone to wildfires and other natural disasters such as earthquakes and power outages. Wildfires, in particular, pose a material risk to our physical infrastructure, employee safety, and overall business continuity
36. 45Increased data protection regulation may result in increased complexities and risk in connection with the operation of our business and our products
37. 46If we do not respond to technological innovations or changes or upgrade our technology systems, our growth prospects and results of operations could be adversely affected

Risks Related to Our Acquisition Strategy

1. 64We can give no assurances as to when we will consummate any future acquisitions or whether we will consummate any of them at all
2. 65A number of other companies are seeking to make acquisitions in our industry, which may make our acquisition strategy more difficult or expensive to pursue
3. 66We may enter into acquisitions and take actions in connection with such transactions that could adversely affect our business and results of operations
4. 67incurring large accounting write-offs or impairments

Risks Related to Technology and Intellectual Property

1. 68We rely heavily on technology to stream content and manage other aspects of our operations and on our CMS. The failure of any of this technology to operate effectively could adversely affect our business
2. 69We may be unable to adequately protect our intellectual property rights
3. 70We may be accused of infringing upon intellectual property rights of third parties
4. 71Our live music streaming network uses open source software, and we license some of our software through open source projects, which may pose particular risks to our proprietary software, products, and services in a manner that could have a negative effect on our business
5. 72Changes in how network operators handle and charge for access to data that travel across their networks could adversely impact our business
6. 73Privacy concerns could limit our ability to leverage our member data and compliance with privacy regulations could result in significant expense
7. 74Our reputation and relationships with members would be harmed if our member data, particularly billing data, were to be accessed by unauthorized persons
8. 75Regulatory and business practice developments relating to personal information of our users and/or failure to adequately protect the personal information of our users may adversely affect our business

Risks Related to Our PodcastOne Business

1. 76We generate a substantial portion of our revenues from PodcastOne’s podcast and advertising sales. If PodcastOne fails to maintain or grow podcasting and advertising revenue, our financial results may be adversely affected
2. 77PodcastOne faces and will continue to face competition for listeners and their listening time
3. 78PodcastOne’s business is dependent upon the performance of its podcasts and their talent
4. 79If PodcastOne fails to increase the number of listeners consuming its podcast content, our business, financial condition and results of operations may be adversely affected
5. 80Significant up-front and/or minimum guarantees required under certain of PodcastOne’s podcast license agreements may limit its operating flexibility and may adversely affect our business, operating results, and financial condition
6. 81PodcastOne’s podcasting revenue and operating results are highly dependent on the overall demand for advertising. Factors that affect the amount of advertising spending, such as economic downturns, can make it difficult to predict our revenue and could adversely affect its business
7. 82Expansion of PodcastOne’s operations to deliver podcasts subjects it to increased business, legal, financial, reputational, and competitive risks
8. 83Increases in the costs in relation to podcast content creators, such as higher hosts’ compensation and costs of discovering and cultivating a top podcast content creator, may have an adverse effect on our business, financial condition and results of operations
9. 84PodcastOne relies on integrations with advertising platforms, demand-side platforms (“DSPs”), proprietary platforms and ad servers, over which it exercises very little control
10. 85PodcastOne’s revenue model also depends in part on high impression volumes, the growth of which may not be sustained
11. 86PodcastOne’s advertising sales depend on how its listener data is collected and how advertisers select their ad listener targeting in the future
12. 87The third-party services and software that PodcastOne uses are highly technical and may contain undetected software bugs or vulnerabilities, which could manifest in ways that could seriously harm its reputation and business
13. 88PodcastOne’s listener metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may seriously harm and negatively affect PodcastOne’s reputation and business
14. 89PodcastOne’s corporate culture has contributed to its success, and if it cannot successfully maintain its culture as it assimilates new employees, it could lose the innovation, creativity and teamwork fostered by its culture

Risks Related to Our E-commerce Merchandising and Other E-commerce Business

1. 90We generate a portion of our revenues from our ecommerce merchandise sales. If we fail to maintain or grow our ecommerce merchandise sales revenue, our financial results may be adversely affected
2. 91CPS' business is affected by seasonality, which could result in fluctuations in our operating results
3. 92Failure to accurately forecast consumer demand could lead to excess inventories or inventory shortages, which could result in decreased operating margins, reduced cash flows and harm to our CPS' business
4. 93CPS is subject to data security and privacy risks that could negatively affect our results, operations or reputation
5. 94Our business may be adversely affected if we are unable to provide our customers a cost-effective shopping platform that is able to respond and adapt to rapid changes in technology
6. 95Significant merchandise returns could harm CPS' business
7. 96Our business relies heavily on email and other messaging services, and any restrictions on the sending of emails or messages or an inability to timely deliver such communications could materially adversely affect our net revenue and business
8. 97We are subject to risks related to online payment methods
9. 98Government regulation of the Internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations
10. 99Changes in tax treatment of companies engaged in e-commerce may adversely affect the commercial use of our sites and our financial results
11. 100CPS faces intense competition and may not be able to compete successfully against existing or future competitors
12. 101traditional general merchandise and specialty retailers
13. 102CPS depends on its relationships with third parties, and changes in its relationships with these parties could adversely impact our net revenue and profits
14. 103We may be, accused of infringing intellectual property rights of third parties