Item 1.01 Entry into a Material Definitive
Agreement.
Effective as of July 8, 2021
(the “Effective Date”), LiveOne, Inc. (the “Company”) entered into an amendment of notes agreement (collectively,
the “Amendments”) with each of the holders of its subordinated 8.5% Secured Convertible Notes (the “Noteholders”)
in the aggregate principal amount of $15.0 million (the “Notes”) agreed to (i) extend the maturity date of the Notes to June
3, 2024, (ii) defer the June 30, 2022 quarterly cash interest payment to July 18, 2022, and defer the quarterly cash interest payment
for the fiscal quarter ending September 30, 2022 to be due and payable at the same time as the quarterly cash interest payment due and
payable to the Noteholders for the fiscal quarter ending December 31, 2022, (iii) reduce the amount of Free Cash (as defined in the Notes)
as follows (x) $7,000,000 from the Effective Date through December 31, 2022 (inclusive), (y) $8,000,000 from January 1, 2023 and until
June 30, 2023 (inclusive), and (z) $10,000,000 from July 1, 2023 and until the Notes are repaid in full at their new maturity date of
June 3, 2024; provided, that in the event that the Notes are repaid or prepaid by the Company, the amount of required Free Cash shall
be then permanently reduced to the amount equal to the product of the aggregate principal amount of the Notes then outstanding multiplied
by 2/3, and (iv) permit the Company to prepay the Notes at any time without any repayment/prepayment penalties and without the written
consent of the Noteholders, subject to approval from the Company’s senior secured lender, provided, that the Company shall give
the Noteholders at least five days prior written notice of any such prepayment or repayment (collectively, “Loan Modification”).
The Company and the
Noteholders also agreed that if (i) at least $5,000,000 of the original principal amount of the Notes is not repaid by the Company
on or prior to January 1, 2023, the conversion price of the Notes shall be amended to $3.00 per share, and the Company shall issue
to the Noteholders in aggregate an additional 250,000 shares of the Company’s restricted common stock, $0.001 par value per
share (the “common stock”); (ii) at least $7,500,000 of the original principal amount of the Notes is not repaid by the
Company on or prior to June 30, 2023, the conversion price of the Notes shall be further amended to $2.50 per share, and the Company
shall then issue to the Noteholders in aggregate an additional 500,000 shares of common stock; and (iii) the entire principal amount
of the Notes then outstanding is not repaid by the Company on or prior to January 1, 2024, the conversion price of the Notes shall
be further amended to $2.25 per share, and the Company shall then issue to the Noteholders in aggregate an additional 750,000 shares
of common stock. In addition, in consideration of the Loan Modification, the Company issued to the Noteholders in aggregate 500,000
shares of common stock. The shares were issued and to the extent applicable, will be issued, to the Noteholders as restricted
securities in a private placement transaction exempt from the registration requirements of the Securities Act of 1933, as amended
(the “Securities Act”).
The Company and the Noteholders
further agreed to certain Note repayment conditions as provided in the Amendments in the event that the Company or any of its subsidiaries
completes an equity or debt financing in the future or if Robert Ellin ceases to be the Company’s Chief Executive Officer and unless
an equally or better qualified CEO, as determined by the majority of the Company’s then-independent directors is appointed within
the time provided by the Amendments, in each case prior to the full repayment of the Notes.
The applicable portions of
the Amendments were consented to by East West Bank, the Company’s senior lender. Except as modified by the Amendments, all other
terms of the Notes and related transaction documents remain the same.
In connection with the Loan
Modification, effective as of the Effective Date, the Company entered into the Amendment of Notes Agreement (the “Trinad Amendment”)
with Trinad Capital Master Fund Ltd. (“Trinad Capital”), a fund controlled by Mr. Ellin, the Company’s Chief Executive
Officer, Chairman, director and principal stockholder, pursuant to which the maturity date of all of the Company’s unsecured convertible
notes issued to Trinad Capital was extended to July 1, 2024, and in consideration of such extension, the Company issue to Trinad Capital
500,000 shares of common stock. The shares were issued to Trinad Capital in a private placement that relies upon an exemption from registration
provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
The foregoing description
of the Amendments is a summary only, does not purport to be complete and is qualified in its entirety by reference to the full texts of
the Amendments, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein
by reference.