Brian Kinstlinger: Great. Lastly, Aaron, if you could quantify any nonrecurring benefits in the December quarter such as gains in accounts payable? And then if either of you could talk about when you expect to be free cash flow positive. I know I didn’t see the 9-month number, but for 6 months, there were some cash uses. So maybe an update there would be great.
Robert Ellin: Yes. So we haven’t publicly put out any cash numbers. We will shortly. But obviously, with that settlement of sound exchange, which is extraordinarily exciting, right? We’ve had 5 years where we bought Slacker Radio. We took on $45 million of payables when we acquired it, right? We find we are now down to where we have no substantial payouts left that haven’t been settled, which really puts us in a very different position with music labels, music publishers, multiple music partnerships have happened where they’ve taken equity at $2.10 or higher. Some as high as $4. So it really puts us in a great position. We haven’t yet talked about free cash flow, but you can see our cash is up from the last time we announced. And separate from the old payables, right, you can really look at substantial improvement in bottom line and cash flows of the company.
Brian Kinstlinger: Great. And Aaron, just if you can quantify the nonrecurring?
Aaron Sullivan: Yes, so — yes. So on recurring, there was just over about $700,000 of nonrecurring item in the quarter.
Operator: We now turn to Jon Hickman from Ladenburg.
Jon Hickman: Maybe this is a question for Aaron, but operating expenses were $8.5 million this quarter. Could you maybe give us a little guidance about operating expense growth for the next 12 months or so?
Aaron Sullivan: Jon, so there’ll be a — as I just noted, there was a onetime benefit in there of about $700,000. So you can expect to see that when you’re trying to come back in, right? in terms of growth, in the expenses, I wouldn’t expect substantial growth. Now you’re going to see a little bit of kind of variability in terms of when expenses hit, and that’s mainly around the corporate side where we have audit fees will kind of hit in certain quarters. But I wouldn’t expect it to be substantially higher than where we’re at. We’ve — we’re going to see the benefits of full year of cost saves going forward, right? We’ve continued to reduce expenses kind of throughout the year. So I would expect a pretty consistent run rate to what we have right now, adding the $700,000 back in.
Jon Hickman: Okay. And then — so you — in the press release, you said that Slacker was growing about 40% on an annual basis. Do you have a number for that for the PodcastOne business?
Aaron Sullivan: We don’t have a number. As we kind of mentioned earlier, we don’t have that download number yet, but expect to see that shortly.
Robert Ellin: And obviously, Jon, as you know, we’re in a quiet period in PodcastOne. We’ll be talking a lot more about it as the SEC has approved the — we just got back the comment letters, and we expect to start trading hopefully in the next 15 to 45 days maximum.
Operator: Our next question comes from Kevin Dede from H.C. Wainwright.
Kevin Dede: Rob, you talked about the white-label with Android. Now is that baked in so that any car that runs Android Auto has LiveOne access? Or is it an additional thing that each car owner chooses upon purchase?
Robert Ellin: Yes. So no, it’s a little bit different than that. So the Android Automotive is the opportunity for us to white — give a white-label solution. Now what are the advantages of Slacker Radio? Number one is our AI and our technology, right? And people just love the virtual behavior and the understanding of our AI and those 44 patents we have to be able to deliver your next song — your next music, your next song, right? Number two is our pricing, right? We’re less than 30% right of our competitors. And now they’re all raising prices, right? Sirius just announced they’re raising the price by $1. Spotify announced they’re raising the price. So we’re going to be even lower than that one, right? And number three is we’re the only ones that I know of that are willing to white-label and give you Tesla radio, give you Cadillac radio, give you BMW radio.
So there’s a huge opportunity, and this is not just for the audio industry. It’s for anything from watches, to gym equipment, to Walmart to Costco. As you know, I’ve built all my businesses off the back of massive partnerships with B2B partners. This is our opportunity now to really expand that business. And while we made all these cuts and cut 30% of our staff, we are adding in B2B because we’re seeing unique opportunities to really grow the business with partners who have 10 million to 2.5 billion eyeballs. And for Android, it’s just a great opportunity for them to sell — to upsell to other car companies for them to be able to do what Elon did, which is just smarter than everybody else, to brand their radio, Cadillac Radio, a BMW radio is just brilliant.
It’s just a great marketing strategy. It makes it look cooler and smarter.
Kevin Dede: And then can you give us an update on where you are in the international spectrum and attaining licenses? You can provide service there?
Robert Ellin: Say that one more time?
Kevin Dede: Yes, Rob, I’m sorry. Just I’m curious about where you are in obtaining the licenses you need to offer service internationally.
Robert Ellin: Yes. So great question. This is the year to pull that off. And I know we’ve talked about it before, but with market conditions in COVID really not raising capital throughout this process. It just took us time to clean up the balance sheet, clean up the payables, right, settle with the publishers and the record labels and really strengthen that position. I think this is our year to do that. I think it’s a massive opportunity to expand overseas. And if you remember when I used to talk about digital turbine, every time I always repeat it. When the cycles change, right, you’re going to see the carriers and others fight back, and they’re going to start the battle to have a deeper and stronger relationship with their customers, right?
And that means they got to have to own content. I see telltale signs that’s going to grow dramatically. And we are in very active negotiations, discussions to expand our licenses in either a partnership and maybe with some who already has them or ourselves overseas. And obviously, Tesla would be number one, right? They’re paying over $8 per sub to Spotify right now. It would be a huge cost savings for them. But I think there are — every carrier car company, there’s huge opportunities for expand, first and foremost, in Europe before anywhere else. But we are in discussion in India, Japan and many other countries. And as you know, almost every one of my company is — have had partnerships with global carriers. And this time, because it’s already owned video, it’s way more than just carriers, right?
It can be cable. It can be satellite. It can be Kindle. It could be any of the streaming platforms, I believe they all have to have audio on their platforms. And I think we offer them something so unique with the content we have.
