Investor Presentation - Nov 2019...Microsoft PowerPoint - Investor Presentation - Nov 2019 Author ptarell Created Date 11/4/2019 5:32:16 PM ...

This presentation includes forward-looking statements that involve numerous assumptions, risks and uncertainties. These include,

but are not limited to, general business conditions, historical losses, competition, changing consumer preferences, subscriber costs

and retention rates, acquisitions, and other risks and uncertainties. Actual results may differ materially from those expressed in

these forward-looking statements due to such risks and uncertainties, including those factors detailed under the caption “Risk

Factors” and elsewhere in the documents we file from time to time in our filings with the Securities and Exchange Commission,

including our reports on Form 10-K and Form 10-Q. Gaia assumes no obligation to publicly update or revise any forward-

looking statements. Research results discussed today are based on information that the Company considered reliable at the

time the study was conducted, but the Company does not represent the results are accurate or complete and they should not be

relied on as such. The information, opinions, estimates and forecasts presented are as of the date thereof and are subject to

change without prior notification.

Disclosure

• Global video subscription service (SVOD) @ $11.99/month (Ad Free)

• Network of niche channels for an underserved subscriber base with 8,000+ original

programs and curated videos

• 90+% of content is exclusive to Gaia including worldwide rights

• $299 Live Access annual membership launched in June 2019

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TARGET DEMOGRAPHIC 

Consumption across channels 50% Female / 50% Male

28-60 years old $75k+ HH income

What is Gaia

Yoga Transformation Seeking Truth Alternative Healing

OUR VISION

Empower the evolution of consciousness

OUR MISSION

Create a transformational network to empower a global conscious community

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Created by Membersfor Members

• 100% of our employees are members

• We publish content that doesn’t see the light of day in mainstream, advertiser-driven media

• We are a self-sustaining enterprise investing in media with a wholly independent voice

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(1) Digital TV Research December 2017(2) Gaia Segmentation and Market Size study 2018

Our Addressable Market is Tremendous

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546MGlobal OTT video service subscriptions by 2022(1)

377MWilling to pay a subscription & interested

in at least one Gaia topic = 69%(2)

26MGaia Target = 7%(2) 

• International rights for 90% of content viewed

• Expand by adding languages without need for foreign operations

• Live in Spanish, German and French, including native language titles

• Gaia international members: now 25% / 4y 50% / 8y 60-65%

• Members in 185+ countries today

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We Are Poised for International Expansion

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• 80+% of viewership on Gaia original content

• Full in-house production capabilities

• No dependence on outside studios

• Cost per hour: Gaia $12K(Netflix $10+M)

UnrivaledOriginalContent

Strategic partnerships that drive brand awareness and reach:

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Cross‐Platform Partnerships

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Our MembersSay It Best

• 150,000 sf. ft (Boulder, CO)

• 12 landscaped acres

• Live streaming theater with300 in person capacity

• Powerful recruiting tool

• Full-service cafeteria and onsite gym

• ~$30 million, owned by Gaia

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Walking the Walk

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$1.0M

$3.3M

2014 2018

HISTORICAL COST BASIS OF CONTENT LIBRARY

$11.5

$18.8

$27.1

$35.9

4Q16 4Q17 4Q18 3Q19

($ in millions at end of each quarter)

Third party valuation as of Dec ‘17:

$55 million

Content Investment With a High ROI

Lifetime gross profit:

$9.2 million

CONTENT PUBLISHED IN 2013

(Gross profit in millions for these titles for indicated year)

Cost to produce:

$2.2 million

MEMBERS(1) ANNUALIZED REVENUE RUN RATE (1)

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$11.6 $16.4

$31.6

$47.6 $54.8

4Q15 4Q16 4Q17 4Q18 3Q19

($ in millions)

128,200198,600

361,400

547,500595,000

4Q15 4Q16 4Q17 4Q18 3Q19

(# of Members)

(1) Reflects discontinued operations for historical periods as disclosed in Q1 2019 Form 10-Q

• Until November 2018 focus was on driving accelerated member and revenue growth to solidify position in our content verticals, achieving 82% member growth in 2017 and 66% through 3Q18 (500,000 members)

• Invested in growth using a 2:1 Lifetime Value (LTV) to Cost Per Acquisition (CPA) target during this period

Accelerated Path to Global Scale

CUSTOMER ACQUISITION SPEND AVERAGE MONTHLY REVENUE PER MEMBER (1)

12(1) Reflects discontinued operations for historical periods as disclosed in Q1 2019 Form 10-Q

• In December 2018 began to focus on an accelerated path to free cash flow generation and self

sustained revenue growth of 20+%, with the goal of EBITDA profitability in 4Q19 and free cash flow

generation beginning in 3Q20

• Increased LTV:CPA target to 3:1for 1Q19, with a goal of 3.5:1 by 3Q19, which was achieved in 2Q19

$13.6 $14.3

$8.5 $7.5

$6.7

3Q18 4Q18 1Q19 2Q19 3Q19

($ in millions)

$7.48 $7.50 $7.49

$7.67 $7.74

3Q18 4Q18 1Q19 2Q19 3Q19

Sustainable Growth Transition

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FY 2017(1)

FY 2018(1)

Q1 2019 Q2 2019 Q3 2019

Gross Profit(% Margin)

86.3% 87.3% 87.2% 86.4% 86.8%

Total Operating Expenses (% of Revenue)

184.0% 174.0% 138.9% 119.0% 104.8%

Customer Acquisition Expenses (% of Revenue)

98.0% 110.3% 68.4% 56.6% 49.3%

Other Operating Expenses (% of Revenue)

86.0% 63.7% 70.5% 62.4% 55.5%

Operating Profit (Loss)(% of Revenue)

(92.2)% (81.2)% (51.4)% (34.4)% (30.3)%

EBITDA(2)

(% of Revenue)(72.7)% (66.3)% (29.1)% (12.4)% (6.8)%

(1) Reflects discontinued operations for historical periods as disclosed in Q1 2019 Form 10-Q(2) Earnings before interest, taxes, depreciation, amortization and share based compensation(3) Based on Q4 of the indicated year or the current quarter

Income Statement

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SEP 30, 2019 ESTIMATED VALUE

Cash $ 11,647,000 Building and Land, net 22,836,000 $ 30,000,000Media Library, net^ 26,157,000 60,000,000Member Base - 595,000 members* - 178,500,000Net Operating Losses (Full VA)+ - 21,000,000Website and Other Assets 28,548,000 Goodwill 17,289,000

Total Assets $106,477,000

Liabilities $ 10,127,000 Deferred Revenue 6,521,000Long-term Debt 18,399,000Equity 71,224,000

Total Liabilities and Equity $106,477,000

Shares Outstanding 18,384,971

^ Estimated fair value based on prior appraisal plus investments made since December 2017* Not capitalized on Gaia’s balance sheet, value estimated using current lifetime value of $300 per member+Gross NOL’s of $91 million federal and $26 million state

Balance Sheet