Welcome to today's LiveOne, Inc. Q1 fiscal 2023 business update and earnings webcast. My name is Jordan, and I'll be coordinating your call today. If you'd like to register a question, you may do so by pressing star followed by one on your telephone keypad. I'm now gonna hand over to Aaron Sullivan, CFO, to begin. Aaron, please go ahead. Thank you. Good morning and welcome to LiveOne's business update and financial results conference call for the company's first fiscal quarter ended June 30, 2022. Presenting on today's call are Robert Ellin, CEO and Chairman, and myself, Aaron Sullivan, interim CFO. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts, and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company's actual results to differ materially from these forward-looking statements, including those described in its annual report on Form 10-K for the year ended March 31, 2022, and subsequent SEC filings. You will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its investor relations website at ir.liveone.com. The company encourages you to periodically visit its IR website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, August 11, 2022. Except as required by law, the company does not undertake any obligation to update or revise this information as of the date of this call. I'd like to highlight to investors that this call is being recorded. The company is making it available to investors and the media via webcast, and a replay will be available on its website in the Investor Relations section shortly following the conclusion of the call. Additionally, it is the property of the company, and any redistribution, retransmission, or rebroadcast of the call or the webcast in any form without the company's express written consent is strictly prohibited. Now, I would like to turn the call over to LiveOne CEO, Robertert Ellin. Thank you, Aaron, and good morning, everyone. I would like to thank you for joining us today for our fiscal year 2023 first quarter business update and financial results webcast. We have now completed the consolidation of our six acquisitions, reducing costs and overhead by an expected $23 million a year on an annual basis. We've just announced our first EBITDA positive quarter as promised, with over $2 million in EBITDA. In addition, we emphasized and expanded our digital and audio platform while largely deferring or eliminating some of our live and streaming events that were not expected to be profitable this year. These initiatives have allowed us to significantly pull forward our path and timeline to achieve positive adjusted EBITDA as well as positive GAAP earnings. We are pleased to announce today that for the first time in the history of the company, we have achieved both positive adjusted EBITDA of $2 million as well as positive GAAP earnings. Our first quarter adjusted EBITDA was well above our previous guidance of between $500,000 and $1 million and was $3.8 million improvement when compared to Q1 fiscal 2022. I'm pleased to be able to increase our fiscal 2023 adjusted EBITDA guidance to between $7 million and $11 million. This is our fourth increase since the end of last quarter, and we see telltale signs there may be room for further, as we'll talk about a little bit deeper into the announcement of a major partnership on the record labels. We also maintained our revenue guidance of $125-$140 million. Our digital business alone is expected to record a staggering $80 million of revenues and generate $16 million in EBITDA at the operating level. We've made enormous progress in our balance sheet. We recently extended all of our short-term debt to the second quarter of calendar 2024. Thus far, we have completed a repurchase of 2 million shares of common stock on the current portion of our stock repurchase program. This is additional to substantial open market buying of LiveOne shares by a number of my board members as well as myself. We will be actively looking and pursuing at expanding that buyback substantially in the near future if stock remains at these low levels. Put simply, we feel strongly that the value of LiveOne stock is dramatically undervalued the sum of our parts, which includes our Slacker, PodcastOne, pay-per-view units. In July 2022, we just announced that our podcast subsidiary closed an $8.1 million financing at $68 million. It's part of our intention to spin out PodcastOne as its own separate public company and to dividend a portion to all of you shareholders. We now have over 15,000 shareholders who'll be receiving shares in that spin out. With successful completion of the spin out, we believe PodcastOne will be only a major pure play podcast company trading on the national stock exchange. We acquired PodcastOne in July of 2020, doing around $20 million in revenues. We publicly stated well over $8 million in revenues for this quarter. It continues to experience robust growth. Over 50 new podcast series have been launched since 2020, and we have expanded distribution by making PodcastOne available in all of our Tesla cars and now in our Android Automotive OEM vehicles partnership in North America. PodcastOne has the exclusive advertising sponsored rights for all of its podcast and content. People can access PodcastOne through our partnerships and distribution with Spotify, Apple, Samsung and iHeart. PodcastOne and its franchise of exclusive shows has grown to more than 250 podcasts and over 300 podcast episodes per week. PodcastOne was ranked number 8 on Podtrac's list of top U.S. podcast companies in July with a U.S. unique monthly audience of 6.1 million. The ranking puts PodcastOne ahead of CNN, Fox, Barstool, and is one of the only two independent podcast platforms left of the top ten podcast publishers in the world. We previously announced our intention to also spin out our pay-per-view business as a separate public company. We anticipate that moving rapidly and expect it to happen in fiscal 2023. As many of you know, through our 9-year exclusive partnership with Tesla, LiveOne Slacker Radio membership is pre-installed in every single Tesla car sold in America. LiveOne is paid directly by Tesla for all those memberships. We recently completed a brand new user interface to refresh all the new top stations within a Tesla car and added all of our podcasts into the vehicles. In December, we launched LiveOne's music streaming service, including PodcastOne content on Google Android Automotive, giving us the ability to white label to any car within that platform. The launch takes LiveOne into the car with a seamlessly integrated in-car user experience without the need to use your mobile device and gives us distribution in many of the current and up-and-coming vehicles via Google Automotive. Allowing consumers to enjoy the library of over 30 million songs, original exclusive content, over 500 curated radio stations, over 250 original podcasts and vodcasts, and we've had over 3,000 artists stream on our platform. Android Automotive continues to see wide adoption from virtually all the major OEMs: Ford, Chevrolet, Nissan, Dodge, Volvo, Lincoln and others. The LiveOne Slacker app is now pre-installed in over 85 other automobiles as well as, of course, major cell carriers Verizon, Sprint and T-Mobile. We're seeing compelling growth opportunities to grow Slacker membership by partnering with other automakers, just as we did with Tesla to their default radio service, as well as other major B2B partnerships like exercise equipment, smartwatches can be part of loyalty programs for restaurant chains, credit card issuers and airlines. As of June 30, 2022, we had over 1.59 million paid members, a net increase of 432,000 or 37% as compared to last June. Total members, including free membership, are now over 2.35 million. We foresee a path to hitting that 10 million paid subscribers by 2027. That number puts this company at over $1 billion in revenues. A recent industry report estimated the total addressable market of TAM for streaming music to be 1.7 billion paying subscribers. That 10 million is less than 1% of the addressable audience. If Slacker was able to capture just 1% of the TAM, that could mean well over $1 billion in annual average revenues. I would like to add that as a result of the successful integration of our advertising and sales division, LiveOne has grown our sponsorships from 7 to well over 300 and growing, and we have over 700 sponsors in the pipeline right now. In fact, PodcastOne has seen more $1 million-plus sales weeks in calendar 2022 than any time in its history, and we see an opportunity for the first time an eight-figure deal. I would now like to hand it back over to Aaron Sullivan who will review our Q1 fiscal 2023 results. Thank you, Aaron. Thanks, Robert. I'll spend just a few minutes to provide an overview of the results for our first fiscal quarter ended June 30, 2022. Q1 2023 revenue was $23.2 million. Contribution margin increased to 34% compared to 20% in fiscal 2022, and our adjusted EBITDA was a record $2 million in Q1 2023 compared to a loss of $1.8 million in fiscal 2022, along with record KPIs, including a 37% increase in paid members year-over-year. On a U.S. GAAP basis, LiveOne posted record net income of $1.35 million or $0.02 per diluted share in Q1 fiscal 2023 versus a net loss of $8.1 million or a loss of $0.10 per diluted share in Q1 fiscal 2022. For the quarter ended June 30, 2022, our revenue was comprised of 52% subscription and 48% advertising, sponsorship, merchandising and ticketing events. Compared to 23% subscription and 77% advertising sponsorship and ticketing events in the prior year period. We ended Q1 with 1.59 million paid members, a net increase of 400,000 as compared to 1.16 million paid members reported at June 30, 2021. Total members, including free members, was 2.36 million at June 30, 2022. Note, included in the total members are certain members who are subject of a contractual dispute for which we are currently not recognizing revenue. Briefly turning to the balance sheet, we ended Q1 with cash of $11.3 million, including restricted cash of $300,000. Now let me hand it back over to Robert. Thanks, Chad. Just to finalize for everybody, the opportunity to read some of the recent, we have $2.10 per record partnership three years, $2.10, well above the market. We're in a very unique global company, and the reason we have to keep guidance is that we convert, right, royalties into equity and truly make the white label industry music partner for this massive growth that we built here, right? The more that join that program and more that come in, the higher that it goes, the higher the cash flow goes, the higher the earnings go. I could say that we have now grown since inception, surviving COVID, right? We've now grown subscription from 250 in 12,000 when we bought Slacker Radio to now 1.6 million. That's to grow from 7x pre-COVID to now well over 300, and we'll surpass numbers. Starting to watch the flywheel year. Listen, watch by two different sources during any content. With that, I'll open it up to questions, and proudly answer for Robert on earnings as well. Please, anyone have any questions, we're happy to answer them now. As a reminder, if you'd like to register questions, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two, and please ensure you're unmuted when speaking. Our first question comes from Barry Sine of Spartan Capital Securities. Barry, please go ahead. Hey, good morning, folks. Hey, Robert, just FYI, your audio is breaking up. The moderator comes through clear. I don't know if you can do anything, but let me go ahead with my questions. First of all, the sustainability of that positive EBITDA, the guidance is looking for a significant ramp up in revenue over the next 3 quarters, you know, to hit your numbers versus 1Q. What do expenses look like? And, you know, how do you sustain positive EBITDA as you ramp up revenue? Great question. As you know, Barry, we have some of our tentpole events which will happen at the end of the third quarter and beginning of fourth quarter. Hopefully everyone can hear me clearly. You're gonna have some spend. As you know, right as we did our big, you know, social media event last time, it was extraordinarily profitable, right, with very, very healthy margins. We feel very confident in that. Number two is we continue to take costs out of the business, right? Focus our energy as the temperatures change on bottom line numbers. You're gonna see more and more, right, EBITDA. You saw us just raise the guidance again to $7 million-$11 million of EBITDA, right? We see those big opportunities to potentially grow those again. We're really excited about where the margins are headed as well as where our bottom line is headed. Okay. On live events, you just called out, you know, a tentpole event, social media event. You've also in the past said that you're gonna be, your metric there is only events that are gonna be profitable, and that requires advertising sponsorships. If you're talking about getting back into, you know, doing this type of event, does that mean that you have good visibility on getting the sponsorship so that you can do the events profitably? Yeah. I mean, we see exceptional visibility right now in the opportunities that are in front of us. Barry, you and I have talked about this a lot, that you know, our content costs have gone down every year. They continue to go down. Those content costs may turn out to now be, as I've articulated to you earlier, because of the success and the size of our community, right? We're getting festival owners, talent creators, right, who wanna put their content on our platform and pay us for all of our services, from production to distribution to marketing to delivery, sponsors to NFTs, right? This is not new to the company. It's exactly what we did with our Social Gloves the last time. We got paid on every component with no risk, right? Because our community has grown and we have billions of downloads of our podcasts, 55 billion of our audio, we are now very much in that sweet spot that we are being hired as a hired gun with the upside and the ability to drive that across our platform, getting paid with very little risk and a lot of upside, on all sides of it. Does that make sense? That makes sense. This kind of a longer term question on these tentpole live events. How important are they to the long-term brand value, building the brand value of visibility of the company? I know you've taken a, you know, a pause this year, Spring Awakening, et cetera. Longer term, do you really need to have live events in the mix to build the visibility of the company and keep that flywheel spinning faster and faster? Yeah, I mean, we do. You know, part of the beauty of this is, you know, we paid very nominal fees for most of those rights, right? I've always articulated this as the ESPN of music, right? You know, ESPN, some of their events they own, some of them they rent, and some they're just the newsroom for, right? Sponsors and advertisers come in in droves, and we just see the advertising sponsors literally lining up now that it's lining up so healthy that again, we have the largest pipeline in the history of this company of million-dollar deals, let alone, you know, sitting on opportunities that could be eight-figure deals for the first time in the history of the company. It's really just a self-fulfilling prophecy, Barry. The more traffic, the bigger audience you have, right, the more you're gonna get paid. My last question, just around the cash balance. You know, there's one kind of non-GAAP cash item that I think is still out there, indeed, which is the insurance proceeds from the prior Spring Awakening that was, you know, interrupted by storms. I think that was pretty significant. I know you can't, you know, book that in the financial statements. Is that still out there? What's the status on that? What might we see in terms- Yeah. of cash inflow when that comes in? Yeah, absolutely. You know, the insurance company's been extremely difficult, but we have made a lot of progress recently in that they've just made this all public. I can tell you they've just moved the case into New York. There could be settlement offers coming soon. You know, our lawyers took it all on contingency basis, and think we're gonna win millions and millions of dollars. There could be worse damages that they've caused us, the overall React business, by not making the payments they should have day one. I mean, there was no question of weather conditions, right? The entire event was shut down for eight and a half hours right at the heart of the festival. We think we have a good opportunity there. You know, we don't like to count our chickens before they hatch, but I think there's just huge potential there. Certainly, the lawyers would not have taken contingency. We may see something very soon. Those are my questions. Thanks, Robert. Thank you as always, Barry. Our next question comes from Brian Kinstlinger of Alliance. Brian, please go ahead. Hi there. This is Sherman calling in for Brian. Thanks for taking my questions. First question is, could you please break down the first quarter revenue from subscriptions and podcasting separately? Aaron, you wanna respond to that? I don't think we can. Yes. Go ahead, Aaron. Yeah, I gave the percentage of subscription in the prepared remarks, so you can kind of back into that. Sorry, I'm just pulling it up here. Sorry. 52% of the quarterly revenue is subscription. Actually, Robert, you will see a table in the 10-Q that breaks out advertising revenue. I can say that that's primarily podcast related and that's at about $9 million for the quarter. It's an exceptional number, Brian, as you know, we bought PodcastOne doing just about $20 million in revenues. You know, that will put us on a run rate to almost double those numbers, right? If we continue at this level in, you know, podcast now that it's spinning into its own division, may also be an acquisition vehicle to acquire other podcast companies. The opportunity is just growing for us as one of the only independent networks left. As you can see, we just keep adding podcasts almost on a weekly basis as we pass Barstool and many others into that number 7, 8 slot every month. All right. Thank you. Second, in regards to the weakening economy, how are CPMs trending in podcasting, and do you expect any pressure on pricing on advertising and sponsorship going forward in your business? Well, I think you have a huge advantage in, you know, in a difficult market. Media always does well, but most important, podcasting is getting so much attention. I mean, this is the beginning of the beginning. It's in the first inning of where it's going. The industry is only past $1 billion in revenues. It feels like a lot more because Spotify and SiriusXM and Apple have paid $20 billion for these companies. But the reality is only $1 billion, but it's on its way to $5 billion-$10 billion, right? That's pretty quickly. We're seeing more and more advertisers moving from other platforms and moving into podcasting and really understanding that, you know, direct response, you know, a creator talking to their super fans is just enormously successful way to drive a product and sell a product. Actually, because it's digital, you know what the performance is of that. We've seen telltale signs that there's gonna be a very healthy run in podcasting. Even if there is a tougher market right now, they're gonna gain market share in many different places. Sure, sure. I definitely agree with that. Do you see some pressure on pricing right now given the recessionary fears from the advertisers? Like, how are the CPMs trending? Yeah, so far terrific. We have not seen it at this point. You know, we're certainly preparing in case there is some downturn in it. So far, we've seen extremely healthy signs right now of where advertisers are pointing in podcasting and utilizing podcasting networks. You know, as Brian, you and I have talked about, we're starting to see more and more of our flywheel, right? How the pieces fit together. We've just had Adam Carolla on the road, LadyGang on the road, Jay Cutler on the road, and more and more. More and more of our podcasts are gonna drive additional revenue to us from sponsorship to direct response, live shows. We'll shortly start to announce our first own products, owning merchandise in conjunction with those podcasters, right? Last but not least, as you know, with our partnership that we announced with Patrick Wachsberger, is second and third windows of television and film. You know my background and what I've done in that space. You know, the fun that we've had and the amount of revenues we generated, we see really strong signs that more and more podcasts are gonna turn into television and films. There's a lot of revenue streams that come out of it. All right. Thank you. Just one last question. Could you talk about the success of converting members to paid subscribers, and do you think that conversion rate has room for improvements? Like, what are you guys doing to get there? I mean, we've been converting, you know, around 6%-8% consistently of our free users, right? It really kinda depends where they come from. I think that's gonna stay pretty consistent. I don't think we're gonna blow it away and do, like, 30%, 40%, 50% conversions. This is gonna be, you know, some of our stuff is more, you know, you come and watch these great events. We're bringing them into the flywheel. We're driving sponsorship around it. We're getting you know, used to our brand and know our brand. I think we've done a really amazing job of in four years, you know, building a brand, you know, against, you know, massive partners and competitors that are out there, right? We built an amazing brand and created a community that again, is starting to get paid for, right? We're starting to get paid for production and, you know, getting paid for all the different skills and the 360 play across our network. We're seeing really strong signs that our brand is becoming really valuable, and the social numbers are growing exceptionally well as well. All right. Thank you so much. That's all I have. Our next question comes from Jon Hickman of Ladenburg. Jon, please go ahead. Hey, Robert, thanks for taking my questions. Nice quarter, by the way. Could I ask a couple of model questions? There was a fairly significant jump in gross margins. Going forward, when you have your tentpole event, are margins gonna be similar? Barry, you wanna take that? Yeah. I think we have slightly higher margins in the current quarter than we'd expect on a 10th full quarter. I would say our margin for the 10th full quarter would be closer to, you know, blended, you know, around 30% as opposed to, you know, our 34% in the current quarter. Okay. A little bit of that, John, just to jump in, a little of that is gonna depend on, right, how the accounting is looked at. As you know, we have a new auditor, right? We're looking forward to many things, including getting rid of our going concern and other exciting things that, you know, the consolidation and restructuring has done for the company, but also the way that the accountants previously at BDO valued, right, the revenues from Social Gloves was extremely high, in our opinion. It was a big number, where a lot of it was almost like barter deals. You weren't part of that number, you were not truly getting any margins on. They were sort of, you know, going from one hand to the other hand. We're gonna see, and we're gonna know more about that, I would say in the next 45-60 days as we announce that big event. Well, multiple big events. Okay. The big event is slated for the December quarter, right? Not the September quarter. I would think that it's more likely it is the end of the third quarter, beginning of the fourth quarter. I wanna be a little bit careful in that we publicly announced a partnership with Ben Silverman. Ben ran NBC and one of the most prolific reality TV creators ever, and created a little show called The Office. You know, Ben and I are in heavy negotiations with many of the networks right now to do a reality TV show around it that could, you know, change these numbers dramatically. I wanna be a little bit careful about picking the date because that could change it. It also can change our cost structure tremendously. Just think if you had, you know, a Fox, a Netflix, a Hulu, an HBO or someone behind you who was spending tens of millions of dollars putting a reality show on to drive that show, very much like Ultimate Fighter did for the UFC. Okay. Definitely we're not gonna see that in the September quarter. Just wanted to make sure I had that right. The expense reductions, should we model for that to be relatively consistent through the remainder of the year? Yes. Yes. Okay. My last one. You know, the reason we raised our guide- Go ahead. Yeah. The reason we raised our guidance again is those expense reductions have proven to be extremely successful. Aaron has done a masterful job of really, you know, consolidating the businesses, the cream rising to the top, right, of the top talent from sales side, marketing side, production side. We've been able to take a tremendous amount of cost out of the business. I couldn't be prouder of the work that Aaron and our finance team has done in really putting this piece of the puzzle together and consolidating. You can imagine how hard it is to consolidate six companies in the heart of COVID, right? Now it's become a lot easier. Okay. My last question. Could you elaborate a little bit on the spinoff of PodcastOne? The money that went in, the $8 million that you raised, could you tell us what percentage those investors are gonna own, and what percentage do you think the company's gonna own, and what percentage existing shareholders of LiveOne might own when it's all said and done? Yeah. Let me give you right out of the 8-K, right? What it publicly states in the 8-K is that the IPO, right, will be no less than $150 million valuation. That's A. Number two is the company will not give up more than 66%. Aaron, just to make sure I'm exactly. Sorry. Yeah. We will maintain control of at least 66%. Yes. All right. Figure if you did a $68 million, right, you did $8 million, right, at $68 million valuation, right? You got about, you know, 14% dilution, whatever you want to put in there in that range, right? You can kinda come to that number that, you know, it's gonna be somewhere in that range. Then we're gonna spin out, you know, as part of that and staying above that 64%, that will include, right, any shares that we spin out to existing shareholders. That'll be, you know, it'll be a very healthy number. It'll be somewhere in the 5%-10% range, right, will be spun out to shareholders. It'll be great to have, you know, a community of that massive size going public profitable, right? Even though positive profitable, right, with 15,000 shareholders day one, right, and very healthy margins. We're really excited for it, and we really do believe that Kit Gray and the team have just done an exceptional job and proven they really can run that business on their own, right, and operate that business on their own. You know, a lot of other things that came out of that, you know, Jon, were the ability to keep some of our board and advisory members, some of those including gentlemen like Steve Bornstein, who built ESPN and the NFL Network. You may see guys like this take bigger roles in the company now that we have a second company for them to, you know, to be more active and proactive in. You know, it's really, you know, really exciting to be the only pure play podcasting business in the next, you know, 6-9 months maximum. Okay. Hey, thanks. We'll talk to you later. Bye. Great, Jon. Thank you. Next question comes from Kevin Dede of H.C. Wainwright. Kevin, please go ahead. Hi, good morning, Robert, Aaron. Thanks for having me on. It's Kevin Dede. Just so you recognize the name in case there are any questions. Robert, you talked a lot about sort of pulling costs out. Can you speak at all to investments you're making, whether it's improvements in software or anything else you're doing on the platform to enhance the experience? Yeah. I mean, you know, that's on a daily basis. As you know, we have a world-class tech team out of San Diego, out of that Qualcomm world. They built for Elon Musk and Tesla. They continue to do an amazing job of building on technology, right, onto our platform. We've announced a partnership with Polygon in NFTs. We've added a digital meet and greet platform that we've used for Lady Gang and others. This is all built by our tech team in-house, so couldn't be prouder of them. We'll continue to upgrade them. Then just with the Tesla cars alone, we've just added, you know, our podcasts and just did a complete upgrade of all that technology. So not a big cash number, not a big expense, right? Really just, you know, a really talented team that's been able to do that and continue to upgrade our product and, you know, make it the best product in the world. Well, at one point you were merging LiveOne tech platform with the Slacker platform. Can you give us, I mean, I know that was some time ago, but is that all complete? I'm not sure what tech platform you're talking about. I assume you're talking about PodcastOne. No, no. I think it was before that acquisition. I know that there were some things that you needed to upgrade on Slacker in order to have it perform better. I assume that's done. It's old. Yeah, long. It's, I mean, it's always, you know, candidly, Kevin, it's done but we always upgrade, right? Every month we'll continue to upgrade, and we have projects that Brad and the team are doing, and this is a brilliant group. It's the best tech team I've ever had, and literally almost any project we give them, including NFTs, right, they're able to handle, right? And able to grow off of. You know, we utilize our partnerships in that. Our partnership with Polygon, they're paying for the whole buildout for our NFT platform. You know, we're gonna continue to leverage, right, large audiences, large distribution, and large partners that believe in our content and need our content. As I've always said, anyone with 10 million, 2.5 billion eyeballs must have LiveOne and must have music. We'll continue to do more and more B2B deals, more and more distribution of our content, you know, with those massive audiences from 10 million to 2.5 billion. You mentioned NFTs, Robert. I was hoping you could talk a little bit more about how your artist first platform is evolving. Maybe speak to more content producers that you're attracting and is there any way to sort of quantify the, you know, the NFT development effort? I mean, the only thing we can say to date is that, you know, right out of our Social Gloves, we did $3 million and sold 136,000 NFTs, right? What we try to do is no different than our merch side is listen, watch, engage, transact, right? We're not sitting here and coming out to you and saying, "Hey, we're gonna create the greatest NFTs ever created in the world on our own." We're gonna leverage massive partners in that world, right? In the metaverse, right, in the NFT world. We're gonna partner with them to do it in conjunction with them, and grow with them and grow off the backs of both their capital as well as their distribution. Okay. If we take a step back, can you talk about the artists that are coming over and how you know how they're trying to leverage your NFT capability? Sure. You know, just start right off the bat, you know, with what we did with T-Pain. They hired us to produce his festival in Milwaukee, right? They paid us to produce it. They built NFTs around it, right? And they built marketing around it. They built merchandise around it. And they gave us the opportunity, like what we did in Social Gloves, with no risk to us, right? To have tremendous upside in getting paid if we deliver sponsors. Paid for our distribution, paid for our marketing, and paid for our services. It just and again all on our platform. Instead of us paying and paying for that content, we're getting paid as well as getting all that traffic and audience. Same thing with The LadyGang, right? In just doing, you know, live event. We're now participating in those live events. New revenue streams with the same piece of talent, right, and growing. We just had the other night, we just did a big charity event. Over 22 artists performed one night on our platform. Okay, so- I think the biggest thing of all. Again, Kevin, the biggest thing in all that is 3,000 artists have now played on our platform. 3,000 artists have hit their social media and told their fans to come listen or watch on LiveOne. Okay. Is there any way to look at those 3,000 and try to figure how many of them have gone as far as having you guys build out NFTs for them? I guess I'm really curious about the, you know, the Milwaukee example that you offered, Robert. Can you just kind of talk about the margin structure given that they're paying for, you know, the development of it, how much of the rev do you get to keep? Yeah. Taking a step back, I'm gonna use Social Gloves as an example because it's the easiest way, right? All the revenue comes to us, right? We got paid to bring in Hard Rock. They paid us $2 million. We got paid for the $3 million in NFT money came in. We got paid for every single ticket that came through the platform, which is all on ours, all the pay-per-views. We got paid for the merchandise, right? Everything runs through us, right? As the sponsors come to us, we collect the money, and then we pay it out, you know, accordingly. In every component of that, we try to have healthy, you know, 20%-30% margin on every one of the 360, you know, position that we have. Okay. Could you give us an update on where you are in taking the Tesla platform internationally? Yeah. I mean, I think if you read the 8-K this week, this is telltale sign. LiveOne is now a 3-year partner with one of the top 10 record labels, right? It's a herd mentality in the music industry, and that usually multiple parties come to the table. I think you're gonna see a sign, almost every one of the labels, every publisher get 2- to 3-year deals now. We've cleaned up our payables, we've cleaned up our balance sheet, we've strengthened the company, and we've proved that, you know, under the toughest times, we're gonna grow, and we're gonna perform, right? You know, just think about how big this could be, right? If record labels took stock in terms instead of royalties, right? Every dollar that, A, is cash flow, B, is EBITDA, and 3, is earnings. It's a self-fulfilling prophecy in that it's a win for them as well as they take equity, right? Their equity is gonna go substantially higher as well off them helping us drive more EBITDA and earnings. I think that's part of why we raised the guidance for this quarter. It's the fourth time we've raised it. If you saw three or four record labels come into it, you'd have to raise it substantially, right? Just think we've said $80 million of our revenues, right, are coming from our subscription-based business, right? That portion of it, right, our audio business. Imagine there's a large chunk that gets paid, right, to the music industry. If they become our partners, that means that they allow us to become, you know, way more profitable, have way more cash flow, and way more earnings. If you read that 8-K and if you believe that that is a model going forward, and remember, Universal Music Group took $10 million in royalties a couple years ago at $4.12. $2.10 is a no-brainer right now, right? Imagine, you know, if we can continue to do that, Aaron and I are gonna have to keep looking at where that EBITDA is and where this could potentially go. Just think about what that number is gonna be next year. Right? You know, if we continue to build these partnerships, continue to deliver these margins, right? Yeah, those EBITDA numbers really explode. You know, in the face of having Tesla also growing at this speed and our other car partnerships growing, we got a lot of upside from those numbers. You know, we wanna underpromise and overdeliver. Do you need? Yeah, going forward every quarter. Do you need more record labels, though, in order to solicit Tesla's business for all their cars outside of the U.S.? That's kind of where I was going, Robert. What steps do you need to take in order to have all the licensing? You know, just, you know, reading between the lines, Kevin, if, you know, you're signing three-year deals, the next step is you're signing international deals. It means the relationship has now grown to the next level. The confidence in our balance sheet, the confidence in our ability to be able to pay additional fees, like the European rights, it's coming, and it's coming quick. Okay. All right. Yeah, that helps, Robert. You know. Thanks very much. Yeah, you know, just understand, like, you know, again, you know, we've talked about this each quarter. Think about that Spotify and Netflix and all these subscription models, 50% of their revenue is U.S., and 50% are overseas. There's a massive growth opportunity for LiveOne. One of the reasons that we win some of this business, including Elon, is our prices are so much lower, and our tech team works together in collaboration to white label these so that everyone can be as smart as Elon can be your Tesla radio. Well, we don't have an ego here. You're seeing more and more of those B2B partnerships. As you saw the announcement with Android Automotive, and as you saw the recent announcement with ZYNC. These are all just uniquely positioned that the Spotifys of the world aren't gonna white label for you. They're too big and they're too powerful, and they've done too much work to build those brands. We're very confident and very comfortable in being a B2B partner, where it's not about branding, it's about bottom line revenues and profits. Okay. Robert, just to clarify on some comments that you and Aaron made regarding the spin-out. Did I understand correctly you're gonna retain 64% or 66%? If that's the case, that means that PodcastOne remains consolidated within LiveOne in the financials, correct? Correct. All right. We expect both PodcastOne and Pay-Per-View One to be consolidated inside of the parent company. Right? You know, the one risk that you have to that is that, you know, obviously when you announce this, it wakes up the world. We're one of the only independent podcast networks left. Everything else has been bought, and it's been bought at huge valuations, including only a month ago, right? You know, in the heart of this market crash, Conan O'Brien sold his to SiriusXM for $150 million. If you go read SiriusXM's story, they paid $150 million in cash for $10 million in revenues. Right? If we did $9 million this quarter, obviously, you know, one of the exciting parts, but also the risks here is that there could be a lot of excitement and energy around someone trying to buy that business as well. Our objective is to be consolidating them and keeping them. We did re-up with JP Morgan. Part of it is offensive, and part of it is defensive. Our job here is, as a fiduciary, to make sure that we again run the stock, you know, and get it to $5, $10 if we have multiple times before, you know, in any shape, fashion we can, in making sure that we're a good fiduciary, and then we look at all the different ways to monetize for our shareholders. Oh, great. Great, Robert. Thank you. Thank you so much. Appreciate it. As a reminder, that's star followed by one to register a question. Our next question comes from Matthew Harrigan of Benchmark. Matthew, please go ahead. Thank you. I'm really intrigued on the live video streaming entertainment side of it. I mean, there aren't a lot of public, you know, vehicles for that. Pure play names or concentrated names to say. You know, I've even asked, you know, Eric Yuan over at Zoom on that, and he thinks that it's gonna be very interesting, you know, five years out on the AR and the VR side as well, although he's very cautious about the near term on that. You know, since that's such an attractive market, what do you think the sustainable advances you have are relative to some people who aren't engaged in it yet, you know, Spotify, Pandora, Live Nation, et cetera? I know that's kind of an entry-level, maybe naive question, but I'd just like to know how or try to get some sense for how sustainable your advantages in that area are. Thanks. Yeah, it's actually a great question. You know, I'm a huge believer in live streaming, and I sold my last 2 companies ago, I sold iWon.com to Barry Diller for almost $1 billion, right? That's almost 20 years now, right? We're a huge believer in live streaming, and we stuck to music. It wasn't because we were smarter. It was because there was a white space. It was in a wide open. MTV left the music industry 20 years ago, and they left this wide open. There are way more festivals, way more concerts, way more content, right? Now you got social media, where the talent has the ability, right, those creators have the ability to reach their audience in such a unique way. We've had 5 billion engagements across our platform. What I mean by 5 billion engagements is not only did they watch it, did the consumer watch, but they repurposed it and sent it back out across their social media to their friends. As I said earlier, we had 3,000 artists forming our platform and skyrocketing every week. Last week, I think it was like 27 alone, right? We've had over 3,000 artists. All 3,000 artists have hit those social media and told their fans to watch or listen on LiveOne. Those numbers are gonna continue to grow. COVID worked up the world because no one can make money, you know, going out and performing live, right? It's a lot easier for Justin Bieber, right, you know, to perform digitally and do a live stream than it is for him to go travel 176 days and go on tour. What may be even better is the hybrid of it, where it's part digital, part live, right? If you think about this, right, we've streamed the biggest festivals on Earth. No different than ESPN streams the Yankees, the Dodgers, the Rangers, whatever your favorite team is, right? In music, we've done everything from Rock in Rio to EDC China, Japan, Montreux Jazz, and the biggest artists around the world. Nobody has ever tested whether or not that works in pay-per-view. We know some sponsorship dollar is gonna come in because MTV used to pay millions and millions of dollars a year. My humble opinion is our pay-per-view business has absolutely explosive growth in that, you know, we just put a K-pop artist on, and we did $600,000 in a night. In a night, right. All they had to do was perform, you know, from a little theater, right, in Korea. They put on their performance, and they put it across their digital media. We're about to have a young star from Israel do the same. When you have super fans, like there's a dollar amount. My belief is, you know, Rock in Rio had 89 million people watch. They had 1 million people attend. If you just hit 1 million people that pay ten cents on the dollar to what they pay for a ticket, a ticket in Brazil is $100 on average. It's really expensive in Brazil. If you got $10, you got $10 times a million, you just created $10 million in revenues, right? In a weekend of a festival. A brand new revenue stream that goes into the artist's hands, the agent's hands, the manager's hands, the writer's hands, and you've just increased the penetration of the dollar amount to everyone in music substantially. I think there's a massive opportunity and, you know, I truly believe our pay-per-view business can be a unicorn on its own. I started years ago Independent Entertainment, which you may remember, went to $1.3 billion, $1.4 billion, 34 years ago, right? You didn't have social media or the ability to reach around the world. You were just reaching the United States. We see one event, you know, selling, you know, 136,000 tickets for one night. I just think there's a massive opportunity with very little risk if you handle it properly. Thanks, Robert. Congrats on the progress. We have no further questions on the phone line, so I'll hand back for any closing remarks. To finalize, I just want to thank everyone and appreciate your support in a difficult market. We are going to continue as a company to, you know, underpromise and overperform. I'm proud of my team. We promised we were gonna hit our first EBITDA positive of $500,000-$1 million, and we were 4x from the bottom of that number and 2x from the top of that number. We just raised our guidance from $5 million to $11 million. That'd be a $23-$24 million swing from last year. We're laser focused. We understand the temperature out there. We understand the world's changed, and we're laser focused on delivering EBITDA and bottom line to our shareholders and increasing the value. We'll be looking very, very closely at increasing our buyback. I personally have been a buyer every quarter. I'll be looking myself to be in the open market as soon as a window opens. Thank you, everyone. I appreciate your time, and I appreciate, you know, everyone's interest in LiveOne. Our team loves this company and hopefully everyone else will soon as well. Thank you. This concludes today's call. Thank you for joining. You may now disconnect your lines.