LiveXLive Earnings Show ‘Contractual Dispute’ With Tesla and Restrictions On Half Its Cash



Streaming media firm LiveXLive continues to be in an “contractual dispute” using Tesla, its biggest client accounting for two-thirds of all LiveXLive’s mixed earnings, company officials announced through Monday’s earnings forecast.

An accompanying earnings report demonstrated that LiveXLive missed analysts’ consensus on earnings and revenue for the quarter by double digit percentages, and noted that executives in the firm only had access to half of the money on its balance sheet due to constraints due to its own senior creditors.

1 bright spot this quarter was LiveXLive’s new subsidiary PodcastOne, offering significant revenue growth this past year for a combined revenue of $14.6 million. LiveXLive finished the quarter with $10.2 million decrease in 15 cents per share and increased its guidance for the year out of $63.5 to $69.5 million.


The automaker was LiveXLive’s reliable revenue generator because LiveXLive gained Slacker Radio in the end of 2017. Tesla carries a LiveXLive on-demand music streaming subscription with every vehicle it sells, but a dispute with the automaker that began in June has cost the company $1.6 million for the first half of the year and has not yet been solved.

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It was uncertain how many of the business ’s 166,000 new readers for the quarter were affected by the dispute. Officials using Tesla didn’t respond to a request for comment for this story, although the automaker’s quarterly report did show that Tesla had delivered 139,000 automobiles to customers within precisely exactly the exact same period of time.

“Under this contract, we’ve had some differences of view over the definition of certain terms,” clarified LiveXLive chief fiscal officer Jerome Gold. “This is actually the next time we’ve been through it. And the very first time we were able to resolve it quite positively. ”

Gold added that LiveXLive’s chief executive and chairman Rob Ellin was working on a new global arrangement with Tesla and had lately added new information to its flowing platform with the purchase of PodcastOne, the Los Angeles-based media firm launched by Westwood One founder Norman Pattiz.

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“We will visit a settlement and we all ’re very confident in our position,” Gold said. “We have a great connection with Tesla and we’d expected to do it quicker, but negotiations take a little while. ”


Investors had big hopes for LiveXLive in the beginning of the COVID-19 pandemic as a potential leader in the livestream concert space as a result of the infrastructure it had grown since going public in 2017. Investor excitement about getting a piece of the $25 billion concert company quadrupled the share price of LiveXLive by a March low of $1.08 per share to a high of $4.59 in early July.

However growth has been small and competition with industry specialists has made it tough to be noticed. A number of the high tier artists are utilizing competing platforms like Driift, which produced concerts by Kylie Minogue and Niall Horan around the exact same weekend, as well as Veeps, that is organizing a concert collection to get Liam Payne.

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Last quarter LiveXLive generated $1.4 million in ticket sales and pay-per-view revenue from concerts including a Monsta X operation broadcasted live from Seoul and attended by Ellin, that says the current quarter’s record of shows will be trending the proper way, despite some postponements.

“A couple of our major pay-per-views including Pitbull were delayed until October and November,” said Ellin, who noted forthcoming shows by Wiz Khalifa, Nelly, and Jeremih this quarter.


LiveXLive has fought to keep up with royalty payments due to the major labels it pays for your rights to stream music around the Slacker Radio program. The company was blocked by getting Universal Music Group’s catalogue for four times in February after missing a $6.8 million payment, according to a suit UMG filed against Slacker Radio from Los Angeles County.

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By late April, LiveXLive owed UMG more than $7.7 million and negotiated a settlement by means of a stock issuance of $ 2.4 million LiveXLive shares worth $10 million in the time, as stated by the organization ’s current quarterly report. By July 17 to Sept. 30, the label gave off the shares and was assured that the difference between whatever revenue UMG was able to receive for selling the shares on the open market and the $10 million that the company was owed.

Since UMG sold off its shares of LiveXLive, the share price dropped from $4.30 to $2.60 per share, ultimately netting UMG $6.9 million in money, leaving LiveXLive using a $3.1 million accrued liability climbed to UMG, according to the quarterly report, which comprised no timeline for the way LiveXLive would settle its bill with UMG.


In April, company officials disclosed that it had approved a $2 million loan from the Small Business Administration’s Paycheck Protection Program, made as part of the CARES Act passed March 27 to assist modest companies during the first days of the COVID-19 pandemic. A month after accepting the mortgage, LiveXLive announced plans to obtain PodcastOne within an $18 million each of stock price (then reduced to $14.5 million).

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In Monday’s report, company officials disclosed that one month after declaring that the PodcastOne deal, LiveXLive received a second loan in the SBA worth $150,000 in a 3.75% interest over a 30-year period. Officials also disclosed that Podcast One had applied for and approved a $500,000 PPP loan April 26, less than two weeks prior to the LiveXLive acquisition was announced.

“The (c)ompany intends to submit an application for the forgiveness of the loans,” in the PPP program, valued at a minimum of 2.5 million, according to the yearly report.

LiveXLive also faces a range of ongoing legal battles, based on its own report, including a $600,000 breach of contract dispute with Wynn resorts, a $300,000 conclusion lien from LiveXLive’s lawyer regarding an unpaid legal bill, plus a $560,000 default judgement entered against the company on Oct. 26 from legal data discovery company Xcellence over unpaid services. Since going public in the end of 2017, LiveXLive and its subsidiaries have been sued 14 times, including seven lawsuits from 2020, according to court records gathered by Billboard. On Nov. 9, the company was sued by California software firm Maestro Interactive within an unpaid bill to permit Maestro’s applications that was previously negotiated with the two companies. Maestro is requiring $58,000 in money and 41,000 shares of the business ’s inventory.


Even though LiveXLive’s balance sheet shows $20.7 million in cash and equivalents, the provider only has access to approximately $10 million due to constraints set up by its own senior secured lender, according to its quarterly report.

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In September, LiveXLive sold $15 million worth of convertible notes to San Francisco-based hedge fund manager Jeff Osher with No Street Capital. According to the conditions of the financing agreement, LiveXLive is only able to access $4.8 million in funds and is required to keep $10 million of the loan in a deposit account until the loan has been repaid, as stated by the organization ’s quarterly report.

The loan was made in the form of a yearlong convertible note that comprised an 8.5% interest rate, $160,000 to pay Osher’s closing costs including $75,000 for Osher’s outside counsel (deducted from the principal amount) and a one-time issuance of 800,000 shares of LiveXLive valued at $2.1 million, that is not implemented to the principal of the loan. Ellin is not allowed to sell some of his shares in LiveXLive until after the loan has been repaid.

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The money crunch has directed LiveXLive to find innovative ways to pay for its own payables and acquisitions. Throughout the year, LiveXLive issued over 8 million shares of company stock company to fund the $14.5 million purchase of PodcastOne and to repay countless outstanding bills. Including the Mani Brothers, LiveXLive’s landlords in 9200 Sunset, the same construction as the famous SoHo House. The Mani Brothers were issued 95,436 shares worth $395,000 to pay bank rent on a 12th floor 5,200-square-feet $40,000-a-month office for LiveXLive.

The company’s next quarterly report is expected in mid-February.

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