Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-27517

 

 

 

GAIA, INC.

(Exact name of registrant as specified in its charter)

 

 

COLORADO		84-1113527
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

833 WEST SOUTH BOULDER ROAD,

LOUISVILLE, COLORADO 80027

(Address of principal executive offices)

[phone]

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	GAIA	NASDAQ Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

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

 

Class		Outstanding at October 27, 2023
Class A Common Stock ($0.0001 par value)		17,609,425
Class B Common Stock ($0.0001 par value)		5,400,000

 

 

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GAIA, INC.

FORM 10-Q

INDEX

 

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):	3
	Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022	4
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 30, 2023 and 2022	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	7
	Notes to interim condensed consolidated financial statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
PART II—OTHER INFORMATION		17
Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	18
	SIGNATURES	19

 

 

 

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Unaudited Interim Condensed Consolidated Financial Statements

We have prepared our unaudited interim condensed consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission. While certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to these rules and regulations, we believe that the disclosures made are adequate to make the information not misleading. In our opinion, the unaudited interim condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly, in all material respects, our consolidated financial position as of September 30, 2023, the interim results of operations for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022. Operating results for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for a full year or any future interim period. These interim statements have not been audited. The balance sheet as of December 31, 2022 was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K. The interim condensed consolidated financial statements contained herein should be read in conjunction with our audited consolidated financial statements, including the notes thereto, for the year ended December 31, 2022.

3

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GAIA, INC.

Condensed Consolidated Balance Sheets

		September 30,				December 31,
(in thousands, except share and per share data)		2023				2022
		(unaudited)
ASSETS
Current assets:
Cash		$	11,229			$	11,562
Accounts receivable			3,829				2,955
Prepaid expenses and other current assets			4,132				2,656
Total current assets			19,190				17,173
Media library, software and equipment, net			50,481				51,115
Right-of-use lease asset, net			6,492				7,093
Real estate, investment and other assets, net			30,296				30,979
Goodwill			31,943				31,943
Total assets		$	138,402			$	138,303
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued and other liabilities		$	14,051			$	12,355
Short-term debt and lease liability			9,920				894
Deferred revenue			15,334				14,124
Total current liabilities			39,305				27,373
Long-term debt, net			5,842				14,958
Long-term lease liability			5,911				6,489
Deferred taxes			499				499
Total liabilities			51,557				49,319
Shareholders’ equity:
Class A common stock, $0.0001 par value, 150,000,000 shares    authorized, 15,754,425 and 15,406,186 shares issued and outstanding    at September 30, 2023 and December 31, 2022, respectively			1				1
Class B common stock, $0.0001 par value, 50,000,000 shares    authorized, 5,400,000 shares issued and outstanding    at September 30, 2023 and December 31, 2022, respectively			1				1
Additional paid-in capital			165,490				164,180
Accumulated deficit			(78,647	)			(75,198	)
Total shareholders’ equity			86,845				88,984
Total liabilities and shareholders’ equity		$	138,402			$	138,303

The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. See accompanying notes to the interim condensed consolidated financial statements.

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GAIA, INC.

Condensed Consolidated Statements of Operations

 

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
(in thousands, except per share data)		2023				2022				2023				2022
		(unaudited)								(unaudited)
Revenues, net		$	20,223			$	19,907			$	59,709			$	62,458
Cost of revenues			2,983				2,648				8,595				8,312
Gross profit			17,240				17,259				51,114				54,146
Expenses:
Selling and operating			16,254				15,543				49,462				48,197
Corporate, general and administration			1,433				2,019				4,726				5,598
Acquisition costs			—				—				—				49
Total operating expenses			17,687				17,562				54,188				53,844
Income (loss) from operations			(447	)			(303	)			(3,074	)			302
Interest and other expense, net			(141	)			(65	)			(375	)			(175	)
SEC settlement			—				(2,000	)			—				(2,000	)
Loss before income taxes			(588	)			(2,368	)			(3,449	)			(1,873	)
Provision for (benefit from) income taxes			—				—				—				—
Loss from continuing operations			(588	)			(2,368	)			(3,449	)			(1,873	)
Loss from discontinued operations			—				(7	)			—				(300	)
Net loss		$	(588	)		$	(2,375	)		$	(3,449	)		$	(2,173	)
Earnings (loss) per share:
Basic
Continuing operations		$	(0.03	)		$	(0.11	)		$	(0.16	)		$	(0.09	)
Discontinued operations		$	—			$	—			$	—			$	(0.01	)
Basic earnings (loss) per share		$	(0.03	)		$	(0.11	)		$	(0.16	)		$	(0.10	)
Diluted
Continuing operations		$	(0.03	)		$	(0.11	)		$	(0.16	)		$	(0.09	)
Discontinued operations		$	—			$	—			$	—			$	(0.01	)
Diluted earnings (loss) per share		$	(0.03	)		$	(0.11	)		$	(0.16	)		$	(0.10	)
Weighted-average shares outstanding:
Basic			21,154				20,806				20,951				20,686
Diluted			21,154				20,806				20,951				20,686

See accompanying notes to the interim condensed consolidated financial statements.

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GAIA, INC.

Condensed Consolidated Statements of Changes in Shareholders’ Equity

		(unaudited)
(in thousands, except shares)		Total Shareholders’ Equity				Accumulated Deficit				Common Stock Amount				Additional Paid-in Capital				Common Stock Shares
Balance at January 1, 2022		$	90,215			$	(72,103	)		$	2			$	162,316				20,461,337
Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation			540				—				—				540				313,823
Net income			86				86				—				—				—
Balance at March 31, 2022		$	90,841			$	(72,017	)		$	2			$	162,856				20,775,160
Issuance of Gaia, Inc. common stock for RSU releases, employee stock purchase plan, stock option exercises and share-based compensation			433				—				—				433				31,026
Net Income			116				116				—				—				—
Balance at June 30, 2022		$	91,390			$	(71,901	)		$	2			$	163,289				20,806,186
Share-based compensation			337				—				—				337				—
Net loss			(2,375	)			(2,375	)			—				—				—
Balance at September 30, 2022		$	89,352			$	(74,276	)		$	2			$	163,626				20,806,186
Balance at January 1, 2023		$	88,984			$	(75,198	)		$	2			$	164,180				20,806,186
Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation			104				—				—				104				19,606
Net loss			(1,143	)			(1,143	)			—				—				—
Balance at March 31, 2023		$	87,945			$	(76,341	)		$	2			$	164,284				20,825,792
Issuance of Gaia, Inc. common stock for media library acquisition			669				—				—				669				272,980
Issuance of Gaia, Inc. common stock for RSU releases, employee stock purchase plan, and share-based compensation			481				—				—				481				55,653
Net loss			(1,718	)			(1,718	)			—				—				—
Balance at June 30, 2023		$	87,377			$	(78,059	)		$	2			$	165,434				21,154,425
Share-based compensation			56				—				—				56				—
Net loss			(588	)			(588	)			—				—				—
Balance at September 30, 2023		$	86,845			$	(78,647	)		$	2			$	165,490				21,154,425

See accompanying notes to the interim condensed consolidated financial statements.

6

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GAIA, INC.

Condensed Consolidated Statements of Cash Flows

 

		For the Nine Months Ended September 30,
(in thousands)		2023				2022
		(unaudited)
Operating activities:
Net loss		$	(3,449	)		$	(2,173	)
Loss from discontinued operations			—				300
Loss from continuing operations			(3,449	)			(1,873	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			12,702				12,009
Share-based compensation expense			599				1,267
Changes in operating assets and liabilities:
Accounts receivable			(874	)			(393	)
Prepaid expenses and other assets			(1,821	)			(752	)
Accounts payable and accrued liabilities			1,714				(1,612	)
Deferred revenue			1,210				(273	)
Net cash provided by operating activities - continuing operations			10,081				8,373
Net cash used in operating activities - discontinued operations			—				(300	)
Net cash provided by operating activities			10,081				8,073
Investing activities:
Additions to media library, software and equipment			(10,371	)			(14,056	)
Acquisitions, net of cash acquired, and purchase of intangible assets			—				(847	)
Net cash used in investing activities			(10,371	)			(14,903	)
Financing activities:
Repayment of debt			(19,985	)			(141	)
Proceeds from short-term borrowings			19,900				7,500
Proceeds from the issuance of common stock			42				43
Net cash provided by (used in) financing activities			(43	)			7,402
Net change in cash			(333	)			572
Cash at beginning of period			11,562				10,269
Cash at end of period		$	11,229			$	10,841
Supplemental cash flow information
Interest paid		$	394			$	201
Value of shares issued for acquisition of content added to Media Library		$	669				—

See accompanying notes to the interim condensed consolidated financial statements.

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Notes to interim condensed consolidated financial statements

References in this report to “we”, “us”, “our” or “Gaia” refer to Gaia, Inc. and its consolidated subsidiaries, unless we indicate otherwise. All textual currency references are expressed in thousands of U.S. dollars (unless otherwise indicated).

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

Gaia, Inc. (“Gaia,” “we” or “us”) operates a global digital video subscription service and on-line community that caters to a unique and underserved member base. Our digital content library includes over 10,000 titles, with a growing selection of titles available in Spanish, German and French. Our members have unlimited access to this vast library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation-related content and more – 88% of which is exclusively available to our members for digital streaming on most internet-connected devices anytime, anywhere, commercial free.

Our mission is to create a transformational network that empowers a global conscious community. Content on our network is currently organized into four primary channels—Yoga, Transformation, Alternative Healing, and Seeking Truth—and delivered directly to our members through our streaming platform. We curate programming for these channels by producing content in our in-house production studios with a staff of media professionals. This produced and owned content currently comprises approximately 75% of our members’ viewing time. We complement our produced and owned content through long term licensing agreements.

We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”), and they include our accounts and those of our subsidiaries. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial position, results of operations and cash flows for the interim periods disclosed in this report are not necessarily indicative of future financial results.

There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2022.

Use of Estimates and Reclassifications

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and disclosures. Although we base these estimates on our best knowledge of current events and actions that we may undertake in the future, actual results may be different from the estimates. We have made certain reclassifications to prior period amounts to conform to the current period presentations.

Discontinued Operations

Yoga International historically had a line of business focused on one-time transactional course sales. With the launch of a premium membership tier that includes this content, this line of business was discontinued in 2022 as the contractual commitments related to this line of business lapsed. There are no other assets or liabilities associated with this revenue stream. As this represents a strategic shift with a major effect on our operations and financial results, we have presented the results of operations related to winding up this line of business as discontinued operations on the accompanying condensed consolidated statement of operations in 2022.

2. Revenue Recognition

Revenues consist primarily of subscription fees paid by our members. We present revenues net of taxes collected from members. Members are billed in advance and revenues are recognized ratably over the subscription term. Deferred revenue consists of subscription fees collected from members that have not been earned and is recognized ratably over the remaining term of the subscription. We recognize revenue on a net basis for relationships where our partners have the primary relationship, including billing and service delivery, with the member. Payments made to partners to assist in promoting our service on their platforms are expensed as marketing expenses in the period incurred. We do not allow access to our service to be provided as part of a bundle by any of our partners.

3. Equity and Share-Based Compensation

During the first nine months of 2023 and 2022, we recognized approximately $599 and $1,267, respectively, of share-based compensation expense. Total share-based compensation expense is reported in selling and operating expenses and corporate, general and administration expenses on our condensed consolidated statements of operations. There were no options exercised during the first nine months of 2023 or 2022.

4. Goodwill and Other Intangible Assets

There were no changes in goodwill for the period from December 31, 2022 through September 30, 2023.

8

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The following table represents our other intangible assets by major asset class as of the dates indicated, which are included in Real estate, investment and other assets, net on the accompanying condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022.

(in thousands)		September 30, 2023				December 31, 2022
Amortizable Intangible Assets
Customer relationships		$	2,000			$	2,000
Tradenames			270				270
Accumulated amortization			(1,004	)			(579	)
		$	1,266			$	1,691
Unamortized Intangible Assets
Domain names		$	563			$	563

Our amortizable assets are expected to be amortized on a straight-line basis over 48 months. Amortization expense was $142 for the three months ended September 30, 2023 and 2022 and $425 for the nine months ended September 30, 2023 and 2022. Future amortization of our amortizable intangible assets as of September 30, 2023 is expected to be as follows:

(in thousands)
2023 (remaining)		$	142
2024			568
2025			556
		$	1,266

 

5. Debt

On September 9, 2020, Boulder Road sold a 50% undivided interest in a portion of our corporate campus to Westside Boulder, LLC (Westside). Boulder Road retained a 50% undivided interest in the property as well as full ownership of our studio and production facilities. Boulder Road received consideration of $13.2 million in the transaction.

On December 28, 2020, Boulder Road and Westside entered into a loan agreement with First Interstate Bank, as lender, providing for a mortgage loan in the principal amount of $13.0 million. The mortgage bears interest at a fixed rate of 3.75% per annum, matures on December 28, 2025, is secured by a deed of trust on our corporate campus, a portion of which is owned by Boulder Road and Westside as tenants-in-common and the remainder of which is owned by Boulder Road. Westside and Boulder Road each received 50% of the loan proceeds and are each responsible for 50% of the monthly installments. Gaia guaranteed payment of the mortgage. The mortgage is subject to certain financial covenants related to the underlying property.

On August 25, 2022 (the Closing Date), Gaia, as borrower, and certain subsidiaries, as guarantors, entered into a Credit and Security Agreement (the Credit Agreement) with KeyBank National Association (KeyBank). The Credit Agreement provides for a revolving credit facility in an aggregate amount of up to $10.0 million with a sublimit of $1.0 million available for issuances of letters of credit. Borrowings under the Credit Agreement are available for working capital and general corporate purposes, but not to fund any permitted acquisitions or other investments. As of September 30, 2023, $9.0 million was drawn under the Credit Agreement, which is included in Short-term debt and lease liability on the accompanying condensed consolidated balance sheets.

Loans made, or letters of credit issued, under the Credit Agreement mature on August 25, 2025 and are secured (subject to permitted liens and other exceptions) by a first priority lien on all business assets, including intellectual property, of Gaia and the subsidiary guarantors.

Any advance under the Credit Agreement shall bear interest at the Daily Simple SOFR rate (subject to a floor of 0.00%), plus, the SOFR Index Adjustment of 0.10%, plus a margin of 2.00%; provided, that, during the existence of a Benchmark Unavailability Period or a SOFR Unavailability Period, advances shall bear interest at the Base Rate, which is a fluctuating interest rate per annum equal to the highest of (i) the Federal Funds Rate plus 0.50%, (ii) KeyBank’s “prime rate,” (iii) SOFR and (iv) 3.00%, plus, in each instance, a margin of 1.00%.

The aggregate outstanding amount of advances under the Credit Agreement is required to be $0 for at least 30 consecutive days during the period commencing on the 12-month anniversary of the Closing Date and ending on the 24-month anniversary of the Closing Date. The company expects this requirement to be satisfied during fourth quarter 2023.

The Credit Agreement contains customary affirmative and negative covenants (each with customary exceptions), including limitations on the Company’s ability to incur liens or debt, make investments, pay dividends, enter into transactions with its affiliates and engage in certain fundamental changes. Additionally, the Credit Agreement requires Gaia to maintain a Fixed Charge Coverage Ratio of not less than 1.20 to 1.00 and to not permit the Leverage Ratio to exceed 1.50 to 1.00 for any computation period.

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Maturities on long-term debt, net are:

(in thousands)
2023 (remaining)		$	9,038
2024			156
2025			5,801
		$	14,995

 

6. Leases

In connection with the sale of a portion of our corporate campus as further discussed in Note 5, we leased the property pursuant to a master lease for an initial term extending through September 30, 2030, with two five-year extensions. We record the right to use the underlying asset for the operating lease term as an asset and our obligation to make lease payments as a liability, based on the present value of the lease payments over the initial lease term. On commencement of the lease, we recorded a right-of-use asset and operating lease liability of $8,800.

Because the rate implicit in the lease is not readily determinable, we used our incremental borrowing rate to determine the present value of lease payments. Information related to our right-of-use asset and related lease liability were as follows:

				September 30,				December 31,
(in thousands)		Balance Sheet Classification		2023				2022
Right-of-use asset		Right-of-use lease asset, net		$	6,492			$	7,093
Operating lease liability (current)		Accounts payable, accrued and other liabilities		$	767			$	745
Operating lease liability (non-current)		Long-term lease liability			5,911				6,489
				$	6,678			$	7,234

 

		For the Three Months Ended September 30,
(in thousands)		2023				2022
Cash paid for operating lease liabilities		$	250			$	250

		For the Nine Months Ended September 30,
(in thousands)		2023				2022
Cash paid for operating lease liabilities		$	750			$	750

Operating lease expense is recognized on a straight-line basis over the lease term. Future amortization of our lease liability as of September 30, 2023 is expected to be:

(in thousands)
2023 (remaining)		$	250
2024			1,008
2025			1,035
2026			1,064
2027			1,093
Thereafter			3,160
Future lease payments, gross			7,610
Less: Imputed interest			(932	)
Operating lease liability		$	6,678

 

7. Earnings Per Share

Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period (“common stock equivalents”). Common stock equivalents consist of incremental shares issuable upon the assumed exercise of stock options and vesting of restricted stock units utilizing the treasury stock method.

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The weighted-average diluted shares outstanding computation is:

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
(in thousands, except per share data)		2023				2022				2023				2022
		(unaudited)								(unaudited)
Weighted-average common stock outstanding			21,154				20,806				20,951				20,686
Common stock equivalents			—				—				—				—
Weighted-average number of shares			21,154				20,806				20,951				20,686

Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive. The following table summarizes the potential shares of common stock excluded from the diluted calculation:

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
(in thousands)		2023				2022				2023				2022
		(unaudited)								(unaudited)
Common stock equivalents excluded due to net loss			67				6				57				97
Employee stock options and RSUs			598				976				497				672
			665				982				554				769

 

8. Income Taxes

Periodically, we perform assessments of the realization of our net deferred tax assets considering all available evidence, both positive and negative. Based on our historical operating losses, combined with our plans to continue to invest in our revenue growth and content library, we have a full valuation allowance on our deferred tax assets as of September 30, 2023. As of September 30, 2023, our net operating loss carryforwards on a gross basis were $80,490 and $26,416 for federal and state, respectively. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a stimulus bill which was in response to economic consequences of the COVID-19 pandemic. The CARES Act provided an employee retention credit, which is a refundable tax credit against certain employment taxes. During the quarter ended September 30, 2023, we recorded $1,750 related to the employee retention credit in Selling and operating expenses in the condensed consolidated statements of operations with a related receivable balance from the United States government related to the CARES Act, which is recorded in Prepaid expenses and other current assets on our condensed consolidated balance sheets.

9. Non-income Taxes

The Company is subject to tax examinations for Value Added Taxes (VAT). A number of these examinations are ongoing and, in certain cases, have resulted in assessments from taxing authorities. Where a VAT liability with respect to a jurisdiction is probable and can be reliably estimated, the Company accrues for these matters in corporate, general, and administration expenses in the condensed consolidated statements of operations. Future developments relating to the foregoing could result in adjustments to these accruals.

10. Contingencies

From time to time, we are involved in legal proceedings that we consider to be in the normal course of business. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, that are considered probable of being rendered against us in litigation or arbitration in existence at September 30, 2023 and that can be reasonably estimated are either reserved against or would not have a material adverse effect on our financial condition, results of operations or cash flows.

11. Subsequent Events

Class A Common Stock Offering

On October 2, 2023, we entered into an underwriting agreement with Lake Street Capital Markets, LLC (the Underwriter) relating to the offer and sale of 1,855,000 shares of our Class A Common Stock ($0.0001 par value) (the Shares). We sold the Shares to the Underwriter at the public offering price of $2.70 per share less underwriting discounts and commissions, resulting in net proceeds of $4,678. We provided a 30-day option to the Underwriter to purchase up to an additional 278,250 Shares to cover over-allotments. At time of filing, the over-allotment option was not exercised.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward looking statements that involve risks and uncertainties. When used in this discussion, we intend the words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “hope,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “strive,” “target,” “will,” “would” and similar expressions as they relate to us to identify such forward-looking statements. Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of certain factors set forth under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q and under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. Risks and uncertainties that could cause actual results to differ include, without limitation: our ability to attract new members and retain existing members; our ability to compete effectively, including for customer engagement with different modes of entertainment; maintenance and expansion of devise platforms for streaming; fluctuation in customer usage of our service; fluctuations in quarterly operating results; service disruptions; production risks; general economic conditions; future losses; loss of key personnel; price changes; brand reputation; acquisitions; new initiatives we undertake; security and information systems; legal liability for website content; failure of third parties to provide adequate service; future internet-related taxes; our founder’s control of us; litigation; consumer trends; the effect of government regulation and programs; the impact of public health threats, including the coronavirus (COVID-19) pandemic and our response to it; and other risks and uncertainties included in our filings with the SEC. We caution you that no forward-looking statement is a guarantee of future performance, and you should not place undue reliance on these forward-looking statements which reflect our views only as of the date of this report. We undertake no obligation to update any forward-looking information.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes included elsewhere in this document. This section is designed to provide information that will assist readers in understanding our consolidated financial statements, changes in certain items in those statements from year to year, the primary factors that caused those changes and how certain accounting principles, policies and estimates affect the consolidated financial statements.

Overview and Outlook

We operate a global digital video subscription service with a library of over 10,000 titles, with a growing selection of titles available in Spanish, German and French that caters to a unique, underserved member base. Our digital content is available to our members on most internet-connected devices anytime, anywhere, commercial-free. Through our online Gaia subscription service our members have unlimited access to a library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation related content, and more – 88% of which is exclusively available to our members for digital streaming on most internet-connected devices.

Gaia’s position in the streaming video landscape is firmly supported by its wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services. Our original content is developed and produced in-house in our production studios near Boulder, Colorado. By offering exclusive and unique content through our streaming service, we believe we will be able to significantly expand our target member base.

Our available content is currently focused on yoga, transformation, alternative healing, seeking truth and conscious films. This content is specifically targeted to a unique member base that is interested in alternatives and supplements to the content provided by mainstream media. We have grown these content options both organically through our own productions and through strategic acquisitions. In addition, through our investments in our streaming video technology and our user interface, we have expanded the many ways our subscription member base can access our unique library of media titles.

Our core strategy is to grow our subscription business domestically and internationally by expanding our unique and exclusive content library, enhancing our user interface, extending our streaming service to new internet-connected devices as they are developed and creating a conscious community built around our content.

The full impact that the COVID-19 pandemic will have on our business, operations and financial results will depend on a number of evolving factors that we may not be able to accurately predict. See Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022 for additional discussion regarding risks related to the COVID-19 pandemic.

Commencing during the second half of March 2020 and continuing through July 2020, we saw an increase in demand for our content from both current and potential members. This created a positive trend in existing member retention, costs to acquire new members, and the corresponding revenue and cash flow impacts from these higher volumes. This trend dissipated beginning in August 2020,

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when we saw the online paid media advertising market start to return to historical norms with a corresponding effect on the cost of our online advertising efforts. With the rollout of privacy changes affecting a large number of mobile consumers during the summer of 2021 we saw an increase in the costs of our online advertising efforts which reduced the number of new members we add each period with our allocated marketing spend. In addition, in the period of March through October 2022, we lost about 40% of the members we added during the COVID-19 lockdowns in 2020 and 2021.

We are a Colorado corporation. Our principal and executive office is located at 833 West South Boulder Road, Louisville, CO 80027-2452. Our telephone number at that address is [phone].

Results of Operations

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

 

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
(in thousands, except per share data)		2023				2022				2023				2022
Revenues, net		$	20,223			$	19,907			$	59,709			$	62,458
Cost of revenues			2,983				2,648				8,595				8,312
Gross profit margin			85.2	%			86.7	%			85.6	%			86.7	%
Selling and operating			16,254				15,543				49,462				48,197
Corporate, general and administration			1,433				2,019				4,726				5,598
Acquisition costs			—				—				—				49
Total operating expenses			17,687				17,562				54,188				53,844
Income (loss) from operations			(447	)			(303	)			(3,074	)			302
Interest and other expense, net			(141	)			(65	)			(375	)			(175	)
SEC settlement			—				(2,000	)			—				(2,000	)
Loss before income taxes			(588	)			(2,368	)			(3,449	)			(1,873	)
Provision for (benefit from) income taxes			—				—				—				—
Loss from continuing operations			(588	)			(2,368	)			(3,449	)			(1,873	)
Loss from discontinued operations			—				(7	)			—				(300	)
Net loss		$	(588	)		$	(2,375	)		$	(3,449	)		$	(2,173	)

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

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2023				2022				2023				2022
Revenues, net			100.0	%			100.0	%			100.0	%			100.0	%
Cost of revenues			14.8	%			13.3	%			14.4	%			13.3	%
Gross profit			85.2	%			86.7	%			85.6	%			86.7	%
Expenses:
Selling and operating			80.4	%			78.1	%			82.8	%			77.2	%
Corporate, general and administration			7.1	%			10.1	%			7.9	%			9.0	%
Acquisition costs			—	%			—	%			—	%			0.1	%
Total operating expenses			87.5	%			88.2	%			90.8	%			86.2	%
Income (loss) from operations			(2.2	)%			(1.5	)%			(5.1	)%			0.5	%
Interest and other expense, net			(0.7	)%			(0.3	)%			(0.6	)%			(0.3	)%
SEC settlement			—	%			(10.0	)%			—	%			(3.2	)%
Loss before income taxes			(2.9	)%			(11.9	)%			(5.8	)%			(3.0	)%
Provision for (benefit from) income taxes			—	%			—	%			—	%			—	%
Loss from continuing operations			(2.9	)%			(11.9	)%			(5.8	)%			(3.0	)%
Loss from discontinued operations			—	%			(0.0	)%			—	%			(0.5	)%
Net loss			(2.9	)%			(11.9	)%			(5.8	)%			(3.5	)%

Three months ended September 30, 2023 compared to three months ended September 30, 2022

Revenues, net. Revenues increased $0.3 million, or 1.5%, to $20.2 million during the three months ended September 30, 2023, compared to $19.9 million during the three months ended September 30, 2022. This was primarily driven by an increase in member count.

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Cost of revenues. Cost of revenues increased $0.4 million or 15.4% to $3.0 million during the three months ended September 30, 2023, compared to $2.6 million during the three months ended September 30, 2022 related to the increase in revenues and increased content amortization. Gross profit margin decreased during the three months ended September 30, 2023 to 85.2% from 86.7% for the three months ended September 30, 2022 primarily due to increased content amortization related to an overall increase in our investment of our original content offerings.

Selling and operating expenses. Selling and operating expenses increased $0.8 million, or 5.2%, to $16.3 million during the three months ended September 30, 2023, compared to $15.5 million for the three months ended September 30, 2022, driven primarily by an increase in marketing spend expenses and tax accruals. These increased expenses are offset by a one-time Employee Retention Tax Credit (ERTC) against payroll tax expense. This ERTC tax credit was recognized upon completion of the filing. As a percentage of net revenues, selling and operating expenses increased to 80.4% for the three months ended September 30, 2023 compared to 78.1% for the three months ended September 30, 2022.

Corporate, general and administration expenses. Corporate, general and administration expenses decreased $0.6 million, or 30.0% to $1.4 million for three months ended September 30, 2023 from $2.0 million for three months ended September 30, 2022, driven primarily by decreases in salary and payroll related expenses. As a percentage of net revenues, these expenses decreased to 7.1% for the three months ended September 30, 2023 from 10.1% for the three months ended September 30, 2022.

Nine months ended September 30, 2023 compared to nine months ended September 30, 2022

Revenues, net. Revenues decreased $2.8 million, or 4.5%, to $59.7 million during the nine months ended September 30, 2023, compared to $62.5 million during the nine months ended September 30, 2022. This was primarily driven by a post-COVID subscriber contraction, experienced industry wide during the second half of 2022, which resulted in decreased revenue and overall member count into 2023. The reversal of this trend began during the first half of 2023, when we started to see member count growth along with revenues. This steady pace of growth culminated in the third quarter of 2023, when we started to see a return to the pre-contraction revenue levels.

Cost of revenues. Cost of revenues increased $0.3 million, or 3.6%, to $8.6 million during the nine months ended September 30, 2023, from $8.3 million during the nine months ended September 30, 2022 due to increased content amortization. Gross profit margin decreased during the nine months ended September 30, 2023 to 85.6% from 86.7% for the nine months ended September 30, 2022 primarily due to decreased revenues.

Selling and operating expenses. Selling and operating expenses increased $1.3 million, or 2.7%, to $49.5 million during the nine months ended September 30, 2023, compared to $48.2 million for the nine months ended September 30, 2022, driven primarily by an increase in marketing spend and tax accruals. These increased expenses are offset by a one-time Employee Retention Tax Credit (ERTC) against payroll tax expense. This ERTC tax credit was recognized upon completion of the filing. As a percentage of net revenues, these expenses increased to 82.8% for the nine months ended September 30, 2023 compared to 77.2% for the nine months ended September 30, 2022.

Corporate, general and administration expenses. Corporate, general and administration expenses decreased $0.9 million or 16.1% to $4.7 million for the nine months ended September 30, 2023 compared to $5.6 million for the nine months ended September 30, 2022, primarily driven by decreases in salary and payroll expenses. As a percentage of net revenues, these expenses decreased to 7.9% for the nine months ended September 30, 2023 from 9.0% for the nine months ended September 30, 2022, driven primarily by a decrease in revenues.

Seasonality

Our member base growth reflects seasonal variations driven primarily by periods when consumers typically spend more time indoors and, as a result, tend to increase their viewing, similar to those of traditional TV and cable networks. The effects of the global pandemic have shifted our historical pattern over the past two years, but we have historically experienced the greatest member growth in the fourth and first quarters (October through February), and slowest growth during May through August. This has historically driven quarterly variations in our spending on member acquisition efforts and the number of net new subscribers we add each quarter but has not historically resulted in corresponding seasonality in net revenue. As we continue to expand internationally, we also expect regional seasonality trends to demonstrate more predictable seasonal patterns as our service offering in each market becomes more established and we have a longer history to assess such patterns.

Liquidity and Capital Resources

Our capital needs arise from working capital required to fund operations, capital expenditures related to acquisition and development of media content, development and marketing of our digital platforms, acquisitions of new businesses and other investments,

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replacements, expansions and improvements to our infrastructure, and future growth. These capital requirements depend on numerous factors, including the rate of market acceptance of our offerings, our ability to expand our customer base, the cost of ongoing upgrades to our offerings, our expenditures for marketing, and other factors. Additionally, we will continue to pursue opportunities to expand our media libraries, evaluate possible investments in businesses and technologies, and increase our marketing programs as needed.

Our budgeted content and capital expenditures for the remainder of 2023 are expected to be between $3.0 to $4.0 million which we intend to fund with cash flows generated from operations. These planned expenditures will be predominately utilized to expand our content library and build out the capabilities of our digital platforms. The planned expenditures are discretionary and, with our in-house production capabilities, we have the ability to scale expenditures based on the available cash flows from operations. We began to generate positive cash flows from operations in October 2019 and have continued to generate cash flows from operations since. We expect to continue generating positive cash flows from operations during the remainder of 2023. We generated approximately $10.1 million in cash flows from operations during the nine months ended September 30, 2023. As of September 30, 2023, our cash balance was $11.2 million.

As described in Note 5, during August 2022, we entered into a Credit Agreement with KeyBank, which provides for a revolving credit facility in an aggregate amount of up to $10.0 million. Funds from the Credit Agreement are available for working capital and general corporate purposes, but not to fund any permitted acquisitions or other investments. As of September 30, 2023, $9.0 million was drawn under the Credit Agreement, which is included in Long-term debt, net on the accompanying condensed consolidated balance sheets.

In the normal course of our business, we investigate, evaluate and discuss acquisition, joint venture, minority investment, strategic relationship and other business combination opportunities in our market. For any future investment, acquisition, or joint venture opportunities, we may consider using then-available liquidity, issuing equity securities or incurring indebtedness.

While there can be no assurances, we believe our cash on hand, our cash expected to be generated from operations, our $10 million revolving line of credit, our potential additional borrowing capabilities now that we have a history of generating positive operating cash flows, and our potential capital raising capabilities will be sufficient to fund our operations on both a short-term and long-term basis. However, our projected cash needs may change as a result of acquisitions, product development, unforeseen operational difficulties, or other factors.

Class A Common Stock Offering

On October 2, 2023, we entered into an underwriting agreement with Lake Street Capital Markets, LLC (the Underwriter) relating to the offer and sale of 1,855,000 shares of our Class A Common Stock ($0.0001 par value) (the Shares). We sold the Shares to the Underwriter at the public offering price of $2.70 per share less underwriting discounts and commissions, resulting in net proceeds of $4,678. We provided a 30-day option to the Underwriter to purchase up to an additional 278,250 Shares to cover over-allotments. At time of filing, the over-allotment option was not exercised. Proceeds were, and are, expected to be used for general corporate purposes, which may include additions to working capital, financing of capital expenditures, repayment of indebtedness, acquisitions and strategic investment opportunities.

Cash Flows

The following table summarizes our sources (uses) of cash during the periods presented:

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
(in thousands)		2023				2022				2023				2022
Net cash provided by (used in):
Operating activities - continuing operations		$	3,601			$	1,686			$	10,081			$	8,373
Operating activities - discontinued operations			—				(7	)			—				(300	)
Operating activities			3,601				1,679				10,081				8,073
Investing activities			(3,252	)			(4,484	)			(10,371	)			(14,903	)
Financing activities			1				7,451				(43	)			7,402
Net change in cash		$	350			$	4,646			$	(333	)		$	572

Operating activities. Cash flows provided by operations increased approximately $2.0 million during the first nine months of 2023 compared to the same period in 2022. The increase was primarily driven by changes in earnings, timing of working capital, primarily accounts payable and deferred revenues.

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Investing activities. Cash flows used in investing activities decreased $4.5 million during the first nine months of 2023 compared to the same period in 2022 due primarily to the cost reduction initiatives we completed in the first quarter of 2023.

Financing activities. Cash flows provided by financing activities were primarily impacted by borrowing and repayment activities associated with our revolving line of credit.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined in Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934. Based upon its evaluation as of September 30, 2023, our management has concluded that those disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

We incorporate by reference the Risk Factors included as Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 that we filed with the SEC on March 6, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits

 

Exhibit No.		Description
31.1*		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2*		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1**		Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File

 

* Filed herewith

** Furnished herewith

18

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

		Gaia, Inc.
		(Registrant)
October 30, 2023	By:	/s/ Jirka Rysavy
Date		Jirka Rysavy
		Chief Executive Officer
		(Authorized Officer)
October 30, 2023	By:	/s/ Ned Preston
Date		Ned Preston
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

 

19

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Exhibit 31.1

CERTIFICATION

I, Jirka Rysavy, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Gaia, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2023

 

/s/ Jirka Rysavy

Jirka Rysavy

Chief Executive Officer

(Principal Executive Officer)

 

---

Exhibit 31.2

CERTIFICATION

I, Ned Preston, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Gaia, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2023

 

/s/ Ned Preston

Ned Preston

Chief Financial Officer

(Principal Financial Officer)

 

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Exhibit 32.1

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gaia, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Jirka Rysavy, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 30, 2023

 

/s/ Jirka Rysavy

Jirka Rysavy

Chief Executive Officer

(Principal Executive Officer)

A signed original of the written statement required by Section 906 has been provided to Gaia will be retained by Gaia and furnished to the Securities and Exchange Commission or its staff upon request.

---

Exhibit 32.2

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Gaia, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Ned Preston, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)

The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 30, 2023

 

/s/ Ned Preston

Ned Preston

Chief Financial Officer

(Principal Financial Officer)

A signed original of the written statement required by Section 906 has been provided to Gaia and will be retained by Gaia and furnished to the Securities and Exchange Commission or its staff upon request.

---

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Oct. 27, 2023
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Trading Symbol	GAIA
Entity Registrant Name	GAIA, INC
Entity Central Index Key	0001089872
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	000-27517
Entity Tax Identification Number	84-1113527
Entity Address, Address Line One	833 WEST SOUTH BOULDER ROAD
Entity Address, City or Town	LOUISVILLE
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80027
City Area Code	303
Local Phone Number	222-3600
Entity Interactive Data Current	Yes
Title of 12(b) Security	Class A Common Stock
Security Exchange Name	NASDAQ
Entity Incorporation, State or Country Code	CO
Document Quarterly Report	true
Document Transition Report	false
Class A Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		17,609,425
Class B Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		5,400,000

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash	$ 11,229	$ 11,562
Accounts receivable	3,829	2,955
Prepaid expenses and other current assets	4,132	2,656
Total current assets	19,190	17,173
Media library, software and equipment, net	50,481	51,115
Right-of-use lease asset, net	6,492	7,093
Real estate, investment and other assets, net	30,296	30,979
Goodwill	31,943	31,943
Total assets	138,402	138,303
Current liabilities:
Accounts payable, accrued and other liabilities	14,051	12,355
Short-term debt and lease liability	9,920	894
Deferred revenue	15,334	14,124
Total current liabilities	39,305	27,373
Long-term debt, net	5,842	14,958
Long-term lease liability	5,911	6,489
Deferred taxes	499	499
Total liabilities	51,557	49,319
Shareholders equity:
Additional paid-in capital	165,490	164,180
Accumulated deficit	(78,647)	(75,198)
Total shareholders equity	86,845	88,984
Total liabilities and shareholders equity	138,402	138,303
Class A Common Stock [Member]
Shareholders equity:
Common stock	1	1
Class B Common Stock [Member]
Shareholders equity:
Common stock	$ 1	$ 1

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Class A Common Stock [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	15,754,425	15,406,186
Common stock, shares outstanding	15,754,425	15,406,186
Class B Common Stock [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	5,400,000	5,400,000
Common stock, shares outstanding	5,400,000	5,400,000

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenues, net	$ 20,223	$ 19,907	$ 59,709	$ 62,458
Cost of revenues	2,983	2,648	8,595	8,312
Gross profit	17,240	17,259	51,114	54,146
Expenses:
Selling and operating	16,254	15,543	49,462	48,197
Corporate, general and administration	1,433	2,019	4,726	5,598
Acquisition costs				49
Total operating expenses	17,687	17,562	54,188	53,844
Income (loss) from operations	(447)	(303)	(3,074)	302
Interest and other expense, net	(141)	(65)	(375)	(175)
SEC settlement		(2,000)		(2,000)
Loss before income taxes	(588)	(2,368)	(3,449)	(1,873)
Loss from continuing operations	(588)	(2,368)	(3,449)	(1,873)
Loss from discontinued operations		(7)		(300)
Net loss	$ (588)	$ (2,375)	$ (3,449)	$ (2,173)
Basic
Continuing operations	$ (0.03)	$ (0.11)	$ (0.16)	$ (0.09)
Discontinued operations				(0.01)
Basic earnings (loss) per share	(0.03)	(0.11)	(0.16)	(0.1)
Diluted
Continuing operations	(0.03)	(0.11)	(0.16)	(0.09)
Discontinued operations				(0.01)
Diluted earnings (loss) per share	$ (0.03)	$ (0.11)	$ (0.16)	$ (0.1)
Weighted-average shares outstanding:
Basic	21,154	20,806	20,951	20,686
Diluted	21,154	20,806	20,951	20,686

Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Accumulated Deficit	Common Stock	Additional Paid-in Capital
Beginning balance at Dec. 31, 2021	$ 90,215	$ (72,103)	$ 2	$ 162,316
Beginning balance (in shares) at Dec. 31, 2021			20,461,337
Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation	540			540
Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation (in shares)			313,823
Net income (loss)	86	86
Ending balance at Mar. 31, 2022	90,841	(72,017)	$ 2	162,856
Ending balance (in shares) at Mar. 31, 2022			20,775,160
Beginning balance at Dec. 31, 2021	90,215	(72,103)	$ 2	162,316
Beginning balance (in shares) at Dec. 31, 2021			20,461,337
Share-based compensation	1,267
Net income (loss)	(2,173)
Ending balance at Sep. 30, 2022	89,352	(74,276)	$ 2	163,626
Ending balance (in shares) at Sep. 30, 2022			20,806,186
Beginning balance at Mar. 31, 2022	90,841	(72,017)	$ 2	162,856
Beginning balance (in shares) at Mar. 31, 2022			20,775,160
Issuance of Gaia, Inc. common stock for RSU releases, employee stock purchase plan, stock option exercises and share-based compensation	433			433
Issuance of Gaia, Inc. common stock for RSU releases, employee stock purchase plan, stock option exercises and share-based compensation (in shares)			31,026
Net income (loss)	116	116
Ending balance at Jun. 30, 2022	91,390	(71,901)	$ 2	163,289
Ending balance (in shares) at Jun. 30, 2022			20,806,186
Share-based compensation	337			337
Net income (loss)	(2,375)	(2,375)
Ending balance at Sep. 30, 2022	89,352	(74,276)	$ 2	163,626
Ending balance (in shares) at Sep. 30, 2022			20,806,186
Beginning balance at Dec. 31, 2022	88,984	(75,198)	$ 2	164,180
Beginning balance (in shares) at Dec. 31, 2022			20,806,186
Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation	104			104
Issuance of Gaia, Inc. common stock for RSU releases and share-based compensation (in shares)			19,606
Net income (loss)	(1,143)	(1,143)
Ending balance at Mar. 31, 2023	87,945	(76,341)	$ 2	164,284
Ending balance (in shares) at Mar. 31, 2023			20,825,792
Beginning balance at Dec. 31, 2022	88,984	(75,198)	$ 2	164,180
Beginning balance (in shares) at Dec. 31, 2022			20,806,186
Share-based compensation	599
Net income (loss)	(3,449)
Ending balance at Sep. 30, 2023	86,845	(78,647)	$ 2	165,490
Ending balance (in shares) at Sep. 30, 2023			21,154,425
Beginning balance at Mar. 31, 2023	87,945	(76,341)	$ 2	164,284
Beginning balance (in shares) at Mar. 31, 2023			20,825,792
Issuance of Gaia, Inc. common stock for media library acquisition	669			669
Issuance of Gaia, Inc. common stock for media library acquisition (in shares)			272,980
Issuance of Gaia, Inc. common stock for RSU releases, employee stock purchase plan, and share-based compensation	481			481
Issuance of Gaia, Inc. common stock for RSU releases, employee stock purchase plan, and share-based compensation, (in shares)			55,653
Net income (loss)	(1,718)	(1,718)
Ending balance at Jun. 30, 2023	87,377	(78,059)	$ 2	165,434
Ending balance (in shares) at Jun. 30, 2023			21,154,425
Share-based compensation	56			56
Net income (loss)	(588)	(588)
Ending balance at Sep. 30, 2023	$ 86,845	$ (78,647)	$ 2	$ 165,490
Ending balance (in shares) at Sep. 30, 2023			21,154,425

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities:
Net loss	$ (3,449)	$ (2,173)
Loss from discontinued operations		300
Loss from continuing operations	(3,449)	(1,873)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	12,702	12,009
Share-based compensation expense	599	1,267
Changes in operating assets and liabilities:
Accounts receivable	(874)	(393)
Prepaid expenses and other current assets	(1,821)	(752)
Accounts payable and accrued liabilities	1,714	(1,612)
Deferred revenue	1,210	(273)
Net cash provided by operating activities - continuing operations	10,081	8,373
Net cash used in operating activities - discontinued operations		(300)
Net cash provided by operating activities	10,081	8,073
Investing activities:
Additions to media library, software and equipment	(10,371)	(14,056)
Acquisitions, net of cash acquired, and purchase of intangible assets		(847)
Net cash used in investing activities	(10,371)	(14,903)
Financing activities:
Repayment of debt	(19,985)	(141)
Proceeds from short term borrowings	19,900	7,500
Proceeds from the issuance of common stock	42	43
Net cash provided by (used in) financing activities	(43)	7,402
Net change in cash	(333)	572
Cash at beginning of period	11,562	10,269
Cash at end of period	11,229	10,841
Supplemental cash flow information
Interest paid	394	$ 201
Value of shares issued for acquisition of content added to Media Library	$ 669

Organization, Nature of Operations, and Principles of Consolidation	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Organization, Nature of Operations, and Principles of Consolidation	1. Organization, Nature of Operations, and Principles of Consolidation Gaia, Inc. (“Gaia,” “we” or “us”) operates a global digital video subscription service and on-line community that caters to a unique and underserved member base. Our digital content library includes over 10,000 titles, with a growing selection of titles available in Spanish, German and French. Our members have unlimited access to this vast library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation-related content and more – 88% of which is exclusively available to our members for digital streaming on most internet-connected devices anytime, anywhere, commercial free. Our mission is to create a transformational network that empowers a global conscious community. Content on our network is currently organized into four primary channels—Yoga, Transformation, Alternative Healing, and Seeking Truth—and delivered directly to our members through our streaming platform. We curate programming for these channels by producing content in our in-house production studios with a staff of media professionals. This produced and owned content currently comprises approximately 75% of our members’ viewing time. We complement our produced and owned content through long term licensing agreements. We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”), and they include our accounts and those of our subsidiaries. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial position, results of operations and cash flows for the interim periods disclosed in this report are not necessarily indicative of future financial results. There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2022. Use of Estimates and Reclassifications The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and disclosures. Although we base these estimates on our best knowledge of current events and actions that we may undertake in the future, actual results may be different from the estimates. We have made certain reclassifications to prior period amounts to conform to the current period presentations. Discontinued Operations Yoga International historically had a line of business focused on one-time transactional course sales. With the launch of a premium membership tier that includes this content, this line of business was discontinued in 2022 as the contractual commitments related to this line of business lapsed. There are no other assets or liabilities associated with this revenue stream. As this represents a strategic shift with a major effect on our operations and financial results, we have presented the results of operations related to winding up this line of business as discontinued operations on the accompanying condensed consolidated statement of operations in 2022.

Revenue Recognition	9 Months Ended
	Sep. 30, 2023
Revenue Recognition [Abstract]
Revenue Recognition	2. Revenue Recognition Revenues consist primarily of subscription fees paid by our members. We present revenues net of taxes collected from members. Members are billed in advance and revenues are recognized ratably over the subscription term. Deferred revenue consists of subscription fees collected from members that have not been earned and is recognized ratably over the remaining term of the subscription. We recognize revenue on a net basis for relationships where our partners have the primary relationship, including billing and service delivery, with the member. Payments made to partners to assist in promoting our service on their platforms are expensed as marketing expenses in the period incurred. We do not allow access to our service to be provided as part of a bundle by any of our partners.

Equity and Share-Based Compensation	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Equity and Share-Based Compensation	3. Equity and Share-Based Compensation During the first nine months of 2023 and 2022, we recognized approximately $599 and $1,267, respectively, of share-based compensation expense. Total share-based compensation expense is reported in selling and operating expenses and corporate, general and administration expenses on our condensed consolidated statements of operations. There were no options exercised during the first nine months of 2023 or 2022.

Goodwill and Other Intangible Assets	9 Months Ended
	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	4. Goodwill and Other Intangible Assets There were no changes in goodwill for the period from December 31, 2022 through September 30, 2023. The following table represents our other intangible assets by major asset class as of the dates indicated, which are included in Real estate, investment and other assets, net on the accompanying condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022. (in thousands)   September 30, 2023     December 31, 2022   Amortizable Intangible Assets             Customer relationships   $ 2,000     $ 2,000   Tradenames     270       270   Accumulated amortization     (1,004 )     (579 )     $ 1,266     $ 1,691                 Unamortized Intangible Assets             Domain names   $ 563     $ 563   Our amortizable assets are expected to be amortized on a straight-line basis over 48 months. Amortization expense was $142 for the three months ended September 30, 2023 and 2022 and $425 for the nine months ended September 30, 2023 and 2022. Future amortization of our amortizable intangible assets as of September 30, 2023 is expected to be as follows: (in thousands)       2023 (remaining)   $ 142   2024     568   2025     556       $ 1,266

Debt	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Debt	5. Debt On September 9, 2020, Boulder Road sold a 50% undivided interest in a portion of our corporate campus to Westside Boulder, LLC (Westside). Boulder Road retained a 50% undivided interest in the property as well as full ownership of our studio and production facilities. Boulder Road received consideration of $13.2 million in the transaction. On December 28, 2020, Boulder Road and Westside entered into a loan agreement with First Interstate Bank, as lender, providing for a mortgage loan in the principal amount of $13.0 million. The mortgage bears interest at a fixed rate of 3.75% per annum, matures on December 28, 2025, is secured by a deed of trust on our corporate campus, a portion of which is owned by Boulder Road and Westside as tenants-in-common and the remainder of which is owned by Boulder Road. Westside and Boulder Road each received 50% of the loan proceeds and are each responsible for 50% of the monthly installments. Gaia guaranteed payment of the mortgage. The mortgage is subject to certain financial covenants related to the underlying property. On August 25, 2022 (the Closing Date), Gaia, as borrower, and certain subsidiaries, as guarantors, entered into a Credit and Security Agreement (the Credit Agreement) with KeyBank National Association (KeyBank). The Credit Agreement provides for a revolving credit facility in an aggregate amount of up to $10.0 million with a sublimit of $1.0 million available for issuances of letters of credit. Borrowings under the Credit Agreement are available for working capital and general corporate purposes, but not to fund any permitted acquisitions or other investments. As of September 30, 2023, $9.0 million was drawn under the Credit Agreement, which is included in Short-term debt and lease liability on the accompanying condensed consolidated balance sheets. Loans made, or letters of credit issued, under the Credit Agreement mature on August 25, 2025 and are secured (subject to permitted liens and other exceptions) by a first priority lien on all business assets, including intellectual property, of Gaia and the subsidiary guarantors. Any advance under the Credit Agreement shall bear interest at the Daily Simple SOFR rate (subject to a floor of 0.00%), plus, the SOFR Index Adjustment of 0.10%, plus a margin of 2.00%; provided, that, during the existence of a Benchmark Unavailability Period or a SOFR Unavailability Period, advances shall bear interest at the Base Rate, which is a fluctuating interest rate per annum equal to the highest of (i) the Federal Funds Rate plus 0.50%, (ii) KeyBank’s “prime rate,” (iii) SOFR and (iv) 3.00%, plus, in each instance, a margin of 1.00%. The aggregate outstanding amount of advances under the Credit Agreement is required to be $0 for at least 30 consecutive days during the period commencing on the 12-month anniversary of the Closing Date and ending on the 24-month anniversary of the Closing Date. The company expects this requirement to be satisfied during fourth quarter 2023. The Credit Agreement contains customary affirmative and negative covenants (each with customary exceptions), including limitations on the Company’s ability to incur liens or debt, make investments, pay dividends, enter into transactions with its affiliates and engage in certain fundamental changes. Additionally, the Credit Agreement requires Gaia to maintain a Fixed Charge Coverage Ratio of not less than 1.20 to 1.00 and to not permit the Leverage Ratio to exceed 1.50 to 1.00 for any computation period. Maturities on long-term debt, net are: (in thousands)       2023 (remaining)   $ 9,038   2024     156   2025     5,801       $ 14,995

Leases	9 Months Ended
	Sep. 30, 2023
Leases [Abstract]
Leases	6. Leases In connection with the sale of a portion of our corporate campus as further discussed in Note 5, we leased the property pursuant to a master lease for an initial term extending through September 30, 2030, with two five-year extensions. We record the right to use the underlying asset for the operating lease term as an asset and our obligation to make lease payments as a liability, based on the present value of the lease payments over the initial lease term. On commencement of the lease, we recorded a right-of-use asset and operating lease liability of $8,800. Because the rate implicit in the lease is not readily determinable, we used our incremental borrowing rate to determine the present value of lease payments. Information related to our right-of-use asset and related lease liability were as follows:         September 30,     December 31,   (in thousands)   Balance Sheet Classification   2023     2022   Right-of-use asset    Right-of-use lease asset, net   $ 6,492     $ 7,093                     Operating lease liability (current)   Accounts payable, accrued and other liabilities   $ 767     $ 745   Operating lease liability (non-current)   Long-term lease liability     5,911       6,489         $ 6,678     $ 7,234         For the Three Months Ended September 30,   (in thousands)   2023     2022   Cash paid for operating lease liabilities   $ 250     $ 250       For the Nine Months Ended September 30,   (in thousands)   2023     2022   Cash paid for operating lease liabilities   $ 750     $ 750   Operating lease expense is recognized on a straight-line basis over the lease term. Future amortization of our lease liability as of September 30, 2023 is expected to be: (in thousands)       2023 (remaining)   $ 250   2024     1,008   2025     1,035   2026     1,064   2027     1,093   Thereafter     3,160   Future lease payments, gross     7,610   Less: Imputed interest     (932 ) Operating lease liability   $ 6,678

Earnings Per Share	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
Earnings Per Share	7. Earnings Per Share Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period (“common stock equivalents”). Common stock equivalents consist of incremental shares issuable upon the assumed exercise of stock options and vesting of restricted stock units utilizing the treasury stock method. The weighted-average diluted shares outstanding computation is:     For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (in thousands, except per share data)   2023     2022     2023     2022       (unaudited)     (unaudited)   Weighted-average common stock outstanding     21,154       20,806       20,951       20,686   Common stock equivalents     —       —       —       —   Weighted-average number of shares     21,154       20,806       20,951       20,686   Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive. The following table summarizes the potential shares of common stock excluded from the diluted calculation:     For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (in thousands)   2023     2022     2023     2022       (unaudited)     (unaudited)    Common stock equivalents excluded due to net loss     67       6       57       97    Employee stock options and RSUs     598       976       497       672         665       982       554       769

Income Taxes	9 Months Ended
	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	8. Income Taxes Periodically, we perform assessments of the realization of our net deferred tax assets considering all available evidence, both positive and negative. Based on our historical operating losses, combined with our plans to continue to invest in our revenue growth and content library, we have a full valuation allowance on our deferred tax assets as of September 30, 2023. As of September 30, 2023, our net operating loss carryforwards on a gross basis were $80,490 and $26,416 for federal and state, respectively. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a stimulus bill which was in response to economic consequences of the COVID-19 pandemic. The CARES Act provided an employee retention credit, which is a refundable tax credit against certain employment taxes. During the quarter ended September 30, 2023, we recorded $1,750 related to the employee retention credit in Selling and operating expenses in the condensed consolidated statements of operations with a related receivable balance from the United States government related to the CARES Act, which is recorded in Prepaid expenses and other current assets on our condensed consolidated balance sheets.

Non-income Taxes	9 Months Ended
	Sep. 30, 2023
Non Income Tax Disclosure [Abstract]
Non-income Taxes	9. Non-income Taxes The Company is subject to tax examinations for Value Added Taxes (VAT). A number of these examinations are ongoing and, in certain cases, have resulted in assessments from taxing authorities. Where a VAT liability with respect to a jurisdiction is probable and can be reliably estimated, the Company accrues for these matters in corporate, general, and administration expenses in the condensed consolidated statements of operations. Future developments relating to the foregoing could result in adjustments to these accruals.

Contingencies	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Contingencies	10. Contingencies From time to time, we are involved in legal proceedings that we consider to be in the normal course of business. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, that are considered probable of being rendered against us in litigation or arbitration in existence at September 30, 2023 and that can be reasonably estimated are either reserved against or would not have a material adverse effect on our financial condition, results of operations or cash flows.

Subsequent Events	9 Months Ended
	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	11. Subsequent Events Class A Common Stock Offering On October 2, 2023, we entered into an underwriting agreement with Lake Street Capital Markets, LLC (the Underwriter) relating to the offer and sale of 1,855,000 shares of our Class A Common Stock ($0.0001 par value) (the Shares). We sold the Shares to the Underwriter at the public offering price of $2.70 per share less underwriting discounts and commissions, resulting in net proceeds of $4,678. We provided a 30-day option to the Underwriter to purchase up to an additional 278,250 Shares to cover over-allotments. At time of filing, the over-allotment option was not exercised.

Organization, Nature of Operations, and Principles of Consolidation (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Use of Estimates and Reclassifications	Use of Estimates and Reclassifications The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and disclosures. Although we base these estimates on our best knowledge of current events and actions that we may undertake in the future, actual results may be different from the estimates. We have made certain reclassifications to prior period amounts to conform to the current period presentations.
Discontinued Operations	Discontinued Operations Yoga International historically had a line of business focused on one-time transactional course sales. With the launch of a premium membership tier that includes this content, this line of business was discontinued in 2022 as the contractual commitments related to this line of business lapsed. There are no other assets or liabilities associated with this revenue stream. As this represents a strategic shift with a major effect on our operations and financial results, we have presented the results of operations related to winding up this line of business as discontinued operations on the accompanying condensed consolidated statement of operations in 2022.

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Other Intangible Assets by Major Asset Class	The following table represents our other intangible assets by major asset class as of the dates indicated, which are included in Real estate, investment and other assets, net on the accompanying condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022. (in thousands)   September 30, 2023     December 31, 2022   Amortizable Intangible Assets             Customer relationships   $ 2,000     $ 2,000   Tradenames     270       270   Accumulated amortization     (1,004 )     (579 )     $ 1,266     $ 1,691                 Unamortized Intangible Assets             Domain names   $ 563     $ 563
Schedule of Future Amortization Expense of Intangible Assets	Future amortization of our amortizable intangible assets as of September 30, 2023 is expected to be as follows: (in thousands)       2023 (remaining)   $ 142   2024     568   2025     556       $ 1,266

Debt (Tables)	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Schedule of Maturities on Long Term Debt, Net	Maturities on long-term debt, net are: (in thousands)       2023 (remaining)   $ 9,038   2024     156   2025     5,801       $ 14,995

Leases (Tables)	9 Months Ended
	Sep. 30, 2023
Leases [Abstract]
Schedule of Right of Use Asset and Related Lease Liability and Supplemental Cash Flow Information	Because the rate implicit in the lease is not readily determinable, we used our incremental borrowing rate to determine the present value of lease payments. Information related to our right-of-use asset and related lease liability were as follows:         September 30,     December 31,   (in thousands)   Balance Sheet Classification   2023     2022   Right-of-use asset    Right-of-use lease asset, net   $ 6,492     $ 7,093                     Operating lease liability (current)   Accounts payable, accrued and other liabilities   $ 767     $ 745   Operating lease liability (non-current)   Long-term lease liability     5,911       6,489         $ 6,678     $ 7,234         For the Three Months Ended September 30,   (in thousands)   2023     2022   Cash paid for operating lease liabilities   $ 250     $ 250       For the Nine Months Ended September 30,   (in thousands)   2023     2022   Cash paid for operating lease liabilities   $ 750     $ 750
Schedule of Future Amortization of Lease Liability	Operating lease expense is recognized on a straight-line basis over the lease term. Future amortization of our lease liability as of September 30, 2023 is expected to be: (in thousands)       2023 (remaining)   $ 250   2024     1,008   2025     1,035   2026     1,064   2027     1,093   Thereafter     3,160   Future lease payments, gross     7,610   Less: Imputed interest     (932 ) Operating lease liability   $ 6,678

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2023
Earnings Per Share [Abstract]
Schedule of Weighted-Average Diluted Shares Outstanding	The weighted-average diluted shares outstanding computation is:     For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (in thousands, except per share data)   2023     2022     2023     2022       (unaudited)     (unaudited)   Weighted-average common stock outstanding     21,154       20,806       20,951       20,686   Common stock equivalents     —       —       —       —   Weighted-average number of shares     21,154       20,806       20,951       20,686
Summary of Potential Common Shares Excluded from Diluted Calculation	The following table summarizes the potential shares of common stock excluded from the diluted calculation:     For the Three Months Ended September 30,     For the Nine Months Ended September 30,   (in thousands)   2023     2022     2023     2022       (unaudited)     (unaudited)    Common stock equivalents excluded due to net loss     67       6       57       97    Employee stock options and RSUs     598       976       497       672         665       982       554       769

Organization, Nature of Operations, and Principles of Consolidation - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2023 USD ($) Channel Title
Organization Nature Of Operations And Principles Of Consolidation [Line Items]
Number of channels | Channel	4
Percentage of produced and owned content views	75.00%
A La Carte Course Purchase [Member]
Organization Nature Of Operations And Principles Of Consolidation [Line Items]
Assets	$ 0
Liabilities	$ 0
Minimum [Member]
Organization Nature Of Operations And Principles Of Consolidation [Line Items]
Number of titles available in digital content library | Title	10,000
Percentage of digital streaming exclusively available for subscribers	88.00%

Equity and Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Share-based compensation expense	$ 56	$ 337	$ 599	$ 1,267
Options exercised during period			0	0

Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Goodwill [Line Items]
Changes in goodwill			$ 0
Customer Relationships [Member]
Goodwill [Line Items]
Intangible assets, useful life	48 months		48 months
Intangible assets, amortization method			straight-line basis
Intangible assets, amortization expense	$ 142,000	$ 142,000	$ 425,000	$ 425,000

Goodwill and Other Intangible Assets - Schedule of Other Unamortized Intangible Assets Included in Real Estate, Investments and Other Assets, Net (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Goodwill [Line Items]
Amortizable Intangible Assets, Accumulated amortization	$ (1,004)	$ (579)
Amortizable Intangible Assets, Net	1,266	1,691
Customer Relationships [Member]
Goodwill [Line Items]
Amortizable Intangible Assets, Gross carrying amount	2,000	2,000
Trade Names [Member]
Goodwill [Line Items]
Amortizable Intangible Assets, Gross carrying amount	270	270
Domain Names [Member]
Goodwill [Line Items]
Unamortized Intangible Assets	$ 563	$ 563

Goodwill and Other Intangible Assets - Schedule of Future Amortization of Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (remaining)	$ 142
2024	568
2025	556
Amortizable Intangible Assets, Net	$ 1,266	$ 1,691

Debt - Additional Information (Detail) - USD ($)			9 Months Ended
	Dec. 28, 2020	Sep. 09, 2020	Sep. 30, 2023	Aug. 25, 2022
Credit Agreement [Member] | Keybank [Member]
Debt Instrument [Line Items]
Outstanding amount under credit facility			$ 9,000,000
Required aggregate outstanding amount for period of 30 consecutive days			$ 0
Number of days considered for calculation of aggregate outstanding amount			30 days
Minimum required fixed charge coverage ratio			1.2
Maximum required leverage ratio			1.5
Line of credit facility, expiration			Aug. 25, 2025
Credit Agreement [Member] | Keybank [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity under credit facility				$ 10,000,000
Credit Agreement [Member] | Keybank [Member] | Letters of Credit [Member]
Debt Instrument [Line Items]
Sublimit for letter of credit facility				$ 1,000,000
Credit Agreement [Member] | Keybank [Member] | Floor Rate [Member]
Debt Instrument [Line Items]
Interest rate			0.00%
Credit Agreement [Member] | Keybank [Member] | SOFR [Member]
Debt Instrument [Line Items]
Percentage of adjustment to floor interest rate			0.10%
Credit Agreement [Member] | Keybank [Member] | Margin [Member]
Debt Instrument [Line Items]
Percentage of adjustment to floor interest rate			2.00%
Credit Agreement [Member] | Keybank [Member] | Benchmark or SOFR Unavailability Period [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest rate			3.00%
Credit Agreement [Member] | Keybank [Member] | Benchmark or SOFR Unavailability Period [Member] | Margin [Member] | Minimum [Member]
Debt Instrument [Line Items]
Percentage of adjustment to floor interest rate			1.00%
Credit Agreement [Member] | Keybank [Member] | Benchmark or SOFR Unavailability Period [Member] | Federal Funds Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Percentage of adjustment to floor interest rate			0.50%
Boulder Road LLC [Member]
Debt Instrument [Line Items]
Subsidiary interest percentage		50.00%
Undivided interest sold consideration received		$ 13,200,000
Boulder Road and Westside Boulder, LLC [Member] | Loan Agreement [Member] | First Interstate Bank [Member] | Mortgage Loan [Member]
Debt Instrument [Line Items]
Loan principal amount	$ 13,000,000
Interest rate	3.75%
Debt instrument, maturity date	Dec. 28, 2025
Percentage of line of credit proceeds	50.00%
Percentage of line of credit monthly installments	50.00%
Westside Boulder, LLC. [Member] | Boulder Road LLC [Member]
Debt Instrument [Line Items]
Undivided interest sold percentage		50.00%

Debt - Schedule of Maturities on Long Term Debt, Net (Detail) $ in Thousands	Sep. 30, 2023 USD ($)
Maturities of Long-Term Debt [Abstract]
2023 (remaining)	$ 9,038
2024	156
2025	5,801
Total maturities on long-term debt	$ 14,995

Leases - Additional Information (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Sep. 09, 2020
Lessee Lease Description [Line Items]
Operating lease, extending Description	we leased the property pursuant to a master lease for an initial term extending through September 30, 2030, with two five-year extensions
Operating lease, existence of option to extend [true false]	true
Right-of-use lease asset, net	$ 6,492	$ 7,093	$ 8,800
Operating lease liability	$ 6,678	$ 7,234	$ 8,800
Two Five Year Extensions [Member]
Lessee Lease Description [Line Items]
Operating lease, Renewal Term	5 years

Leases - Schedule of Right of Use Asset and Related Lease Liability (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 09, 2020
Leases [Abstract]
Right-of-use asset	$ 6,492	$ 7,093	$ 8,800
Operating Lease Right Of Use Asset Statement Of Financial Position Extensible List	Right-of-use asset	Right-of-use asset
Operating lease liability (current)	$ 767	$ 745
Operating Lease Liability Current Statement Of Financial Position Extensible List	Accounts payable, accrued and other liabilities	Accounts payable, accrued and other liabilities
Operating lease liability (non-current)	$ 5,911	$ 6,489
Operating Lease Liability Noncurrent Statement Of Financial Position Extensible List	Operating lease liability (non-current)	Operating lease liability (non-current)
Operating Lease, Liability	$ 6,678	$ 7,234	$ 8,800

Leases - Schedule of Supplemental Cash Flow Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Cash paid for operating lease liabilities	$ 250	$ 250	$ 750	$ 750

Leases - Schedule of Future Amortization of Lease Liability (Detail) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 09, 2020
Leases [Abstract]
2022 (remaining)	$ 250
2023	1,008
2024	1,035
2025	1,064
2026	1,093
Thereafter	3,160
Future lease payments, gross	7,610
Less: Imputed interest	(932)
Operating lease liability	$ 6,678	$ 7,234	$ 8,800

Earnings Per Share - Schedule of Weighted-Average Diluted Shares Outstanding (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Weighted-average common stock outstanding	21,154	20,806	20,951	20,686
Weighted-average number of shares	21,154	20,806	20,951	20,686

Earnings Per Share - Summary of Potential Common Shares Excluded from Diluted Calculation (Detail) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	665	982	554	769
Common Stock Equivalents Excluded due to Net Loss [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	67	6	57	97
Employee Stock Options and RSUs [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	598	976	497	672

Income Taxes - Additional Information (Detail) $ in Thousands	3 Months Ended
	Sep. 30, 2023 USD ($)
Income Taxes [Line Items]
Employee retention credit in Selling and operating expenses related to CARES Act	$ 1,750
Federal [Member]
Income Taxes [Line Items]
Net operating loss carryforwards	80,490
State [Member]
Income Taxes [Line Items]
Net operating loss carryforwards	$ 26,416

Subsequent Events- Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	Oct. 02, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Subsequent Event [Line Items]
Proceeds from the issuance of common stock		$ 42	$ 43
Class A Common Stock [Member]
Subsequent Event [Line Items]
Common stock, par value		$ 0.0001		$ 0.0001
Lake Street Capital Markets, LLC [Member] | Class A Common Stock [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of share offer and sale	1,855,000
Common stock, par value	$ 0.0001
Underwriter public offering price per share	$ 2.7
Proceeds from the issuance of common stock	$ 4,678
Lake Street Capital Markets, LLC [Member] | Class A Common Stock [Member] | Over-Allotment Option [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of share offer and sale	278,250

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