gaia-10q_20220630.htm

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 June 30, 2022

☐	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)

(303) 222-3600

(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 July 29, 2022
Class A Common Stock ($0.0001 par value)		15,406,186
Class B Common Stock ($0.0001 par value)		5,400,000

GAIA, INC.

FORM 10-Q

INDEX

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):	3

	Condensed Consolidated Balance Sheets at June 30, 2022 and December 31, 2021	4

	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	5

	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2022 and 2021	6

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	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	15

Item 4.	Controls and Procedures	15

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

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 June 30, 2022, the interim results of operations for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021. Operating results for the three and six months ended June 30, 2022 and 2021 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, 2021 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, 2021.

GAIA, INC.

Condensed Consolidated Balance Sheets

	June 30,			December 31,
(in thousands, except share and per share data)	2022			2021
	(unaudited)
ASSETS
Current assets:
Cash	$	6,195		$	10,269
Accounts receivable		2,972			2,728
Prepaid expenses and other current assets		2,278			1,986
Total current assets		11,445			14,983
Media library, software and equipment, net		52,618			50,558
Right-of-use lease asset, net		7,486			7,871
Real estate, investment and other assets, net		31,002			31,394
Goodwill		28,870			28,870
Total assets	$	131,421		$	133,676
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued and other liabilities	$	11,604		$	14,962
Deferred revenue		15,218			14,847
Total current liabilities		26,822			29,809
Long-term mortgage, net		6,035			6,109
Long-term lease liability		6,865			7,234
Deferred taxes		309			309
Total liabilities		40,031			43,461
Shareholders' equity:
Class A common stock, $0.0001 par value, 150,000,000 shares authorized, 15,406,186 and 15,061,337 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively		1			1
Class B common stock, $0.0001 par value, 50,000,000 shares authorized, 5,400,000 shares issued and outstanding at June 30, 2022 and December 31, 2021		1			1
Additional paid-in capital		163,289			162,316
Accumulated deficit		(71,901	)		(72,103	)
Total shareholders' equity		91,390			90,215
Total liabilities and shareholders' equity	$	131,421		$	133,676

The year-end condensed 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.

GAIA, INC.

Condensed Consolidated Statements of Operations

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(in thousands, except per share data)	2022			2021			2022			2021
	(unaudited)						(unaudited)
Revenues, net	$	20,720		$	19,443		$	42,551		$	38,339
Cost of revenues		2,759			2,509			5,664			4,947
Gross profit		17,961			16,934			36,887			33,392
Expenses:
Selling and operating		15,869			14,738			32,654			29,276
Corporate, general and administration		1,794			1,501			3,579			2,997
Acquisition costs		—			—			49			—
Total operating expenses		17,663			16,239			36,282			32,273
Income from operations		298			695			605			1,119
Interest and other expense, net		(50	)		(52	)		(110	)		(118	)
Income before income taxes		248			643			495			1,001
Provision for (benefit from) income taxes		—			—			—			—
Income from continuing operations		248			643			495			1,001
Loss from discontinued operations		(132	)		—			(293	)		—
Net income	$	116		$	643		$	202		$	1,001

Earnings per share:
Basic
Continuing operations	$	0.01		$	0.03		$	0.02		$	0.05
Discontinued operations	$	(0.01	)	$	—			(0.01	)		—
Basic earnings per share	$	—		$	0.03		$	0.01		$	0.05
Diluted
Continuing operations	$	0.01		$	0.03		$	0.02		$	0.05
Discontinued operations	$	(0.01	)	$	—			(0.01	)		—
Diluted earnings per share	$	—		$	0.03		$	0.01		$	0.05
Weighted-average shares outstanding:
Basic		20,788			19,268			20,627			19,235
Diluted		20,795			19,810			20,795			19,786

See accompanying notes to the interim condensed consolidated financial statements.

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

Balance at January 1, 2021

SEC Form 10-Q filed by Gaia Inc.