LiveOne, Inc. (LVO) Earnings Call Transcript & Summary

Hello, and welcome to the LiveOne Special Update, including Spin-Out of PodcastOne and dividend to shareholders. My name is Elliot, and I'll be coordinating your call today. [Operator Instructions] I would now like to hand over to Aaron Sullivan, Interim CFO. The floor is yours. Please go ahead.

Thank you, and welcome to LiveOne special management webcast to provide a business update and some detail regarding the planned spin-out of PodcastOne as a separate public entity, its direct listing on a national securities exchange and the related special dividend to LiveOne shareholders. Presenting on today's call are Rob Ellin, CEO and Chairman of LiveOne; Kit Gray, President of PodcastOne; and myself, Aaron Sullivan, Interim CFO. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth in the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to each of LiveOne's and PodcastOne filings with the SEC for information about factors, which could cause each company's actual results to differ materially from those forward-looking statements, including those described in LiveOne's annual report on Form 10-K for the year ended March 31, 2023, and PodcastOne special financial reports under the cover of Form 10-K for the year ended March 31, 2023, and filed by each company with the SEC on June 29, 2023, along with subsequent SEC filings made by each company. You will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed today in the company's earnings release, which is posted on its Investor Relations website. Each company encourages you to periodically visit each company's Investor Relations website for important content. The following discussion, including responses to your questions, contains time-sensitive information and reflects management's view as of the date of this call, August 17, 2023. Except as required by law, neither company undertakes any obligation to update or revise this information after the date of this call. I'd like to highlight to investors that this call is being recorded. Slide 1 is making it available to investors and the media via webcast, and a replay will be available on LiveOne's website in the Investor Relations section shortly following the conclusion of this call. Additionally, it is the property of the company and any redistribution, retransmission or rebroadcast of the call or the webcast in any form without the company's expressed written consent is strictly prohibited. Now I would like to turn the call over to LiveOne's CEO, Rob Ellin.

Thank you, Aaron. And thank you, everyone, for your patience. This has been a -- taking a little bit longer than we expected, but I couldn't be more excited than to be the first company listing on a national exchange. We expect our record date to be August 28 and to begin trading on September 8. This will be the first company in history to actually list a minority stake, issue a dividend and be listed on a major exchange. So it took a little longer than we expected, but we're proud of the team, we're proud of everyone's hard work, and we look forward to beginning the trading. In the interim, we've had enormous success by both last quarter, we announced $10.6 million in revenues, up from $34 million in revenues that puts us on a run rate to over $42 million. We've just increased our guidance to $42 million to $47 million, up from $34 million. In February, LiveOne received an independent third-party valuation, which indicates that the fair market value of Podcast equity is between $230 million and $274 million. Let me give you a brief reason of the spin-out and why PodcastOne will trade as a public company. Number one is our world-class management team. You'll have an opportunity to hear today from Kit Gray, between Kit, Sue and Eli and our team that many of you heard from already. We have a team that has over 60 years of history in the radio and podcasting business and has really pioneered the podcasting industry. As a creative first platform, we continue to grow the number of celebrities and number of podcasters on our network dramatically. This will allow PodcastOne to continue as we've done with Kast Media. Kast Media had over 27 podcasters, we've just announced a few of them joining our network that Kit will describe, but there are many more in the pipeline that we hope to move over, and one from Logan Paul to Rob Dial to Whitney Cummings to Sarah Silverman, there's an enormous lineup of potential there that hopefully, we can bring additional ones over and this will help to increase those revenues going forward. We also announced the acquisition of Fantasy Guru. So we'll add over $2.5 million in revenues and over $600,000 of EBITDA. PodcastOne will have a separate Board of Directors, comprised of certain of the LiveOne senior management, certain current LiveOne members as well as the Board members that previously associated with LiveOne. We feel strongly that the company is in the best position it's ever been since we acquired it when it was doing $20 million in revenues and losing over $5 million a year. With that, I'm going to hand it off to Kit Gray to walk you through the exciting updates of the company and look forward to beginning, trading in a couple of weeks. Thanks, Kit.

Thank you, everyone, and I hope everyone is having a great day today. I appreciate your time. As you know, these are very exciting times for PodcastOne, I want to give you a little bit of a background on who I am and why I started PodcastOne before it was even PodcastOne from 12 to 13 years ago. My background is in the radio industry and the digital sales industry working for iHeartMedia and being a national rep manager. I realized as people like Adam Carolla and other personalities on air, like Howard Stern started to move off the radio that it was going to be a challenging time for the radio industry, and I had then to evolve as a salesperson and a professional. I started listening to podcasts. My now dear friend, Adam Carolla was -- I was a big fan of him when he lost his job from CBS and a friend of mine told me about his podcast. I started listening to it back when you had to actually download the file, drag it over to your phone or your -- we didn't have iPhones back then. So it's changed quite a bit. But when you were able to get the podcast and you like the podcast, and that's the type of person that as a salesperson, I would want to sell to. So I reached out to Adam Carolla, and I met and we talked about the business and we started working together. That was the first person to bring in the [ sams.com ], [ The Legal Zen ], the Untuckit to the world, the ProFlowers of the world, where they would see great results on what they call direct response campaigns, where the spot rates that they would be paying would noodle out and they would make more money by buying the spot in terms of sales. So from that point on, I knew there was a business I started reaching out to others like Bill Burg, Marc Maron, CBS News and other people like the Nerdist Industry and selling their inventory and growing their businesses for them. I was fortunate to meet legends in the Radio Hall Of Famer, Norman Pattiz, who started Westwood One, some 35, 40 years ago. Norm and I instantly hit it off and became not only partners, but great friends. Norm taught me a lot about talent management and how to actually build the business with ratings, research and everything like that to make the advertisers very much comfortable with what we were bringing to them. Back in the day, no one knew what a download is. It doesn't equate to an impression. So we had to make metrics in understanding the ways that advertisers could actually potentially buy the media. It was a crazy last 10 to 12 years, where we built the business having over 40 employees, hundreds of shows and a really strong network that would allow us to pretty much plan any advertising category, whether it's moms, kids, dads, whatever it may be, we had a network that could now reach that. The last 12 years, 10 years in the space, the podcasting business has grown more and more people have gotten into it, the Amazons of the world, the Spotify's and the iHeart's and even the Westwood One's and Odyssey's of the world have really invested heavily in the podcasting space. Some of those deals have worked out and some of them have not. Our business, and it always has been to be one that's profitable and when we joined LiveOne, when they acquired us some 2.5 years ago, 3 years ago, we had to be a profitable business to stay alive. We're in the middle of COVID and it's scary at different times, but it offered us a great opportunity to really understand the metrics of what makes this business work. We couldn't necessarily plan the Joe Rogan deals where -- they're going to have huge loss leaders, but it makes sense for them building a new business category. So we could really only play in the place where we had to make money. And that has made us stronger, and it actually gives us a great opportunity moving forward. We all know the world and the economic difficulties that are now presented in our country and our world. But to let everyone know the podcasting business is still booming. Advertisers are jumping in, spending more than ever because it works like I mentioned earlier. And we're seeing different channels of groups. We're now seeing programmatic pods. We're seeing video. Now YouTube is very heavy into the podcasting space. That's allowed us to expand not only distribution, but it's allowed us to expand people discovery. We now have 360 sponsorships with social media packages, live shows, pay-per-views, merch and even IP, which I'll get more into later. PodcastOne is currently growing and we're acquiring new shows, launching new shows, growing our existing shares and looking at buying other companies, like Rob mentioned earlier, where we're buying assets of Kast Media and Fantasy Guru. So basic metrics for PodcastOne. We have over 200 exclusive podcasts that we work with on a very, very, very close relationships. We have 2.1 billion downloads that are happening annually with almost 14 million monthly unique listeners. Just this past month, in July, PodcastOne came out on the Podtrac rank is #10. We're ahead of such companies as Paramount, Fox and CNN. We have over 200 advertisers, and that list is growing every day with many of them being Fortune 500 companies. Many, as we know, have seen these -- the Super Bowl commercials for Squarespace and Untuckit. Well, all those advertisers, they started in the podcasting space gave them a great base for growth and ROI in day 1. So the basics of podcasting, so you guys can understand what our business model and how we work. PodcastOne has designed her business where we exclusively control the distribution and sales rights of all our shows. PodcastOne shows are distributed through the likes of Apple, Spotify, iHeart, individual platforms like adamcarolla.com, ane.com, pc1.com, PodcastOne TV, wherein -- we have a great relationship with the Slacker team here as part of LiveOne, where we're the only podcast company that's exclusive into the Tesla [ AKAradio ] program, which has 1 million subscribers on it. Here we have YouTube, which has just jumped into the space heavily over the last 12 months, and we have a big presence on that, where many of our big shows have -- are broadcasted not only in audio, but now in video on YouTube. So basically, we want to go wherever a listener can go. It's important to understand that we control the feed that goes to all these places that feed is very important because that controls the advertising inventory. It closed it and it controls the targetability of advertisers and posting and everything like that. So again, we control that exclusively, but it goes to all these different places for consumption. We have our own studio in Beverly Hills. Many of our shows are produced from there and also all around the world. As you know, you can bring a computer and you can use them anywhere in the world now. And technology has really advanced the podcasting medium for the benefit of that. And that has helped us, and it has allowed our talent to go meet people all over the world to do amazing great interviews. Our model is specifically built on revenue shares. That's how it's been forever, where basically we do what we do, the talent does what they do, and we split the revenue. In some cases, there are minimum guarantees to help with revenue share and making sure our margins are higher, but that's the basic model of our business. We also have an advantage of that being a network in the sense that any unsold inventory allows us to be used for marketing. So if we're launching a new show, as we are in many, many cases, we have the ability to use that unsold inventory to market that podcast, make sure it's a hit and it's a very cost-effective medium to get to podcasters to listen to a new show. Management team, we have what I would say, the best in the business, and I judge that not only by just knowing who they are, but when I look at our show list in our top 25, 30 shows, many of those shows have been here for 7, 8, 9 years. We couldn't do that if it was just me. We have an amazing team. Eli has been working who has been with me since day 1 and who is with me when Norman Pattiz at Westwood One for years, runs our talent acquisition team, and he's tremendous. Sue McNamara, who is a dear, dear friend has worked with us for 4 years as our CRO. She leads our sales team. She's based out of New York City, manages 10-plus sales reps across the country, works a lot with our talent to make sure they're doing what they need to with advertisers. And we have 2 heads of production who are world-class and Stacy Fowler and Alistair Walford, who runs the production, not only for the radio for the podcasting shows, but also for live events and so forth. They do an amazing job. The company also has a really unique offering just like the Amazon's and Spotify's of the world when they spend hundreds of millions of dollars on Art19 and Megaphone, which are hosting platforms we have our own. We work with a company called Nox Solution, and we're tied into AdsWizz, which is owned by SiriusXM. This AdsWizz is a dynamic ad insertion company where basically their sophisticated systems allows us to serve ads to not only current listeners of current podcasters, but go back and monetize old episodes. So if you just found out about the Adam Carolla show and we want to go listen to when he had Ray Romano on a year ago, well, you can go back and listen to that, and we can actually monetize that impression. It also allows us to do behavioral targeting, geo-targeting as well as time-sensitive campaigns. This puts us in the space where you need to be as a digital advertising company and attract those media dollars. We also have what we call a long tail system called LaunchPad. LaunchPad has over 1,000 shows. And what we do for that is anyone that wants a podcast, they can go on and have free hosting on LaunchPad many of our competitors charge $19, $20 a month, whatever it might be. But we give it to them free, and we take care of all the hosting fees. But in return, we get the ad revenue that comes through there as well as any open inventory for marketing or new shows, that is -- there's huge potential there to expand and grow that in the future. Our PodcastOne roster includes the likes of Adam Carolla, LadyGang, Jordan Harbinger, Caitlin Bristow, A&E with Cold Case Files and I Survived. We're also, as Rob mentioned, we had some really great new acquisition. One of our top 10 shows we just acquired back in April when it only had 20,000 downloads so-called, I've Had It, [ Sweet Home Oklahoma ] or one is an interior design, runs an interior design firm and one is an attorney. They started to show, again, back in April, had 20,000 downloads and we're now sitting where they're at 125,000 downloads an episode. They were just on the Today Show last week. And this show alone will generate over 7 figures for us in this calendar year. As Rob mentioned, we've acquired some of the Kast Media assets, and we look to acquire many more of those, as he mentioned. 2 of them are 2 big properties that we've gotten so far. One would be Some More News with over 500,000 video and audio impressions weekly. This is a big get, again, a 7-figure show for us. We also acquired Brendan Schaub, he has 3 programs, which one they are The Fighter and The Kid, The Golden Hour and the Brendan The Schaub Show is over $1 million in video and audio impressions week. These are tremendous opportunities because we were lacking as a network in that -- those 2 categories and this rounds us out quite nicely. We're actually launching a new show or I'm sorry, the second season Bad Bad Thing with Host Barbara Schroeder, she worked in Directed the Netflix the documentary Evil Genius. The first season of Bad Bad Thing it was a tremendous hit for us, and we look forward to launching that in the next couple of months. We also are launching another show that has tied to IP, which we spoke about earlier, which is called [ Barton Town ]. That's going to be hosted by Kyle MacLachlan and Josh Davis. It was produced with Patrick Wachsberger, who is known for CODA, The Hunger Games and Divergent. And we're working with Epic to launch those that will launch in October. We're really excited about that story and having the IP around that. So that should be great. We mentioned quickly about our acquisition strategy. We have over 100 shows that were in talks with on different levels to acquire. Again, I mentioned Eli Dvorkin and his talent acquisition strategy, but he works with all the major talent agencies in town from UTA to WME to Girsch and many more. We also get a lot of our podcast acquisitions are from our current podcasters who just love our relationship so much, know people that are at different platforms and tell them to come over to us. We have actually a revenue share model with them on that as well. So we have a really good strategy in acquiring the shows. One of our advantages as a company is that we have basically developed these financial models and have a really good understanding of where the advertising dollars are right now. So when we go in and we presented a new show or we're looking at a new show, we know the numbers that we need. We know that the audience type, we know how they're doing in terms of performance for direct response fees. Are they getting renewals? Are they getting higher rates? Are they getting advertisers? Are they canceling? Are they branded friendly? We have their own proprietary formula where our team looks at every opportunity that comes down, and we know exactly what -- where we can actually kind of hedge our bets to make as much money and make sure the margins are where we need them to be. That formula is really our secret sauce. It's really what we call like a money ball game and allows us to be advantageous in making really smart deals and not getting ourselves in some of the hot water that some of these other podcasting companies that have unfortunately taken on over the last 6 to 12 months. So the current state of the industry, this offers quite an opportunity, right? There are many, many, many big shows out there that are not -- they don't have a good home either they had a great deal initially and no longer those deals are no longer available based on the state of the industry or maybe some of these podcasting companies have grown too fast too quickly and can't manage it. This is allows us such an advantage to actually go out there, make smart bets, now use PodcastOne stock to actually acquire some of these programs. So that's kind of where we are in the acquisition stage. Rob quickly mentioned about Fantasy Guru and how they have 24,000 subscribers with -- an average revenue per user around $8 and a really strong EBITDA and some strong revenue numbers on it. As we know, the fantasy sports world is crazy. If you talk to anybody or any of your friends, I'm sure you're all doing your fantasy draft right now as you get ready for NFL football to start. Well, we see this as quite an opportunity we will help them create bigger podcasts, different categories of podcasts beyond just the NFL. We'll use our network of 14 million unique users to introduce them to the Fantasy Guru, the community and the resources and grow their subscription base. We're really excited about that opportunity. We also work hand-in-hand with the soccer team, which is part of LiveOne. This helps with our efficiencies on our hosting platforms and our CDNs and all that type of stuff, reporting and back-end stuff. But we also have this amazing Tesla relationship, again, where Slacker Radio is in all the Teslas and right in the front, you'll see our podcast there, which is really a unique opportunity for us. They also help us with pay-per-view events and live show broadcast. So it's been an amazing relationship with them in a really great fit. At the end of this -- that's basically all I have to say today. I'm sure you guys have some questions, I'm happy to answer them, but I'm going to hand it back to Rob Ellin to wrap this up.

Yes. Thank Kit, and great job as always. We're -- it's a really exciting time for the company. The senior management have all just extended their contracts long-term. I couldn't be more excited and proud of this team, the direction they're going. That $42 million to $47 million has a lot of room in it, like I said in the last conference call, and you can hear from Kit, the type of shows that we're signing. This is that opportunity that sort of the perfect storm is happening where there's an opportunity to acquire existing podcast, create our own podcast as well as acquire additional companies. And we've got a pipeline of over 10 additional acquisitions that we're carefully looking at. And if they're super accretive, like the cash in the Fantasy Guru deals, we will be very aggressive out to continue to grow that. It's a big part of the reason that we're taking the company public. And for all of our shareholders, right, that record date in the 28 that is coming, and it's coming quick. That will be the last opportunity where you will receive a dividend. That dividend is about 19%, so the parent company will remain in control position with over 81% of the company, but our shareholders will get the benefit that, as an example, for every 100,000 shares you own, you will get approximately 4,800 shares. We didn't give the exact price today, but NASDAQ must be over $8, right? We've said between $8 and $12, and we're really excited that, that fits right within the range of that $230 million valuation bided and really excited where it's going, really excited in the direction where it's going. And I'd like to open it up to any questions, any thoughts and try to help you guys with any clarity.

[Operator Instructions] First question comes from Sean McGowan with ROTH Capital.

A couple of questions if I can. On LaunchPad, I think you said that you keep all of the ad revenue initially if you help them get launched? Or is that just a much more favorable share? Could you elaborate on that a little bit?

Yes, sure. No problem. Yes. So basically, they -- these people get free hosting. And what happens is if they have 100 listeners or 5,000 listeners, we actually keep a good eye on it, right? So if we see that something is growing or we've actually done a contest where we've really had like the LaunchPad show the week or show of the year, and it moves up into what we call the big leagues and then we can craft a real deal with them and put a marketing budget around them as well. But the long and short of it is that there's a digital ad insertion breaks in all these podcasts that are on LaunchPad and we get all of the revenue that comes through there, 100% of it, just on the programmatic stuff or if we even sell into it, we would get 100% of that. And then if there's open inventory in there, we have the ability to use that inventory for marketing new shows or whatnot.

Okay. And what typically happens in the case, whether it's a new one or a show coming over from somewhere else, where the show reaches a lot more success. What is that -- what typically happens to the terms? Do they -- does the term just -- demand a more favorable revenue split?

Yes. Yes. Most of our deals are 2-plus years with auto renews. We have favorable termination clauses. So if it doesn't work out, we can get out and not waste our time on something. But yes, that typically happens, right, as the show gets bigger and finds its path, they typically have more leverage when it comes to negotiations down the road. But that being said, we really do believe in what we do. As a company, we have an unbelievable sales team. We have a marketing team, production. We have the back end. We do everything really soup to nuts. So yes, maybe you might get a little bit better of the rev share from another company, but you're not going to get those resources that I just talked about. So -- our job is creating relationships to show them how good we are in those years and show them our value to try and keep the margins up as much as we can. It's constant churn, right? Our bottom 10%, 20% of our shares, we're moving on from and we're bringing new ones in that hopefully fall in our top 10, right? And we're making more money and have better splits on. So we're constantly looking at that and making sure our funnel is strong and we're bringing in new shows of favorable margins.

Okay. One more, and then I'll get myself back in the line here. That bump that you talked about, I think you said the show was we've had it. How typical is that bump?

Yes.

Or is calling that out because it's unusual -- are you calling it out the business exemplary of what kind of bump you usually see?

I call it out because it is unique. That was a fast growth. It has a lot to do with -- one, they do a tremendous job. They're very talented people. But two, it has a lot to do with our marketing, right, and making sure they have the resources to get the word out. We've had them on a ton of our podcast. We do all the talent bookings. So we've had some great talent come on their shows. In turn, we've also gotten them on a lot of big shoes, too. So it's just a proof of like we use our system. They want it just as much as we want it, maybe even more in terms of success. That it works. These 2 women really tackled into the TikTok world and found some great success and growth on that side of things. And yes, so that is a little unique, but it's not regular. I mean this happens where if we see 10%, 15%, 20% growth on some of these shows on an initial come over to our network just based on the first 3 or 4 months of how we react. That's a big success. This one is really big. It's great, but I think it's one that we're kind of replicating with all our other shows.

Kit, if you don't mind to add to that, just talk about -- Kit, if you don't mind talking about our community, specifically in that your female community and how powerful we are in the female community to really grow. And that's why the show really took off.

Yes. The reason why that -- when I started the company and Norm and I actually went on like a bit of a roadshow all the major advertising agencies in New York and Chicago, San Francisco and L.A. every single media, major media buyer that we had relationships with and would see us all said, go get a mons,right? And what the trend with podcasting is initially, it was comedians, mostly male listeners, right, sports, a lot of that, the females, they typically follow a little to -- a little bit later than the males do when it comes to this stuff or tech adoption and so forth. But they dominate it now. I mean, when you look at the females shows that are out there, the consumption by women, whether it's the housewife's content or I've Had It or talking about The Bachelor at or just a great -- the accomplishments that women are doing in business, those communities have grown tremendously, right? I mean you're seeing 2 women from that show that both have successful careers. One is a powerful Divorce Attorney in Oklahoma and one running a big design firm, right? And they don't want to do that anymore. They want to do this podcast, and they're going to have the ability to do that. But nonetheless, we built our network where we'd be supporting a huge female network. So we can go to advertisers that it's easier for us to sell. It's easier for us to monetize. Typically, women have the majority of the money in the household to spend. So that's worked out really well. And then when we launch these new female shows, we have such an advantage because we've got this community of hundreds of female shows and millions of female podcast listeners already. So it gives us a real advantage.

We now turn to John Hankinson with Ladenburg.

Aaron, maybe this is a little bit of boring question, but can you walk us through how many shares are going to be outstanding in PodcastOne? And then 90% goes to the current shareholders, who's going to own the rest?

So that's laid out in the registration, John. So can you hear me?

Yes.

Yes. Great. So the number of shares specifically as laid out in the registration statement. There is -- the dividend is one component of it. There's also some bridge notes that will converge that's another component of it. And then the remainder will be held by LiveOne. There's also a small employee equity plan as well and that kind of rounds out the ownership.

That's why total number is going to be approximately?

It's probably $20 million. Sorry, Rob, go ahead.

Yes. No, there'll be about 23 million shares, John outstanding?

Okay.

And the float will be tiny, right? The float will be spread out amongst 25,000-plus shareholders, right? There'll be around 3 million shares in that range, right? And that clarity will come in the next 10 days or so will be the exact number. But as you know, NASDAQ in order to meet NASDAQ, you have to be approved and accepted over $8 a share.

Our next question comes from Leo Carpio with Joseph Gunnar.

Congratulations. I have a couple of quick questions. First question is, you had mentioned that you're in conversations with about 100 different talent. Could you give us any color in terms of this is 100 talent out of how many conversations you're having? Is it hundreds or thousands? And then the second question is, given the industry environment, are you seeing any rival networks that are in trouble right now, like ones that are in your range, size or smaller that could be possible targets in the next 8 to 12 months?

Yes. So on the pipeline, I was saying is it's well over 100, it's the largest pipeline we've ever had in the history of the company. And a lot of that is, is that Spotify has walked away from a lot of this, right, as they publicly announced, right, the head of content away. And this is really -- this is where we stride by being a creative first platform and really having a hands-on white glove experience, right, with that talent. And that's what Kit and Sue and Eli and the team do best, okay? In terms of acquisitions, very much like Kast Media. There's really not a home for these small podcast networks now. So there's a tremendous amount of great talent and a tremendous amount of really interesting podcast networks that fit within our range that are targets of ours and right now, we have over 10 right now that are very much in the works and looking at the both super accretive to us as well as the right talent to fit in with us. And so we're really excited to continue to look at acquisitions like Kast and Fantasy Guru and fully expect that there'll be more coming shortly.

Okay. And just one last question. Have you seen any change in your advertising rates? I mean, as the economy by any impact? Or it's just things are good right now?

Yes. That's a good question. The rates on our top shows are remaining strong and continuing to grow, and you'll see anywhere from a $25 to even $70 CPM, depending on some of the shows and what we're actually doing with them. What you'll see in the space is that more advertisers are coming into the space, but not paying those premium CPMs like I just mentioned. They're leveraging that programmatic world, right, where you're seeing that the AI inventory that I kind of mentioned about. So bigger brands are looking for more efficiencies, but still the quality audience that you get in podcasting, and they use more like their radio spots, right, that you would hear on the radio in the programmatic buying space because you're really looking at like an $8, $9 CPM in that world. You're not getting the Adam Carolla saying, "Hey, I use Castrol Oil in my BMW" or something like that, right? But he's -- that's what you're seeing. So you're seeing a little bit of shift in the sense that there's just more advertisers just spending smaller rates and different inventories, which is a good thing for us.

[Operator Instructions] We have a follow-up question from Sean McGowan with ROTH Capital.

A couple quickies for Kit, and then a couple for Aaron. Kit, when you have a show that maybe was produced without the intentional commercial break, how do you -- how does your program know where to put the break? And how does it know if it's an appropriate commercial concert at that point?

That's a good question. Okay. So each show is a little different, right? But we pretty much have a producer that is responsible to work with the host on where those breaks will be in the shows. Again, they're not live for the most part, right? These are prerecorded. And then we go back in, and we find the right breaks during the times of the conversation and say, all right, here's a good spot to this, and here's a good spot for that. We have strategies on positioning certain advertisers in certain places for sure. That's a big thing that we talked about with our production team on a weekly, monthly basis. That has to do with certain types of advertiser responses that we need and so forth. So we're very tied into that. Some of the new technology that we've developed over the years that gives us really an advantage over some of our networks is that we have the efficiencies now where we can actually pull these embedded advertisement rates. So if you hear Adam Carolla, again talk about Castrol and putting it in his BMW and how it makes the engine run bla, bla, bla. A month after 30 days after that actual podcast has heard, we aired, we can pull that advertisement out and put this the AI markers in there. We don't have to do that with people anymore. This is done just by efficiencies in technology. So it gives us a lot more advertising inventory to go out and monetize yet again. It's a whole process on how to do it. It's -- it goes back to building radio shows and understanding advertisers and what they want, and then working with the talent and the producers to make sure we do it the right way.

Okay. Maybe over to [indiscernible], I'll tell you some fun. I listen to about 25 different podcasts and someone to do this very poorly and you handled it quite well. Aaron couple of thorough questions. Could you repeat when you expect those 2 acquisitions that you've announced Kast and Fantasy Guru, when do you expect them to close?

So Kast, we're -- it's kind of a rolling close. We are acquiring shows from them. And so that's kind of ongoing. And then Fantasy Guru, we expect in the next couple of weeks to be able to close that one.

Okay. And going back to the call the other day, these -- the revenues from whatever would come with them is not included in the guidance. Is that right?

Correct. Fantasy Guru is not into our guidance. Yes.

Correct.

Okay. Then last question. I have a model that's been tracking the share count going back to the early question on share count. What is the current level of the bridge note that's outstanding today? And do you expect that to be the same level as of the 28?

No, Sean what happens is there's 2 million left. We bought back 3 million. So as part of our cleanup of the balance sheet, we converted all of our debt at $2.10 including with Harvest and the Street and myself, we paid down $3 million in the bridge note, okay? And we also bought back almost 3.2 million shares of common stock, right, in the open market, and we're continuing that buyback. We have about 4 million left to buy in that buyback, okay? And it was just reporting yesterday, our highest cash position, even though we spent over $6 million in buybacks, we had about $9 million in debt as of yesterday and $27 million in short-term asset. So the additional $2 million bridge will convert into common shares as part of this. So that will go away.

Okay. I just wanted to get the update on how much of that was left. I know you had paid down 3 [ billion ] notes, there was any additional -- and you don't expect any more to be paid down between now and the closing date? I mean the record date?

I mean we would if they want it, but my guess is they're not going to want to do it, right. We've got some really good investors here and really good people. It just took longer than we thought and the process of getting through the regulatory approval. Yes, this is the first time ever done in history, right? You know me a long time, Sean. I mean this was a tough one, right? We had to get through really everybody understanding the structure we did here, it's very much like a John Malone type spin-off where the control position is still at the parent level. So it took longer than we thought, and so we've been buying back those bridge notes. And I would suspect that they're going to stay in, we certainly would be happy to buy them back if they choose to.

This concludes our Q&A. I'll now hand back to Rob Ellin, CEO and Chairman, for any closing remarks.

I just want to thank everyone and thank everyone again for the patients. You've got the opportunity now to meet Kit and you'll get to meet the rest of the team. It's really, really explosive substantial management team with a career history of delivering hundreds and hundreds of millions of billions of dollars of revenues across radio and podcasting. That brand, PodcastOne started from Westwood One with Norm Pattiz. We have adopted that brand, or it was one of the great geniuses in radio and created in Westwood One, and then PodcastOne with Kit. We've adopted that with LiveOne, and we have a lot of work to do, but we fully expect, as I said in the last call, that we will be by 2027, well over a $1 billion company. I think we have tremendous upside in each of our audio businesses and the podcast business being public on its own is going to give Kit and Sue and Eli the ability to flex the muscles to continue acquisitions of both podcasts as well as acquisitions that is super accretive. And it will also give me opportunity for those second windows that we've touched on with the Patrick Wachsberger in the world who not get a view win a Academy Award the CODA, but he also did Twilight, he's done well over $20 billion with the movies. We think there's a real opportunity in podcasting to move this from podcast to vodcast. That video, which cast media is helping our numbers tremendously on the video side. We think there's an opportunity that this first show will be a thought leader into moving into television and film, right? And not when we produce them, but we get paid a lot of money by selling those in the Netflix, in the Amazons in the world is immature. And we're also moving more and more to live shows. We just added Carolla with pay-per-view. Our tech team has built for live streaming for pay-per-view for NFTs, for digital meet and greets. We think there's a huge opportunity there, and you see Brendan signing recently. We're going to see a lot more comedy on our network that's comedians really, I think there's a huge opportunity in live. And then you're going to see, for the first time ever, you're going to see like we've announced with Jeremih on the music side, you're going to see us own and distribute products through our merchandise business, right in conjunction with those celebrities. And I think there's a real opportunity there. And as I've talked about for the TAM for podcasting, right, has gone from $400 million to $1.4 billion. It's going to $5 billion to $10 billion quickly, and we're going to be a piece of it. We're going to get a slice of it. And this team is the best in the world at doing it. So thank you, everyone. I appreciate your time, and I look forward to starting trading on the eighth. And you got a few days left, if you want to own the Podcast shares through the dividend, right, you only got a few days left in it. So thank you, everyone. Appreciate it and look forward to the next call.

Ladies and gentlemen, this call has now concluded. We'd like to thank you for your participation. You may now disconnect your lines.