LiveOne (LVO) to spin-out its wholly owned subsidiary, PodcastOne

LiveOne (Nasdaq: LVO), an award-winning, creator-first, music, entertainment and technology platform focused on delivering premium experiences and content worldwide through memberships and live and virtual events, announced today its intention to spin-out its wholly owned subsidiary, PodcastOne, as a separate public company to be listed on a national exchange and its plan to dividend a portion of PodcastOne's common equity to LiveOne's more than 15,000 stockholders as of a future record date, anticipated to be completed by year-end, in each case subject to obtaining applicable approvals and consents and complying with applicable rules and regulations and public market trading and listing requirements. In connection with the anticipated spin-out, PodcastOne closed a private placement financing of convertible notes and warrants totaling approximately $8.1 million prior to offering expenses, including $3 million invested by LiveOne, whereby the terms of the financing value PodcastOne at a pre-money valuation of $60 million.

PodcastOne is the leading advertiser-supported on-demand digital podcast company, offering a 360-degree solution for both content creators and advertisers, including content development, brand integration and distribution. Acquired by LiveOne in 2020, PodcastOne has had more than 2.1 billion downloads a year since its acquisition, across the more than 350 weekly episodes it distributes. It boasts a roster of top podcast programs, including top influencer talent like Adam Carolla, Kaitlyn Bristowe, Jordan Harbinger, The LADYGANG, Kail Lowry, T-Pain, Jay Cutler and Michael Irvin.

According to the Interactive Advertising Bureau ("IAB") and PwC's 2021 U.S. Podcast Advertising Revenue Study, in 2021, U.S. podcast advertising revenues rose to $1.4 billion, surpassing the $1 billion mark for the first time, a revenue increase of 72% year over year. IAB also forecasts that the market will exceed $2 billion in 2022 and will be over $4 billion by 2024.

Commenting on the announcement, LiveOne's CEO, Robert Ellin, stated, "The goal of both our management team and board of directors is to maximize stockholder value. PodcastOne has been a tremendous addition to LiveOne since our acquisition in 2020, and we feel strongly that the market value of our stock dramatically undervalues the sum of our parts, which includes our PodcastOne subsidiary. Upon the successful completion of the spin out, we believe PodcastOne will be the only major pure play podcast company trading on a national exchange."

PodcastOne's President, Kit Gray, commented, "The podcasting business has exploded over the past five years and PodcastOne is one of the largest independent podcast companies in the world. The company is one of only two independent podcasting publishers in the top 10 of Podtrac's list of Top Publishers. We believe that by trading as a separate public company, PodcastOne will have the opportunity to access the public capital markets as well as be better positioned to both acquire podcast platforms and attract significant podcast talent."

As part of the private placement, LiveOne invested $3 million. For additional information on the financing, please review LiveOne's Current Report on Form 8-K to filed with the U.S. Securities and Exchange Commission. There can be no assurance that LiveOne's efforts will result in the planned spin-out of PodcastOne or its pay-per-view business as a separate public company, the planned distribution of a portion of PodcastOne's common equity to LiveOne's stockholders or with respect to the timing of such plans.

Joseph Gunnar & Co., LLC acted as the sole placement agent for the private placement to institutional and accredited investors.

The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state or other jurisdiction's securities laws, and may not be resold absent registration under, or exemption from registration under, the Securities Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

PodcastOne's select anticipated financial results for the quarter ended June 30, 2022 ("Q1 Fiscal 2023") discussed in this press release are based on management's preliminary unaudited analysis of financial results for such quarter. As of the date of this press release, LiveOne has not completed its financial statement reporting process for Q1 Fiscal 2023, and LiveOne's independent registered accounting firm has not audited the preliminary financial data discussed in this press release. During the course of LiveOne's quarter-end closing procedures and review process, LiveOne may identify items that would require it to make adjustments, which may be material, to the information presented above. As a result, the estimates above constitute forward-looking information and are subject to risks and uncertainties, including possible adjustments to preliminary financial results.

You May Also Be Interested In

• CoStar Group acquires Zonda for $800M, adding new home data
• BMO starts chip stocks coverage: Here are its preferred picks
• Two Harbors receives final approval for CrossCountry Mortgage merger