10-12B/A

As filed with the Securities and Exchange Commission on September 9, 2015

File No. 001-36854

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 2

TO

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or 12(g) of

the Securities Exchange Act of 1934

Gaia, Inc.

(Exact name of registrant as specified in its charter)

Colorado	20-8246004
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer Identification number)
833 West South Boulder Road Louisville, Colorado	80027-2452
(Address of principal executive offices)	(Zip Code)

(303) 222-3997

(Registrant’s telephone number, including area code)

Copies to:

Rikard Lundberg

Kristin Macdonald

Brownstein Hyatt Farber Schreck, LLP

410 Seventeenth Street, Suite 2200

Denver, Colorado 80202

Securities to be registered pursuant to Section 12(b) of the Act:

Title of Each Class to be so Registered	Name of Each Exchange on which Each Class is to be Registered
Class A Common Stock, par value $0.0001 per share	Nasdaq Stock Market LLC

Securities to be registered pursuant to Section 12(g) of the Act:

None.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

INFORMATION REQUIRED IN REGISTRATION STATEMENT

CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10

Item 1. Business

The information required by this item is contained under the sections “Summary,” “Risk Factors,” “Our Relationship with Gaiam, Inc. After the Spin-Off,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Our Business” of the Information Statement. Those sections are incorporated herein by reference.

Item 1A. Risk Factors

The information required by this item is contained under the section “Risk Factors” of the Information Statement. That section is incorporated herein by reference.

Item 2. Financial Information

The information required by this item is contained under the sections “Unaudited Pro Forma Condensed Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Information Statement. Those sections are incorporated herein by reference.

Item 3. Properties

The information required by this item is contained under the section “Description of Property” of the Information Statement. That section is incorporated herein by reference.

Item 4. Security Ownership of Certain Beneficial Owners and Management

The information required by this item is contained under the section “Security Ownership of Certain Beneficial Owners and Management” of the Information Statement. That section is incorporated herein by reference.

Item 5. Directors and Executive Officers

The information required by this item is contained under the sections “Our Relationship with Gaiam, Inc. After the Spin-Off” and “Management” of the Information Statement. Those sections are incorporated herein by reference.

Item 6. Executive Compensation

The information required by this item is contained under the sections “Management—Committees of the Board of Directors,” “Director Compensation” and “Executive Compensation” of the Information Statement. Those sections are incorporated herein by reference.

Item 7. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is contained under the sections “Risk Factors—Risks Relating to Separating GTV from Gaiam, Inc.—After the spin-off, certain of our directors may have actual or potential conflicts of interest because of their ongoing employment by or relationships with the Gaiam, Inc.,” “Our Relationship with Gaiam, Inc. After the Spin-Off,” “Management—Structure of the Board of Directors and Director Independence,” “Management—Committees of the Board of Directors” and “Certain Relationships and Related Party Transactions” of the Information Statement. Those sections are incorporated herein by reference.

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Item 8. Legal Proceedings

The information required by this item is contained under the section “Legal Proceedings” of the Information Statement. That section is incorporated herein by reference.

Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Shareholder Matters

The information required by this item is contained under the sections “Questions and Answers about the Spin-Off,” “Risk Factors,” “The Spin-Off,” “Executive Compensation—Securities Authorized for Issuance Under Equity Compensation Plans” and “Description of Our Capital Stock—Listing” of the Information Statement. Those sections are incorporated herein by reference.

Item 10. Recent Sales of Unregistered Securities

None.

Item 11. Description of Registrant’s Securities to be Registered

The information required by this item is contained under the section “Description of Our Capital Stock” of the Information Statement. That section is incorporated herein by reference.

Item 12. Indemnification of Directors and Officers

The information required by this item is contained under the section “Indemnification of Directors and Officers” of the Information Statement. That section is incorporated herein by reference.

Item 13. Financial Statements and Supplementary Data

The information required by this item is contained under the sections “Unaudited Pro Forma Condensed Consolidated Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Index to Financial Statements” of the Information Statement. Those sections are incorporated herein by reference.

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 15. Financial Statements and Exhibits

(a) Financial Statements. The information required by this item is contained under the sections “Unaudited Pro Forma Condensed Consolidated Financial Statements,” and “Index to Financial Statements” of the Information Statement. Those sections are incorporated herein by reference.

(b) Exhibits. The following documents are filed as exhibits hereto

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Exhibit Number	Description
2.1	Form of Reorganization Agreement by and between Gaiam, Inc. and Gaia, Inc.
3.1	Amended and Restated Articles of Incorporation of Gaia, Inc.*
3.2	Amended and Restated Bylaws of Gaia, Inc.*
4.1	Form of Gaia, Inc. Class A Common Stock Certificate*
4.2	Form of Gaia, Inc. Class B Common Stock Certificate*
10.1	Form of Transitional Operating Agreement by and between Gaiam, Inc. and Gaia, Inc.
10.2	Form of Assignment of SVOD Rights in AV Works Owned by Gaiam Brand, by and among Gaiam, Inc., Gaiam Americas, Inc. and Gaia, Inc.
10.3	Form of Sub-License Agreement of SVOD Rights in AV Works Under License Gaiam Brand, by and among Gaiam, Inc., Gaiam Americas, Inc. and Gaia, Inc.
10.4	Trademark License and Domain Name Agreement, by and among Gaiam, Inc., Gaiam Americas, Inc. and Gaia, Inc.
10.5	Assignment and Contribution Agreement by and among Gaiam, Inc., Gaia, Inc. and Boulder Road LLC
10.6	Lease Agreement by and between Boulder Road LLC and Gaiam Americas, Inc.
10.7	Amendment No. 1 to Lease Agreement by and between Boulder Road LLC and Gaiam Americas, Inc.
10.8	Gaia, Inc. Long-Term Deferred Compensation Plan
10.9	Form of Gaia, Inc. Restricted Stock Unit Awards Agreement
10.10	Gaia, Inc. 2015 Long-Term Incentive Plan
21.1	Subsidiaries of Gaia, Inc.**
99.1	Information Statement of Gaia, Inc.

* To be filed by amendment.

** Previously Filed

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SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

Gaia, Inc.
By:	/s/ Jirka Rysavy
Name:	Jirka Rysavy
Title:	Chief Executive Officer

Date: September 9, 2015

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EXHIBIT INDEX

Exhibit Number	Description
2.1	Form of Reorganization Agreement by and between Gaiam, Inc. and Gaia, Inc.
3.1	Amended and Restated Articles of Incorporation of Gaia, Inc.*
3.2	Amended and Restated Bylaws of Gaia, Inc.*
4.1	Form of Gaia, Inc. Class A Common Stock Certificate*
4.2	Form of Gaia, Inc. Class B Common Stock Certificate*
10.1	Form of Transitional Operating Agreement by and between Gaiam, Inc. and Gaia, Inc.
10.2	Form of Assignment of SVOD Rights in AV Works Owned by Gaiam Brand, by and among Gaiam, Inc., Gaiam Americas, Inc. and Gaia, Inc.
10.3	Form of Sub-License Agreement of SVOD Rights in AV Works Under License Gaiam Brand, by and among Gaiam, Inc., Gaiam Americas, Inc. and Gaia, Inc.
10.4	Trademark License and Domain Name Agreement, by and among Gaiam, Inc., Gaiam Americas, Inc. and Gaia, Inc.
10.5	Assignment and Contribution Agreement by and among Gaiam, Inc., Gaia, Inc. and Boulder Road LLC
10.6	Lease Agreement by and between Boulder Road LLC and Gaiam Americas, Inc.
10.7	Amendment No. 1 to Lease Agreement by and between Boulder Road LLC and Gaiam Americas, Inc.
10.8	Gaia, Inc. Long-Term Deferred Compensation Plan
10.9	Form of Gaia, Inc. Restricted Stock Unit Awards Agreement
10.10	Gaia, Inc. 2015 Long-Term Incentive Plan
21.1	Subsidiaries of Gaia, Inc.**
99.1	Information Statement of Gaia, Inc.

* To be filed by amendment.

** Previously Filed

EX-2.1

EXHIBIT 2.1

FORM OF

REORGANIZATION AGREEMENT

between

GAIAM, INC.

and

GAIA, INC.

Dated as of             , 2015

TABLE OF CONTENTS

		Page
ARTICLE I	THE RESTRUCTURING		2
1.1	Restructuring		2
1.2	Contribution and Transfer of Spinco Assets; Assumption of Spinco Assumed Liabilities		2
1.3	Third Party Consents and Government Approvals		4
1.4	Restructuring Documents		4
1.5	Qualification as Reorganization		4
ARTICLE II	THE DISTRIBUTION		4
2.1	The Distribution		4
2.2	Conditions to the Distribution and Spin-Off		5
2.3	Treatment of Outstanding Equity Awards		6
ARTICLE III	REPRESENTATIONS AND WARRANTIES		8
3.1	Representations and Warranties of the Parties		8
3.2	Additional Representations and Warranties of Spinco		9
ARTICLE IV	COVENANTS		10
4.1	Cross-Indemnities		10
4.2	Mutual Release of Certain Liabilities		14
4.3	Specific Performance		15
4.4	Access to Information		15
4.5	Financial Information Certifications		16
4.6	Confidentiality		16
4.7	Notices Regarding Transferred Assets		17
4.8	Limitation of Liability		17
4.9	Settlement of Intercompany Accounts		18
4.10	Restrictions Relating to the Distribution		18
ARTICLE V	CLOSING		20
5.1	Closing		20
5.2	Conditions to Closing		20
5.3	Deliveries at Closing		20
ARTICLE VI	INSURANCE MATTERS		21
6.1	D&O Policies		21
6.2	Pre-Distribution Claims		22
6.3	Retentions/Deductibles		22
6.4	Unearned Premium		23
6.5	Expirations and Renewals		23
6.6	Copies of Policies		23

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ARTICLE VII	TERMINATION	22
7.1	Termination	22
7.2	Effect of Termination	22
ARTICLE VIII	MISCELLANEOUS	22
8.1	Definitions	22
8.2	Further Assurances	30
8.3	No Third-Party Rights	30
8.4	Notices	30
8.5	Entire Agreement	31
8.6	Binding Effect; Assignment	31
8.7	Costs and Expenses	31
8.8	Governing Law; Jurisdiction	31
8.9	Waiver of Jury Trial	32
8.10	Severability	32
8.11	Amendments; Waivers	33
8.12	No Strict Construction; Interpretation	33
8.13	Counterparts	33

EXHIBIT A — Form of Trademark License Agreement

EXHIBIT B — Form of Assignment Agreement

EXHIBIT C — Form of Content License Agreement

EXHIBIT D — Lease Agreement

EXHIBIT E — Form of Transitional Operating Agreement

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REORGANIZATION AGREEMENT

This REORGANIZATION AGREEMENT (together with all Schedules and Exhibits hereto, this “Agreement”), dated as of             , 2015, is entered into by and between GAIAM, INC., a Colorado corporation (“Parent”), and GAIA, INC., a Colorado corporation (“Spinco” and together with Parent, the “Parties” and each a “Party”). Certain capitalized terms used herein have the meanings ascribed thereto in Section 8.1.

RECITALS:

WHEREAS, Parent owns and operates the business commonly referred to as the “Branded Business”, which consists of yoga, fitness, and wellness products and physical media distributed through Parent’s website, apps, retail network, and catalogs, and which also includes Gaiam, Inc.’s eco-travel business;

WHEREAS, Spinco was incorporated on September 29, 2006 and since the date of its incorporation, and prior to the Spin-Off (as defined herein), has been a wholly-owned subsidiary of Parent and has been operating as a business division of Parent operating under the brand name “Gaiam TV”;

WHEREAS, certain assets and liabilities of Parent generally consisting of those associated with the global digital video subscription service doing business as “Gaiam TV” have previously been contributed to Spinco as reflected in the financial statements of Spinco as reflected in the registration statement on the Form 10 (the “Prior Contribution”);

WHEREAS, the Parent Board has determined that it is appropriate and in the best interests of Parent and its shareholders to reorganize its assets and liabilities by means of a spin-off (the “Spin-Off”) of Spinco, and the contribution of certain remaining assets and liabilities of Parent generally consisting of those associated with the global digital video subscription service doing business as “Gaiam TV” set forth on Schedule A attached hereto (the “Remaining Assets” and the “Remaining Assumed Liabilities”) on the Distribution Date (as defined herein);

WHEREAS, the Spin-Off is motivated, in substantial part, by Parent Board’s conclusion that separating the Branded Business and the Spinco Business (as defined herein) into two independent and focused companies is the best way to grow and unlock the full value of Parent’s businesses in both the short and long term;

WHEREAS, the Parties desire to effect the transactions contemplated by this Agreement, including the Restructuring (as defined herein) and the distribution (the “Distribution”), by means of a dividend, of all of the issued and outstanding shares of common stock of Spinco to the holders of record on the Record Date of Parent’s Class A Gaiam, Inc. common stock, par value $.0001 per share (“Parent Class A Common Stock”), and Class B Gaiam, Inc. common stock, par value $.0001 per share (“Parent Class B Common Stock” and together with Parent Class A Common Stock, the “Parent Common Stock”);

WHEREAS, the transactions contemplated by this Agreement, including the Restructuring and the Distribution, have been approved by the Parent Board and, to the extent applicable, the Spinco Board (as defined herein);

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WHEREAS, the transactions contemplated by this Agreement, including the Restructuring and the Distribution, are intended to qualify, under, among other provisions, Sections 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”);

WHEREAS, this Agreement constitutes, and is hereby adopted as, a “plan of reorganization” within the meaning of Section 368 of the Code, and the Treasury Regulations promulgated thereunder; and

WHEREAS, the Parties wish to set forth in this Agreement the terms on which, and the conditions subject to which, they intend to implement the measures referred to above and elsewhere herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein, the Parties hereby agree as follows:

ARTICLE I

THE RESTRUCTURING

1.1 Restructuring.

(a) The Parties have taken or will take, and have caused or will cause their respective Subsidiaries to take, all actions that are necessary or appropriate to implement and accomplish the transactions contemplated by this Agreement (collectively, the “Restructuring”).

(b) The Parties agree that this Agreement constitutes a “plan of reorganization” within the meaning of Treasury Regulation Section 1.368-2(g). All the transactions contemplated by the Restructuring and the Distribution are intended to be effected pursuant to same plan of reorganization, even though there may be delays between the completion of certain of the transactions.

1.2 Contribution and Transfer of Spinco Assets; Assumption of Spinco Assumed Liabilities.

(a) On the terms and subject to the conditions of this Agreement, and in furtherance of the Restructuring and the Spin-Off, by no later than the Distribution Date:

(i) Parent shall cause all of its (or its Subsidiaries’) rights, title and interest in and to all of the Remaining Assets to be contributed, assigned, transferred, conveyed and delivered, directly or indirectly, to Spinco, and Spinco agrees to accept or cause to be accepted all such rights, title and interest in and to all the Spinco Assets (the “Contribution”).

(ii) Parent shall cause all of the Remaining Assumed Liabilities to be assigned, directly or indirectly, to Spinco, and Spinco shall accept, assume, perform, discharge and fulfill all of the Spinco Assumed Liabilities in accordance with their respective terms.

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(iii) The Parties shall execute or cause to be executed by the appropriate entities such additional documents and instruments as shall be necessary to effect the valid and effective transfer to Spinco, and assumption by Spinco, of the Spinco Assets, including the Remaining Assets and Spinco Assumed Liabilities, including the Remaining Assumed Liabilities.

(b) Upon completion of the transactions contemplated by Section 1.2(a) above: (i) Spinco will own, directly or indirectly, the Spinco Business and the Spinco Assets and be subject to the Spinco Assumed Liabilities; and (ii) Parent will continue to own, directly or indirectly, the Parent Retained Businesses and the Parent Retained Assets and continue to be subject to the Parent Retained Liabilities.

(c) In the event that any transfer, conveyance or assignment of any Spinco Assets or Spinco Assumed Liabilities has not been effected at or before the Distribution Date, the obligation to transfer such Spinco Assets or Spinco Assumed Liabilities shall continue past the Distribution Date and shall be accomplished as soon thereafter as practicable.

(d) For purposes of this Section 1.2 and elsewhere in this Agreement, the following terms have the corresponding meanings:

(i) “Parent Retained Assets” means all Assets which are held by Parent or its Subsidiaries other than the Spinco Assets.

(ii) “Parent Retained Businesses” means all businesses which are held, conducted or operated by Parent or its Subsidiaries immediately prior to the Distribution Date other than the Spinco Business.

(iii) “Parent Retained Liabilities” means all Liabilities of Parent or its Subsidiaries other than the Spinco Assumed Liabilities.

(iv) “Spinco Assets” means all Assets owned by Parent, Spinco or their respective Subsidiaries immediately prior to the Distribution Date which (A) are used primarily in, or that primarily relate to, the Spinco Business, or (B) are otherwise assigned to and assumed by Spinco in connection with the Spin-Off, including without limitation all Assets reflected in the Balance Sheet or the Interim Balance Sheet.

(v) “Spinco Assumed Liabilities” means all Liabilities (A) arising out of or related to the Spinco Business or the Spinco Assets (B) which also meet one or more of the following criteria: (1) such Liabilities are reflected or reserved against in the Balance Sheet or the Interim Balance Sheet, or are required by GAAP to be so reflected or reserved against (regardless of whether or not actually so reflected or reserved against); (2) such Liabilities are current Liabilities incurred in the Ordinary Course of Business (regardless of when such Liabilities were incurred or whether such Liabilities were reflected or reserved against in the Balance Sheet or the Interim Balance Sheet); (3) such Liabilities arise out of or result from Spinco’s material breach of the Spinco Financial Representations; (4) such Liabilities arise out of or result from Spinco’s material breach of any Spinco Contract (regardless of when such Liabilities were incurred or whether such Liabilities were reflected or reserved against in the Balance Sheet or the

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Interim Balance Sheet); or (5) such Liabilities arise, become due and payable, or otherwise accrue subsequent to the Distribution Date, including without limitation Liabilities arising after the Distribution Date under the Spinco Contracts. For avoidance of doubt, the term “Spinco Assumed Liabilities” shall not include Liabilities which do not meet any of the criteria in the foregoing (1) through (4), notwithstanding that such Liabilities may arise out of or be related to the Spinco Business or the Spinco Assets.

(vi) “Spinco Business” means the global digital video subscription service doing business as “Gaiam TV”.

1.3 Third Party Consents and Government Approvals. To the extent that any transaction or step contemplated by the Contribution, the Distribution, the Restructuring Agreements or the Other Agreements requires a consent of any third party or a Governmental Authorization, the Parties will use commercially reasonable efforts to obtain each such consent and Governmental Authorization at or prior to the time such consent or Governmental Authorization is required in order to lawfully effect the transactions provided for in this Agreement.

1.4 Restructuring Documents. All documents and instruments used to effect the Restructuring and otherwise to comply with this Agreement shall be in form satisfactory to Parent, Spinco and any additional signatories thereto.

1.5 Qualification as Reorganization. For U.S. federal income Tax purposes, (a) each step of the Restructuring is generally intended to be undertaken in a manner so that no gain or loss is recognized by Parent, Spinco or their respective Subsidiaries, and so that shareholders of Parent recognize gain only to the extent that they receive cash in lieu of fractional shares, and (b) the Contribution, the Distribution and the other steps described herein are intended to qualify as transactions that are described in Sections 368(a)(1)(D) and 355 of the Code.

ARTICLE II

THE DISTRIBUTION

2.1 The Distribution.

(a) The Parent Board shall have the authority and right: (i) to declare or refrain from declaring the Distribution; (ii) to establish and change the record date for the Distribution (the “Record Date”); (iii) to establish and change the date on which the Distribution and Spin-Off shall be effective (the “Distribution Date”); and (iv) prior to the Distribution Date, to establish and change the procedures for effecting the Distribution; subject, in all cases, to the applicable provisions of the CBCA.

(b) On the Distribution Date, subject to the conditions to the Distribution set forth in Section 2.2, Parent shall cause to be distributed to the holders of record of Parent Common Stock on the Record Date, as a dividend, all the issued and outstanding shares of Spinco Common Stock on the basis of (i) one share of Class A Common Stock, par value $.0001 per share, of Spinco (“Spinco Class A Common Stock”) for each          share(s) of Parent Class A Common Stock held of record on the Record Date and (ii) one share of Class B Common Stock, par value $.0001 per share, of Spinco (“Spinco Class B Common Stock” and together with the

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Spinco Class A Common Stock, “Spinco Common Stock”) for each          share(s) of Parent Class B Common Stock held of record on the Record Date. Parent will give effect to the foregoing sentence by causing the Transfer Agent to make the Distribution on the Distribution Date, including by crediting the appropriate class and number of shares of Spinco Common Stock to book entry accounts for each such record holder of Spinco Common Stock or designated transferee or transferees of each such record holder of Spinco Common Stock. For shareholders of Parent who own Parent Common Stock through a broker or other nominee, their shares of Spinco Common Stock will be credited to their respective accounts by such broker or nominee. No action by any holder of Parent Common Stock on the Record Date shall be necessary for such shareholder (or such shareholder’s designated transferee or transferees) to receive the applicable number of shares of Spinco Common Stock (and, if applicable, cash in lieu of any fractional shares) to which such shareholder is entitled in the Distribution.

(c) Shareholders of Parent who, after aggregating the number of shares of Spinco Common Stock (or fractions thereof) to which such shareholder would be entitled on the Record Date, would be entitled to receive a fraction of a share of Spinco Common Stock in the Distribution, will receive cash in lieu of fractional shares. Fractional shares of Spinco Common Stock will not be distributed in the Distribution nor credited to book-entry accounts. The Transfer Agent shall, as soon as practicable after the Distribution Date (i) determine the number of whole shares and fractional shares of Spinco Common Stock allocable to each other holder of record or beneficial owner of Parent Common Stock as of close of business on the Record Date, (ii) aggregate all such fractional shares into whole shares and sell the whole shares obtained thereby in open market transactions at then prevailing trading prices on behalf of holders who would otherwise be entitled to fractional share interests, and (iii) distribute to each such holder, or for the benefit of each such beneficial owner, such holder’s or owner’s ratable share of the net proceeds of such sale, based upon the average gross selling price per share of Spinco Common Stock after making appropriate deductions for any amount required to be withheld for United States federal income Tax purposes. Spinco shall bear the cost of brokerage fees and transfer taxes incurred in connection with these sales of fractional shares, which such sales shall occur as soon after the Distribution Date as practicable and as determined by the Transfer Agent.

(d) Spinco has caused, or prior to the Distribution Date shall cause, the Spinco Articles to be filed with the Colorado Secretary of State, whereupon the issued and then outstanding shares of Spinco Common Stock (all of which shall be owned by Parent), shall automatically be reclassified into: (i) a number of shares of Spinco Class A Common Stock equal to the number of shares of Parent Class A Common Stock outstanding as of the effective time of the Spinco Articles and (ii) a number of shares of Spinco Class B Common Stock equal to the number of shares of Parent Class B Common Stock as of the effective time of the Spinco Articles.

(e) Parent will take such action, if any, as may be necessary or appropriate under applicable state and foreign securities and “blue sky” laws to permit the Distribution to be effected in compliance, in all material respects, with such laws.

2.2 Conditions to the Distribution and Spin-Off. The Spin-Off and Distribution are subject to the satisfaction of the following conditions:

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(a) the Parent Board, or as applicable, a committee thereof, shall have taken all necessary corporate action to establish the Record Date and to declare the dividends in order to effect the Distribution in accordance with the Parent Articles, Parent’s bylaws and the CBCA;

(b) Parent shall have received the opinion of Brownstein Hyatt Farber Schreck, LLP (“Counsel”), in form and substance reasonably acceptable to Parent, to the effect that (i) the Restructuring and the Spin-Off should qualify under Sections 355 and 368(a)(1)(D) of the Code; (ii) no gain or loss should be recognized by Parent upon the distribution of Spinco Common Stock under Sections 355(c)(1) and 361(c) of the Code; and (iii) except for cash received in lieu of fractional shares, if any, no gain or loss should be recognized by, and no amount should be included in the income of, holders of Parent Common Stock upon receipt of the Spinco Common Stock in the Spin-Off under Section 355(a)(1) of the Code (the “Distribution Tax Opinion”);

(c) Parent shall have received a written solvency opinion from a financial advisor, in form and substance acceptable to the Parent Board, regarding the Spin-Off and related transactions, which opinion shall not have been withdrawn or modified;

(d) the Registration Statement on Form 10 with respect to the registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of Spinco Common Stock shall be effective as of the Distribution Date;

(e) the Spinco Common Stock shall have been approved for listing on a NASDAQ market; and

(f) any other regulatory or contractual approvals that the Parent Board or a committee thereof determines to obtain shall have been so obtained and be in full force and effect.

The foregoing conditions are for the sole benefit of Parent and shall not in any way limit Parent’s right to amend, modify or terminate this Agreement in accordance with Section 7.1. Any of the foregoing conditions may be waived by the Parent Board and any determination made by the Parent Board prior to the Distribution concerning the satisfaction or waiver of any condition set forth in this Section 2.2 shall be final and conclusive.

2.3 Treatment of Outstanding Equity Awards.

(a) Certain current and former employees, non-employee directors and consultants of Parent and its Subsidiaries have been granted options, restricted stock and/or restricted stock units in respect of Parent Common Stock pursuant to the Parent Incentive Plan administered by the Parent Board (collectively, “Awards”). Parent and Spinco shall use commercially reasonable efforts to take all actions necessary or appropriate so that Awards that are outstanding immediately prior to the Distribution Date are adjusted as set forth in this Section 2.3.

(b) Adoption of the Spinco Incentive Plan. Prior to the Distribution Date, Parent shall cause Spinco to adopt an equity incentive plan substantially similar the Parent Incentive Plan, effective as of the Distribution Date (the “Spinco Incentive Plan”) and shall approve, as the sole shareholder, the adoption of the Spinco Incentive Plan.

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(c) Stock Options.

(i) Each Parent Option which is outstanding immediately prior to the Distribution Date (a “Parent Option”) shall, as of the Distribution Date, be converted into an option to purchase Spinco Class A Common Stock in the same proportions as set forth in Section 2.1(b). (a “Spinco Option”) granted under the Spinco Incentive Plan and an adjusted Parent Option (an “Adjusted Parent Option”) such that intrinsic value of the Parent Option immediately prior to the Distribution is allocated between the Spinco Option and the Adjusted Parent Option.

(ii) Except as described herein, all other terms of the Spinco Options and the Adjusted Parent Options (including the vesting terms thereof) will, in all material respects, be the same as those of the corresponding Parent Options, and this Section 2.3(c) shall be construed and administered so as to avoid the application of the requirements of Section 409A of the Code and, as applicable, to comply with the requirements of Treasury Regulation Section 1.424-1(a).

(d) Restricted Stock; Restricted Stock Units.

(i) Restricted stock awards granted under the Parent Incentive Plan (“Parent Restricted Stock”) shall participate in the Distribution in the same manner as other outstanding shares of Parent Common Stock. Except as otherwise described herein, shares of Spinco Common Stock received by such holders of Parent Restricted Stock will be subject, in all material respects, to the same terms and conditions (including the vesting terms thereof) as those applicable to such shares of Parent Restricted Stock immediately prior to the Distribution Date (“Spinco Restricted Stock”). Such Spinco Restricted Stock shall be issued under the Spinco Incentive Plan.

(ii) Each holder of a restricted stock unit award granted under the Parent Incentive Plan that is outstanding immediately prior to the Distribution Date (a “Parent Restricted Stock Unit Award”) shall receive, as of the Distribution Date, a restricted stock unit award under the Spinco Incentive Plan (a “Spinco Restricted Stock Unit”). The number of Spinco Restricted Stock Units shall be equal to the number of shares of Spinco Common Stock that the holder of Parent Common Stock, equivalent in number to the restricted stock units granted under the Parent Restricted Stock Unit Award, would be entitled in the Distribution had the Parent Restricted Stock Unit Awards represented actual shares of Parent Common Stock, rounded down to the nearest whole unit. Except as otherwise described herein, the Spinco Restricted Stock Units shall be subject, in all material respects, to the same terms and conditions (including the vesting terms thereof) as those applicable to the related Parent Restricted Stock Unit Awards (as applicable) immediately prior to the Distribution Date.

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(e) It is intended that the Spinco Incentive Plan be considered, as to any Spinco Option, Spinco Restricted Stock or Spinco Restricted Stock Unit that is issued as part of the adjustment provisions of this Section 2.3, to be a successor plan to the Parent Incentive Plan pursuant to which the corresponding Award was issued, and Spinco shall be deemed to have assumed the obligations under the Parent Incentive Plan to make the adjustments to the Awards set forth in this Section 2.3.

(f) With respect to Awards adjusted and any equity awards issued as a result of such adjustments (collectively, “Post-Spin Awards”), in each case, pursuant to this Section 2.3, service after the Distribution Date as an employee or non-employee director of Parent, Spinco or any of their respective Subsidiaries shall be treated as service to Parent and Spinco and their respective Subsidiaries for all purposes under such Post-Spin Awards following the Distribution Date, except, with respect to incentive stock options, to the extent inconsistent with Section 422 of the Code and the U.S. Treasury regulations issued thereunder.

(g) From and after the Distribution Date, Spinco Options, Spinco Restricted Stock and Spinco Restricted Stock Units, regardless of by whom held, shall be settled by Spinco pursuant to the terms of the Spinco Incentive Plan. The obligation to deliver (i) shares of Spinco Common Stock upon the exercise of Spinco Options or (ii) pursuant to Spinco Restricted Stock awards or Spinco Restricted Stock Units shall be the sole obligation of Spinco, and Parent shall have no Liability in respect thereof.

(h) Neither the Distribution nor any other transaction contemplated by this Agreement shall be considered a termination of service or employment for any director, officer or employee of Parent, Spinco or any of their respective Subsidiaries for purposes of any Post-Spin Award.

(i) Spinco agrees that, on and after the Distribution Date, it shall use its reasonable efforts to cause to be effective under the Securities Act, on a continuous basis, a registration statement on Form S-8 with respect to shares of Spinco Common Stock issuable upon exercise of Spinco Options.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Parties. Each Party represents and warrants to the other Party as follows:

(a) Organization and Qualification. Such Party is a corporation duly organized, validly existing and in good standing under the laws of the state of Colorado, has all requisite corporate power and authority to own, use, lease or operate its properties and Assets, and to conduct the business heretofore conducted by it, and is duly qualified to do business and is in good standing in each jurisdiction in which the properties owned, used, leased or operated by it or the nature of the business conducted by it requires such qualification, except in such jurisdictions where the failure to be so qualified and in good standing would not have a material adverse effect on its business, financial condition or results of operations or its ability to perform its obligations under this Agreement.

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(b) Authorization and Validity of Agreement. Such Party has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, the agreements and instruments to which it is to be a party that are necessary in order to effect the transactions described in Article I hereof or to otherwise effect the Restructuring (the “Restructuring Agreements”), and the agreements to be delivered by it at the Closing pursuant to Section 5.3 (the “Other Agreements”). The execution, delivery and performance by such Party of this Agreement, the Restructuring Agreements and the Other Agreements and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized by the board of directors of such Party and, to the extent required by law, its shareholders, and no other corporate or other action on its part is necessary to authorize the execution and delivery by such Party of this Agreement, the Restructuring Agreements and the Other Agreements, the performance by it of its obligations hereunder and thereunder and the consummation by it of the transactions contemplated hereby and thereby. This Agreement has been, and each of the Restructuring Agreements and each of the Other Agreements, when executed and delivered, will be, duly executed and delivered by such Party and each is, or will be, a valid and binding obligation of such Party, enforceable in accordance with its terms.

(c) No Approvals or Notices Required; No Conflict with Instruments. The execution, delivery and performance by such Party of this Agreement, the Restructuring Agreements and the Other Agreements, and the consummation of the transactions contemplated hereby and thereby, do not and will not materially conflict with or result in a material breach or violation of any of the material terms or provisions of, constitute a material default under, or result in the creation of any material lien, charge or encumbrance upon any of its Assets pursuant to the terms of the articles of incorporation or bylaws of such Party, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it or any of its Assets are bound, or any law, rule, regulation, judgment, order or decree of any court or governmental authority having jurisdiction over it or its properties.

(d) No Other Reliance. In determining to enter into this Agreement, the Restructuring Agreements and the Other Agreements, and to consummate the transactions contemplated hereby and thereby, such Party has not relied on any representation, warranty, promise or agreement other than those expressly contained herein or therein, and no other representation, warranty, promise or agreement has been made or will be implied. Except as otherwise expressly set forth herein or in the Restructuring Agreements or the Other Agreements, all Spinco Assets are being transferred or have been transferred on an “as is, where is” basis, at the risk of the transferee, without any warranty whatsoever on the part of the transferor and from and after the Distribution Date.

3.2 Additional Representations and Warranties of Spinco. In addition to the representations and warranties set forth in Section 3.1, Spinco represents and warrants to Parent that (the “Spinco Financial Representations”): Spinco has delivered to Parent (a) an audited consolidated balance sheet of Spinco as at December 31 in each of the years 2012, 2013 and 2014, and the related audited consolidated statements of income, changes in shareholders’ equity, and cash flow for each of the fiscal years then ended, together with the report thereon of EKS&H, LLLP, independent certified public accountants, (b) an audited consolidated balance sheet of Spinco as at December 31, 2014 (including the notes thereto, the “Balance Sheet”), and the related consolidated statements of income, changes in shareholders’ equity, and cash flow for the fiscal year then ended, together with the report thereon of EKS&H, LLLP, independent certified public accountants, and (c) an unaudited consolidated balance sheet of Spinco as at

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[            ], 2015 (including the notes thereto, the “Interim Balance Sheet”) and the related unaudited consolidated statements of income, changes in shareholders’ equity, and cash flow for the [            ] months then ended. Such financial statements and notes fairly present the financial condition and the results of operations, changes in shareholders’ equity, and cash flow of Spinco as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP, subject, in the case of interim financial statements, to normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be materially adverse) and the absence of notes (that, if presented, would not differ materially from those included in the Balance Sheet). The financial statements referred to in this Section 3.2 reflect the consistent application of such accounting principles throughout the periods involved, except as disclosed in the notes to such financial statements.

ARTICLE IV

COVENANTS

4.1 Cross-Indemnities.

(a) Spinco hereby covenants and agrees, on the terms and subject to the limitations set forth in this Article IV, from and after the Distribution Date, to indemnify and hold harmless Parent and its current and former directors, officers and employees, and each of the heirs, executors, trustees, administrators, successors and assigns of any of the foregoing (the “Parent Indemnified Parties”) from and against any Losses incurred by the Parent Indemnified Parties (in their capacities as such) to the extent arising out of or resulting from any of the following:

(i) the conduct of the Spinco Business from and after the Distribution Date;

(ii) the Spinco Assets from and after the Distribution Date;

(iii) the Spinco Assumed Liabilities, whether incurred before or after the Distribution Date;

(iv) all Spinco Taxes and any costs and expenses related to the foregoing (including reasonable attorneys’ fees and expenses); or

(v) any material breach of, or failure to perform or comply with, any representation or warranty (including without limitation the Spinco Financial Representations), covenant, undertaking or obligation of Spinco or any of its Subsidiaries under this Agreement, any Restructuring Agreement or any Other Agreement.

(b) Parent hereby covenants and agrees, on the terms and subject to the limitations set forth in this Article IV, from and after the Distribution Date, to indemnify and hold harmless Spinco and its current and former directors, officers and employees, and each of the heirs, executors, trustees, administrators, successors and assigns of any of the foregoing (the “Spinco Indemnified Parties”) from and against any Losses incurred by the Spinco Indemnified Parties (in their capacities as such) to the extent arising out of or resulting from:

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(i) the conduct of the Parent Retained Businesses, whether before or after the Distribution Date;

(ii) the Parent Retained Assets, whether before or after the Distribution Date;

(iii) the Parent Retained Liabilities, whether incurred before or after the Distribution Date;

(iv) all Parent Taxes and any costs and expenses related to the foregoing (including reasonable attorneys’ fees and expenses); or

(v) any material breach of, or failure to perform or comply with, any representation, warranty, covenant, undertaking or obligation of Parent or any of its Subsidiaries (other than the Spinco Entities) under this Agreement, any Restructuring Agreement or any Other Agreement.

(c) The indemnification provisions set forth in Sections 4.1(a) and (b) shall not apply to: (i) any Losses the responsibility for which is expressly covered by a Restructuring Agreement or an Other Agreement; (ii) any Losses incurred by any Spinco Entity pursuant to any contractual obligation (other than this Agreement, the Restructuring Agreements or the Other Agreements) existing on or after the Distribution Date between (A) Parent or any of its Subsidiaries or Affiliates, on the one hand, and (B) Spinco or any of its Subsidiaries or Affiliates, on the other hand; and (iii) any Losses incurred by any Parent Entity pursuant to any contractual obligation (other than this Agreement, the Restructuring Agreements or the Other Agreements) existing on or after the Distribution Date between (A) Parent or any of its Subsidiaries or Affiliates, on the one hand, and (B) Spinco or any of its Subsidiaries or Affiliates, on the other hand.

(d) (i) In connection with any indemnification provided for in this Section 4.1, the Party seeking indemnification (the “Indemnitee”) will give the Party from which indemnification is sought (the “Indemnitor”) prompt notice whenever it comes to the attention of the Indemnitee that the Indemnitee has suffered or incurred, or may suffer or incur, any Losses for which it is entitled to indemnification under this Section 4.1, and, if and when known, the facts constituting the basis for such claim and the projected amount of such Losses (which shall not be conclusive as to the amount of such Losses), in each case in reasonable detail. Without limiting the generality of the foregoing, in the case of any Action commenced by a third party for which indemnification is being sought (a “Third-Party Claim”), such notice will be given no later than ten business days following receipt by the Indemnitee of written notice of such Third-Party Claim. Failure by any Indemnitee to so notify the Indemnitor will not affect the rights of such Indemnitee hereunder except to the extent that such failure has a material prejudicial effect on the defenses or other rights available to the Indemnitor with respect to such Third-Party Claim. The Indemnitee will deliver to the Indemnitor as promptly as practicable, and in any event within five business days after Indemnitee’s receipt, copies of all notices, court papers and other documents received by the Indemnitee relating to any Third-Party Claim.

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(ii) After receipt of a notice pursuant to Section 4.1(d)(i) with respect to any Third-Party Claim, the Indemnitor will be entitled, if it so elects, to take control of the defense and investigation with respect to such Third-Party Claim and to employ and engage attorneys reasonably satisfactory to the Indemnitee to handle and defend such claim, at the Indemnitor’s cost, risk and expense, upon written notice to the Indemnitee of such election, which notice acknowledges the Indemnitor’s obligation to provide indemnification under this Agreement with respect to any Losses arising out of or relating to such Third-Party Claim. The Indemnitor will not settle any Third-Party Claim that is the subject of indemnification without the written consent of the Indemnitee, which consent will not be unreasonably withheld, conditioned or delayed; provided that, after reasonable notice, the Indemnitor may settle a claim without the Indemnitee’s consent if such settlement (A) makes no admission or acknowledgment of Liability or culpability with respect to the Indemnitee, (B) includes a complete release of the Indemnitee and (C) does not seek any relief against the Indemnitee other than the payment of money damages to be borne by the Indemnitor. The Indemnitee will cooperate in all reasonable respects with the Indemnitor and its attorneys in the investigation, trial and defense of any Action with respect to such Third-Party Claim and any appeal arising therefrom (including the filing in the Indemnitee’s name of appropriate cross-claims and counterclaims). The Indemnitee may, at its own cost, participate in any investigation, trial and defense of any Third-Party Claim controlled by the Indemnitor and any appeal arising therefrom, including participating in the process with respect to the potential settlement or compromise thereof. If the Indemnitee has been advised by its counsel that there may be one or more legal defenses available to the Indemnitee that conflict with those available to, or that are not available to, the Indemnitor (“Separate Legal Defenses”), or that there may be actual or potential differing or conflicting interests between the Indemnitor and the Indemnitee in the conduct of the defense of such Third-Party Claim, the Indemnitee will have the right, at the expense of the Indemnitor, to engage separate counsel reasonably acceptable to the Indemnitor to handle and defend such Third-Party Claim, provided, that, if such Third-Party Claim can be reasonably separated between those portion(s) for which Separate Legal Defenses are available (“Separable Claims”) and those for which no Separate Legal Defenses are available, the Indemnitee will instead have the right, at the expense of the Indemnitor, to engage separate counsel reasonably acceptable to the Indemnitor to handle and defend the Separable Claims, and the Indemnitor will not have the right to control the defense or investigation of such Third-Party Claim or such Separable Claims, as the case may be (and, in which latter case, the Indemnitor will have the right to control the defense or investigation of the remaining portion(s) of such Third-Party Claim).

(iii) If, after receipt of a notice pursuant to Section 4.1(d)(i) with respect to any Third-Party Claim as to which indemnification is available hereunder, the Indemnitor does not undertake to defend the Indemnitee against such Third-Party Claim, whether by not giving the Indemnitee timely notice of its election to so defend or otherwise, the Indemnitee may, but will have no obligation to, assume its own defense, at the expense of the Indemnitor (including attorneys’ fees and costs), it being understood that the Indemnitee’s right to indemnification for such Third-Party Claim shall not be adversely affected by its assuming the defense of such Third-Party Claim. The Indemnitor will be bound by the result obtained with respect thereto by the Indemnitee;

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provided that the Indemnitee may not settle any Action with respect to which the Indemnitee is entitled to indemnification hereunder without the consent of the Indemnitor, which consent will not be unreasonably withheld, conditioned or delayed; provided further that such consent shall not be required if (i) the Indemnitor had the right under this Section 4.1 to undertake control of the defense of such Third-Party Claim and, after notice, failed to do so within thirty days of receipt of such notice (or such lesser period as may be required by court proceedings in the event of a litigated matter), or (ii) (A) the Indemnitor does not have the right to control the defense of the entirety of such Third-Party Claim pursuant to Section 4.1(d)(ii) or (B) the Indemnitor does not have the right to control the defense of any Separable Claim pursuant to Section 4.1(d)(ii) (in which case such settlement may only apply to such Separable Claims), the Indemnitee provides reasonable notice to Indemnitor of the settlement, and such settlement (1) makes no admission or acknowledgment of Liability or culpability with respect to the Indemnitor, (2) does not seek any relief against the Indemnitor and (3) does not seek any relief against the Indemnitee for which the Indemnitor is responsible other than the payment of money damages.

(e) In no event will the Indemnitor be liable to any Indemnitee for any special, consequential, indirect, collateral, incidental or punitive damages, however caused and on any theory of liability arising in any way out of this Agreement, whether or not such Indemnitor was advised of the possibility of any such damages; provided that the foregoing limitations shall not limit a Party’s indemnification obligations for any Losses incurred by an Indemnitee as a result of the assertion of a Third Party Claim.

(f) The Indemnitor and the Indemnitee shall use commercially reasonable efforts to avoid production of confidential information, and to cause all communications among employees, counsel and others representing any Party with respect to a Third Party Claim to be made so as to preserve any applicable attorney-client or work-product privilege.

(g) The Indemnitor shall pay all amounts payable pursuant to this Section 4.1 by wire transfer of immediately available funds, promptly following receipt from an Indemnitee of a bill, together with all accompanying reasonably detailed backup documentation, for any Losses that are the subject of indemnification hereunder, unless the Indemnitor in good faith disputes the amount of such Losses or whether such Losses are covered by the Indemnitor’s indemnification obligation in which event the Indemnitor shall promptly so notify the Indemnitee. In any event, the Indemnitor shall pay to the Indemnitee, by wire transfer of immediately available funds, the amount of any Losses for which it is liable hereunder no later than three (3) days following any final determination of the amount of such Losses and the Indemnitor’s liability therefor. A “final determination” shall exist when (i) the parties to the dispute have reached an agreement in writing or (ii) a court of competent jurisdiction shall have entered a final and non-appealable order or judgment.

(h) If the indemnification provided for in this Section 4.1 shall, for any reason, be unavailable or insufficient to hold harmless an Indemnitee in respect of any Losses for which it is entitled to indemnification hereunder, then the Indemnitor shall contribute to the amount paid or payable by such Indemnitee as a result of such Losses, in such proportion as shall be appropriate to reflect the relative benefits received by and the relative fault of the Indemnitor on the one hand and the Indemnitee on the other hand with respect to the matter giving rise to such Losses.

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(i) Spinco shall use its best efforts to mitigate any Taxes for which Parent is liable pursuant to Section 4.1(b)(iv) to the extent such Taxes are (i) Transaction Taxes or (ii) other Taxes imposed on or by reason of the Transactions or the failure of the Transactions to qualify for the Tax-Free Status of the Transactions.

(j) The remedies provided in this Section 4.1 shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against an Indemnitor, subject to Section 4.1(e).

(k) The rights and obligations of the Parent Indemnified Parties and the Spinco Indemnified Parties under this Section 4.1 shall survive the Spin-Off.

(l) To the fullest extent permitted by applicable law, the Indemnitor will indemnify the Indemnitee against any and all reasonable fees, costs and expenses (including attorneys’ fees), incurred in connection with the enforcement of his, her or its rights under this Section 4.1.

4.2 Mutual Release of Certain Liabilities.

(a) Except as provided in Section 4.2(d), effective as of the Distribution Date, Spinco does hereby, on behalf of itself and its Subsidiaries, release and forever discharge each Parent Indemnified Party, from any and all of the Spinco Assumed Liabilities.

(b) Except as provided in Section 4.2(d), effective as of the Distribution Date, Parent does hereby, on behalf of itself and its Subsidiaries, release and forever discharge each Spinco Indemnified Party from any and all of the Parent Retained Liabilities.

(c) The Parties expressly understand and acknowledge that it is possible that unknown losses or claims exist or might come to exist or that present losses may have been underestimated in amount, severity, or both.

(d) For avoidance of doubt, nothing contained in Section 4.2(a) or Section 4.2(b) shall impair any right of any Person to enforce this Agreement, the Restructuring Agreements or any Other Agreement or any agreements, arrangements, commitments or understandings that are specified in, or contemplated to continue pursuant to, this Agreement, the Restructuring Agreements or any Other Agreement. Without limiting the foregoing, nothing contained in Section 4.2(a) or Section 4.2(b) shall release any Person from:

(i) any Liability that such Person may have with respect to indemnification or contribution pursuant to this Agreement, the Restructuring Agreements or any Other Agreement for claims brought by third Persons, which Liability shall be governed by the provisions of this Article IV and, if applicable, the appropriate provisions of such agreements;

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(ii) any unpaid accounts payable or receivable arising from or relating to the sale, provision, or receipt of goods, payment for goods, property or services purchased, obtained or used in the Ordinary Course of Business by the Parent Entities from the Spinco Entities, or by the Spinco Entities from the Parent Entities; or

(iii) any Liability the release of which would result in the release of any Person other than an Indemnitee; provided that the Parties agree not to bring suit, or permit any of their Subsidiaries to bring suit, against any Indemnitee with respect to such Liability.

(e) Spinco shall not make, and shall not permit any of its Subsidiaries to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or indemnification, against any Parent Indemnified Party with respect to any Liabilities released pursuant to Section 4.2(a). Parent shall not make, and shall not permit any of its Subsidiaries to make, any claim or demand, or commence any action asserting any claim or demand, including any claim of contribution or any indemnification, against any Spinco Indemnified Party with respect to any Liabilities released pursuant to Section 4.2(b).

4.3 Specific Performance. Each Party hereby acknowledges that the benefits to the other Party of the performance by such Party of its obligations under this Agreement are unique and that the other Party is willing to enter into this Agreement only in reliance that such Party will perform such obligations, and agrees that monetary damages may not afford an adequate remedy for any failure by such Party to perform any of such obligations. Accordingly, subject to Section 2.1(a) and Article VII hereof, each Party hereby agrees that the other Party will have the right to enforce the specific performance of such Party’s obligations hereunder and irrevocably waives any requirement for securing or posting of any bond or other undertaking in connection with the obtaining by the other Party of any injunctive or other equitable relief to enforce their rights hereunder.

4.4 Access to Information.

(a) Each Party will provide to the other Party, at any time before or after the Distribution Date, upon written request and promptly after the request therefor (subject in all cases, to any bona fide concerns of attorney-client or work-product privilege that any Party may reasonably have and any restrictions contained in any agreements or contracts to which any Party or its Subsidiaries is a party (it being understood that each of Parent and Spinco will use its reasonable best efforts to provide any such information in a manner that does not result in a violation of a privilege)), any information in its possession or under its control that the requesting Party reasonably needs (i) to comply with reporting, filing or other requirements imposed on the requesting Party by a foreign or U.S. federal, state or local judicial, regulatory or administrative authority having jurisdiction over the requesting Party or its Subsidiaries, (ii) to enable the requesting Party to institute or defend against any action, suit or proceeding in any foreign or U.S. federal, state or local court, (iii) to enable the requesting Party to implement the transactions contemplated hereby, including but not limited to performing its obligations under this Agreement, the Restructuring Agreements and the Other Agreements, and (iv) any information in its possession or under its control that reasonably relates to the business, Assets or Liabilities of the other Party.

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(b) Any information belonging to a Party that is provided to another Party pursuant to Section 4.4(a) will remain the property of the providing Party. The Parties agree to cooperate in good faith to take all reasonable efforts to maintain any legal privilege that may attach to any information delivered pursuant to this Section 4.4 or which otherwise comes into the receiving Party’s possession and control pursuant to this Agreement. Nothing contained in this Agreement will be construed as granting or conferring license or other rights in any such information.

(c) The Party requesting any information under this Section 4.4 will reimburse the providing Party for the reasonable out of pocket costs, if any, of creating, gathering and copying such information, to the extent that such costs are incurred for the benefit of the requesting Party.

(d) No Party will have any Liability to any other Party if any information exchanged or provided pursuant to this Agreement (whether exchanged pursuant to this Section 4.4 or otherwise) is found to be inaccurate, absent willful misconduct, intentional misrepresentation or fraud by the Party providing such information.

4.5 Financial Information Certifications.

(a) In order to enable the principal executive officer or officers, principal financial officer or officers and controller or controllers of each Party to make the certifications required of them under Section 302 of the Sarbanes-Oxley Act of 2002, within thirty (30) days following the end of any fiscal quarter during which Spinco was a Subsidiary of Parent, and within thirty-five (35) days following the end of any fiscal year during which Spinco was a Subsidiary of Parent, the other Party shall provide a certification statement with respect to testing of internal controls for corporate and shared services processes and other accounting disclosure matters to be reasonably and mutually agreed upon, for such quarter, year or portion thereof to those certifying officers and employees, which certification shall be in substantially the same form as has been provided by officers or employees in certifications delivered prior to the Distribution Date (provided that such certification shall be made by the relevant Party rather than individual officers or employees), or as otherwise agreed upon between the Parties.

(b) Notwithstanding Section 4.5(a), in connection with the audit of Parent’s financial statements for the year ended December 31, 2015 as it relates to the period during which Spinco was a Subsidiary of Parent, Spinco agrees to cooperate with Parent and its accounting firm and timely provide, and/or provide access to, any reasonably requested information, records and employees so as to enable Parent and its accounting firm to complete by December 31, 2015 the audit processes and procedures related to the discontinued operations for the [    ]-month period ended [            ], 2015.

4.6 Confidentiality. Each Party will keep confidential for five years following the Distribution Date (or for three years following disclosure to such Party, whichever is longer) except to the extent any Proprietary Information constitutes a trade secret, in which case the confidentiality obligations contained herein shall continue in effect indefinitely to the extent permitted by applicable law, and will use commercially reasonable efforts to cause its officers, directors, members, employees, Affiliates and agents to keep confidential during such period, all Proprietary Information of the other Party, in each case to the extent permitted by applicable law.

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(a) “Proprietary Information” means any proprietary ideas, plans and information, including information of a technological or business nature, of a Party (in this context, the “Disclosing Party”) (including all trade secrets, intellectual property, data, summaries, reports or mailing lists, in whatever form or medium whatsoever, including oral communications, and however produced or reproduced), that is marked proprietary or confidential, or that bears a marking of like import, or that the Disclosing Party states is to be considered proprietary or confidential, or that a reasonable and prudent person would consider proprietary or confidential under the circumstances of its disclosure. Without limiting the foregoing, all information of the types referred to in the immediately preceding sentence to the extent used by Spinco or the Spinco Business or which constitute Spinco Assets on or prior to the Distribution Date will constitute Proprietary Information of Spinco for purposes of this Section 4.6.

(b) Anything contained herein to the contrary notwithstanding, information of a Disclosing Party will not constitute Proprietary Information (and the other Party (in this context, the “Receiving Party”) will have no obligation of confidentiality with respect thereto), to the extent such information: (i) is in the public domain other than as a result of disclosure made in breach of this Agreement or breach of any other agreement relating to confidentiality between the Disclosing Party and the Receiving Party; (ii) was lawfully acquired by the Disclosing Party from a third party not bound by a confidentiality obligation; (iii) is approved for release by prior written authorization of the Disclosing Party; or (iv) is disclosed in order to comply with a judicial order issued by a court of competent jurisdiction, or to comply with the laws or regulations of any governmental authority having jurisdiction over the Receiving Party, in which event the Receiving Party will give prior written notice to the Disclosing Party of such disclosure as soon as or to the extent practicable and will cooperate with the Disclosing Party in using reasonable efforts to disclose the least amount of such information required and to obtain an appropriate protective order or equivalent, and provided that the information will continue to be Proprietary Information to the extent it is covered by a protective order or equivalent or is not so disclosed.

4.7 Notices Regarding Transferred Assets. Any transferor of an Asset or Liability in the Restructuring that receives a notice or other communication from any third party, or that otherwise becomes aware of any fact or circumstance, after the Restructuring, relating to such Asset or Liability, will use commercially reasonable efforts to promptly forward the notice or other communication to the transferee thereof or give notice to such transferee of such fact or circumstance of which it has become aware. The Parties will cause their respective Subsidiaries to comply with this Section 4.7.

4.8 Limitation of Liability. EXCEPT TO THE EXTENT SPECIFICALLY PROVIDED IN THIS AGREEMENT, THE RESTRUCTURING AGREEMENTS OR THE OTHER AGREEMENTS, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE OR SPECULATIVE DAMAGES (INCLUDING IN RESPECT OF LOST PROFITS OR REVENUES), HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF ANY PROVISION OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

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4.9 Settlement of Intercompany Accounts. The Intercompany Accounts will be settled, capitalized, cancelled, assigned or assumed by the relevant Parent Entities or Spinco Entities, as applicable, forty-five (45) days after the Distribution Date, in each case in the manner agreed to by the Parties. With respect to any outstanding checks issued by Parent Entities, Spinco Entities, or any of their respective Subsidiaries prior to the Distribution Date, such outstanding checks shall be honored following the Distribution Date by the entity owning the account on which the check is drawn. As between Parent Entities and Spinco Entities, all payments and reimbursements received after the Distribution Date by either Party (or any of its Subsidiaries) in respect or satisfaction of a business, Asset or Liability of the other Party (or any of its Subsidiaries), shall be held by such Party in trust for the use and benefit of the Party entitled thereto and, as promptly as commercially practicable or as otherwise agreed between the Parties, upon receipt by such Party of any such payment or reimbursement, such Party shall pay over, or shall cause its applicable Subsidiary to pay over, to the other Party the amount of such payment or reimbursement.

4.10 Restrictions Relating to the Distribution.

(a) General. Neither Parent nor Spinco shall, nor shall Parent or Spinco permit, any Parent Entity or any Spinco Entity, respectively, to take or fail to take, as applicable, any action that constitutes a Disqualifying Action described in the definitions of Parent Disqualifying Action and Spinco Disqualifying Action, respectively.

(b) Restrictions. Prior to the first day following the second anniversary of the Distribution (the “Restriction Period”), Spinco:

(i) shall continue and cause to be continued the active conduct (as defined in Section 355(b)(2) of the Code and the Treasury Regulations) of the Spinco Business, taking into account Section 355(b)(3) of the Code;

(ii) shall not voluntarily dissolve or liquidate (including any action that is a liquidation for federal income Tax purposes);

(iii) shall not (A) enter into any Proposed Acquisition Transaction or, to the extent Spinco has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur, (B) redeem or otherwise repurchase (directly or through an Affiliate) any stock, or rights to acquire stock, except to the extent such repurchases satisfy Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48 and Revenue Procedure 2013-32), (C) amend its certificate of incorporation (or other organizational documents), or take any other action, whether through a stockholder vote or otherwise, affecting the relative voting rights of its capital stock (including through the conversion of any capital stock into another class of capital stock), (D) merge or consolidate with any other Person, or (E) take any other action or actions (including any

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action or transaction that would be reasonably likely to be inconsistent with any representation made in the Tax Materials) which in the aggregate (and taking into account any other transactions described in this Section 4.10(b)(iii)) would be reasonably likely to have the effect of causing or permitting one or more Persons (whether or not acting in concert) to acquire directly or indirectly stock representing a Fifty-Percent or Greater Interest in Spinco or otherwise jeopardize the Tax-Free Status of the Transactions; and

(iv) shall not, and shall not permit Spinco or any Spinco Entity, to sell, transfer, or otherwise dispose of or agree to, sell, transfer or otherwise dispose (including in any transaction treated for federal income Tax purposes as a sale, transfer or disposition) of assets (including, any shares of capital stock of a Subsidiary) that, in the aggregate, constitute more than 30% of the consolidated gross assets of Spinco or the Spinco Entities. The foregoing sentence shall not apply to (A) sales, transfers, or dispositions of assets in the Ordinary Course of Business, (B) any cash paid to acquire assets from an unrelated Person in an arm’s-length transaction, (C) any assets transferred to a Person that is disregarded as an entity separate from the transferor for U.S. federal income Tax purposes, or (D) any mandatory or optional repayment (or pre-payment) of any indebtedness of Spinco or any Spinco Entity. The percentages of gross assets or consolidated gross assets of Spinco or the Spinco Entities sold, transferred, or otherwise disposed of, shall be based on the fair market value of the gross assets of Spinco and the Spinco Entities as of the Distribution Date. For purposes of this Section 4.10(b)(iv), a merger of Spinco or one of its Subsidiaries with and into any Person that is not a wholly owned Subsidiary of Spinco shall constitute a disposition of all of the assets of Spinco or such Subsidiary.

(c) Notwithstanding the restrictions imposed by Section 4.10(b), during the Restriction Period, Spinco may proceed with any of the actions or transactions described therein, if (i) Spinco shall have provided to Parent an Unqualified Tax Opinion in form and substance reasonably satisfactory to Parent, or (ii) Parent shall have waived in writing the requirement to obtain such opinion. In determining whether such opinion is satisfactory, Parent shall exercise its discretion, in good faith, solely to preserve the Tax-Free Status of the Transactions and may consider, among other factors, the appropriateness of any underlying assumptions or representations used as a basis for the ruling or opinion and the views on the substantive merits.

(d) Certain Issuances of Capital Stock. If Spinco proposes to enter into any Section 4.10(d) Acquisition Transaction or, to the extent Spinco has the right to prohibit any Section 4.10(d) Acquisition Transaction, proposes to permit any Section 4.10(d) Acquisition Transaction to occur, in each case, during the Restriction Period, Spinco shall provide Parent no later than ten (10) days following the signing of any written agreement with respect to any Section 4.10(d) Acquisition Transaction, with a written description of such transaction (including the type and amount of Spinco capital stock to be issued in such transaction).

(e) Tax Reporting. Each of Parent and Spinco covenants and agrees that it will not take, and will cause its respective Affiliates to refrain from taking, any position on any income Tax Return that is inconsistent with the Tax-Free Status of the Transactions. Parent and Spinco shall cooperate as each requests of the other in preparing, executing and filing all Tax Returns and other documentation on a timely basis as may be required to comply with the

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provisions of applicable Law with respect to the Transactions and all Tax periods to which the Transactions relate, and shall cooperate in good faith in responding to and otherwise handling any audit, contest, Tax Controversy or other proceeding with respect to Taxes (including unclaimed or escheatable property) Transactions and all Tax periods to which the Transactions relate, including, without limitation, by promptly providing such party with all notices and other information received from the applicable taxing authority and not entering into any settlement or otherwise taking any material action with respect to such audit, contest or other proceeding without the prior written consent of such party, not to be unreasonably withheld, conditioned or delayed.

ARTICLE V

CLOSING

5.1 Closing. Unless this Agreement is terminated and the transactions contemplated by this Agreement abandoned pursuant to the provisions of Article VII, and subject to the satisfaction or waiver of all conditions set forth in Sections 2.2 and 5.2 (or the waiver of such conditions), the closing of the Distribution (the “Closing”) will take place at the offices of Parent, at 833 West South Boulder Road, Louisville, CO, 80027, at a mutually acceptable time and date.

5.2 Conditions to Closing.

(a) The obligations of the Parties to complete the transactions provided for herein are conditioned upon the satisfaction or, if applicable, waiver of the conditions set forth in Section 2.2.

(b) The performance by each Party of its obligations hereunder is further conditioned upon:

(i) the performance in all material respects by the other Party of its covenants and agreements contained herein to the extent such are required to be performed at or prior to the Distribution Date; and

(ii) the representations and warranties of the other Party being true and complete in all material respects as of the Closing with the same force and effect as if made at and as of the Closing.

5.3 Deliveries at Closing.

(a) Parent. On or prior to the Closing, Parent will deliver or cause to be delivered to Spinco:

(i) the Transitional Operating Agreement duly executed by an authorized officer of Parent;

(ii) the Content License Agreement duly executed by an authorized officer of Parent;

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(iii) the Trademark License Agreement duly executed by an authorized officer of Parent;

(iv) a secretary’s certificate certifying that the Parent Board has authorized the execution, delivery and performance by Parent of this Agreement, the Restructuring Agreements and the Other Agreements, which authorization will be in full force and effect at and as of the Closing; and

(v) such other documents and instruments as Spinco may reasonably request.

(b) Spinco. On or prior to the Closing, Spinco will deliver or cause to be delivered to Parent:

(i) the Transitional Operating Agreement duly executed by an authorized officer of Spinco;

(ii) the Content License Agreement duly executed by an authorized officer of Spinco;

(iii) the Trademark License Agreement duly executed by an authorized officer of Spinco;

(iv) a secretary’s certificate certifying that the Spinco Board has authorized the execution, delivery and performance by Spinco of this Agreement, the Restructuring Agreements and the Other Agreements, which authorizations will be in full force and effect at and as of the Closing; and

(v) such other documents and instruments as Parent may reasonably request.

ARTICLE VI

INSURANCE MATTERS

6.1 D&O Policies.

(a) Parent shall cause each Insurance Policy with respect to those Persons who are currently covered by Parent’s, or its Subsidiaries’, existing directors and officers Insurance Policies (the “Existing D&O Policies”) to be renewed as of the Distribution Date on substantially similar terms as the Existing D&O Policies, but with an exclusion for claims that arise out of, or are [primarily] related to, the Spinco Assets, serving as a director or officer of Spinco or its Subsidiaries, or the operation of the Spinco Business.

(b) Spinco shall cause directors and officers Insurance Policies to be put in place as of the Distribution Date for the benefit of directors and officers of Spinco or its Subsidiaries (it being understood that Spinco shall be responsible for all premiums, costs and fees associated with such policies).

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(c) For the six-year period commencing immediately after the Distribution Date, Parent shall maintain in effect prepaid run-off tail coverage (the “Run-Off Policy”) for claims that arise out of, or are [primarily] related to, the Spinco Assets, serving as a director or officer of Spinco or its Subsidiaries, or the operation of the Spinco Business prior to the Distribution Date, with respect to those Persons who are currently covered by the Existing D&O Policies, on terms and at limits no less favorable than the coverage currently provided under such policies. All premiums and commissions due with respect to the Run-Off Policy shall be paid by Spinco.

6.2 Pre-Distribution Claims.

(a) For any claim asserted against Spinco or its Subsidiaries after the Distribution Date arising out of a Loss or occurrence taking place prior to the Distribution Date (“Pre-Distribution Claim”), Spinco or its applicable Subsidiary may access coverage under any of the Insurance Policies under which the Parent Entities are insured and Parent shall cooperate with Spinco or its applicable Subsidiary in connection with the tendering of such claims.

(b) In the event that a Pre-Distribution Claim relates to the same occurrence for which the Parent Entities are seeking coverage under an Insurance Policy, and the limits under the applicable Insurance Policy are not sufficient to fund all covered claims of the Parent Entities and of the Spinco Entities, amounts due under such Insurance Policy shall be paid to the respective entities in proportion to the amounts which otherwise would be due were the limits of liability infinite.

(c) After the Distribution Date, any third party administrator fees and deposits related to claims made under any Insurance Policy shall be paid in accordance with the protocol historically used prior to the Distribution Date.

ARTICLE VII

TERMINATION

7.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be amended, modified, supplemented or abandoned at any time prior to the Distribution Date by and in the sole and absolute discretion of Parent without the approval of Spinco. For the avoidance of doubt, from and after the Distribution Date, this Agreement may not be terminated (or any provision hereof modified, amended or waived) without the written agreement of each Party.

7.2 Effect of Termination. In the event of any termination of this Agreement in accordance with Section 7.1, this Agreement will immediately become void and the Parties will have no Liability whatsoever to each other with respect to the transactions contemplated hereby.

ARTICLE VIII

MISCELLANEOUS

8.1 Definitions. For purposes of this Agreement, the following terms have the corresponding meanings:

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“Action” means any demand, action, claim, suit, countersuit, litigation, arbitration, prosecution, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation whether or not commenced, brought, conducted or heard by or before, or otherwise involving, any court, grand jury or other governmental authority or any arbitrator or arbitration panel.

“Affiliates” means with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person; provided that, for any purpose hereunder, in each case both before and after the Distribution Date, none of the following shall be deemed to be Affiliates of each other: (a) Parent taken together with its Subsidiaries and any of their respective Investees, and (b) Spinco taken together with its Subsidiaries and any of their respective Investees.

“Assets” means assets, properties, interests and rights (including goodwill), wherever located, whether real, personal or mixed, tangible or intangible, movable or immovable, in each case whether or not required by GAAP to be reflected in financial statements or disclosed in the notes thereto.

“Assignment Agreement” means the Assignment of SVOD Rights in AV Works Owned by Gaiam Brand, substantially in the form attached hereto as Exhibit B.

“CBCA” means the Colorado Business Corporation Act, as in effect from time to time, or any successor statute.

“Content License Agreement” means the Sub-License Agreement for SVOD Rights to be entered into between Parent and Spinco, substantially in the form attached hereto as Exhibit C.

“Control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through ownership of securities or partnership, membership, limited liability company, or other ownership interests, by contract or otherwise and the terms “Controlling” and “Controlled” have meanings correlative to the foregoing.

“Disqualifying Action” means a Parent Disqualifying Action or a Spinco Disqualifying Action.

“Fifty-Percent or Greater Interest” has the meaning ascribed to such term for purposes of Section 355(d) and (e) of the Code.

“GAAP” means generally accepted United States accounting principles, applied on a basis consistent.

“Governmental Authorization” means any authorization, approval, consent, license, certificate or permit issued, granted, or otherwise made available under the authority of any court, governmental or regulatory authority, agency, stock exchange, commission or body.

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“Insurance Policy” means any insurance policies and insurance contracts, including, without limitation, general liability, property and casualty, workers’ compensation, automobile, marine, directors & officers liability, errors and omissions, employee dishonesty and fiduciary liability policies, whether, in each case, in the nature of primary, excess, umbrella or self-insurance overage, together with all rights, benefits and privileges thereunder.

“Intercompany Account” means any receivable, payable or loan between Parent, on the one hand and Spinco, on the other hand, that exists prior to the Distribution Date and is reflected in the records of the Parties, except for any such receivable, payable or loan that arises pursuant to this Agreement, the Restructuring Agreements or the Other Agreements.

“Investee” of any Person means any Person in which such first Person owns or controls an equity or voting interest.

“Law” means any U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, administrative pronouncement, order, requirement or rule of law (including common law).

“Lease Agreement” means the lease agreement to be entered into between Parent and Spinco, substantially in the form attached hereto as Exhibit D.

“Liabilities” means any and all debts, liabilities, commitments and obligations (including trade accounts payable), whether or not fixed, contingent or absolute, matured or unmatured, direct or indirect, liquidated or unliquidated, accrued or unaccrued, known or unknown, and whether or not required by GAAP to be reflected in financial statements or disclosed in the notes thereto.

“Losses” means any and all damages, losses, deficiencies, Liabilities, penalties, judgments, settlements, claims, payments, fines, interest, costs and expenses (including the fees and expenses of any and all actions and demands, assessments, judgments, settlements and compromises relating thereto and the costs and expenses of attorneys’, accountants’, consultants’ and other professionals’ fees and expenses incurred in the investigation or defense thereof or the enforcement of rights hereunder), whether in connection with a Third-Party Claim or otherwise.

“Order” means any order, injunction, judgment, decree or ruling of any court, governmental or regulatory authority, agency, commission or body.

“Ordinary Course of Business” when used with respect to an action taken by a Person, means: an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if:

(a) such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;

(b) such action is not required to be authorized by the board of directors of such Person and is not required to be specifically authorized by the parent company (if any) of such Person; and

(c) such action is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

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“Parent Articles” means the Amended and Restated Articles of Incorporation of Parent, as in effect immediately prior to the Distribution Date.

“Parent Board” means the Board of Directors of Parent or a duly authorized committee thereof.

“Parent Disqualifying Action” means (a) any action (or the failure to take any action) within its control by Parent or any Parent Entity (including entering into any agreement, understanding or arrangement or any negotiations with respect to any transaction or series of transactions), (b) any event (or series of events) within the control of Parent or any Parent entity involving the capital stock of Parent, any assets of Parent or any assets of any Parent Entity, or (c) any breach by Parent or any Parent Entity of any representation, warranty or covenant made by them in this Agreement, in each case, that causes or is reasonably expected to cause the Tax-Free Status of the Transactions to be lost; provided, however, the term “Parent Disqualifying Action” shall not include any action described in or contemplated by the Transaction Documents or that is undertaken pursuant to the Transactions, in each case, to the extent such action does not constitute a breach by Parent or any Parent Entity of any representation, warranty or covenant made by them in the Transaction Documents.

“Parent Entity” or “Parent Entities” means and includes each of Parent and its Subsidiaries (other than the Spinco Entities), after giving effect to the Restructuring.

“Parent Incentive Plan” means the 2009 Long-Term Incentive Plan as adopted by and amended from time to time by Parent.

“Parent Taxes” any Taxes of Parent or any Subsidiary (or former Subsidiary) of Parent for any Pre-Closing Period and including any and all Taxes relating to the Restructuring; provided, however, “Parent Taxes” shall not include any Spinco Taxes.

“Person” means any individual, corporation, company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind.

“Pre-Closing Period” means any taxable period (or portion thereof) ending on or before the Distribution Date, including for the avoidance of doubt, the portion of any Straddle Period ending at the end of the day on the Distribution Date.

“Proposed Acquisition Transaction” means a transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and Treasury Regulation Section 1.355-7, or any other regulations promulgated under Section 355(e), to enter into a transaction or series of transactions), whether such transaction is supported by Spinco management or shareholders, is a hostile acquisition, or otherwise, as a result of which Spinco would merge or consolidate with any other Person or as a result of which one or more Persons would (directly or indirectly) acquire, or have the right to acquire, from Spinco and/or one or more holders of outstanding shares of Spinco capital stock, as the case may be, a number of shares of Spinco capital stock that would, when combined with any other direct or indirect

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changes in ownership of Spinco capital stock pertinent for purposes of Section 355(e) of the Code, comprise 40% or more of (a) the value of all outstanding shares of stock of Spinco as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or (b) the total combined voting power of all outstanding shares of voting stock of Spinco as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series. Notwithstanding the foregoing, a “Proposed Acquisition Transaction” shall not include (i) the adoption by Spinco of a shareholder rights plan or (ii) issuances by Spinco that satisfy Safe Harbor VIII (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d). For purposes of determining whether a transaction constitutes an indirect acquisition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders. This definition, and the application thereof, is intended to monitor compliance with Section 355(e) of the Code and shall be interpreted accordingly. Any clarification of, or change in, the statute or regulations promulgated under Section 355(e) of the Code shall be incorporated in this definition and its interpretation.

“Section 4.10(d) Acquisition Transaction” means any transaction or series of transactions that is not a Proposed Acquisition Transaction but would be a Proposed Acquisition Transaction if the percentage reflected in the definition of Proposed Acquisition Transaction were 25% instead of 40%.

“Securities Act” means the Securities Act of 1933, as amended, together with all rules and regulations promulgated thereunder.

“Spinco Articles” means the Amended and Restated Articles of Incorporation of Spinco to be filed with the Colorado Secretary of State immediately prior to the Distribution Date.

“Spinco Board” means the Board of Directors of Spinco or a duly authorized committee thereof.

“Spinco Contract” means any agreement, contract, lease, consensual obligation, promise or undertaking (whether written or oral and whether express or implied), whether or not legally binding, to which Spinco is a party at the Distribution Date or becomes a party after the Distribution Date, or which is otherwise assigned to and assumed by Spinco in connection with the transactions contemplated herein.

“Spinco Disqualifying Action” means (a) any action (or the failure to take any action) within its control by Spinco or any Spinco Entity (including entering into any agreement, understanding or arrangement or any negotiations with respect to any transaction or series of transactions), (b) any event (or series of events) within the control of Spinco or any Spinco entity after the Distribution Date involving the capital stock of Spinco, any assets of Spinco or any assets of any Spinco Entity, or (c) any breach by Spinco or any Spinco Entity of any representation, warranty or covenant made by them in this Agreement that, in each case, causes or is reasonably expected to cause the Tax-Free Status of the Transactions to be lost; provided, however, that the term “Spinco Disqualifying Action” shall not include any action described in

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or contemplated by the Transaction Documents or that is undertaken pursuant to the Transactions, in each case, to the extent such action does not constitute a breach by Spinco or any Spinco Entity of any representation, warranty or covenant made by them in the Transaction Documents.

“Spinco Entity” or “Spinco Entities” means and includes each of Spinco and its Subsidiaries, after giving effect to the Restructuring.

“Spinco Taxes” means, without duplication, (i) any Taxes attributable to, or arising with respect to, assets or activities of the Spinco Business (excluding any Transaction Taxes), and (ii) any Taxes attributable to a Spinco Disqualifying Action. For the avoidance of doubt, Spinco Taxes shall not include any Taxes attributable to a Parent Disqualifying Action.

“Straddle Period” means any taxable period that begins on or before and ends after the Distribution Date.

“Subsidiary” when used with respect to any Person, means: (a)(i) a corporation a majority in voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar encumbrance; (ii) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (A) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (B) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company; or (iii) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has or have (A) the power to elect or direct the election of a majority of the members of the governing body of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, or (B) in the absence of such a governing body, at least a majority ownership interest; or (b) any other Person of which an aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person. For purposes of this Agreement, both prior to and after the Distribution Date, none of Spinco and its Subsidiaries shall be deemed to be Subsidiaries of Parent or any of its Subsidiaries.

“Tax” means (a) all taxes, charges, fees, duties, levies, imposts, or other similar assessments, imposed by any U.S. federal, state or local or foreign governmental authority, including, but not limited to, net income, gross income, gross receipts, excise, real property, personal property, sales, use, service, service use, license, lease, capital stock, transfer, recording, franchise, business organization, occupation, premium, environmental, windfall profits, profits, customs, duties, payroll, wage, withholding, social security, employment, unemployment, insurance, severance, workers compensation, stamp, alternative minimum, estimated, value added, ad valorem, escheat, and other taxes, charges, fees, duties, levies, imposts, or other similar assessments, (b) any interest, penalties or additions attributable thereto and (c) all

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liabilities in respect of any items described in clauses (a) or (b) payable by reason of assumption, transferee or successor liability, operation of law or Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision under law).

“Tax Controversies” means any Tax audits, Tax disputes or administrative, judicial or other proceedings with respect to the Taxes in connection with the Transactions or any Tax period to which the Transactions relate.

“Tax Materials” means (i) the Distribution Tax Opinion, (ii) the representation letter from Spinco and Parent addressed to Counsel supporting the Distribution Tax Opinion, and (iii) any other materials delivered or deliverable by Spinco or Parent in connection with the rendering by Counsel of the Distribution Tax Opinion.

“Tax Return” means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, or declaration of estimated Tax) required to be supplied to, or filed with, a Taxing authority in connection with the payment, determination, assessment or collection of any Tax or the administration of any Laws relating to any Tax and any amended Tax return or claim for refund.

“Tax-Free Status” means that (i) the Restructuring and the Spin-Off will qualify under Sections 355 and 368(a)(1)(D) of the Code; (ii) no gain or loss will be recognized by Parent upon the distribution of Spinco Common Stock under Sections 355(c)(1) and 361(c) of the Code; and (iii) except for cash received in lieu of fractional shares, if any, no gain or loss will be recognized by, and no amount will be included in the income of, holders of Parent Common Stock upon receipt of the Spinco Common Stock in the Spin-Off under Section 355(a)(1) of the Code.

“Trademark License Agreement” means the Trademark and Domain Name License Agreement to be entered into between Parent and Spinco, substantially in the form attached hereto as Exhibit A.

“Transaction Documents” means this Agreement, the Content License Agreement, the Trademark License Agreement, the Lease Agreement and the Transitional Operating Agreement.

“Transaction Taxes” means any Taxes imposed on or by reason of the Transactions, other than any such Taxes caused by a Disqualifying Action. For the avoidance of doubt, Transaction Taxes include Taxes by reason of deferred intercompany transactions triggered by the Transactions.

“Transactions” means the Restructuring, the Contribution, the Distribution and the other transactions contemplated by the Transaction Documents.

“Transfer Agent” means Corporate Stock Transfer.

“Transitional Operating Agreement” means the Transitional Operating Agreement to be entered into between Parent and Spinco, substantially in the form attached hereto as Exhibit E.

“Treasury Regulations” means the Treasury regulations promulgated under the Code.

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“Unqualified Tax Opinion” means a “will” opinion, without substantive qualifications, of a nationally recognized law or accounting firm, which firm is reasonably acceptable to Parent, to the effect that a transaction will not affect the Tax-Free Status of the Transactions.

In addition to the foregoing defined terms, the following capitalized terms are defined in the following Sections of this Agreement:

Term	Section
Adjusted Parent Option	Section 2.3(c)(i)
Agreement	Preamble
Awards	Section 2.3(a)
Balance Sheet	Section 3.2
Closing	Section 5.1
Code	Recitals
Contribution	Section 1.2
Counsel	Section 2.2(b)
Disclosing Party	Section 4.6(a)
Distribution	Recitals
Distribution Date	Section 2.1(a)
Distribution Tax Opinion	Section 2.2(b)
Exchange Act	Section 2.2(d)
Existing D&O Policies	Section 6.1(a)
Indemnitee	Section 4.1(d)(i)
Indemnitor	Section 4.1(d)(i)
Interim Balance Sheet	Section 3.2
Other Agreements	Section 3.1(b)
Parent	Preamble
Parent Class A Common Stock	Recitals
Parent Class B Common Stock	Recitals
Parent Common Stock	Recitals
Parent Indemnified Parties	Section 4.1(a)
Parent Restricted Stock	Section 2.3(d)(i)
Parent Retained Assets	Section 1.2(d)
Parent Retained Businesses	Section 1.2(d)
Parent Retained Liabilities	Section 1.2(d)
Party	Preamble
Post-Spin Awards	Section 2.3(f)
Pre-Distribution Claim	Section 6.2(a)
Proprietary Information	Section 4.6(a)
Receiving Party	Section 4.6(b)
Record Date	Section 2.1(a)
Restructuring	Section 1.1(a)
Restructuring Agreements	Section 3.1(b)
Run-Off Policy	Section 6.1(c)
Separable Claims	Section 4.1(d)(ii)
Separate Legal Defenses	Section 4.1(d)(ii)
Spin-Off	Recitals

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Term	Section
Spinco	Preamble
Spinco Assets	Section 1.2(d)
Spinco Assumed Liabilities	Section 1.2(d)
Spinco Business	Section 1.2(d)
Spinco Class A Common Stock	Section 2.1(b)
Spinco Class B Common Stock	Section 2.1(b)
Spinco Common Stock	Section 2.1(b)
Spinco Financial Representations	Section 3.2
Spinco Indemnified Parties	Section 4.1(b)
Spinco Restricted Stock	Section 2.3(d)(i)
Third-Party Claim	Section 4.1(d)(i)

8.2 Further Assurances. At any time before or after the Distribution Date, each Party hereto covenants and agrees that it will (or will cause its Subsidiaries to) make, execute, acknowledge and deliver such instruments, agreements, consents, assurances and other documents, and to take all such other commercially reasonable actions, as any other party may reasonably request and as may reasonably be determined to be necessary, proper or appropriate in order to carry out the purposes and intent of this Agreement, and to implement the terms hereof and the transactions described herein.

8.3 No Third-Party Rights. Except for the indemnification rights of the Parent Indemnified Parties and the Spinco Indemnified Parties pursuant to Section 4.1, nothing expressed or referred to in this Agreement is intended or will be construed to give any Person other than the Parties hereto (and where applicable, their Subsidiaries) and their respective successors and assigns any legal or equitable right, remedy or claim under or with respect to this Agreement, or any provision hereof, it being the intention of the Parties hereto that this Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the Parties to this Agreement and their respective successors and assigns.

8.4 Notices. All notices and other communications hereunder shall be in writing and shall be delivered in person, by facsimile (with confirming copy sent by one of the other delivery methods specified herein), by overnight courier or sent by certified, registered or express air mail, postage prepaid, and shall be deemed given when so delivered in person, or when so received by facsimile or courier, or, if mailed, three (3) calendar days after the date of mailing, as follows:

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if to any Parent Entity:	Gaiam, Inc. 833 West South Boulder Road Louisville, CO 80027 Facsimile [                ] Attention: John Jackson
if to any Spinco Entity:	Gaia, Inc. 833 West South Boulder Road Louisville, CO 80027 Facsimile [                ] Attention: Paul Tarell

or to such other address as the Party to whom notice is given may have previously furnished to the other Party in writing in the manner set forth above.

8.5 Entire Agreement. This Agreement (including the Recitals and the Exhibits and Schedules attached hereto) together with the Restructuring Agreements and the Other Agreements embody the entire understanding among the Parties relating to the subject matter hereof and thereof and supersedes and terminates any prior agreements and understandings between the Parties with respect to such subject matter, and no Party to this Agreement shall have any right, responsibility or Liability under any such prior agreement or understanding. Any and all prior correspondence, conversations and memoranda are merged herein and shall be without effect hereon. No promises, covenants or representations of any kind, other than those expressly stated herein, have been made to induce either Party to enter into this Agreement.

8.6 Binding Effect; Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns. Except with respect to a merger of a Party, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by a Party hereto without the prior written consent of the other Party; provided that the Parties may assign their respective rights, interests, duties, Liabilities and obligations under this Agreement to any of their respective wholly-owned Subsidiaries, but such assignment shall not relieve such Party of its obligations hereunder.

8.7 Costs and Expenses. Except as otherwise specifically provided in this Agreement, the Restructuring Agreements or the Other Agreements, Parent will bear all of the costs and expenses related to the Restructuring and Distribution incurred prior to the Distribution Date. From and after the Distribution Date, costs and expenses related to the Restructuring and Distribution will be shared equally by the Parties.

8.8 Governing Law; Jurisdiction. This Agreement and the legal relations among the Parties hereto will be governed in all respects, including validity, interpretation and effect, by the laws of the State of Colorado applicable to contracts made and performed wholly therein, without giving effect to any choice or conflict of laws provisions or rules that would cause the application of the laws of any other jurisdiction. Each of the Parties hereto irrevocably agrees

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that any legal action or proceeding with respect to this Agreement, and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement, and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns, shall be brought and determined exclusively in a federal or state court in Colorado. Each of the Parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or the transactions contemplated hereby in any court other than the aforesaid courts. Each of the Parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with Section 8.4 and this Section 8.8, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement or the subject matter hereof may not be enforced in or by such courts. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each Party agrees that service of process on such Party as provided in Section 8.4 shall be deemed effective service of process on such Party.

8.9 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.9.

8.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Upon a determination that any provision of this Agreement is prohibited or unenforceable in any jurisdiction, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the provisions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

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8.11 Amendments; Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each Party to this Agreement, or in the case of a waiver, by the Party against whom the waiver is to be effective. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by applicable law. Any consent provided under this Agreement must be in writing, signed by the Party against whom enforcement of such consent is sought.

8.12 No Strict Construction; Interpretation.

(a) Parent and Spinco each acknowledge that this Agreement has been prepared jointly by the Parties hereto and shall not be strictly construed against any Party hereto.

(b) When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.

8.13 Counterparts. This Agreement may be executed in two or more identical counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same agreement. The Agreement may be delivered by facsimile transmission of a signed copy thereof.

[Signature page follows]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.

GAIAM, INC.
By:
	Name:
	Title:
GAIA, INC.
By:
	Name:
	Title:

[Signature Page to Reorganization Agreement]

Exhibit A

Form of Trademark License Agreement

Exhibit A-1

Exhibit B

Form of Assignment Agreement

Exhibit B-1

Exhibit C

Form of Content License Agreement

Exhibit C-1

Exhibit D

Lease Agreement

Exhibit D-1

Exhibit E

Form of Transitional Operating Agreement

Exhibit E-1

List of Omitted Exhibits and Schedules

The following exhibits and schedules to the Reorganization Agreement, dated as of [            ], 2015, by and between Gaiam, Inc. and Gaia, Inc. have not been provided herein:

EXHIBIT A — Form of Trademark License Agreement

EXHIBIT B — Form of Assignment Agreement

EXHIBIT C — Form of Content License Agreement

EXHIBIT D — Lease Agreement

EXHIBIT E — Form of Transitional Operating Agreement

Schedule A – Spinco Assets and Spinco Assumed Liabilities

The undersigned registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request.

Omitted Exhibits and Schedules

EX-10.1

EXHIBIT 10.1

FORM OF

TRANSITIONAL OPERATING AGREEMENT

This Transitional Operating Agreement (“Agreement”) is entered into as of                      (the “Effective Date”) by and between GAIAM, INC. and GAIAM AMERICAS, INC. (collectively, “Gaiam Brand”), on one side, and GAIA, INC. DBA GAIAMTV (“GTV”), on the other side, on the following terms and conditions:

RECITALS

WHEREAS, GTV owns and controls the real property (including the buildings and certain equipment and fixtures) located at 833 W. South Boulder Road, Louisville, CO 80027 (the “Louisville Campus”);

WHEREAS, Gaiam Brand owns and controls certain contractual rights, business equipment and systems (including servers and software), vendor relationships and has rights to the services of certain individuals as employees;

WHEREAS, GTV and Gaiam Brand mutually desire to cooperate and share certain of the benefits and financial responsibilities for certain of the foregoing rights and assets, for a limited period of time, in the manner set forth herein;

NOW, THEREFORE, in consideration of the agreements and obligations set forth in this Agreement, and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto hereby agree as follows:

AGREEMENT

1. Transition Period. As used herein, the “Transition Period” means the period commencing on the Spin-Off Date and ending twenty-four (24) months after the last day of the month in which a Spin-Off Event occurs.

a. “Spin-Off Date” means the date on which a Spin-Off Event occurs.

b. “Spin-Off Event” means a transaction or corporate restructuring pursuant to which GTV is “spun off” as a separate public company.

2. Space and Facilities: Gaiam Brand as Tenant and GTV as Landlord / Lease for the Louisville Campus. Each of GTV (as landlord) and Gaiam Brand (as tenant) shall enjoy certain rights and undertake certain obligations with respect to Gaiam Brand’s tenancy at the Louisville Campus, on the terms and conditions set forth in a separate Lease Agreement entered into by Gaiam Brand and GTV (the “Lease”). All matters relating to Gaiam Brand’s tenancy at the Louisville Campus shall be governed by the Lease, except as specifically set forth in this Agreement.

3. Gaiam Brand’s Access to and Use of Production Studios.

a. GTV owns and controls two (2) production studios at the Louisville Campus (the “Studios”).

b. GTV hereby agrees that, during the term of Gaiam Brand’s tenancy under the Lease, Gaiam Brand will have access to and use of one of the Studios (including use of all equipment installed and/or located therein) for up to fourteen (14) days per calendar quarter, on a “no charge” basis.

c. Gaiam Brand and GTV will communicate and cooperate in good faith with respect to scheduling Gaiam Brand’s use of the Studios as provided herein. Without limiting the foregoing, Gaiam Brand will provide as much advance notice as possible to GTV with regard to Gaiam Brand’s preferred shooting dates, and which of the two Studios would be ideal for Gaiam Brand’s use in each instance; and GTV will use good faith efforts to accommodate Gaiam Brand’s requests as to dates and studio preferences (taking into account GTV’s own production schedule).

d. If for any reason Gaiam Brand desires to use the Studios for more than fourteen (14) days in any calendar quarter, then Gaiam Brand’s access to and use of the Studios shall be on a “space available” basis (as determined by GTV in its good faith discretion); and Gaiam Brand shall pay GTV for such use at a “day rate” of Five Hundred Dollars ($500) per day (it being understood that, for these purposes, a “day” shall mean a consecutive 24-hour period).

4. Digital Asset Management System (Front Porch Digital).

a. Gaiam Brand is a party to an agreement (the “FPD Agreement”) with Front Porch Digital (“FPD”), a company which provides the digital asset management system currently used by Gaiam Brand and GTV. Gaiam Brand has advised GTV that the FPD Agreement will expire on July 25, 2016.

b. GTV will have access to the FPD System for the duration of the term of the current FPD Agreement. Following the expiration of the current FPD Agreement, GTV will be responsible for procuring its own agreement with respect to a digital asset management system.

c. In consideration of Gaiam Brand providing GTV with access to the FPD System for the duration of the term of the FPD Agreement, GTV will pay to Gaiam Brand an amount equal to the FPD Contribution, payable on a monthly basis, within 15 days following month end.

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d. The “FPD Contribution” means an amount equal to sixty percent (60%) of the monthly amounts invoiced to Gaiam by FPD under the FPD Agreement in respect of the period from January 1, 2015 through the expiration of the term of the current FPD Agreement.

5. Digital Distribution Staff.

a. During calendar year 2015 only, GTV’s digital distribution staff (the “GTV Digital Staff”) will provide services for the benefit of Gaiam Brand relating to digital distribution of content owned or controlled by Gaiam Brand.

b. Without limiting the foregoing, during calendar year 2015 only, the GTV Digital Staff will solicit, market, promote and exploit content owned or controlled by Gaiam Brand to all appropriate third party digital distribution partners, as may be requested by Gaiam Brand; and the GTV Digital Staff will provide related services to Gaiam Brand and those partners in a customary manner (including, without limitation, delivery of assets and metadata, and collection and reporting of revenues).

c. In consideration of the foregoing services rendered by the GTV Digital Staff for the benefit of Gaiam Brand during calendar year 2015, Gaiam Brand will pay to GTV an amount equal to the GTV Digital Staff Contribution, payable on a monthly basis, within 15 days following the month end.

d. The “GTV Digital Staff Contribution” means an amount equal to forty percent (40%) of the aggregate of all salaries, T&E expenses and cost of employee benefits paid by GTV which are attributable to the GTV Digital Staff in respect of calendar year 2015.

6. IT and IS (Information Technology and Information Systems).

a. During the Transition Period, Gaiam Brand’s IT/IS staff will provide services for the benefit of GTV relating to IT and IS access, maintenance and support (including, without limitation, domain name management and SSL Certificate support); and in consideration of those services, GTV will pay to Gaiam Brand the amounts detailed on Schedule A annexed hereto, payable on a monthly basis, within 15 days following month end.

b. GTV will have access to certain of Gaiam Brand’s technology and software systems and platforms, as more specifically listed on Schedule A annexed hereto, and for the time periods listed on such Schedule A. (For the avoidance of doubt, after the expiration of the applicable time periods listed on Schedule A, GTV will cease to have access to the applicable systems and platforms.) In consideration of the foregoing access rights, GTV will pay to Gaiam Brand the amounts detailed on Schedule A annexed hereto, payable on a monthly basis, within 15 days following month end.

7. Finance & Accounting Services.

a. During the Transition Period, Gaiam Brand’s Finance staff will provide services for the benefit of GTV relating to tax provision preparation, tax return preparation and filing, including sales and use taxes.

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b. In consideration of the foregoing services rendered by Gaiam Brand for the benefit of GTV during the Transition Period, GTV will pay to Gaiam Brand an amount equal to the F&A Contribution, payable on a monthly basis, within 15 days following month end.

c. The “F&A Contribution” means (i) $2,375 per month in respect of calendar year 2015, (ii) $2,625 per month in respect of calendar year 2016 and (iii) $2,775 per month in respect of calendar year 2017.

8. Insurance (including Workers Compensation).

a. During the Transition Period, GTV will continue to be included as a “named insured” under all of the insurance policies (including workers’ compensation) that Gaiam Brand has purchased.

b. In consideration of Gaiam Brand including GTV under the aforesaid policies during the Transition Period, GTV will pay to Gaiam Brand an amount equal to the Insurance Contribution, payable on a monthly basis, within 15 days following month end.

c. The “Insurance Contribution” means $7,000 per month in respect of calendar year 2015. For each of calendar year 2016 and 2017, the Insurance Contribution will be a monthly amount equal to the “GTV Share” of the total insurance premiums payable by Gaiam Brand in respect of the applicable calendar year. The “GTV Share” means a fraction, the numerator of which is $84,000 and the denominator of which is the total insurance premiums paid by Gaiam Brand in respect of calendar year 2015. Gaiam Brand will notify GTV of the details regarding the calculation of the Insurance Contribution for each of calendar year 2016 and 2017 on or before November 30 of the preceding calendar year.

9. Human Resources Staff.

a. During the Transition Period, Gaiam Brand’s human resources staff (the “HR Staff”) will provide services for the benefit of GTV relating to human resources (including with respect to payroll, employee benefits, etc.).

b. In consideration of the foregoing services rendered by the HR Staff for the benefit of GTV during the Transition Period, GTV will pay to Gaiam Brand an amount equal to the HR Contribution, payable on a monthly basis, within 15 days following month end.

c. The “HR Contribution” means $9,250 per month in respect of calendar year 2015. For each of calendar year 2016 and 2017, the HR Contribution will be a monthly amount equal to the “GTV Employee Percentage” of all salaries, T&E expenses and cost of employee benefits paid by Gaiam Brand which are attributable to the HR Staff for the applicable calendar year. The “GTV Employee Percentage” means the total number of GTV employees, as a percentage of the total number of all employees of Gaiam Brand and GTV, collectively, as of October 31 of the calendar year immediately preceding the calendar year at issue. (By way of example, for purposes of calculating the HR

4

Contribution for 2016, the GTV Employee Percentage shall be calculated as of October 31, 2015.) Gaiam Brand will notify GTV of the details regarding the calculation of the HR Contribution for each of calendar year 2016 and 2017 on or before November 30 of the preceding calendar year.

d. In addition to the HR Contribution, GTV will pay to Gaiam Brand the GTV Employee Percentage of any costs incurred by Gaiam Brand for employee events which GTV agrees to participate in.

10. Employee Benefits.

a. During the Transition Period, GTV’s employees will continue to participate in Gaiam Brand’s employee benefit plans, subject to subparagraph 10.d. below.

b. In consideration of Gaiam Brand including GTV’s employees under Gaiam Brand’s employee benefit plans during the Transition Period, GTV will pay to Gaiam Brand an amount equal to the Benefits Contribution, payable on a monthly basis, within 15 days following month end.

c. The “Benefits Contribution” means all premiums and/or other amounts paid by Gaiam Brand in connection with employee benefits for GTV’s employees.

d. Notwithstanding the foregoing, on an annual basis during the Transition Period, GTV will have the option to discontinue its participation in the Gaiam Brand employee benefits program. GTV may exercise such option with respect to a particular calendar year by providing written notice to Gaiam Brand no later than September 15 of the preceding calendar year.

e. During the Transition Period, GTV’s employees will have access to all of the classes offered by Gaiam Brand to Gaiam Brand’s employees.

11. Cleaning & Maintenance Services and Plant Care Services.

a. During the Transition Period, GTV will be entitled to use and enjoy the benefits of (i) the cleaning and maintenance services provided by Robert Chavez’s company with respect to Building C at the Louisville Campus (pursuant to Gaiam Brand’s contract with Mr. Chavez’s company), as well as (ii) plant care services for all indoor plants in Building C at the Louisville Campus.

b. In consideration of those services, GTV will pay to Gaiam Brand an amount equal to the Maintenance Services Contribution, payable on a monthly basis, within 15 days following month end.

c. The “Maintenance Services Contribution” means the GTV Allocated Share of all amounts paid by Gaiam Brand for (i) the cleaning and maintenance services provided by Robert Chavez’s company with respect to Building C at the Louisville Campus (pursuant to Gaiam Brand’s contract with Mr. Chavez’s company), as well as (ii) plant care services for all indoor plants in Building C at the Louisville Campus. The “GTV Allocated Share” means the square footage within Building C that is occupied, used or allocated to GTV, as a percentage of the total square footage within Building C that is occupied, used or allocated to Gaiam Brand and GTV, collectively. (For the avoidance of doubt, square footage for shared space—such as lobby areas, bathrooms and kitchens—shall not be taken into account in calculating the GTV Allocated Share.)

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12. Miscellaneous.

a. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, supersedes all prior correspondence, negotiations, understandings and agreements between the parties hereto with respect to the subject matter hereof, whether oral, written or otherwise, and may not be changed, modified or amended except by a written instrument signed by all of the parties hereto.

b. This Agreement is entered into in the State of Colorado and shall be construed in accordance with the laws of the State of Colorado applicable to contracts entered into and to be wholly performed therein (without giving effect to any conflict of laws principles under Colorado law).

c. This Agreement may be executed in one more counterparts, each of which shall constitute an original, and all of which taken together shall be deemed to constitute one and the same instrument. This Agreement may be executed and delivered by electronic facsimile transmission or in Portable Document Format (PDF) with the same force and effect as if it were executed and delivered by the parties simultaneously in the presence of one another, and signatures on a facsimile or PDF copy hereof shall be deemed authorized original signatures.

GAIAM BRAND:	GTV:
GAIAM, INC.	GAIA, INC. dba GaiamTV
By:	By:
Name:	Name:
Title:	Title:
GAIAM AMERICAS, INC.
By:
Name:
Title:

6

Schedule A

GTV’s Access to Gaiam Brand IT/IS Staff

and to

IT/IS Technology, Software Systems & Platforms

Services / System / Platform	Time Period	GTV Allocation
“Full Bundle” for 2015	1/1/15 thru 12/31/15	$22,506.75 per month**
Gaiam Brand IT/IS Staff Services
Phones
Canon Copiers
Microsoft Office 365
Network & Hosting Infrastructure
(incl. Sungard and PCI Compliance Services)

^**  2015 GTV Allocation is subject to reduction by $1,784 per month if and when each of Gaiam Brand and GTV implement separate phone systems, under separate agreements with 8x8 (but only if separate phone systems are “live” prior to 11/30/2015).

“Full Bundle” for 2016	1/1/16 thru 9/30/16	$22,623.24 per month**
	10/1/16 thru 12/31/16	$17,145.24 per month++
Gaiam Brand IT/IS Staff Services
Canon Copiers
Microsoft Office 365
Network & Hosting Infrastructure
(incl. Sungard++ and PCI Compliancexx Services)

^**  2016 GTV Allocation assumes that phones are not included in the “Full Bundle” for 2016.

⁺⁺  Sungard agreement expires on 9/30/16 and will not be renewed. Effective 10/1/16: (i) GTV will procure its own hosting/cloud service provider and remove all GTV equipment from Sungard facilities; and (ii) the 2016 GTV Allocation of $22,634.24 per month will be reduced by $5,489 to **reflect the difference in cost between Sungard and a new service provider.

^xx  All dates listed for continued sharing of Network & Hosting Infrastructure are subject to earlier end date if PCI Compliance requires.

A-1

“Full Bundle” for 2017	1/1/17 thru 12/31/17	TBD**
Gaiam Brand IT/IS Staff Services
Canon Copiers
Microsoft Office 365
Network & Hosting Infrastructure
(incl. PCI Compliancexx Services)

^**  The 2017 GTV Allocation will be based on the GTV Allocation in effect for December 2016, but subject to adjustment and good faith negotiations to occur in Q3 2016, to take into account any changes in vendor prices and/or staff salaries and/or associated staff costs which will take effect in 2017.

^xx  All dates listed for continued sharing of Network & Hosting Infrastructure are subject to earlier end date if PCI compliance requires.

• Note 1 re: Canon Copiers: The GTV Allocation in 2016 and/or 2017 will be reduced by $3,960 per month if and when GTV establishes a separate copier relationship to replace Canon (provided that GTV will refrain from doing so at any time when it would have a material adverse financial impact on Gaiam Brand—e.g., if doing so would trigger a termination payment to Canon).

• Note 2 re: Microsoft Office 365: The GTV Allocation for 2015 and 2016 assumes that GTV has 83 users on Microsoft Office 365. If the number of GTV users increases or decreases, then the GTV Allocation will be adjusted up or down (as appropriate) based on an annual subscription rate of $265 per user per year.

• Note 3 re: Microsoft Office 365: The GTV Allocation in 2016 and/or 2017 will be reduced by $1,832.92 per month (assuming 83 GTV users) if and when GTV establishes a separate office software suite relationship to replace Microsoft Office 365 (provided that GTV will refrain from doing so at any time when it would have a material adverse financial impact on Gaiam Brand—e.g., if doing so would trigger a termination payment to Microsoft).

• Note 4 re: Notice of Contract Renewals, or Increases to Prices or Salaries: Gaiam Brand will notify GTV at least 30 days prior to (i) committing to any renewal of any contract for any services or rights under this Schedule A or (ii) implementing any increases to prices or salaries for any of the services or rights under this Schedule A.

A-2

• Technology Space Allocations: As of August 20, 2015, Gaiam Brand and GTV are sharing access to the IDF closets, server rooms and storage areas located within Building A, Building B and Building C on the Louisville Campus. Effective no later than the date of a Spin-Off Event, the following space allocations shall apply:

a. Gaiam Brand will have separate, exclusive and secure access and control over IDF Closet 1 (located on the first floor of Building C behind the reception area);

b. Gaiam Brand and GTV (along with Real Goods) will have shared access to IDF Closet 2 (located on the second floor of Building B);

c. Gaiam Brand will have separate, exclusive and secure access and control over the server room and storage area located in the hallway on the first floor of Building B;

d. Gaiam Brand will have shared access to the DMARC closet on the first floor of Building A.

• Air Conditioning Units: GTV will ensure that each server room to which Gaiam Brand will have separate, exclusive and secure access and control is equipped with two (2) functioning air conditioning units, and one (1) functioning backup air conditioning unit.

A-3

EX-10.2

EXHIBIT 10.2

Form of

Assignment of SVOD Rights in AV Works Owned by Gaiam Brand

This Assignment Agreement (“Agreement”) is entered into as of                      (the “Effective Date”) by and between GAIAM, INC. and GAIAM AMERICAS, INC. (collectively, “Gaiam Brand”), on one side, and GAIA, INC. DBA GAIAMTV (“GTV”), on the other side, on the following terms and conditions:

1. Defined Terms. All capitalized terms used in this Agreement and not specifically defined herein shall have the meaning set forth on Exhibit 1 annexed hereto.

2. Assignment of SVOD Rights for Existing Owned AV Works. For good and valuable consideration, the adequacy and receipt of which are hereby acknowledged, Gaiam Brand hereby irrevocably grants, conveys, transfers and assigns to GTV, on a quitclaim basis, all of Gaiam Brand’s rights to exploit the SVOD Rights in and to the Existing Owned AV Works, except in any instance where Gaiam Brand’s rights in a particular Existing Owned AV Work do not include SVOD Rights. The rights granted to GTV pursuant to the foregoing conveyance will subsist throughout the universe and in perpetuity, except in any instance where Gaiam Brand’s rights in a particular Existing Owned AV Work are subject to a territorial limitation and/or an earlier expiration or termination date.

3. GTV’s Option to Acquire SVOD Rights in New Owned AV Works.

a. Gaiam Brand hereby grants to GTV the exclusive option (the “SVOD Option”) to acquire the SVOD Rights in any New Owned AV Work produced during the Transition Period, except in any instance where Gaiam Brand’s rights in a particular New Owned AV Work do not include SVOD Rights. If GTV acquires the SVOD Rights in any New Owned AV Work pursuant to this paragraph, then GTV’s SVOD Rights in such New Owned AV Work will subsist throughout the universe and in perpetuity, except in any instance where Gaiam Brand’s rights in a particular New Owned AV Work are subject to a territorial limitation and/or an earlier expiration or termination date.

b. During the Transition Period, Gaiam Brand will notify GTV as promptly as possible in each instance when Gaiam Brand intends to produce a New Owned AV Work, including all relevant and available details regarding the New Owned AV Work (e.g., talent, subject matter, running time, anticipated release date, etc.) (such notice, a “New Production Notice”).

c. GTV may exercise the SVOD Option for a particular New Owned AV Work by (i) notifying Gaiam Brand of GTV’s desire to exercise the SVOD Option within ten (10) business days following GTV’s receipt of the applicable New Production Notice from Gaiam Brand and (ii) paying the SVOD Contribution Amount to Gaiam Brand.

d. As used herein, the “SVOD Contribution Amount” means the following amount:

i. 10% of the total production budget for the applicable New Owned AV Work, if the total production budget is $20,000 or more.

ii. $2,000 if the total production budget for the applicable New Owned AV Work is less than $20,000 but greater than $4,000.

iii. 50% of the total production budget for the applicable New Owned AV Work, if the total production budget is $4,000 or less.

4. GTV’s Obligations Relating to SVOD Rights. With respect to all Existing Owned AV Works and any New Owned AV Works where GTV acquires the SVOD Rights, GTV agrees to assume all of the obligations of Gaiam Brand relating to the exercise of the SVOD Rights (including, without limitation, any royalty obligations to third parties). In furtherance of GTV’s assumption and performance of those obligations, Gaiam Brand will provide to GTV true and correct copies of the relevant provisions of all agreements relating to the exploitation of the SVOD Rights in the Existing Owned AV Works and applicable New Owned AV Works (including royalty and accounting provisions). Notwithstanding the foregoing, with respect to any royalty obligations to third parties arising out of GTV’s exercise of the SVOD Rights, GTV will render accounting statements and pay royalties to Gaiam Brand; and Gaiam Brand, in turn, will render accounting statements and pay royalties to the applicable third parties.

5. Restrictions on GTV Relating to SVOD Rights. Notwithstanding anything to the contrary expressed or implied herein, the following restrictions shall apply to all Existing Owned AV Works and any New Owned AV Works where GTV acquires the SVOD Rights:

a. 6-Month Holdback: GTV will have no right to exploit any of the SVOD Rights in any Covered AV Work until the date which is six (6) months after the initial commercial release of that Covered AV Work by Gaiam Brand (whether such initial commercial release occurs on Video Devices or by means of EST or ER).

b. No Third Party SVOD during Transition Period: During the Transition Period, GTV will not distribute or exploit any Existing Owned AV Work or New Owned AV Work by means of SVOD other than as part of the GTV Service.

6. Restrictions Relating to AVOD and FVOD.

a. Gaiam Brand expressly agrees that, during the Transition Period, except for Permitted Segments, Gaiam Brand will not distribute or exploit any Existing Owned AV Works or New Owned AV Works by means of AVOD or FVOD without GTV’s prior written approval.

b. Similarly, GTV expressly agrees that, during the Transition Period, except for Permitted Segments, GTV will not distribute or exploit any audiovisual content owned and/or controlled by GTV by means of AVOD or FVOD without Gaiam Brand’s prior written approval.

c. “Permitted Segment” means an excerpt from an audiovisual work which comprises not more than one-third (1/3) of the complete program embodied in such work.

7. Delivery Materials. For each Existing Owned AV Work and each New Owned AV Work where GTV acquires the SVOD Rights, Gaiam Brand will deliver the Delivery Materials (as defined and detailed on Schedule A annexed hereto) to GTV, at GTV’s expense, promptly following the date on which the SVOD Rights in such Covered AV Work are first available for exploitation.

8. Miscellaneous.

a. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, supersedes all prior correspondence, negotiations, understandings and agreements between the parties hereto with respect to the subject matter hereof, whether oral, written or otherwise, and may not be changed, modified or amended except by a written instrument signed by all of the parties hereto.

2

b. This Agreement is entered into in the State of Colorado and shall be construed in accordance with the laws of the State of Colorado applicable to contracts entered into and to be wholly performed therein (without giving effect to any conflict of laws principles under Colorado law).

GAIAM BRAND:		GTV:
GAIAM, INC.		GAIA, INC. dba GaiamTV
By:		By:
	An Authorized Signatory		An Authorized Signatory
GAIAM AMERICAS, INC.
By:
	An Authorized Signatory

3

Exhibit 1

Certain Definitions

1. “AVOD” means VOD pursuant to a business mode based upon an advertising based business model.

2. “Digital Distribution” means delivery of audiovisual works by means of transmission via the Internet or any other form of digital, wireless and/or electronic transmission now known or hereafter invented that utilizes the Internet or any successor network as its primary means of transmission (collectively, “Internet Technologies”), including via transferring, streaming, downloading and/or other non-tangible delivery to fixed and/or mobile platforms utilizing Internet Technologies, including, without limitation, to computers, mobile phones, other personal communication devices, personal and other music, video and/or other audiovisual recorders and/or players and/or other digital devices, platforms and services.

3. “ER” (also known as “Electronic Rental”) means delivery of audiovisual works via Digital Distribution under a business model whereby a consumer makes a specific, one-time payment for the right to access and view a particular audiovisual work an unlimited number of times within a limited time period (subject to customary rules with respect to the number and type of devices from which such work may be accessed and viewed).

4. “EST” (also known as “Electronic Sell-Through”) means delivery of audiovisual works via Digital Distribution under a business model whereby a consumer makes a specific, one-time payment for the right to access and view a particular audiovisual work an unlimited number of times and for an unlimited time period (subject to customary rules with respect to the number and type of devices from which such work may be accessed and viewed).

5. “Existing Owned AV Work” means a long-form audiovisual work produced by Gaiam Brand prior to the Spin-Off Date which is owned by Gaiam Brand and whose subject matter relates to fitness, yoga, wellness and/or personal development.

6. “FVOD” means VOD that is free to the viewer and not AVOD.

7. “GTV Service” means the SVOD-based Subscription Service owned and controlled by GTV (and currently known as “GaiamTV”). Without limiting the foregoing, the GTV Service includes arrangements where a subscriber pays a recurring subscription fee to a third party (rather than directly to GTV) to access and use the GTV Service on authorized devices (e.g., via Comcast, Amazon Prime, Verizon FiOS, etc.).

8. “New Owned AV Work” means a long-form audiovisual work produced by Gaiam Brand during the Transition Period which is owned by Gaiam Brand and whose subject matter relates to fitness, yoga, wellness or personal development.

9. “Spin-Off Date” means the date on which a Spin-Off Event occurs.

Exhibit 1, Page 1

10. “Spin-Off Event” means a transaction or corporate restructuring pursuant to which GTV is “spun off” as a separate public company.

11. “Subscription Service” means a service that provides subscribers with on-demand access to audiovisual works for a periodic fee. A Subscription Service may include limited free trial subscriptions for promotional purposes.

12. “SVOD” means VOD pursuant to a business model based upon a Subscription Service.

13. “SVOD Rights” means the rights to distribute and exploit an audiovisual work by means of SVOD solely via the GTV Service. The SVOD Rights include the right to offer promotional “clips” of the Sub-Licensed AV Works on the GTV Service, provided that no such “clip” shall exceed two (2) minutes in duration.

14. “Television” means any and all forms of electronic or electromagnetic or other non-tangible exhibition of audiovisual programming over distance (whether now existing or hereafter devised) for display on a television receiver or other form of display device (whether now existing or developed in the future), including, without limitation, mobile devices. Television shall include, without limitation, exhibition by means of VHF or UHF broadcast, cable, satellite, wire or fiber of any material, or “over-the-air pay TV” in any frequency band, any and all forms of electronic or electromagnetic or other non-tangible transmission (whether analog or digital, SD or HD, 3-D, via the Internet, mobile networks or any other electronic or non-tangible medium).

15. “Transition Period” means the period commencing on the Spin-Off Date and ending twenty-four (24) months after the last day of the month in which a Spin-Off Event occurs.

16. “Video Devices” means physical devices embodying one or more audiovisual recordings, in any and all formats and/or configurations now known or hereafter invented, including, without limitation, videocassettes, videodiscs, DVD, Blu-Ray, UMD and CD-ROM, designed to be used with a playback device which causes a visual image (whether or not synchronized with sound) to be seen on the screen of a television receiver, personal computer, portable video player, hand-held device or other comparable video playback device now known or hereafter invented.

17. “VOD” (also known as “Video On Demand”) means delivery of audiovisual works selected by the viewer where the commencement time for the exhibition of the audiovisual works is not predetermined or scheduled by the program provider but rather is entirely at the viewer’s discretion. Without limiting the foregoing, VOD may occur by means of Digital Distribution and/or Television.

Exhibit 1, Page 2

EX-10.3

EXHIBIT 10.3

Form of Sub-License Agreement for SVOD Rights in AV Works Under License to Gaiam Brand

This SVOD Sub-License Agreement (“Agreement”) is entered into as of                     (the “Effective Date”) by and between GAIAM, INC. and GAIAM AMERICAS, INC. (collectively, “Gaiam Brand”), on one side, and GAIA, INC. DBA GAIAMTV (“GTV”), on the other side, on the following terms and conditions:

1. Defined Terms. All capitalized terms used in this Agreement and not specifically defined herein shall have the meaning set forth on Exhibit 1 annexed hereto.

2. Sub-Licensed AV Works. The “Sub-Licensed AV Works” means all long-form audiovisual works relating to fitness, yoga, wellness or personal development which have been or shall be licensed to Gaiam Brand prior to the Spin-Off Date, but only if the rights licensed to Gaiam Brand include the SVOD Rights and Gaiam Brand is permitted to sublicense such rights to GTV pursuant to its license with the owner or licensor of the Sub-Licensed AV Works. For the avoidance of doubt, the Sub-Licensed AV Works specifically exclude any audiovisual works which are merely distributed by Gaiam Brand under a distribution agreement (i.e., where Gaiam Brand is compensated for distribution services by retention of a distribution fee).

3. SVOD Rights. The “SVOD Rights” means the rights to distribute and exploit the Sub-Licensed AV Works by means of SVOD solely via the GTV Service. The SVOD Rights include the right to offer promotional “clips” of the Sub-Licensed AV Works on the GTV Service, provided that no such “clip” shall exceed two (2) minutes in duration.

4. SVOD Rights Include Jillian Michaels for Comcast. Notwithstanding anything to the contrary expressed or implied herein, the SVOD Rights herein granted by Gaiam Brand to GTV include, without limitation, the “Comcast Television VOD Rights” granted to Gaiam Brand pursuant to that certain Digital Distribution Agreement dated as of January 1, 2014 between EM Productions, LLC and Gaiam Americas, Inc. relating to certain audiovisual works featuring Jillian Michaels.

5. Grant of SVOD Rights. From the Effective Date of this Agreement, through and including the end of the Transition Period, for good and valuable consideration, the adequacy and receipt of which are hereby acknowledged, Gaiam Brand hereby grants to GTV an exclusive sub-license to exploit the SVOD Rights solely via the GTV Service, throughout the universe and for the duration of Gaiam Brand’s rights to exploit the SVOD Rights; provided, however, the license granted hereunder shall be subject to all restrictions and limitations contained in the license agreement between Gaiam Brand and the owner or licensor of the content, including, without limitation, all territorial limitations. The license granted in this Section 5 does not include the right to grant sublicenses without Gaiam Brand’s prior written approval.

6. GTV’s Obligations Relating to SVOD Rights. With respect to all Sub-Licensed AV Works, GTV agrees to assume all of the obligations of Gaiam Brand relating to the exercise of the SVOD Rights (including, without limitation, any royalty obligations to third parties). In furtherance of GTV’s assumption and performance of those obligations, Gaiam Brand will provide to GTV true and correct copies of the relevant provisions of all agreements relating to

1

the exploitation of the SVOD Rights in Sub-Licensed AV Works (including royalty and accounting provisions). Notwithstanding the foregoing, with respect to any royalty obligations to third parties arising out of GTV’s exercise of the SVOD Rights, GTV will render accounting statements and pay royalties to Gaiam Brand; and Gaiam Brand, in turn, will render accounting statements and pay royalties to the applicable third parties.

7. Restrictions on GTV Relating to SVOD Rights. Notwithstanding anything to the contrary expressed or implied herein, the following restrictions shall apply to all Sub-Licensed AV Works:

a. 6-Month Holdback: GTV will have no right to exploit any of the SVOD Rights in any Sub-Licensed AV Work until the date which is six (6) months after the initial commercial release of that Sub-Licensed AV Work by Gaiam Brand (whether such initial commercial release occurs on Video Devices or by means of EST or ER).

b. No Third Party SVOD: During the Transition Period, GTV will not distribute or exploit any Sub-Licensed AV Work by means of SVOD other than as part of the GTV Service.

8. Delivery Materials. For each Sub-Licensed AV Work, Gaiam Brand will deliver the Delivery Materials (as defined and detailed on Schedule A annexed hereto) to GTV, at GTV’s expense, promptly following the date on which the SVOD Rights in such Sub-Licensed AV Work are first available for exploitation.

9. Miscellaneous.

a. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, supersedes all prior correspondence, negotiations, understandings and agreements between the parties hereto with respect to the subject matter hereof, whether oral, written or otherwise, and may not be changed, modified or amended except by a written instrument signed by all of the parties hereto.

b. This Agreement is entered into in the State of Colorado and shall be construed in accordance with the laws of the State of Colorado applicable to contracts entered into and to be wholly performed therein (without giving effect to any conflict of laws principles under Colorado law).

GAIAM BRAND:		GTV:
GAIAM, INC.		GAIA, INC. dba GaiamTV
By:		By:
	An Authorized Signatory		An Authorized Signatory
GAIAM AMERICAS, INC.
By:
	An Authorized Signatory

2

Exhibit 1

Certain Definitions

1. “Digital Distribution” means delivery of audiovisual works by means of transmission via the Internet or any other form of digital, wireless and/or electronic transmission now known or hereafter invented that utilizes the Internet or any successor network as its primary means of transmission (collectively, “Internet Technologies”), including via transferring, streaming, downloading and/or other non-tangible delivery to fixed and/or mobile platforms utilizing Internet Technologies, including, without limitation, to computers, mobile phones, other personal communication devices, personal and other music, video and/or other audiovisual recorders and/or players and/or other digital devices, platforms and services.

2. “ER” (also known as “Electronic Rental”) means delivery of audiovisual works via Digital Distribution under a business model whereby a consumer makes a specific, one-time payment for the right to access and view a particular audiovisual work an unlimited number of times within a limited time period (subject to customary rules with respect to the number and type of devices from which such work may be accessed and viewed).

3. “EST” (also known as “Electronic Sell-Through”) means delivery of audiovisual works via Digital Distribution under a business model whereby a consumer makes a specific, one-time payment for the right to access and view a particular audiovisual work an unlimited number of times and for an unlimited time period (subject to customary rules with respect to the number and type of devices from which such work may be accessed and viewed).

4. “GTV Service” means the SVOD-based Subscription Service owned and controlled by GTV (and currently known as “GaiamTV”). Without limiting the foregoing, the GTV Service includes arrangements where a subscriber pays a recurring subscription fee to a third party (rather than directly to GTV) to access and use the GTV Service on authorized devices (e.g., via Comcast, Amazon Prime, Verizon FiOS, etc.).

5. “Spin-Off Date” means the date on which a Spin-Off Event occurs.

6. “Spin-Off Event” means a transaction or corporate restructuring pursuant to which GTV is “spun off” as a separate public company.

7. “Subscription Service” means a service that provides subscribers with on-demand access to audiovisual works for a periodic fee.

8. “SVOD” means VOD pursuant to a business model based upon a Subscription Service.

Exhibit 1, Page 1

9. “Television” means any and all forms of electronic or electromagnetic or other non-tangible exhibition of audiovisual programming over distance (whether now existing or hereafter devised) for display on a television receiver or other form of display device (whether now existing or developed in the future), including, without limitation, mobile devices. Television shall include, without limitation, exhibition by means of VHF or UHF broadcast, cable, satellite, wire or fiber of any material, or “over-the-air pay TV” in any frequency band, any and all forms of electronic or electromagnetic or other non-tangible transmission (whether analog or digital, SD or HD, 3-D, via the Internet, mobile networks or any other electronic or non-tangible medium).

10. “Transition Period” means the period commencing on the Spin-Off Date and ending twenty-four (24) months after the last day of the month in which a Spin-Off Event occurs.

11. “Video Devices” means physical devices embodying one or more audiovisual recordings, in any and all formats and/or configurations now known or hereafter invented, including, without limitation, videocassettes, videodiscs, DVD, Blu-Ray, UMD and CD-ROM, designed to be used with a playback device which causes a visual image (whether or not synchronized with sound) to be seen on the screen of a television receiver, personal computer, portable video player, hand-held device or other comparable video playback device now known or hereafter invented.

12. “VOD” (also known as “Video On Demand”) means delivery of audiovisual works selected by the viewer where the commencement time for the exhibition of the audiovisual works is not predetermined or scheduled by the program provider but rather is entirely at the viewer’s discretion. Without limiting the foregoing, VOD may occur by means of Digital Distribution and/or Television.

Exhibit 1, Page 2

SCHEDULE A

Delivery Materials

Delivery with respect to each Sub-Licensed AV Work shall consist of delivery of all of the items listed in this Schedule (collectively, the “Delivery Materials”). All Delivery Materials shall be subject to Licensee’s approval as technically satisfactory for exploitation in the manner provided in the Agreement.

A. REQUIRED MATERIALS

1. Audiovisual Materials:

• Featured Program (whether full-length feature, episodic series or short-subject)

• Trailer

• Closed Captioning

• Subtitled and Dubbed Versions (if available)

• Bonus footage (e.g., promos, “behind the scenes” or “making of” footage, cast & crew interviews, filmmaker bios, etc.) (if available)

2. Metadata

3. Art

4. Restrictions/Requirements/Copyright Info

ALL REQUIRED MATERIALS TO BE DELIVERED TO:

Emmy Smith

Gaia, Inc. dba GaiamTV

833 W. South Boulder Road

Louisville, CO 80027-2452

Tel: 303-222-3886

Email: emmy.smith@gaiam.com

General Specs for Audiovisual Materials

• Audiovisual materials should be delivered as digital files on hard drive(s). (The hard drive(s) will be provided on loan to Licensee for a period of 90 days, and then returned at Licensee’s expense.)

• If audiovisual materials cannot be delivered as digital files on hard drive(s), then Licensor may deliver physical tape elements.

• IMPORTANT NOTE: DVDs are NOT ACCEPTABLE as delivery materials.

A-1

Specs for File-Based Delivery on Hard Drive(s):

• HD Files:

• If originally shot in HD, then HD must be delivered

• Must be source HD, do not up res from SD

• Apple Pro Res HQ 422 or PAL (must provide PAL if PAL is native source)

• H264 not acceptable

• Aspect Ratio: 1920 x 1080p

• Native Frame Rate: 23.98 or 29.97

• Audio

• 5.1 with LTRT Stereo/Full Stereo Mix -or-

• Ch.’s 1 & 2 full stereo mix -or-

• Split audio or mono tracks with proper ID are acceptable if all that is available

• 16 bit, 48khz, -12db

• Timecode: Start at 1:00:00:00

• If Non-English speaking, master must contain burned in subtitles (see details under section Subtitle File Specs)

• SD Files:

• SD is acceptable only if originally shot in SD

• Apple Pro Res HQ 422 or PAL (must provide PAL if PAL is native source)

• H264 not acceptable

• Aspect Ratio: 720 x 480, 720 x 486, 853 x 480 (16x9)

• Native Frame Rate: 23.98 or 29.97 (16x9) or 29.97 (4x3)

• Audio

• 5.1 with LTRT Stereo/Full Stereo Mix -or-

• Ch.’s 1 & 2 full stereo mix -or-

• Split audio or mono tracks with proper ID are acceptable if all that is available

• 16 bit, 48khz, -12db

• Timecode: Start at 1:00:00:00

• If Non-English speaking, master must contain burned in subtitles (see details under section Subtitle File Specs)

A-2

Specs for Physical Tape Delivery:

• Physical tapes are acceptable if this is all that is available and adhere to the same specs for file based delivery

• Tapes must be clearly labeled on the outside with:

• Licensor Name

• Address

• Feature Title

• If trailer and/or bonus footage is on separate tape please also label as such.

• If feature is episodic, tape must be labeled with series title and episode title

• If audio is Mono, please label as such

Specs for Trailers:

• Please deliver an official trailer. If an official trailer does not exist, then a 1-2 minute “preview” clip is acceptable.

• For episodic content, delivery of one (1) trailer for the entire series is acceptable (although delivery of separate trailers for each episode is also acceptable).

• IMPORTANT NOTE ON TRAILERS: Trailers shall not include any “R-rated” language (profanity, language which is explicitly sexual, vulgar, or could be considered blasphemous or sacrilegious) or “R-rated” imagery (sexual acts, graphic nudity, verbal or physical abuse, graphic violence, depictions of the use of weapons, drugs or illegal conduct involving minors).

Specs for Closed Captioning (CC)

• Feature only (trailer and bonus footage exempt)

• .scc file

• Pop-On, Centered

• No more than 3 lines per caption

• Must line up properly with content

• If CC not currently available, then Licensor must arrange for CC to be created for delivery to Licensee. Recommended Vendor: Vitac (Tel: 1-800-278-4822; Website: www.vitac.com).

• Note: If Licensor fails to deliver CC, then Licensee reserves the right to create CC on Licensor’s behalf and all associated costs will be charged back to Licensor.

Specs for Subtitles and Dubbed Versions

• Subtitles and Dubbed Versions are relevant for non-English speaking content only

• If content features one or more languages excluding English:, then English-language subtitles must be burned into the Featured Program, Trailer and Bonus Footage for all languages spoken

A-3

• If content features one or more languages including English:

• English speaking parts must be provided as a CC file

• Non-English speaking parts must have burned-in subtitles (this will serve as CC for the Non-English speaking parts)

Technical QC Rules:

• No commercial breaks or bumpers

• Must confirm to SMPTE specifications regarding all levels and blanking measurements

• Audio tracks complete and in sync

• No URLs, air dates or call outs

• No Digital Hits

• No Interlacing

• No Artifacting

• No Ghosting

• No Blanking

• No Aliasing

• No Duplicate Frames

• No Tearing

• No pixilation or blurry images

• Audio must be in sync with no drop-outs, hits or channel issues

• Clear Cadence

• No up res from SD to HD

• All copy (including credits) must be title safe

Note: If further explanation is needed, please contact Emmy Smith via email at emmy.smith@gaiam.com

Specs for Metadata

Please use the metadata form provided by Licensee, or provide an Excel doc with the following information:

• Title

• Series Title (if episodic)

• Season Number

• Number of Episodes

• Episode Title(s) & Number

• DVD Street Date (if any) or Initial Release Date

• Theatrical Release Date

• Theatrical Markets

• Feature Run Time

A-4

• Trailer Run Time

• Synopsis Short (under 240 characters including spaces)

• Synopsis Long (4000 character max including spaces)

• Cast (in order of top billing)

• Director

• Producer

• Writer & Creator

• Network/Studio

• Copyright Date & Owner

• Rating

• Genre/Categories

• Keywords

• Language (if multiple list all)

• Country of Origin

Specs for Artwork

Cover Art

• 1600w x 2400h px (or larger)

• 300 dpi, RGB, PSD

• Must be labeled as: FullTitle_KeyArt1, FullTitle_KeyArt2 etc (if more than one option)

• Must be a layered PSD with the title and any other copy on separate layers

• Fonts must be MAC based: Post Script 1, True Type or Opentype fonts

Stills/Promotional Art

• 1400w x 2100h px (or larger)

• 300 dpi, RGB

• PSD or JPG

• Must be labeled as: FullTitle_Still1, FullTitle_Still2 etc (if more than one option) or FullTitle_PromoArt1, FullTitle_PromoArt2 etc (if more than one option)

Additional Required Materials

All records and documentation listed below should be delivered in a digital format (CD, DVD, via email, etc.)

• 3 DVD viewing copies

• Documentation (MS Word) of any credit restrictions and/or requirements, including any dubbing restrictions

• Documentation (MS Word) of any copyright or trademark information and/or notices to be used in connection with the Sub-Licensed AV Works and/or promotional materials

A-5

• If any Sub-Licensed AV Work contains any third party source materials that are subject to any restrictions on use (e.g. out of context uses), one complete and accurate visual cue sheet of third party source material, together with a description of any restrictions on uses of that material

• If any Sub-Licensed AV Work contains any third party music that is subject to any restrictions on use, one complete and accurate music cue sheet, setting forth with respect to each sound recording and musical composition, its title, running time, performer, master owner, composer, publisher and performing rights society, if applicable.

A-6

EX-10.4

EXHIBIT 10.4

FORM OF

TRADEMARK LICENSE

and

DOMAIN NAME AGREEMENT

This Agreement is entered into as of                      (the “Effective Date”) by and between GAIAM, INC. and GAIAM AMERICAS, INC. (collectively, “Gaiam Brand”), on one side, and GAIA, INC. DBA GAIAMTV (“GTV”), on the other side, on the following terms and conditions:

1. Defined Terms. All capitalized terms used in this Agreement and not specifically defined herein shall have the meaning set forth on Exhibit 1 annexed hereto.

2. Trademark License.

a. From the Effective Date through and including the Transition Period, for good and valuable consideration, Gaiam Brand hereby grants to GTV the non-exclusive and non-transferable right, license and privilege, under trademark and otherwise, to use and exploit the Gaiam Marks on, in and in connection with the GTV Service, throughout the universe; provided that such use and exploitation of the Gaiam Marks may only occur as part of the “GaiamTV” brand name (e.g., GaiamTV, GaiamTV Fit & Yoga, etc.) and/or the logo design related thereto (collectively, the “GaiamTV Name and Logo Design”).

b. GTV’s use of the Gaiam Marks in and as part of the GaiamTV Name and Logo Design shall conform to each of the following standards:

i. No Gaiam Mark shall be used in any generic or descriptive manner;

ii. The first time the GaiamTV Name or logo design is used on the GTV Service or in any advertisement or marketing materials, it must be followed, in the case of registered trademarks, by the registration symbol (^®) and in the case of all other trademarks by the symbol TM, with appropriate language designated by Gaiam Brand to denote Gaiam Brand as the owner of the Gaiam Marks. GTV acknowledges that the registration symbol (^®) may be used only in connection with goods and services specified in registrations, if any, for the applicable mark.

iii. The GTV Service shall be of a high, consistent and merchantable quality. GTV recognizes that Gaiam Brand has a reputation for high quality and that GTV must, therefore, maintain such high quality with respect to the GTV Service.

iv. All uses of the Gaiam Marks will be subject to Gaiam Brand’s prior written approval. Without limiting the foregoing, the nature and quality of the goods and services bearing the Gaiam Marks shall at all times be subject to Gaiam Brand’s inspection, review and approval to the maximum extent required by law to maintain the validity of the Gaiam Marks. Gaiam Brand’s approval shall not be unreasonably withheld or delayed, and will be deemed given if Gaiam Brand fails to object to any particular matter or item submitted for approval within ten (10) business days following Gaiam Brand’s receipt of submission. Once Gaiam Brand has approved any particular use of the Gaiam Marks, GTV may continue to make the same or substantially similar uses of the Gaiam Marks without seeking further approval.

v. GTV acknowledges Gaiam Brand’s exclusive right, title and interest in and to the Gaiam Marks. GTV shall not take any action to contest Gaiam Brand’s ownership of the Gaiam Marks, or to impair any of the Gaiam Marks. GTV also acknowledges that its uses of the Gaiam Marks shall inure to Gaiam Brand’s benefit. GTV recognizes the great value of the publicity and goodwill associated with the Gaiam Marks, and accordingly acknowledges that all such goodwill exclusively belongs to Gaiam Brand and that none is transferred hereunder. All rights in the Gaiam Marks other than those specifically granted herein are expressly reserved by Gaiam Brand.

vi. Upon Gaiam Brand’s reasonable request and at Gaiam Brand’s expense, GTV will execute, deliver or file any and all documents which Gaiam Brand reasonably deems necessary or appropriate to make fully effective or to implement the provisions of this paragraph 2 relating to the ownership, registration or use of the Gaiam Marks; and GTV will take such other actions as are reasonably necessary to protect and preserve the validity of the Gaiam Marks.

vii. For the avoidance of doubt, Gaiam Brand will be solely responsible for paying any and all costs in connection with the filing and prosecution of trademark applications, registrations and renewals of the Gaiam Marks. Gaiam Brand shall at all times have the right, but not the obligation, to police and enforce Gaiam Brand’s rights in respect of the Gaiam Marks.

viii. Notwithstanding the foregoing, Gaiam Brand hereby acknowledges that all uses of the Gaiam Marks publicly made by GTV prior to September 3, 2015 are hereby approved by Gaiam Brand.

3. Domain Names Owned by GTV.

a. Prior to the date hereof, GTV registered the internet domain name “GaiamTV.com” (the “GaiamTV.com Domain Name”); and as of the date hereof, GTV is using the GaiamTV.com Domain Name as an active, consumer-facing URL for the website on which the GTV Service is hosted.

b. Gaiam Brand hereby agrees that GTV is and will remain the owner of the GaiamTV.com Domain Name and the six (6) additional domain names (“Additional GTV-Owned Domain Names”) listed on Schedule B annexed hereto, throughout the world and in perpetuity.

c. During the Transition Period, GTV will have the right to use the GaiamTV.com Domain Name and the Additional GTV-Owned Domain Names as active, consumer-facing URLs in connection with the GTV Service.

4. Licensed Domain Names. Gaiam Brand hereby grants to GTV an exclusive license, during the Transition Period, to use the Licensed Domain Names solely for purposes of redirecting Internet users to the GaiamTV.com Domain Name where the GTV Service is hosted during the Transition Period.

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5. After the Transition Period. Upon the expiration of the Transition Period:

a. GTV will cease using the name “GaiamTV” as the name of the GTV Service;

b. GTV will cease using the Gaiam Marks in any manner in connection with the GTV Service; provided that GTV may continue to distribute and exploit certain audiovisual content on the GTV Service which features, displays or otherwise embodies any of the Gaiam Marks (e.g., as set dressing, in pre-roll, etc.), as follows: (i) any audiovisual work produced or acquired by GTV prior to the Spin-Off Date or (ii) any audiovisual work produced by Gaiam Brand after the Spin-Off Date in respect of which GTV acquires or licenses SVOD Rights;

c. GTV will implement a new name (Gaia) and select a new logo for the GTV Service which does not incorporate any of the Gaiam Marks.

d. GTV will cease using the GaiamTV.com Domain Name and/or the Additional GTV-Owned Domain Names as active, consumer-facing URLs in connection with the GTV Service; and GTV will implement gaia.com in their place (the “New URLs”).

e. Notwithstanding subparagraph d. above, GTV may continue using the GaiamTV.com Domain Name and the Additional GTV-Owned Domain Names in perpetuity, solely for purposes of redirecting Internet users to the New URLs.

6. Restrictions on Competitive Activities. During the Transition Period, the following shall apply:

a. Neither GTV nor Gaiam Brand shall engage in any activity which is directly competitive with the other party’s products or services. Each of GTV and Gaiam Brand hereby acknowledges that that none of the public activities of the other party prior to September 3, 2015 shall be construed as a violation of the preceding sentence.

b. Without limiting subparagraph a. above:

i. Gaiam Brand shall not operate an SVOD-based Subscription Service, nor enter into any marketing partnerships or sponsorship arrangements with any SVOD-based Subscription Service which is directly competitive with GTV (such as, by way of example, YogaGlo);

ii. GTV shall not enter into any marketing partnerships or sponsorship arrangements with Lululemon, Athleta, prAna, Nike, adidas, Under Armour, Manduka, Jade, Natural Fitness, GoFit, Icon Fitness, SKLZ, Perform Better or Power Systems;

iii. GTV shall not develop, create, distribute, sell or market any app relating to yoga, fitness, meditation or wellness (other than apps to deliver the GTV Service);

3

iv. GTV shall not market or sell any audio or audiovisual content on an “a la carte” or “transactional” basis (whether via EST or ER or on Video Devices) if such content is owned and/or controlled by Gaiam Brand (i.e., content which has been licensed by Gaiam Brand to GTV);

v. With respect to paid search (so-called “keyword advertising” or “pay per click advertising), GTV shall not bid on any keywords that include the name “Gaiam”; provided that GTV shall be entitled to bid on the keyword “GaiamTV” or any other keyword that includes the name “GaiamTV” (or any variant thereof, such as “Gaiam TV”); and

vi. GTV shall not develop, create, distribute, sell or market any YFW Products.

7. GTV’s Product Needs. During the Transition Period, Gaiam Brand will be GTV’s preferred provider of any YFW Products that GTV wishes to distribute on a promotional basis to its subscribers; provided that Gaiam Brand agrees to sell such YFW Products to GTV at “cost of goods” plus applicable freight (if any).

8. Miscellaneous.

a. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, supersedes all prior correspondence, negotiations, understandings and agreements between the parties hereto with respect to the subject matter hereof, whether oral, written or otherwise, and may not be changed, modified or amended except by a written instrument signed by all of the parties hereto.

b. This Agreement is entered into in the State of Colorado and shall be construed in accordance with the laws of the State of Colorado applicable to contracts entered into and to be wholly performed therein (without giving effect to any conflict of laws principles under Colorado law).

c. This Agreement may be executed in one more counterparts, each of which shall constitute an original, and all of which taken together shall be deemed to constitute one and the same instrument. This Agreement may be executed and delivered by electronic facsimile transmission or in Portable Document Format (PDF) with the same force and effect as if it were executed and delivered by the parties simultaneously in the presence of one another, and signatures on a facsimile or PDF copy hereof shall be deemed authorized original signatures

[Signature page follows]

4

GAIAM BRAND (as Licensor):		GTV (as Licensee):
GAIAM, INC.		GAIA, INC. dba GaiamTV
By:		By:
	An Authorized Signatory		An Authorized Signatory
GAIAM AMERICAS, INC.
By:
	An Authorized Signatory

5

Exhibit 1

Certain Definitions

1. “Digital Distribution” means delivery of audiovisual works by means of transmission via the Internet or any other form of digital, wireless and/or electronic transmission now known or hereafter invented that utilizes the Internet or any successor network as its primary means of transmission (collectively, “Internet Technologies”), including via transferring, streaming, downloading and/or other non-tangible delivery to fixed and/or mobile platforms utilizing Internet Technologies, including, without limitation, to computers, mobile phones, other personal communication devices, personal and other music, video and/or other audiovisual recorders and/or players and/or other digital devices, platforms and services.

2. “ER” (also known as “Electronic Rental”) means delivery of audiovisual works via Digital Distribution under a business model whereby a consumer makes a specific, one-time payment for the right to access and view a particular audiovisual work an unlimited number of times within a limited time period (subject to customary rules with respect to the number and type of devices from which such work may be accessed and viewed).

3. “EST” (also known as “Electronic Sell-Through”) means delivery of audiovisual works via Digital Distribution under a business model whereby a consumer makes a specific, one-time payment for the right to access and view a particular audiovisual work an unlimited number of times and for an unlimited time period (subject to customary rules with respect to the number and type of devices from which such work may be accessed and viewed).

4. “Gaiam Marks” means the marks listed and/or depicted on Schedule A annexed hereto.

5. “GTV Service” means the SVOD-based Subscription Service owned and controlled by GTV (and currently known as “GaiamTV”). Without limiting the foregoing, the GTV Service includes arrangements where a subscriber pays a recurring subscription fee to a third party (rather than directly to GTV) to access and use the GTV Service on authorized devices (e.g., via Comcast, Amazon Prime, Verizon FiOS, etc.).

6. “Licensed Domain Names” means the domain names owned by Gaiam Brand which are listed on Schedule C annexed hereto.

7. “Spin-Off Date” means the date on which a Spin-Off Event occurs.

8. “Spin-Off Event” means a transaction or corporate restructuring pursuant to which GTV is “spun off” as a separate public company.

Exhibit 1, Page 1

9. “Subscription Service” means a service that provides subscribers with on-demand access to audiovisual works for a periodic fee. A Subscription Service may include limited free trial subscriptions for promotional purposes.

10. “SVOD” means VOD pursuant to a business model based upon a Subscription Service.

11. “Television” means any and all forms of electronic or electromagnetic or other non-tangible exhibition of audiovisual programming over distance (whether now existing or hereafter devised) for display on a television receiver or other form of display device (whether now existing or developed in the future), including, without limitation, mobile devices. Television shall include, without limitation, exhibition by means of VHF or UHF broadcast, cable, satellite, wire or fiber of any material, or “over-the-air pay TV” in any frequency band, any and all forms of electronic or electromagnetic or other non-tangible transmission (whether analog or digital, SD or HD, 3-D, via the Internet, mobile networks or any other electronic or non-tangible medium).

12. “Transition Period” means the period commencing on the Spin-Off Date and ending twenty-four (24) months after the last day of the month in which a Spin-Off Event occurs.

13. “Video Devices” means physical devices embodying one or more audiovisual recordings, in any and all formats and/or configurations now known or hereafter invented (including, without limitation, DVD and Blu-Ray) designed to be used with a playback device which causes a visual image (whether or not synchronized with sound) to be seen on the screen of a television receiver, personal computer, portable video player, hand-held device or other comparable video playback device now known or hereafter invented.

14. “VOD” (also known as “Video On Demand”) means delivery of audiovisual works selected by the viewer where the commencement time for the exhibition of the audiovisual works is not predetermined or scheduled by the program provider but rather is entirely at the viewer’s discretion. Without limiting the foregoing, VOD may occur by means of Digital Distribution and/or Television.

15. “YFW Products” means physical products relating to yoga, fitness, meditation or wellness.

Exhibit 1, Page 2

SCHEDULE A

Gaiam Marks

1. GaiamTV (word mark)

2. [Gaiam TV design mark]

3. GaiamTV Fit & Yoga (word mark)

4. [GaiamTV Fit & Yoga design mark]

SCHEDULE B

Domain Names Owned by GTV

1. GAIAMTV.COM

2. GAIAM.TV

3. GAIAMTV.CO.UK

4. GAIAMTV.DE

5. GAIAMTV.TV

6. GAIAMTVMEDIA.COM

7. GAIAMTVPARTNERS.COM

SCHEDULE C

Licensed Domain Names

GAIAMCHANNEL.COM

GAIAMCHANNEL.TV

GAIAMCINEMA.COM

GAIAMCINEMACIRCLE.COM

GAIAMCIRCLE.COM

GAIAMDVDCLUB.COM

GAIAMFILM.COM

GAIAMFILMCOMMUNITY.COM

GAIAMFILMCOMMUNITY.NET

GAIAMFILMCOMMUNITY.ORG

GAIAMFITNESS.TV

GAIAMHEALTH.TV

GAIAMYOGA.TV

EX-10.5

EXHIBIT 10.5

ASSIGNMENT

AND

CONTRIBUTION AGREEMENT

This Assignment and Contribution Agreement (this “Assignment”) is dated as of January 1, 2015 (the “Effective Date”), by and among Gaiam, Inc., a Colorado corporation (“Assignor”), Gaia, Inc., a Colorado corporation (“Assignee”), and Boulder Road LLC, a Colorado limited liability company (the “Company). Assignor, Assignee, and the Company are each referred to herein as a “Party” and collectively as the “Parties.”

RECITALS

A. Assignor owns 100% of the membership interests of the Company (the “Membership Interest”), and 100% of the shares of stock of Assignee.

B. Assignor desires to restructure the ownership of the Company so that the Company is owned 100% by Assignee.

C. The Company owns certain commercial real property located at 833 West South Boulder Road, Louisville, Colorado 80027 (the “Real Estate”).

D. Subject to the terms and conditions set forth in this Agreement, in order to consummate such restructuring, Assignor desires to contribute all of the Membership Interests as a contribution to the capital of Assignee.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

1. Contribution of the Membership Interests. Concurrently with the execution and delivery of this Agreement, Assignor hereby contributes and transfers to Assignee all of Assignor’s right, title and interest in and to the Membership Interests (including, without limitation, Assignor’s entire 100% share of: (a) all the Company’s profits, losses, distributions, credits, income, gain, loss and deduction (or items thereof); (b) any and all rights to appreciation in the Company’s assets; (c) all interest in the Company’s capital, including, but not limited to, all rights of Assignor to be repaid its contributions of money or other property to the Company, whether made at the formation of the Company or subsequent thereto), and Assignee hereby accepts the contribution of such Membership Interests (including all of the right, title, power, interest, obligations and responsibilities associated therewith).

2. Characterization of Assignment. The assignment and contribution described in Section 1 shall be characterized, for federal and state income tax purposes, as (i) a contribution of capital by Assignor to Assignee under Section 118(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) a transfer of property to Assignee in exchange solely for common stock constituting control of Assignee under Section 351 of the Code.

3. Execution of the Company’s Operating Agreement. Concurrently with the execution and delivery of this Agreement, Assignee shall enter into an Operating Agreement of the Company in substantially the form attached hereto as Exhibit A (the “Company Operating Agreement”).

4. Sale of Real Estate. In consideration for the contribution and assignment set forth in Section 1, upon the earlier to occur of (a) a sale of all or substantially all of the Real Estate, to any Person (as defined herein) other than Assignor, Assignee, or any of their respective Affiliates (as defined herein), or (b) a sale of all or substantially all of the ownership interests of Boulder Road LLC, a Colorado limited liability company, to any Person other than Assignor, Assignee, or any of their respective Affiliates (as defined herein) (the “Sale”), the Assignee hereby agrees to pay to Assignor (i) 100% of the first five millions dollars ($5,000,000.00) of proceeds received in excess of twelve million dollars and no cents ($12,000,000), (ii) plus 50% of the proceeds above seventeen million dollars and no cents ($17,000,000), if any, from a Sale up to a maximum of ten million dollars and no cents ($10,000,000.00). For the avoidance of doubt, no payments will be due to Assignor unless a Sale occurs with proceeds in excess of twelve million dollars and no cents ($12,000,000):

(i) an “Affiliate” of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person. The term “control” means (a) the possession, directly or indirectly, of the power to vote 10% or more of the securities or other equity interests of a Person having ordinary voting power, (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, by contract or otherwise or (c) being a director, officer, executor, trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person; and

(ii) a “Person” means any individual and any firm, corporation, partnership, limited liability company, professional association, trust, joint venture, unincorporated organization, governmental instrumentality, entity or body (including any subdivision thereof) or other entity.

5. Representations and Warranties.

(a) The Company. The Company hereby represents and warrants that:

(i) The Company has all requisite limited liability company power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the performance by the Company of its obligations hereunder have been duly authorized by all necessary limited liability company action by the Company. This Agreement has been duly executed and delivered by the Company and constitutes the Company’s valid and binding obligation, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies; and

2

(ii) Upon the consummation of the transactions contemplated by this Agreement, the Company will be a wholly-owned subsidiary of Assignee.

(b) Assignee. Assignee hereby represents and warrants that:

(i) Assignee has all requisite limited liability company power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the performance by Assignee of its obligations hereunder have been duly authorized by all necessary limited liability company action by Assignee. This Agreement has been duly executed and delivered by Assignee and constitutes Assignee’s valid and binding obligation, enforceable against Assignee in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies; and

(ii) Upon the consummation of the transactions contemplated by this Agreement, the Company will be a wholly-owned subsidiary of Assignee.

(c) Assignor. Assignor hereby represents and warrants that:

(i) Assignor has all requisite power and authority to enter into this Agreement, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the performance by Assignor of its obligations hereunder and thereunder have been duly authorized by all necessary action by Assignor. This Agreement has been duly executed and delivered by Assignor and constitute Assignor’s valid and binding obligation, enforceable against Assignor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws in effect which affect the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies; and

(ii) Immediately prior to the Effective Date, Assignor was the sole member of the Company and the exclusive owner of the Membership Interest, free and clear of any Liens. Assignor has the right to contribute the Membership Interest to Assignee free and clear of any mortgages, liens, pledges, charges, security interests or other encumbrances of any kind or other limitations or restrictions with respect thereto, including, without limitation, any restriction on voting, transfer or other disposition thereof, subject to the terms of this Agreement and to general restrictions on transfer imposed by federal and state securities laws.

6. Consents; Further Assurances. Each Party hereby consents to the taking of the action set forth in and contemplated by this Agreement. Each Party shall execute and deliver such other agreements, documents, instruments, or consents as may be necessary to effectuate the transactions contemplated by this Agreement.

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7. Miscellaneous.

(a) Entire Agreement; Amendment; Waiver. This Agreement embodies the complete agreement and understanding among the Parties with respect to the subject matter hereof. This Agreement may be amended, altered, supplemented or otherwise modified only by written consent of all of the Parties hereto. No waiver or any provision hereof shall be binding unless it is in writing and signed by each of the Parties.

(b) Binding Effect; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon each of the Parties and their respective legal representatives, successors and assigns. Nothing in this Agreement, express or implied, is intended to, nor shall it, confer upon any other person any rights or remedies.

(c) Governing Law. This Agreement shall be governed by the laws of the State of Colorado, without giving effect to its conflict of law principles.

(d) Counterparts. This Agreement may be executed and delivered in one or more counterparts, each of which when executed and delivered shall be an original, and all of which when executed shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile or other electronic transmission shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes. Signatures of the Parties transmitted by facsimile or other electronic means shall be deemed to be their original signatures for all purposes.

(e) Recitals. The “Recitals” set forth in this Agreement are hereby incorporated into and made part of this Agreement.

* * * * *

4

IN WITNESS WHEREOF, this Assignment and Contribution Agreement has been made effective as of the Effective Date.

ASSIGNOR:
GAIAM, INC., a Colorado corporation
By:	/s/ John R. Jackson
Name:	John R. Jackson
Title:	Vice President / General Counsel
ASSIGNEE:
GAIA, INC., a Colorado corporation
By:	/s/ Paul Tarell Jr.
Name:	Paul Tarell Jr.
Title:	Chief Financial Officer
COMPANY:
BOULDER ROAD LLC, a Colorado limited liability company
By:	/s/ Paul Tarell Jr.
Name:	Paul Tarell Jr.
Title:	Manager

EXHIBIT A

COMPANY AGREEMENT

[attached]

A-1

OPERATING AGREEMENT

OF

BOULDER ROAD LLC

THIS OPERATING AGREEMENT (this “Agreement”) of BOULDER ROAD LLC, a Colorado limited liability company (the “Company”) is entered into by Gaia, Inc., a Colorado corporation, its sole member and manager (“Gaia” or the “Member”).

WHEREAS, the Company was originally formed on December 28, 2007, by Gaiam, Inc., a Colorado corporation (the “Original Member”), by filing articles of organization with the Secretary of State of Colorado, pursuant to and in accordance with the Colorado Limited Liability Company Act (C.R.S. § 7-80-101 et. seq.), as amended from time to time (the “Act”); and

WHEREAS, pursuant to that certain Assignment and Contribution Agreement, dated as of the date of this Agreement, the Original Member has transferred 100% of the membership interests of the Company to Gaia.

NOW, THEREFORE, the Member, intending to be legally bound, hereby agrees as follows:

1. Name. The name of the limited liability company is Boulder Road LLC.

2. Purpose. The Company is organized and operated for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act and engaging in any and all activities necessary or incidental to the foregoing.

3. Perpetual Duration. The Company’s duration shall be perpetual.

4. Management. Gaia is hereby designated the Manager of the Company. Gaia’s address is 833 West South Boulder Road, Louisville, Colorado 80027, Attention: Jirka Rysavy and Paul Tarell, Jr. The Manager may be replaced by the Member upon written notice to the Manager.

5. Powers. The business and affairs of the Company shall be managed by the Manager. The Manager shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes of the Company including all powers, statutory or otherwise, possessed by members under the laws of the State of Colorado. Only the Manager is hereby authorized, empowered and directed in the name and on behalf of the Company to approve, execute and deliver any and all agreements, certificates or any other documents on behalf of the Company.

6. Sole Member; Contributions. On the date of this Agreement, the Member shall be admitted to the Company and credited with having contributed to the capital of the Company the amount set forth on Schedule A. The Member shall not be required to make any additional contribution to the capital of the Company.

A-2

7. Admission of New Members. New members shall be admitted to the Company only after obtaining the prior written consent of the Member and execution and delivery of such instruments in form and substance satisfactory to the Manager, as the Manager may deem necessary or desirable. On the admission of a new member, the Company shall be taxable as a partnership and the members shall amend this Agreement to comply with the provisions of Subchapter K of the Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated thereunder.

8. Distributions. Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Manager.

9. Liability of Member. The Member shall not have any liability for the obligations or liabilities of the Company except to the extent provided in the Act.

10. Governing Law. This Agreement shall be governed by, and construed under, the laws of the State of Colorado.

* * * * *

A-3

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the 1st day of January, 2015.

MEMBER:
GAIA, INC., a Colorado corporation
By:	/s/ Paul Tarell Jr.
Name:	Paul Tarell Jr.
Title:	Chief Financial Officer

A-4

SCHEDULE A

Member	Capital Contribution	Membership Percentage
Gaia, Inc. 833 West South Boulder Road, Louisville, Colorado 80027 Attention Paul Tarell, Jr.	***		100	%

*** Capital Contribution equals the amount set forth in the Company’s accounting records as of January 1, 2015.

A-5

EX-10.6

EXHIBIT 10.6

LEASE AGREEMENT

By and Between

BOULDER ROAD LLC

(“Landlord”)

and

GAIAM AMERICAS, INC.

(“Tenant”)

January 1, 2015

TABLE OF CONTENTS

1.	Premises	1
2.	Term	1
3.	Tenant’s Use of Premises	1
4.	Base Rent, Base Rent Increase, Rent Credit, and Additional Rent	1
5.	Condition, Repair, Replacement and Maintenance of the Premises	4
6.	Common Areas	5
7.	Insurance	5
8.	Compliance with Laws and Insurance Requirements	6
9.	Alterations, Additions and Improvements	7
10.	Fire and Other Casualty	8
11.	Assignment and Subletting	9
12.	Landlord’s Right to Inspect and Repair	9
13.	Landlord’s Right to Exhibit Premises	9
14.	Signs	10
15.	Landlord not Liable	10
16.	Force Majeure	10
17.	Indemnification and Waiver of Liability	10
18.	Subordination; Attornment	11
19.	Condemnation	12
20.	Bankruptcy or Insolvency of Tenant	12
21.	Landlord’s Right to Re-Enter	12
22.	Default by Tenant and Landlord’s Remedies	13
23.	Tenant’s Trade Fixtures and Removal	14
24.	Estoppel Certificate	14
25.	Limitations on Landlord’s Liability	14
26.	Services and Utilities	14
27.	Qualification in Colorado	15
28.	Notices	15
29.	Broker	15
30.	Tenant’s Right to Quiet Enjoyment	15
31.	Miscellaneous	15

Page 1

LEASE AGREEMENT

This Lease Agreement made as of and effective January 1, 2015, between Boulder Road LLC, a Colorado limited liability company, referred to in this Lease as “Landlord”, and Gaiam Americas, Inc., a Colorado corporation, referred to in this Lease as “Tenant.”

1. Premises. Landlord, in consideration of the rents and of the terms and conditions hereinafter contained, does hereby lease to Tenant, and Tenant does hereby lease from Landlord, the Premises (as defined below) located within the 4-building complex (consisting of individual buildings “A”, “B”, “C” and “D”) known as 833 W. South Boulder Road, Louisville, Colorado 80027 (collectively the “Building”). The Premises (the “Premises”) consists of the following spaces (which are depicted on Exhibit A attached hereto):

Location	Floor / Suite	Rentable Square Feet
Bldg A	Storage Area		1,762
Bldg B	Level 1 & 2		2,937
Bldg C	Level 1		15,374
Bldg C	Level 2		17,597
Bldg D	Level 1 & 2		1,186
Bldg D	Storage Area		922
Total			39,778

Landlord and Tenant each agree that the Premises contains a total of 39,778 square feet of rentable area and the Building contains a total of 150,262 square feet of rentable area, which is conclusive for all purposes of this Lease. Tenant’s mailing address for the Premises shall be 833 W. South Boulder Road, Louisville, Colorado 80027. The Building, any parking areas, and the land (the “Land”) on which such improvements are located (said Land being more particularly described on Exhibit B attached hereto) are hereinafter collectively referred to as the “Property”).

2. Term. The term of this Lease shall be for ten (10) years, commencing on January 1, 2015 (the “Commencement Date”) and ending at midnight of the last day of the 120th full calendar month after the Commencement Date (the “Term”).

3. Tenant’s Use of the Premises.

(a) Use by Tenant and Certificate of Occupancy. Tenant shall use and occupy the Premises for the operation of a health and fitness company, including office, administrative, and other related uses as necessary (the “Permitted Use”). If required, Tenant shall, at Tenant’s own expense, apply for and obtain a Temporary Certificate of Occupancy or Certificate of Occupancy with respect to the Premises as well as any other required licenses or approvals, based upon the use set forth above, from the appropriate authorities.

(b) Prohibited Use. Tenant shall not occupy nor use all or any part of the Premises nor permit or suffer the Premises to be occupied or used for any purpose other than as provided for in this Lease, nor for any unlawful or disreputable purpose, nor for any extra hazardous purpose on account of fire or other casualty.

4. Base Rent, Base Rent Increase, Rent Credit, and Additional Rent

(a) Base Rent. Except as otherwise provided herein, Tenant shall pay Base Rent (“Base Rent”) to Landlord for the use and occupancy of the Premises, as indicated in the following schedule and per the terms below:

Location	Floor / Suite	Rentable Square Feet		Base Rent (/ rsf, /yr)
Bldg A	Storage Area		1,762	$	6.00
Bldg B	Level 1 & 2		2,937	$	9.80
Bldg C	Level 1		15,374	$	12.00
Bldg C	Level 2		17,597	$	14.00
Bldg D	Level 1 & 2		1,186	$	14.00
Bldg D	Storage Area		922	$	6.00
Effective Base Rent			39,778	$	12.38

Page 1

Base Rent is payable in equal monthly installments (“Monthly Base Rent”) in advance, commencing on the first day of each month as hereinafter set forth. Tenant shall pay, subject to the provisions of Sections 4(b) and 4(c) below, Monthly Base Rent to Landlord for Tenant’s use and occupancy of the Premises.

Base Rent and all other sums, whether designated Additional Rent or otherwise, payable to Landlord under this Lease shall be payable in U.S. Dollars at the office of Landlord, or at such other place or places as Landlord may in writing direct. All rent payable under this Lease shall be paid by Tenant without notice or demand, both of which are expressly waived by Tenant and without offset or deduction of any kind unless expressly set forth in this Lease.

(b) Base Rent Increases. Commencing on January 1, 2016, and on each January 1st thereafter, the Base Rent for the next twelve month period shall be increased by the greater of (i) 3%, or (ii) the change in the Consumer Price Index for the immediate twelve month period using the CPI formula as set forth herein. The Consumer Price Index shall be defined as follows: At the end of each January, the Base Rent for the next succeeding 12 months shall be increased by the increase in the Consumer Price Index (“CPI”) where the “CPI” is the Consumer Price Index for the month of December instant, and the “Base CPI” is the Consumer Price Index for the December of the previous calendar year. As used herein, Consumer Price Index shall mean and refer to that table which is presently designated as the Consumer Price Index “All Urban Consumers” (“CPI-U”) with a base period equaling One Hundred (100) in 1982-84, and specifically that portion of the “CPI-U” relating to Denver, Colorado published by the United States Department of Labor, Bureau of Labor Statistics. In the event the statistics are not available from said Index relating to Denver, Colorado, the Index for the next nearest city of comparable population to Denver, Colorado, in which such statistics are available, shall be used. In the event that publication of the said Consumer Price Index is modified or discontinued in its entirety, the adjustment provided for herein shall be made on the basis of changes in the most comparable and recognized index of the purchasing power of the United States consumer dollar published by the U.S. Department of Labor or other governmental agency, if said Department of Labor ceases to publish such index. Tenant shall pay the new Base Rent from its effective date until the next periodic increase. In no event shall Base Rent be reduced from the last previous adjusted Base Rent by reason of any decrease in the Index. Tenant shall pay the new Base Rent from its effective date until the next periodic increase. Both Landlord and Tenant agree that if the December CPI has not been determined when March Monthly Base Rent is due, Tenant will pay the previous year’s Base Rent until the December CPI has been determined, and then Tenant shall pay over the difference to Landlord upon demand and thereafter, pay the newly determined rent.

(c) Additional Rent Based Upon Operating Expenses. In addition to Base Rent, Tenant shall pay Additional Rent (“Additional Rent”), starting on the Commencement Date, and on the first (1^st) day of each month in advance thereafter, one-twelfth (1/12th) of its Pro Rata Share of Operating Expenses (as hereinafter defined) for any calendar year in such amount as Landlord may reasonably estimate.

After each calendar year, Landlord shall deliver to Tenant a statement setting forth, in reasonable detail, the actual Operating Expenses paid or incurred by Landlord during the preceding calendar year and Tenant’s Pro Rata Share thereof. If the amount paid by Tenant for Operating Expenses exceeds or is less than Tenant’s Pro Rata Share as shown by the statement, the excess shall be credited against or the amount unpaid shall be added to Tenant’s next payment due under this Section.

In this Lease, “Operating Expenses” shall mean and include all amounts, expenses, and costs of whatever nature paid or incurred because of or in connection with the ownership, management (including a management fee not to exceed ten percent (10%) of the Operating Expenses otherwise payable by Tenant), operation, repair, maintenance, or security of the Property, all additional facilities that may be added to the Property, and Landlord’s personal property that may be utilized in connection therewith. Operating Expenses shall additionally include, but are not limited to, premiums for liability, property damage, fire and other types of casualty insurance and worker’s compensation insurance; all personal property taxes and assessments levied on or attributable to the Common Areas (as defined in Section 6) and all improvements thereon; all personal property taxes levied on or attributable to personal property used in connection with the Common Areas, the Building or the Property; straight-line depreciation on personal property owned by Landlord and consumed or used in the operation or maintenance of the Property; rental or lease payments paid by Landlord for rented or leased personal property used in the operation or maintenance of the Property; fees for required licenses and permits; repairing, replacing, resurfacing, repaving, maintaining, painting the paved areas of the Property, parking lot sweeping, snow removal, lighting, cleaning, refuse removal, security and similar items. Notwithstanding anything contained herein to the contrary, Operating Expenses shall not include, (i) costs of alterations of the premises of tenants of the Property, (ii) costs of capital improvements to the Property (except for amortized portion of capital improvements installed for the purpose of reducing or controlling Operating Expenses or complying with applicable laws), (iii) depreciation charges, (iv) interest and principal payments on loans, (v) ground rental payments, (vi) real estate brokerage and leasing commissions, (vii) advertising and marketing expenses directed at leasing the Property to new tenants, (viii) costs of Landlord reimbursed by insurance proceeds, (ix) expenses incurred in negotiating leases of other tenants in the Property or enforcing lease obligations of other tenants in the Property and (x) Landlord’s or Landlord’s property manager’s corporate general overhead or corporate general administrative expenses.

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Tenant’s “Pro Rata Share” as used in this Lease shall be obtained by multiplying the expense in question by a fraction, the numerator of which shall be the rentable square footage area of the Premises, and the denominator of which shall be the rentable square footage area of the Building. For purposes of this Lease, Tenant’s Pro Rata Share is 26.47%. Tenant’s Pro Rata Share of Operating Expenses, including utilities, but excluding Real Estate Taxes (see Section 4.(d) below), is estimated to be $4.24 per square foot in the Premises for calendar year 2015.

Tenant’s Additional Rent shall include a monthly charge for each of Tenant’s employees based at the Premises, for the right to make use of the cafeteria located within the Building. This charge will be adjusted quarterly based on the actual reasonable cost after revenues to operate the cafeteria divided by the total number of full-time equivalent employees within the Building, with each tenant’s charge to be based on the number of such tenant’s employees reflected on that tenant’s payroll records at the end of the prior quarter. Tenant’s employees shall be charged the agreed rates for all meals and food items. The monthly charge for each of Tenant’s employees based at the Premises is estimated to be $80 per month for the first quarter of 2015.

(d) Additional Rent Based Upon Real Estate Taxes. As Additional Rent, starting on the Commencement Date, Tenant shall pay Landlord Tenant’s Pro Rata Share of the annual real estate taxes and assessments assessed and levied against the Property, on the first (1st) day of each month, in advance, in a sum equal to 1/12th of Tenant’s Pro Rata Share of the annual real estate taxes and assessments due and payable for the then calendar year. If at a time a payment is required the amount of the real estate taxes and assessments for the then calendar year shall not be known, Tenant shall pay Landlord, as Additional Rent, 1/12th of the real estate taxes and assessments for the preceding calendar year; and upon ascertaining the real estate taxes and assessments for the current calendar year, Tenant shall pay Landlord any difference upon demand, or if Tenant shall be entitled to a credit, Landlord shall credit the excess against the next monthly installment(s) of Additional Rent falling due. Additional Rent based upon real estate taxes and assessments payable for the first and last years of the lease term shall be adjusted and prorated, so that Landlord shall be responsible for Landlord’s prorated share for the period prior to and subsequent to the lease term and Tenant shall pay Landlord its prorated share for the lease term. Tenant’s Pro Rata Share of Real Estate Taxes is estimated to be $2.26 per square foot in the Premises for calendar year 2015.

(e) Additional Rent Based Upon Other Sums. Tenant shall pay Landlord, as Additional Rent, all other sums of money on Tenant’s part to be paid pursuant to the terms, covenants and conditions of this Lease.

(f) Additional Rent Based Upon Reimbursement to Landlord. If Tenant shall fail to comply with or to perform any of the terms, conditions and covenants of this Lease, Landlord may (but with no obligation to do so) carry out and perform such terms, conditions and covenants, at the expense of Tenant, which expense shall be payable by Tenant, as Additional Rent, upon the demand of Landlord, together with interest at the rate per annum of eight percent (8%) (the “Default Rate”), which interest shall accrue from the date of Landlord’s demand.

(g) Additional Rent Based Upon Late Payment. If Tenant defaults, for more than five (5) days after written notice from Landlord in the payment of any monthly installment of Base Rent, Additional Rent or any of the sums required of Tenant under the Lease, or if Tenant, within five (5) days after demand from Landlord, fails to reimburse Landlord for any expenses incurred by Landlord pursuant to the Lease, then Tenant shall pay Landlord, as Additional Rent, a late charge of five (5%) percent of the rent or expense.

(h) Additional Rent Based Upon Landlord’s Legal Expenses in Enforcing Lease. As Additional Rent, Tenant shall pay Landlord, all reasonable attorneys’ fees that may be incurred by Landlord in enforcing Tenant’s obligations under this Lease; provided, however, that in the event Landlord commences a suit against Tenant to enforce Tenant’s obligations under this Lease, and such suit is tried to conclusion and judgment is entered in favor of Tenant, then in that event Tenant shall not be under any obligation to pay Landlord the attorneys’ fees that Landlord may have incurred.

(i) Additional Rent Based Upon Taxes Based on Rent. If at any time during the term of this Lease a tax or charge shall be imposed by the State of Colorado or the county or municipality in which the Premises is located, pursuant to any future law, which tax or charge shall be based upon the rent due or paid by Tenant to Landlord, then Tenant shall pay Landlord, as Additional Rent, such tax or charge. The foregoing shall not require payment by Tenant of any income taxes assessed against Landlord or of any capital levy, franchise, estate, succession, inheritance or transfer tax due from Landlord.

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(j) Net Lease, No Setoff and Application.

(i) Net Lease. It is the intention of the parties that this Lease is a “triple net lease” and Landlord shall receive the Base Rent, Additional Rent and other sums required of Tenant under the Lease, undiminished from all costs, expenses and obligations of every kind relating to the Premises, which shall arise or become due during the Lease term, all of which shall be paid by Tenant.

(ii) No Setoff. Tenant shall pay Landlord all Base Rent, Additional Rent and other sums required of Tenant under the Lease, without abatement, deduction or setoff, and irrespective of any claim Tenant may have against Landlord; and this covenant shall be deemed independent of any other terms, conditions or covenants of this Lease.

(iii) Application. No payment by Tenant or receipt by Landlord of an amount less than the full Base Rent, Additional Rent, or other sums required of Tenant under the Lease, shall be deemed anything other than a payment on account of the earliest Base Rent, Additional Rent, or other sum due from Tenant under the Lease. No endorsements or statements on any check or any letter accompanying any check or payment of Base Rent, Additional Rent, or other sum due from Tenant under the Lease, shall be deemed an accord and satisfaction of Landlord. Landlord may accept any check for payment from Tenant without prejudice to Landlord’s right to recover the balance of Base Rent, Additional Rent, or other sum due from Tenant under the Lease, or to pursue any other right or remedy provided under this Lease or by Requirements.

(l) Place of Payment of Rent. The Base Rent, Additional Rent and other sums required of Tenant under this Lease, shall be paid by Tenant to Landlord at the address provided for Landlord in Section 29 or to such other place as Landlord may notify Tenant.

5. Condition, Repair, Replacement and Maintenance of the Premises.

(a) Condition of the Premises. Tenant acknowledges examining the Premises prior to the commencement of the Lease term, that Tenant is fully familiar with the condition of the Premises and that Tenant accepts the Premises “As-Is.” Tenant enters into the Lease without any representations or warranties on the part of Landlord, express or implied, as to the condition of the Premises, including, but not limited to, the cost of operations and the condition of its fixtures, improvements and systems. Tenant acknowledges that neither Landlord nor its agents or employees has agreed to undertake any alterations or construct any tenant improvements to the Building or the Premises, except as specifically set forth in the Lease. Notwithstanding anything contained herein to the contrary, Landlord represents and warrants that as of the Commencement Date the Building systems, including, without limitation, the heating, ventilation and air conditioning system, serving the Premises will be in good working order.

(b) Landlord’s Obligations.

(i) Structure. Landlord shall, at Landlord’s own expense, maintain the roof, foundation and the structural soundness of the exterior walls of the Building in good repair. Landlord shall also maintain, and keep in good repair, the underground utility and sewer pipes outside the exterior walls of the Building. Notwithstanding the foregoing, Tenant shall repair and pay for any damage caused by the negligence of Tenant, or a “Tenant Representative” (as defined below), or otherwise, caused by Tenant’s default hereunder. The term “walls” as used herein shall not include windows, glass or plate glass, doors, special store fronts or office entries. Tenant shall within a reasonable amount of time give Landlord written notice of a defect or need for repairs, after which Landlord shall have reasonable opportunity to repair same or cure such defect. Landlord’s failure to repair or cure such defect after a reasonable notice and right-to-cure period (but in no event less than thirty (30) days) shall be a default hereunder by Landlord. Landlord’s liability with respect to any defects, repairs or maintenance for which Landlord is responsible under any of the provisions of this Lease shall be limited to the cost of such repairs or maintenance or the curing of such defect.

(ii) Tenant Representative. The term “Tenant Representative” shall mean any shareholder, officer, director, member, partner, employee, agent, licensee, assignee, sublessee or invitee of Tenant.

(c) Tenant’s Obligations.

(i) Tenant Finish. Tenant shall, at its sole cost and expense, complete all of the build-out (including all items of Tenant finish) in the Premises necessary for Tenant to utilize the Premises for Tenant’s intended use. All alterations, additions, and improvements made to the Premises by Tenant (collectively the “Alterations”) in connection with such build-out or otherwise shall be approved in advance by Landlord pursuant to, and completed in accordance with, Section 9 below. Tenant may have access to the Premises prior to the Commencement Date for the purpose of completing its build-out, provided that all of the provisions of this Lease shall apply to such early access except for the provisions involving the payment of Base Rent.

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(ii) Repairs. Tenant shall, at Tenant’s own expense, keep and maintain all parts of the Premises (except those for which Landlord is expressly responsible under the terms of this Lease) in good condition, promptly making all necessary repairs and replacements, including, but not limited to, windows, glass and plate glass, doors, any special office entry, interior walls and finish work, floors and floor covering, heating and air conditioning systems, dock boards, truck doors, dock bumpers, plumbing work and fixtures, and interior termite and pest extermination.

(iii) Tenant to Keep Premises Clean. In addition to the foregoing, and not in limitation of it, Tenant shall also, at Tenant’s own expense, undertake all replacement of all plate glass and light bulbs, florescent tubes and ballasts, and decorating, redecorating and cleaning of the interior of the Premises, and shall keep and maintain the Premises in a clean condition, free from debris, trash, refuse, snow and ice.

(iv) Tenant’s Negative Covenants. Tenant shall not injure, deface, permit waste nor otherwise harm any part of the Premises, permit any nuisance at the Premises, permit the emission of any objectionable noise or odor from the Premises, place a load on the floor on the Premises exceeding the floor load per square foot the floor was designed to carry, or install, operate or maintain any electrical equipment in the Premises that shall not bear an underwriters approval.

6. Common Areas. In this Lease, “Common Areas” shall mean all areas on the Property from time to time designated by Landlord which are available for the common use of tenants of the Property and which are not part of the Premises or the premises of other tenants. Landlord may from time to time change the size, location, nature and use of any of the Common Areas. Tenant acknowledges that such activities may result in occasional inconvenience and such activities and changes shall be expressly permitted if they do not materially affect Tenant’s use of the Property.

(a) Use of Common Areas. Tenant shall have the nonexclusive right (in common with all others to whom Landlord has granted or may grant such rights) to use the Common Areas for the purposes intended, subject to such reasonable rules and regulations as Landlord may establish from time to time. Tenant shall abide by such rules and regulations and shall use its best effort to cause others who use the Common Areas with Tenant’s expressed or implied permission to abide by Landlord’s rules and regulations. Tenant shall not, at any time, interfere with the rights of Landlord, other tenants, or any other person entitled to use the Common Areas.

(b) Vehicle Parking. Tenant shall be entitled to use the vehicle parking spaces allocated to Tenant on the Property without paying any Additional Rent. Tenant’s parking, other than for loading dock(s) adjacent to the Premises, shall not be reserved and shall be limited to vehicles no larger than standard size automobiles or pickup utility vehicles. Tenant shall not cause large trucks or other large vehicles to be parked in any area on the Property or on the adjacent public streets except for the loading dock(s) adjacent to the Premises. Temporary parking of large delivery vehicles on the Property may be permitted by the rules and regulations established by Landlord. Vehicles shall be parked only in striped parking spaces and not in driveways, loading areas or other locations not specifically designated for parking.

(c) Common Area Maintenance. Landlord shall maintain the Common Areas in good order, condition and repair. Landlord’s cost of such maintenance, repair and replacement shall be included as an Operating Expense which is subject to proportionate reimbursement as provided in Section 4(d) above.

7. Insurance.

(a) Tenant Insurance Coverage. Tenant will maintain Commercial General Liability insurance with respect to the Premises naming Landlord, its property manager, and any mortgagee as additional insured, with a combined single limit of $1,000,000 bodily injury and property damage per occurrence and $2,000,000 aggregate limit applicable to this location. This insurance coverage shall extend to any liability of Tenant arising out of the indemnities provided for in this Lease. The liability insurance obtained by Tenant under this Section 7.(a) shall be primary, not contributing with, and not in excess, any coverage that Landlord may carry. Tenant shall ensure that all employees, owners and agents of Tenant who operate motor vehicles at or around the Building maintain effective motor vehicle insurance in compliance with Colorado law. Tenant shall deliver to Landlord a Certificate of Insurance by the Commencement Date and a renewal certificate at least seven (7) days prior to the expiration of the Certificate it renews. Said Certificate must provide thirty (30) days prior notice to Landlord in the event of material change or cancellation. Tenant also agrees to maintain broad form Commercial Property insurance coverage under ISO form CP1030 or like coverage under a non-ISO form covering all Tenant’s personal property, improvements

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and betterments to their full replacement value and Worker’s Compensation insurance in accordance with applicable state law and Employer’s Liability insurance with limits of not less than $100,000/$100,000/$500,000. Tenant agrees that if its use and occupancy of the Premises cause the property insurer to raise premiums as a result of such use or occupancy, then Tenant will directly reimburse the Landlord for the cost of such increased premium. Tenant agrees to comply with all reasonable recommendations from any insurer of the property that result as a direct result of the Tenant’s use of the Premises.

During the Occupancy Period, Tenant shall maintain in effect Business Interruption Insurance, providing in the event of damage or destruction of the Premises an amount sufficient to sustain Tenant for a period of not less than one (1) year for: (i) the net profit that would have been realized had Tenant’s business continued; and (ii) such fixed charges and expenses as must necessarily continue during a total or partial suspension of business to the extent to which they would have been incurred had no business interruption occurred, including, but not limited to, interest on indebtedness of Tenant, salaries of executives, foremen, and other employees under contract, charges under noncancelable contracts, charges for advertising, legal or other professional services, taxes and rents that may still continue, trade association dues, insurance premiums, and depreciation.

(b) Waiver of Subrogation. To the extent permitted by law, and without affecting the coverage provided by insurance required to be maintained hereunder, Landlord nor Tenant shall be liable by way of subrogation or otherwise to the other party, or to any insurance company insuring the other party for any loss or damage to any of the property of Landlord or Tenant, as the case may be, which loss or damage is covered by any insurance policies carried by the parties and in force at the time of any such damage, even though such loss or damage might have been occasioned by the negligence of Landlord or Tenant, and the party hereto sustaining such loss or damage so protected by insurance waives its rights, if any, of recovery against the other party hereto to the extent and amount that such loss is covered by such insurance. This provision is intended to waive, fully and for the benefit of each party, any rights and/or claims which might give rise to a right of subrogation by any insurance carrier. The coverage obtained by each party pursuant to this Lease shall include, without limitation, a waiver of subrogation by the carrier which conforms to the provisions of this section.

8. Compliance with Laws and Insurance Requirements.

(a) General Compliance with Laws and Requirements. Tenant shall, at Tenant’s own expense, promptly comply with: (i) each and every applicable statute, ordinance, code, rule, regulation, order, directive or requirement, currently or hereafter existing, including, but not limited to, the Americans with Disabilities Act of 1990 (“ADA”) and all environmental laws, together with all amending and successor applicable statutes, ordinances, codes, rules, regulations, orders, directives or requirements, and the common law, regardless of whether such laws are foreseen or unforeseen, ordinary or extraordinary, applicable to the Premises, Tenant, Tenant’s use of or operations at the Premises, or all of them, (the “Requirements”); (ii) the requirements of any regulatory insurance body; or (iii) the requirements of any insurance carrier insuring the Premises; regardless of whether compliance (X) results from any condition, event or circumstance existing on or after the Commencement Date; (Y) interferes with Tenant’s use or enjoyment of the Premises; or (Z) requires structural or non-structural repairs or replacements. The failure to mention any specific statute, ordinance, rule, code, regulation, order, directive or requirement shall not be construed to mean that Tenant was not intended to comply with such statute, ordinance, rule, code, regulation, order, directive or requirement. Notwithstanding anything contained in this Section 8(a) to the contrary, the parties hereby agree that: (A) Landlord shall be responsible for ADA compliance in the Common Areas and the restroom facilities in the Premises, and (B) Tenant shall be responsible for ADA compliance in the remainder of the Premises, including any leasehold improvements or other work to be performed in the Premises under or in connection with this Lease other than the restroom facilities.

(b) Environmental Laws.

(i) Tenant’s Obligations and Liabilities: Tenant shall not cause or permit any Hazardous Material to be brought upon, kept or used in or about the Premises or the Property by Tenant, its agents, employees, contractors, or invitees. If Tenant breaches this obligation, Tenant shall indemnify, defend and hold Landlord harmless from any and all claims, judgments, damages, penalties, fines, costs or liabilities (including, without limitation, diminution in value of the Premises or the Property, damages for the loss of restriction on use of rentable or usable space or of any amenity of the Premises or the Property, damages arising from any adverse impact on marketing of space, and sum paid in settlement of claims, attorneys’ fees, consultant fees and expert fees) which arise during or after the lease Term as a result of such contamination to the extent caused by Tenant, its agents, employees, contractors, or invitees This indemnification of Landlord by Tenant, includes, without limitation, costs incurred in connection with any investigations of site conditions or any clean-up, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of Hazardous Material present in the soil or ground water on or under the Premises. Without limiting the foregoing, if the presence of Hazardous Material on the Premises caused by Tenant results in any contamination of the Premises, Tenant shall promptly take all actions at its sole expense as are necessary to return the Premises to the conditions existing prior to the introduction of any such Hazardous

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Material in the Premises, provided that Landlord’s approval of such actions shall first be obtained, which approval shall not be unreasonably withheld so long as such actions would not potentially have any material adverse long-term or short-term effect on the Premises. Landlord shall indemnify, defend and hold Tenant harmless from any and all claims, judgments, damages, penalties, fines, costs or liabilities which arise during or after the lease Term as a result of contamination to the Premises or the Property to the extent caused by Landlord, its agents, employees, contractors, or invitees. The foregoing indemnity shall survive the expiration or earlier termination of this Lease.

(ii) Definition. As used herein, the term “Hazardous Material” means any hazardous or toxic substance, material or waste, including, but not limited to those substances, materials and wastes listed in the United States Department of Transportation Hazardous Materials Table (49 CFR 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 261) and amendments thereto, or such substances, materials and wastes that are or become regulated under any applicable local, state or federal law.

(iii) Inspection: Landlord and its property manager or agents shall have the right, but not the duty, to inspect the Premises at any time to determine whether Tenant is complying with the terms of this Lease. If Tenant is not in compliance with this Lease, Landlord shall have the right to immediately enter upon the Premises to remedy any contamination caused by Tenant’s failure to comply, notwithstanding any other provisions of this Lease. Landlord shall use its best efforts to minimize interference with Tenant’s business but shall not be liable for interference caused thereby.

(iv) Default: Any default under this Article X of this Lease shall be a material default enabling Landlord to exercise any of the remedies set forth in this Lease.

(c) Permits. Tenant shall not commence or alter any operations at the Premises prior to: (A) obtaining all permits, registrations, licenses, certificates and approvals from all applicable governmental authorities required pursuant to any Requirements; and (B) delivering a copy of each permit, registration, license, certificate and approval to Landlord, together with a copy of the application upon which such permit, registration, license, certificate and approval is based.

(d) Attendance at Meetings. Tenant shall notify Landlord in advance of all meetings scheduled between Tenant or Tenant’s Representatives and any applicable governmental authority pertaining to the Premises, and Landlord and Landlord’s agents, representatives and employees, including, but not limited to, legal counsel and environmental consultants and engineers, shall have the right, without the obligation, to attend and participate in all such meetings.

9. Alterations, Additions and Improvements.

Tenant will not make or allow to be made any Alterations in or to the Premises without the prior written consent of Landlord, which consent may be granted or withheld by Landlord, in Landlord’s sole and absolute discretion, provided, however, if Tenant is not in default under this Lease, Tenant shall have the right, subject to Tenant’s compliance with all of the other provisions of this Section 9, to make non-structural Alterations to the Premises without first obtaining Landlord’s consent in an aggregate amount not to exceed $50,000.00 in any twelve (12) month period. Alterations to the Premises shall be done by Landlord or by contractors approved in writing by Landlord, at Tenant’s sole cost and expense. If Landlord approves Tenant’s proposed Alterations, or if such proposed Alterations are not subject to Landlord’s consent, and Landlord agrees to permit Tenant’s contractor to do the work, Tenant shall require contractor, and all subcontractors employed by the contractor, to carry worker’s compensation insurance (as required under the Workman’s Compensation Act of Colorado) and commercial general liability insurance, issued by such companies as Landlord may approve and in such amounts as Landlord may reasonably require, naming Landlord and any other parties designated by Landlord, as additional insured. Tenant shall provide certificates of insurance, evidencing satisfaction of the insurance requirements, prior to the commencement of such work. All Alterations, (whether or not such Alterations are subject to Landlord’s prior consent),must conform to all requirements of all governmental entities having jurisdiction. Tenant’s contractor shall obtain all applicable building and occupancy permits required by law. Landlord shall have the right, at Tenant’s expense, to have Tenant’s contractor’s work inspected by architects and engineers. At any time Tenant either desires to, or is required to, make repairs or Alterations in accordance with this Lease, Landlord may, in addition to its other options, require Tenant, at Tenant’s sole cost and expense, to obtain and provide to Landlord a lien and completion bond (or such other applicable bond as reasonably determined by Landlord) in an amount equal to one and one-half times the estimated cost of such improvements to insure Landlord against risk and liability, including but not limited to liability for mechanics and materialman’s lien, and to insure the completion of the work. Tenant agrees to indemnify Landlord and hold it harmless against any loss, liability or damage resulting from such work. Tenant further agrees that plans and drawings for installation or revision of mechanical, electrical or plumbing systems shall be designed by an engineer approved by Landlord, and bear an engineer’s seal, such design work to be done at Tenant’s expense. Notwithstanding anything to the contrary contained herein, in no event shall Tenant be permitted to remove or alter any restrooms in the Premises.

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All Alterations and systems installed in or attached to the Premises by Tenant shall, at the option of Landlord, upon the expiration or earlier termination of the Lease, belong to and become the property of Landlord without any payment from Landlord and if such option is exercised, shall be surrendered by Tenant in good order and condition as part of the Premises upon the expiration or sooner termination of the Lease term. Tenant shall not use or penetrate the roof of the Building for any purpose whatsoever without the prior written consent of Landlord, which consent may be granted or withheld by Landlord, in Landlord’s sole and absolute discretion. All Alterations (whether or not such Alterations are subject to Landlord’s prior consent) shall be performed by Tenant in a good and workmanlike manner, in compliance with all Requirements.

Tenant shall keep the Premises and the Property free from any liens arising out of any work performed, materials furnished, or obligations incurred by Tenant. Tenant’s obligations regarding liens shall be satisfied if during any period that a lien is disputed Tenant provides a bond (or other similar security) sufficient for the satisfaction of the lien together with costs and interest.

10. Fire and Other Casualty.

(a) Repair of Damage. If the Premises or the Building are damaged or destroyed by fire or other casualty, Landlord shall commence repair or restoration within sixty (60) days of such damage or destruction and shall diligently pursue such repair and restoration to completion unless this Lease is terminated as provided herein. Landlord shall pay the cost of repair of any damage or destruction of the Building or the Premises (exclusive of Tenant’s leasehold improvements, inventory, furnishings, fixtures, equipment and other tangible personal property whose repair and restorations shall be the responsibility of Tenant). Tenant shall pay the cost of repair of any damage or destruction of the Building caused by the negligence or willful misconduct of Tenant, its employees, agents, contractors, or invitees which is not insured or required to be insured against hereunder, plus any deductible under such insurance policies. Tenant shall cooperate with Landlord to allow Landlord access to such portion of the Premises as Landlord reasonably requires to enable Landlord to repair the Premises or such portion of the Building (as requires access to the Premises to effect such repairs).

(b) Abatement. If the Premises or any portion of the Building materially affecting Tenant’s use of or access to the Premises are damaged or destroyed by fire or other casualty not caused by the negligence or willful misconduct of Tenant, its agents, contractors, employees, or invitees, the fixed rent, Additional Rent and other expenses shall abate until such damage or destruction is repaired in proportion to the impairment of Tenant’s use of or access to the Premises. Except as specifically provided in this Lease, this Lease shall not terminate, Tenant shall not be released from any of its obligations under this Lease, the fixed rent, Additional Rent and other expenses payable by Tenant under this Lease shall not abate, and Landlord shall have no liability to Tenant for any damage or destruction to the Premises or the Building.

(c) Termination by Landlord. If the Building is damaged or destroyed, Landlord shall have the option to terminate this Lease within sixty (60) days from the date of the event of such damage or destruction by written notice to Tenant delivered at least ninety (90) days prior to the proposed termination date specifying the cost of such repair if Landlord reasonably determines that the cost of repair to the Building (exclusive of Tenant’s leasehold improvements, inventory, furnishings, fixtures, equipment and other tangible personal property whose repair and restorations shall be the responsibility of Tenant and exclusive of other tenant improvements which are the responsibility of other tenants of the Building), exceeds fifty percent (50%) of the value of the Building exclusive of the land prior to such damage. If the Premises are damaged or destroyed, Landlord shall have the further option to terminate this Lease within sixty (60) days from the date of the event of such damage or destruction by written notice to Tenant delivered at least thirty (30) days prior to the proposed termination date specifying the cost of such repair, if the cost of repair of the Premises (exclusive of Tenant’s leasehold improvements, inventory, furnishings, fixtures, equipment and other tangible personal property whose repair and restorations shall be the responsibility of Tenant), as reasonably determined by Landlord, exceeds by more than twenty percent (20%) the insurance proceeds estimated by Landlord to be payable to Landlord for such damage or destruction, plus Landlord’s deductible, unless the Tenant agrees in writing to pay any cost of repairs of the Premises in excess of such amount, within thirty (30) days of receipt by Tenant of written notice from Landlord of its intention to terminate this Lease pursuant to this sentence.

(d) End of Term. Landlord shall not have any obligation to repair, reconstruct or restore the Premises during the last twelve (12) months of the term of this Lease or any extension thereof, as a result of any damage to the Premises if the cost of any such repair, reconstruction, or restoration as reasonably estimated by the Landlord exceeds the then Base Rent and if Landlord gives notice of its election not to repair or rebuild within thirty (30) days after the date of the casualty. If Landlord elects not to repair the Premises or the Building pursuant to this Section 10(d), Tenant may elect to terminate this Lease within sixty (60) days of receipt of Landlord’s notification

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of its election not to repair pursuant to this Section 10(d). If Tenant elects to terminate this Lease as provided in this Section, this Lease shall terminate on the earlier of the date Tenant vacates the Premises or the date of the election by Tenant to terminate this Lease. If Tenant does not elect to terminate this Lease in such sixty (60) day period, the fixed rent, Additional Rent and other expenses payable by Tenant shall abate in proportion to the impairment of Tenant’s use (unless the damage or destruction was caused by the negligence or willful misconduct of Tenant, its agents, contractors, employees or invitees and Landlord does not receive payment under any loss of rents or business interruption insurance in lieu of rent), and Tenant may repair the Premises at Tenant’s cost and expense.

(e) Rights of Mortgagee. Anything contained in this Section or elsewhere in this Lease to the contrary notwithstanding, any different procedure for the distribution of the insurance proceeds which may be required by a mortgagee that is commercially reasonable and customary at the time shall take precedence over and be in lieu of any contrary procedure provided for in this Lease; provided, however, that Landlord shall use good faith efforts to obtain such mortgagee’s consent to such use of the insurance proceeds. If required, Landlord shall agree to accept such reasonable conditions that such mortgagee may require to allow use of the insurance proceeds for the restoration of the Building and/or Premises.

11. Assignment and Subletting.

(a) Landlord’s Consent Required. Tenant shall not voluntarily or by operation of law assign, sublet, mortgage or otherwise transfer or encumber all or any part of Tenant’s interest in this Lease or in the Premises without Landlord’s prior written consent, which consent may be granted or withheld in Landlord’s sole and absolute discretion. Any attempted assignment, subletting, mortgage, transfer or encumbrance without such consent shall be void as against Landlord, and shall constitute an Event of Default by Tenant under this Lease.

(b) No Release of Tenant. Regardless of Landlord’s consent or the need under subsection (a) to obtain Landlord’s consent, no assignment or subletting shall release Tenant from this Lease. Acceptance of Base Rent and Additional Rent from any other person shall not be deemed a waiver by Landlord of any provision of this Lease. Consent to one assignment or subletting shall not be deemed a consent to any subsequent assignment or subletting. In the event of a consent by Landlord to an assignment or subletting, Tenant shall deliver to Landlord a duplicate original of the assignment by Tenant and assumption by Tenant’s assignee of Tenant’s obligations under this Lease, or a duplicate original of the sublease, as the case may be.

(c) Participation by Landlord. In the event of any assignment or sublease involving rent in excess of the Base Rent or Additional Rent required under this Lease (“Excess Rent”), Landlord shall participate in the Excess Rent. Tenant shall promptly pay to Landlord, as Additional Rent, fifty (50%) percent of all such Excess Rent collected from the assignee or subtenant, and shall supply Landlord with a true copy of each assignment or sublease, and in the case of the former, an originally executed assumption by the assignee of all of Tenant’s obligations under this Lease.

(d) Permitted Transfer. Notwithstanding anything contained in this Section 11 to the contrary, Tenant shall have the unrestricted right to transfer or assign this Lease without the prior written consent of Landlord as long as such assignee or transferee (i) is an entity which controls, is controlled by or is under common control with Tenant, or any entity which serves as a secured lender to Tenant (each, an “Affiliate”), (ii) is the surviving entity following any merger or consolidation or sale of all or substantially all of Tenant’s or an Affiliate of Tenant’s assets by Tenant or an Affiliate of Tenant, (iii) is the result of a reorganization or other corporate restructuring of Tenant or an Affiliate, or (iv) acquires any or all of the interests of Tenant or an Affiliate; provided, further, that in no event shall (i) any change in the management of Tenant or in the management of an Affiliate of Tenant be deemed to be a transfer or assignment requiring the consent of Landlord, and (ii) any assignment or transfer permitted pursuant to this Section 11(d) release Tenant from its obligations under this Lease.

12. Landlord’s Right to Inspect and Repair. Landlord or Landlord’s agents, employees or representatives, shall have the right upon twenty-four (24) hours prior notice to enter into and upon all or any part of the Premises during the Lease term at all reasonable hours, for the purpose of: (a) examination; (b) determination whether Tenant is in compliance with its obligations under this Lease; or (c) making repairs, alterations, additions or improvements to the Premises, as may be necessary by reason of Tenant’s failure to make same after notice to Tenant to do so, except in an emergency. This Section shall not be deemed nor construed to create an obligation on the part of Landlord to make any inspection of the Premises or to make any repairs, alterations, additions or improvements to the Premises for its safety or preservation.

13. Landlord’s Right to Exhibit Premises. Landlord or Landlord’s agents, employees or representatives shall have the right, upon twenty-four (24) hours prior notice, to show the Premises during the Lease term to persons wishing to purchase or grant fee

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mortgages on the Premises. Landlord or Landlord’s agents, employees or other representatives shall have the right within the last six (6) months of the Lease term to place notices on any parts of the Premises, offering the Premises for lease and at any time during the Lease term, offering the Premises for sale, and Tenant shall permit the signs to remain without hindrance or molestation.

14. Signs. Tenant shall not cause any signs to be placed at the Premises, except of a design and structure and at such places as Landlord shall consent to in writing prior to the installation. All signage will be of a size and design consistent with that of other tenants of the Building, and will be created and placed at the Premises at Tenant’s expense. If Landlord or Landlord’s agents, employees or other representatives wish to remove any such signs in order to make any repairs, alterations, additions or improvements to the Premises, such signs may be removed, but shall be replaced, at Tenant’s expense, when the repairs, additions, alterations or improvements shall be completed; however, such provision shall not create an obligation on the part of Landlord to make any repairs, alterations, additions or improvements to the Premises. All signs of Tenant at the Premises shall conform with all municipal ordinances or other laws and regulations applicable to such signs.

15. Landlord Not Liable. Landlord shall not be liable for any damage or injury to any person or any property as a consequence of the failure, breakage, leakage or obstruction of water, well, plumbing, septic tank, sewer, waste or soil pipes, roof, drains, leaders, gutters, down spouts or the like, or of the electrical system, gas system, air conditioning system or other system, or by reason of the elements, or resulting from any act or failure to act on the part of Landlord, or Landlord’s agents, employees, invitees or representatives, assignees or successors, or attributable to any interference with, interruption of or failure beyond the control of Landlord.

16. Force Majeure. Whenever a period of time is herein prescribed for the taking of any action by Landlord, Landlord shall not be liable or responsible for, and there shall be excluded from the computation of such period of time, any delays due to strikes, lockouts, riots, acts of God, shortages of labor or materials, war, civil commotion, fire or other casualty, catastrophic weather conditions, a court order that causes a delay, governmental laws, regulations, or restrictions, or any other cause whatsoever beyond the control of Landlord (any of the foregoing being referred to an “Unavoidable Delay”). Landlord shall use reasonable efforts to notify Tenant not later than ten (10) business days after Landlord knows of the occurrence of an Unavoidable Delay; provided, however, that Landlord’s failure to notify Tenant of the occurrence of an event constituting an Unavoidable Delay shall not alter, detract from, or negate its character as an Unavoidable Delay or otherwise result in the loss of any benefit or right granted to Landlord under this Lease.

17. Indemnification and Waiver of Liability.

(a) Tenant. Except to the extent caused by the negligence of Landlord or any Landlord Indemnitee (as defined below, neither Landlord nor Landlord’s employees, agents, or contractors (collectively “Landlord Indemnitee”) shall be liable for and Tenant shall indemnify and save harmless Landlord and each Landlord Indemnitee from and against any and all liabilities, damages, claims, suits, costs (including costs of suit, attorneys’ fees and costs of investigation) and actions of any kind, foreseen or unforeseen, arising or alleged to arise by reason of injury to or death of any person or damage to or loss of property, occurring on, in, or about the Premises or the Property, or by reason of any other claim whatsoever of any person or party, occasioned, directly or indirectly, wholly or partly: (a) by any act or omission on the part of Tenant or its employees, agents or contractors (collectively “Tenant Representative”); or (b) by any breach, violation or non-performance of any covenant of Tenant under this Lease. If any action or proceeding shall be brought by or against Landlord or any Landlord Indemnitee in connection with any such liability, claim, suit, cost, injury, death or damage, Tenant, on notice from Landlord or any Landlord Indemnitee, shall defend such action or proceeding, at Tenant’s expense, by or through attorneys reasonably satisfactory to Landlord or the Landlord Indemnitee. The provisions of this Section shall apply to all activities of Tenant or any Tenant Representative with respect to the Premises, whether occurring before or after execution of this Lease. Tenant’s obligations under this Section shall not be limited to the coverage of insurance maintained or required to be maintained by Tenant under this Lease. In no event shall Landlord or any Landlord Indemnitee be liable in any manner to Tenant or any Tenant Representative as the result of the acts or omissions of Tenant or a Tenant Representative and all liability therefore shall rest with Tenant. All personal property upon the Premises shall be at the risk of Tenant only, and neither Landlord nor any Landlord Indemnitee shall be liable for any damage thereto or theft thereof, except to the extent caused by the negligence, willful misconduct or gross negligence of Landlord or any Landlord Indemnitee.

(b) Landlord. Except to the extent caused by the negligence of Tenant or Tenant’s Indemnitees, (as defined below), neither Tenant nor Tenant’s employees, agents, or contractors (collectively “Tenant Indemnitee”) shall be liable for and Landlord shall indemnify and save harmless Tenant and each Tenants Indemnitee from and against any and all liabilities, damages, claims, suits, costs (including costs of suit, attorneys’ fees and costs of investigation) and actions of any kind, foreseen or unforeseen, arising or alleged to arise by reason of injury to or death of any person or damage to or loss of property, occurring on, in, or about the Common Areas, or by reason of any other claim whatsoever of any person or party, occasioned, directly or indirectly, wholly or partly: (a) by any act or omission on the part of Landlord or its employees, agents or contractors (collectively, “Landlord Representative”); or (b) by any breach, violation or

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non-performance of any covenant of Landlord under this Lease. If any action or proceeding shall be brought by or against Tenant or any Tenant Indemnitee in connection with any such liability, claim, suit, cost, injury, death or damage, Landlord, on notice from Tenant or any Tenant Indemnitee, shall defend such action or proceeding, at Landlord’s expense, by or through attorneys reasonably satisfactory to Tenant or the Tenant Indemnitee. The provisions of this Section shall apply to all activities of Landlord or any Landlord Representative with respect to the Common Areas, whether occurring before or after execution of this Lease. Landlord’s obligations under this Section shall not be limited to the coverage of insurance maintained or required to be maintained by Landlord under this Lease. In no event shall Tenant or any Tenant Indemnitee be liable in any manner to Landlord or any Landlord Representative as the result of the acts or omissions of Landlord or a Landlord Representative and all liability therefore shall rest with Landlord.

18. Subordination; Attornment.

(a) Subordination. This Lease shall be subject and subordinate to any mortgage, deed of trust, trust indenture, assignment of leases or rents or both, or other instrument evidencing a security interest, which may now or hereafter affect any portion of the Premises, or be created as security for the repayment of any loan or any advance made pursuant to such an instrument or in connection with any sale-leaseback or other form of financing transaction and all renewals, extensions, supplements, consolidations, and other amendments, modifications, and replacements of any of the foregoing instruments (“Mortgage”), and to any ground lease or underlying lease of the Premises or any portion of the Premises whether presently or hereafter existing and all renewals, extensions, supplements, amendments, modifications, and replacements of any of such leases (“Superior Lease”). Tenant shall, at the request of any successor-in-interest to Landlord claiming by, through, or under any Mortgage or Superior Lease, attorn to such person or entity as described below. The foregoing provisions of this subsection (a) shall be self-operative and no further instrument of subordination shall be required to make the interest of any lessor under a Superior Lease (a “Superior Lessor”) or any mortgagee, trustee or other holder of or beneficiary under a Mortgage (a “Mortgagee”) superior to the interest of Tenant hereunder; provided, however, Tenant shall execute and deliver promptly any certificate or instrument, in recordable form, that Landlord, any Superior Lessor or Mortgagee may request in confirmation of such subordination, provided that such certificate or instrument provides that the beneficiary of such superior interest will not disturb Tenant’s possession of the Premises and rights under this Lease so long as Tenant is not in default of its obligations under this Lease, following all applicable notice and cure periods.

(b) Rights of Superior Lessor or Mortgagee. Any Superior Lessor or Mortgagee may elect that this Lease shall have priority over the Superior Lease or Mortgage that it holds and, upon notification to Tenant by such Superior Lessor or Mortgagee, this Lease shall be deemed to have priority over such Superior Lease or Mortgage, whether this Lease is dated prior to or subsequent to the date of such Superior Lease or Mortgage. If, in connection with the financing of the Premises or with respect to any Superior Lease, any Mortgagee or Superior Lessor shall request reasonable modifications of this Lease that do not increase the monetary obligations of Tenant under this Lease, materially increase Tenant’s other obligations, or materially and adversely affect the rights of Tenant under this Lease, then Tenant shall make such modifications.

(c) Attornment. If at any time prior to the expiration of the term of this Lease, any Superior Lease shall terminate or be terminated by reason of a default by Landlord as tenant thereunder or any Mortgagee comes into possession of the Premises or the estate created by any Superior Lease by receiver or otherwise, Tenant shall, at the election and upon the demand of any owner of the Premises, or of the Superior Lessor, or of any Mortgagee-in-possession of the Premises, attorn, from time to time, to any such owner, Superior Lessor or Mortgagee, or any person or entity acquiring the interest of Landlord as a result of any such termination, or as a result of a foreclosure of the Mortgage or the granting of a deed in lieu of foreclosure, upon the then-executory terms and conditions of this Lease, for the remainder of the term provided that such Superior Lessor or any Mortgagee-in-possession of the Premises agrees not to disturb Tenant’s possession of the Premises and rights under this Lease so long as Tenant is not in default of its obligations under this Lease, following all applicable notice and cure periods. In addition, in no event shall any such owner, Superior Lessor or Mortgagee, or any person or entity acquiring the interest of Landlord be bound by (i) any payment of rent or Additional Rent for more than one (1) month in advance, or (ii) any security deposit or the like not actually received by such successor, or (iii) any amendment or modification in this Lease made without the consent of the applicable Superior Lessor or Mortgagee, or (iv) any construction obligation, free rent, or other concession or monetary allowance, or (v) any set-off, counterclaim, or the like otherwise available against any prior landlord (including Landlord), or (vi) any act or omission of any prior landlord (including Landlord).

(d) Rights Accruing Automatically. The provisions of this Section 17 shall inure to the benefit of any such successor-in-interest to Landlord, shall apply notwithstanding that, as a matter of law, this Lease may terminate upon the termination of any such Superior Lease, and shall be self-operative upon any such demand, and no further instrument shall be required to give effect to such provisions. Tenant, however, upon demand of any such successor-in-interest to Landlord, shall execute, from time to time, instruments in confirmation of the foregoing provisions of this Section, reasonably satisfactory to any such successor-in-interest to Landlord, acknowledging such attornment and setting forth the terms and conditions of its tenancy.

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(e) Limitation on Rights of Tenant. As long as any Superior Lease or Mortgage shall exist, Tenant shall not seek to terminate this Lease by reason of any act or omission of Landlord until Tenant shall have given written notice of such act or omission to all Superior Lessors and Mortgagees at such addresses as shall have been furnished to Tenant by such Superior Lessors and Mortgagees and, if any such Superior Lessor or Mortgagee, as the case may be, shall have notified Tenant within ten (10) business days following receipt of such notice of its intention to remedy such act or omission, until a reasonable period of time shall have elapsed following the giving of such notice (but not to exceed sixty (60) days), during which period such Superior Lessors and Mortgagees shall have the right, but not the obligation, to remedy such act or omission. The foregoing shall not, however, be deemed to impose upon Landlord any obligations not otherwise expressly set forth in this Lease.

19. Condemnation.

(a) Permanent Condemnation.

(i) Lease Termination. If all or any portion of the Premises is taken under the power of eminent domain, or sold under the threat of the exercise of the power (both called “Condemnation”), this Lease shall terminate as to the part taken as of the first date the condemning authority takes either title or possession. If more than twenty-five (25%) percent of the leasable area of the Premises is taken or the balance of the Premises is unfit for Tenant’s use, Tenant has the option to terminate this Lease as of the date the condemning authority takes possession. The option shall be exercised in writing as follows:

(A) Notice of Taking. Within thirty (30) days after Landlord or the condemning authority has given Tenant written notice of the taking; or

(B) Possession. Absent notice, within ten (10) days after the condemning authority has taken possession. If Tenant does not terminate, this Lease shall remain in full force and effect as to the portion of the Premises remaining. The Base Rent and Additional Rent shall be reduced in the same proportion as the area of the Premises taken bears to the entire area leased hereunder.

(ii) Award. Any award for Condemnation is Landlord’s, whether the award is made as compensation for diminution in value of the leasehold or for the taking of the fee, or as severance damages. If this Lease is not terminated, Landlord shall diligently repair any damage to the Premises caused by such Condemnation, subject to delays due to Force Majeure, as provided in Section 16.

(b) Temporary Condemnation. Upon condemnation of all or any portion of the Premises for temporary use, this Lease shall continue without change or abatement in Tenant’s obligations, as between Landlord and Tenant. Tenant is entitled to the award made for the use. If the Condemnation extends beyond the term of the Lease, the award shall be prorated between Landlord and Tenant as of the expiration date of the term. Tenant is responsible, at its sole cost and expense, for performing any restoration work required to place the Premises in the condition it was in prior to Condemnation, unless the release of the Premises occurs after termination. In such case, Tenant shall assign to Landlord any claim it may have against the condemning authority for the cost of restoration, and if Tenant has received restoration funds, it shall give the funds to Landlord within ten (10) days after demand.

20. DAMAGES. NOTWITHSTANDING ANY OTHER SECTION OF THIS LEASE, IN NO EVENT SHALL EITHER LANDLORD OR TENANT BE LIABLE TO THE OTHER UNDER ANY THEORY OF TORT, CONTRACT OR STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY LOST PROFITS, EXEMPLARY OR PUNITIVE DAMAGES OR CONSEQUENTIAL DAMAGES (EXCEPT TO THE EXTENT TENANT HOLDS OVER IN THE PREMISES AFTER THE TERM HEREOF HAS ENDED), EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER OR NOT ANY PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES WHICH MAY NOW EXIST OR HEREAFTER ARISE.

21. Landlord’s Right to Re-Enter. If Tenant shall default in any of the terms, conditions or covenants of this Lease, then it shall be lawful for Landlord to re-enter the Premises and to again possess and enjoy the Premises.

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22. Default by Tenant and Landlord’s Remedies.

(a) Event of Default. If any one or more of the following events shall occur and be continuing beyond the period set forth in any default notice provided to be given, an Event or Events of Default shall have occurred under this Lease:

(i) Non-Payment. If Tenant shall fail to pay any installment of Base Rent, Additional Rent or other sums when due under this Lease and such failure shall continue for five (5) days after the receipt of written notice from Landlord specifying the amount outstanding; or

(ii) Non-Performance. If Tenant shall fail to comply with any of the other terms, covenants, conditions or obligations of this Lease and such failure in compliance shall continue for thirty (30) days after delivery of notice from Landlord to Tenant specifying the failure, or, if such failure cannot with due diligence be remedied within thirty (30) days, Tenant shall not, in good faith have commenced within said thirty (30) day period to remedy such failure and continued diligently and continuously thereafter to prosecute the same to completion; or

(iii) Bankruptcy. If (i) a petition is filed by or against Tenant to declare Tenant bankrupt or seeking a plan of reorganization or arrangement under any Chapter of the Bankruptcy Act, or any amendment, replacement or substitution therefor, or to delay payment of, reduce or modify Tenant’s debts, which in the case of an involuntary action is not discharged within thirty (30) days; (ii) Tenant is declared insolvent by law or any assignment of Tenant’s property is made for the benefit of creditors; (iii) a receiver is appointed for Tenant or Tenant’s property, which appointment is not discharged within thirty (30) days; (iv) any action taken by or against Tenant to reorganize or modify Tenant’s capital structure in a materially adverse way which in the case of an involuntary action is not discharged within thirty (30) days; or (v) upon the dissolution of Tenant.

(b) Right to Terminate Lease and Re-Enter. Landlord may, in addition to any other remedy available to Landlord under this Lease or available under Requirements, at Landlord’s option, on 10 days’ notice to Tenant, declare this Lease terminated at the expiration of such 10 day period and Tenant shall quit and surrender possession of the Premises, but Tenant shall remain liable to Landlord as hereinafter provided, and upon Tenant’s failure to surrender of possession, Landlord may re-enter the Premises by summary proceeding or otherwise free from any estate or interest of Tenant therein.

(c) Landlord’s Right to Restore and Re-Let, and Tenant’s Liability for Expenses. In the event that Landlord shall obtain possession by re-entry, legal or equitable actions or proceedings or other lawful means as a result of an Event of Default by Tenant, Landlord shall have the right, without the obligation, to make renovations, alterations and repairs to the Premises required to restore them to the condition the same should be during the term of the Lease, and to re-let the Premises or any part thereof for a term or terms that may be less or more than the full term of the Lease had Landlord not re-entered and re-possessed or terminated the Lease, and Landlord may grant reasonable concessions in the re-renting to a new tenant, without affecting the liability of Tenant under the Lease. Landlord shall in no way be responsible for any failure to re-let all or any part of the Premises or for any failure to collect any rent due after any re-letting, and in no event shall Tenant be entitled to any surplus rents collected. Any of the foregoing action taken or not taken by Landlord shall be without waiving any rights that Landlord may otherwise have under Requirements or pursuant to the terms of this Lease. Tenant shall pay Landlord all legal and other expenses incurred by Landlord in terminating this Lease by reason of an Event of Default, in obtaining possession of the Premises, in making all alterations, renovations and repairs and in paying the usual and ordinary commissions for re-letting the same, together with interest thereof at the Prime Rate, which interest shall accrue from the date of Landlord’s demand.

(d) Survival Covenant - Liability of Tenant after Re-Entry and Possession or Termination.

(i) Survival of Obligations. If any Event of Default occurs (whether or not this Lease shall be terminated as a result of an Event of Default), Tenant shall remain liable to Landlord for all Base Rent and Additional Rent herein reserved (including, but not limited to, the expenses to be paid by Tenant pursuant to the provisions of this Lease); less the net amount of rent, if any, that shall be collected and received by Landlord from the Premises, for and during the remainder of the term of this Lease. In addition, Landlord may, from time to time, without terminating this Lease, as agent for Tenant, re-let the Premises or any part thereof for such term or terms, at such rental or rentals, and upon such other terms and conditions as Landlord may deem advisable, in accordance with the provisions of subsection (c) above. The failure or refusal of Landlord to re-let the Premises or any part thereof shall not release Tenant or affect Tenant’s liability for damages. Landlord shall have the right, without the obligation, following re-entry and possession or termination, to apply any rentals received by Landlord in the following order: (i) to the payment of indebtedness or costs other than rent or damages; (ii) to the payment of any cost of re-letting; (iii) to the payment of any cost of altering or repairing the Premises; (iv) to the payment of Base Rent and Additional Rent, or damages, as the case may be, due and unpaid hereunder; and (v) the residue, if any, shall be held by landlord and applied for the payment of future Base Rent and Additional Rent, or damages, as the case may be, as the same may become due and payable hereunder. Landlord may sue periodically for and collect the amount that may be due pursuant to the provisions of

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this Section, and Tenant expressly agrees that any such suit shall not bar or in any way prejudice the rights of Landlord to enforce the collection or the amount due at the end of any subsequent period by a like or similar proceeding. The words “re- entry” and “re-enter,” as used herein, shall not be construed as limited to their strict legal meaning.

(ii) Rights on Termination. Should Landlord terminate this Lease by reason of an Event of Default, then Landlord shall thereupon have the right, without the obligation, as an alternative to suing Tenant periodically pursuant to the provisions of subsection (i) above, to recover from Tenant the difference, if any, at the time of such termination, between the amount of Base Rent and Additional Rent reserved herein for the remainder of the term over the then reasonable rental value of the Premises for the same period both discounted to present value at the rate than being given prime loans minus one point by Wells Fargo N.A. Landlord shall not, by any re-entry or other act, be deemed to have terminated this Lease, unless Landlord shall notify Tenant in writing, that Landlord has elected to terminate the same.

(iii) Remedies Cumulative. The remedies of Landlord specified herein shall be cumulative as to each other and as to all such allowed by Requirements.

(e) Right to Injunction. In the event of a breach or threatened breach by Tenant of any of the covenants or provisions hereof, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity as if re-entry, summary proceedings and other remedies were not herein provided for. Mention in this Lease of any particular remedy shall not preclude Landlord from any other remedy, in law or in equity. Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of the Premises, by reason of the violation by Tenant of any of the covenants and conditions of this Lease, or otherwise.

23. Tenant’s Trade Fixtures and Removal. Any trade equipment, trade fixtures, goods or other property of Tenant shall be removed by Tenant on or before the expiration of the Lease term or sooner termination of the Lease term. Any trade equipment, trade fixtures, goods or other property of Tenant not removed by Tenant on the expiration of the Lease term or sooner termination of the Lease term, or upon any deserting, vacating or abandonment of the Premises by Tenant, or upon Tenant’s eviction, shall, at Landlord’s discretion, be considered as abandoned and Landlord shall have the right (without any obligation to do so), without notice to Tenant, to sell or otherwise dispose of Tenant’s property, at the expense of Tenant, and Landlord shall not be accountable to Tenant for any proceeds of the sale, or for any damage or loss to Tenant’s property.

24. Estoppel Certificate. Within ten (l0) days of request from Landlord, Tenant shall execute, acknowledge and deliver to Landlord, a written instrument certifying (i) that this Lease has not been modified and is in full force and effect, or if there has been a modification, that the Lease is in full force and effect as modified, stating the modification; (ii) specifying the dates to which rent and other sums due from Tenant under this Lease have been paid; (iii) stating whether or not to the knowledge of Tenant, Landlord is in default, and if so, the reasons for the default; (iv) stating the commencement date of the Lease term; and (v) providing such other information as is reasonably requested by Landlord.

25. Limitations on Landlord’s Liability. Notwithstanding any provision of this Lease to the contrary, Tenant agrees that it shall look only to the Premises (which includes all of Landlord’s equity or interest therein, including proceeds of sale, insurance and condemnation) in seeking to enforce any obligations or liabilities whatsoever of Landlord under this Lease or to satisfy a judgment (or any other charge, directive or order) of any kind against Landlord; and Tenant shall not look to the property or assets of any of the any officers, directors, shareholders (or principal or partner of any non-corporate Landlord), employees, agents, or legal representatives of Landlord in seeking to enforce any obligations or liabilities whatsoever of Landlord under this Lease or to satisfy a judgment (or any other charge, directive or order) of any kind against Landlord, and in no event shall any deficiency judgment be sought or obtained against Landlord. No person who is an officer, director, shareholder (or principal or partner of any non-corporate Landlord), employee, agent, or legal representative of Landlord shall be personally liable for any obligations or liabilities of Landlord under this Lease.

26. Services and Utilities. To the extent not included in Operating Expenses, Tenant shall, at Tenant’s own expense, obtain all utility services supplying the Premises, including but not limited to electricity, water, sewer, standby water for sprinkler, gas, telephone and all other utilities and other communication services, in its own name, effective as of the commencement of the Lease, and shall pay the cost directly to the applicable utility, including any fine, penalty, interest or cost that may be added thereto for non-payment thereof. If required by Landlord, Tenant shall have a separate water, electric, and/or gas meter installed for the Premises, or shall reimburse Landlord for the costs of such meter(s) if Landlord has a separate water, electric or gas meter installed for the Premises.

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27. Qualification in Colorado. Tenant represents and warrants to Landlord that it has qualified with the Secretary of State of Colorado to do business in the State of Colorado.

28. Notices. All notices, consents, demands, communications or approvals required or permitted by this Lease shall be in writing and shall be delivered personally or delivered by certified or registered mail, return receipt requested, addressed as follows:

If to Landlord:	Boulder Road LLC
	833 W. South Boulder Road
	Louisville, Colorado 80027
	Attn: John Jackson
If to Tenant:	Gaiam Americas, Inc.
	833 W. South Boulder Road
	Louisville, Colorado 80027
	Attn: Steve Thomas, CFO

Landlord and Tenant may, by notice given in the same manner set forth above, designate a different address to which subsequent notices shall be sent. Notice shall be deemed given when delivered, if delivered personally or by reputable overnight delivery service that provides proof of delivery, or when mailed if sent by certified or registered mail, return receipt requested.

29. Broker. Each party represents and warrants to the other no real estate broker was instrumental in effecting this Lease. Tenant shall indemnify and defend Landlord from the claim of any broker, that such broker was authorized on behalf of Tenant to make an offer to Landlord with respect to this transaction.

30. Tenant’s Right to Quiet Enjoyment. Upon paying the rents and other sums required of Tenant under the Lease and faithfully and fully performing the terms, conditions and covenants of the Lease on Tenant’s part to be performed, Tenant shall peaceably and quietly have, hold and enjoy the Premises for the Lease term.

31. Miscellaneous.

(a) Validity of Lease. The provisions of this Lease are severable. If any provision of the Lease is adjudged to be invalid or unenforceable by a court of competent jurisdiction, it shall not affect the validity of any other provision of this Lease.

(b) Non-Waiver by Landlord. The rights, remedies, options or elections of Landlord in this Lease are cumulative, and the failure of Landlord to enforce performance by Tenant of any provision of this Lease applicable to Tenant, or to exercise any right, remedy, option or election, or the acceptance by Landlord of the annual fixed rent or Additional Rent from Tenant after any default by Tenant, in any one or more instances, shall not act as a waiver or a relinquishment at the time or in the future, of Landlord of such provisions of this Lease, or of such rights, remedies, options or elections, and they shall continue in full force and effect.

(c) Entire Agreement. This Lease contains the entire agreement between the parties. No representative, agent or employee of Landlord has been authorized to make any representations, warranties or promises with respect to the letting, or to vary, alter or modify the provisions of this Lease. No additions, changes, modifications, renewals or extensions of this Lease, shall be binding unless reduced to writing and signed by both parties.

(d) Effective Law. This Lease shall be governed by, construed and enforced in accordance with the laws of the State of Colorado without giving effect to its principles of conflicts of law. Landlord and Tenant waive their right to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other, or with respect to any issue or defense raised therein,

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on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use and occupancy of the Premises, including summary proceedings and possession actions, and any emergency statutory or other statutory remedy.

(e) Commercial Lease. This Lease shall be construed as a commercial Lease.

(f) Captions. The captions of the Sections in this Lease and the Table of Contents are for reference purposes only and shall not in any way affect the meaning or interpretation of this Lease.

(g) Obligations Joint and Several. If there is more than one party tenant, their obligations under this Lease are joint and several. If Tenant is a partnership, the obligations of Tenant under this Lease are joint and several obligations of each of the partners and of the partnership.

(h) Counterparts. This Lease may be executed in one or more counterparts, each of which shall be an original, and all of which constitutes one and the same Lease.

(i) Landlord’s Performance of Tenant’s Obligations. The performance by Landlord of any obligation required of Tenant under this Lease shall not be construed to modify this Lease, nor shall it create any obligation on the part of Landlord with respect to any performance required of Tenant under this Lease, whether Landlord’s performance was undertaken with the knowledge that Tenant was obligated to perform, or whether Landlord’s performance was undertaken as a result of mistake or inadvertence.

(j) Remedies and Rights Not Exclusive. No right or remedy conferred upon Landlord shall be considered exclusive of any other right or remedy, but shall be in addition to every other right or remedy available to Landlord under this Lease or by law. Any right or remedy of Landlord, may be exercised from time to time, and as often as the occasion may arise. The granting of any right, remedy, option or election to Landlord under this Lease shall not impose any obligation on Landlord to exercise the right, remedy, option or election.

(k) Signature and Delivery by Landlord. This Lease is of no force and effect unless it is signed by Landlord and Tenant, and a signed copy of this Lease delivered by Landlord to Tenant. The mailing, delivery or negotiation of this Lease by Landlord or Tenant or any agent or attorney of Landlord or Tenant prior to the execution and delivery of this Lease as set forth in this subsection shall not be deemed an offer by Landlord or Tenant to enter into this Lease, whether on the terms contained in this Lease or on any other terms. Until the execution and delivery of this Lease as set forth in this subsection, Landlord or Tenant may terminate all negotiations and discussions of the subject matter of this Lease, without cause and for any reason, without recourse or liability.

(l) Inspection, Length of Time of Tenant’s Default. Nothing in this Lease requires Landlord at any time, to inspect the Premises to determine whether Tenant is in default of Tenant’s obligations under this Lease. Any default by Tenant of the provisions of this Lease for any length of time, and whether Landlord has direct or indirect knowledge or notice of the default, is not a waiver of Tenant’s default by Landlord, and Landlord has the right to declare Tenant in default, notwithstanding the length of time the default exists.

(m) No Offer. The submission of the Lease to Tenant shall not be deemed an offer by Landlord to rent the Premises to Tenant, such an offer only being made by the delivery to Tenant of a Lease signed by Landlord.

(n) Surrender. Neither the acceptance of keys to the Premises nor any other act or thing done by Landlord or any agent, employee or representative of Landlord shall be deemed to be an acceptance of a surrender of the Premises, excepting only an agreement in writing, signed by Landlord, accepting or agreeing to accept a surrender of the Premises.

(o) Drafting Ambiguities; Interpretation. In interpreting any provision of this Lease, no weight shall be given to nor shall any construction or interpretation by influenced by the fact that counsel for one of the parties drafted this Lease, each party recognizing that it and it’s counsel have had an opportunity to review this Lease and have contributed to the final form of this Lease. Unless otherwise specified, the words “include” and “including” and words of similar import shall be deemed to be followed by the words “but not limited to” and the word “or” shall be “and/or.”

(p) References. In all references to any persons, entities or corporations, the use of any particular gender or the plural or singular number is intended to include the appropriate gender or number as the text of this Lease may require.

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(q) Binding Effect. This Lease is binding upon and shall inure to the benefit of the parties, their legal representatives, successors and permitted assigns.

(r) Landlord Defined. The term “Landlord” in this Lease means and includes only the owner at the time in question of the Premises and, in the event of the sale or transfer of the Premises, Landlord shall be released and discharged from the provisions of this Lease thereafter accruing, but such provisions shall be binding upon each new owner of the Premises while such party is an owner.

(s) Time of the Essence. Time is of the essence of this Lease.

(t) No Recordation. Neither this Lease, nor any memorandum, affidavit or other writing with respect to this Lease, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant, and the recording thereof in violation of this provision shall make this Lease voidable at Landlord’s election.

Page 17

IN WITNESS WHEREOF, these presents have been executed as of the day and year first above written.

Landlord:

BOULDER ROAD LLC, a Colorado limited liability company

By:	/s/ Paul Tarell Jr.
Name:	Paul Tarell Jr.
Title:	Chief Financial Officer
DATE:	4-28-2015

Tenant:

GAIAM AMERICAS, INC., a Colorado corporation

By:	/s/ John Jackson
Name:	John Jackson
Title:	Vice President
DATE:	4-28-2015

Page 18

EXHIBIT A

Diagram of Building Showing Premises

(See Attached)

Page 19

EXHIBIT B

Legal Description of Property

Lot 1, NeoData Subdivision, recorded July 1, 1982 at Reception No. 500722, County of Boulder, State of Colorado.

Page 22

EX-10.7

EXHIBIT 10.7

FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE (“First Amendment”) is made and entered into as of this 3^rd day of September 2015 by and between BOULDER ROAD LLC, a Colorado limited liability company (“Landlord”), and GAIAM AMERICAS, INC., a Colorado corporation (“Tenant”).

WITNESSETH

WHEREAS, Landlord and Tenant are parties to that certain Lease Agreement dated January 1, 2015 (the “Lease”) for certain property more particularly describe therein (the “Premises”) located at 833 West South Boulder Road, Louisville, CO.

WHEREAS, Landlord and Tenant agree the Effective Date of this First Amendment is the 1^st day of October 2015.

WHEREAS, Landlord and Tenant desire to amend the Lease as hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing Recitals the mutual covenants herein contained, and good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties herby agree as follows:

1. Defined Terms. Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain unchanged and in full force and effect and are hereby ratified and confirmed by the parties hereto. Any capitalized term used in this First Amendment and not defined herein shall have the meaning ascribed to such term in the Lease.

2. Building D. Landlord and Tenant hereby agree to reduce the Tenant storage area, identified in the Lease as Bldg D Storage Area, from 922 square feet to 399 square feet. Additionally, Landlord and Tenant hereby agree to remove from the Tenant Premises the first floor room in Building D consisting of 916 square feet. Both modifications are shown and attached hereto as Exhibit A.

3. Building B. Landlord and Tenant herby agree to include in Tenant Premises an area in Building B totaling 3,221 square feet (the “Expansion Space”) as shown and attached hereto as Exhibit A.

4. Base Rent. Upon the effective date of this First Amendment, Base Rent for the Expansion Space is $9.80 per square foot, per year, subject to the terms and conditions as set forth for Base Rent in Section 4 of the Lease.

5. Tenant Improvement Allowance. Landlord agrees that it will pay up to $86,967 of the cost for Tenant Improvement work in the Expansion Space. Tenant agrees that it will provide to Landlord, in a manner and at a level of detail, reasonably requested by Landlord, all invoices, receipts or other documentation, to support costs paid by Landlord.

6. Access to Expansion Space. Tenant may have access to the Expansion Space prior to the Effective Date for the purpose of completing Tenant Improvement work, provided that all of the provisions of the Lease and this First Amendment shall apply to such early access except for the provisions involving the payment of Base Rent.

7. Revised Square Feet and Pro Rata Share. Upon the Effective Date of this First Amendment, Tenant Premises will be a total of 41,560 square feet. Tenant Pro Rata share, as defined in Section 4(c) of the Lease will be 27.66%, the numerator of which is 41,560 square feet and the denominator of which is 150,262 square feet.

8. Miscellaneous. With the exception of those terms and conditions specifically modified and amended herein, the Lease shall remain in full force and effect in accordance with all its terms and conditions. In the event of any conflict between the terms and conditions of this First Amendment and the terms and conditions of the Lease, the terms and conditions of this First Amendment shall control.

[SIGNATURE PAGE TO FOLLOW]

IN WITNESS WHEREOF, Landlord and Tenant, acting herein by duly authorized individuals, have caused these presents to be executed, effective as of the Effective Date set forth herein.

LANDLORD:
BOULDER ROAD, LLC a Colorado limited liability company
By:	/s/ Paul Tarell Jr.
Name:	Paul Tarell Jr.
Title:	Chief Financial Officer
Date:	September 3, 2015
TENANT:
GAIAM AMERICAS, INC a Colorado corporation
By:	/s/ Lynn Powers
Name:	Lynn Powers
Title:	Chief Executive Officer
Date:	September 3, 2015

EX-10.8

EXHIBIT 10.8

Gaia Inc.

Long-Term Deferred Equity Compensation Plan

1. Purpose. The purpose of this Gaia, Inc. Long-Term Deferred Equity Compensation Plan is to help align the interests of eligible participants with those of the Company’s shareholders and to help attract, retain and motive key personnel upon whose judgment, initiative and effort the successful conduct of the Company’s business is dependent.

2. Definitions. Wherever the following terms are used herein, they shall have the following meanings:

“Award” means a grant of Restricted Stock Units.

“Award Agreement” means an agreement entered into between the Company and a Participant setting forth the terms and conditions of an Award.

“Award Cycle” means a five-year period beginning on the first Award Date in a given Award Cycle during which the Committee (or the Chairman) may Award RSUs.

“Award Date” means the date on which an Award is made by the Committee or the Chairman hereunder.

“Board” means the Board of Directors of the Company.

“Change in Control” shall have the meaning set forth in Section 6 hereof.

“Committee” means the Compensation Committee of the Board, or such other committee of the Board as the Board may appoint to administer the Plan.

“Company” means Gaia, Inc., dba Gaiam TV, a Colorado corporation.

“Eligible Person” means any employee, officer or director of the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, as of the date of determination, the closing price of a Share as reported on the principal national securities exchange on which such Shares are listed or admitted to trading or, if such Shares are not so listed or admitted to trading, the average of the per Share closing bid price and the closing asked price on such date as quoted on the New York Stock Exchange or such other market in which such prices are regularly quoted. If the Shares are not traded on any exchange, Fair Market Value shall be determined by such other method as the Committee determines in good faith to be reasonable.

“Participant” or “Grantee” means an Eligible Person who is granted an Award under the Plan.

“Plan” means the Gaia, Inc. Long-Term Deferred Equity Compensation Plan as set forth herein, and as may be amended from time to time.

“Restricted Stock Unit” or “RSU” means the right to receive one Share from the Company on the terms of the Plan and the Award Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” means the Company’s Class A common shares, par value $ 0.0001 per share.

3. Administration.

3.1 Committee. The Plan shall be administered by the Committee, provided that the full Board may perform any function of the Committee hereunder (in which case, the term “Committee” shall refer to the Board). No member of the Committee will be liable for any action or determination made in good faith by the Committee with respect to the Plan or Award thereunder. The Committee, in its discretion, and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the Plan, to any person or persons selected by it, which delegation may be revoked by the Committee at any time.

3.2 Committee Authority. The Committee shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (i) select those Eligible Persons to whom Awards shall be granted under the Plan, after taking into account the recommendation of the Company’s Chairman, (ii) determine the times at which Awards may be granted, and the number of RSUs subject to each Award, (iii) determine the terms and conditions of each Award, (iv) interpret and construe the provisions of the Plan and terms of the Awards, and (v) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and interpret, amend or revoke any such rules. The Committee’s determinations under the Plan need not be uniform and may be made by the Committee selectively among Participants and Eligible Persons, whether or not such persons are similarly situated. All interpretations, determinations, and actions by the Committee shall be final, conclusive, and binding upon all parties.

4. Shares Subject to the Plan.

4.1 Number of Shares Reserved. Subject to the adjustment provisions below, the number of Shares with respect to which Awards may be issued or delivered under the Plan shall not exceed the equivalent of ten percent of fully diluted shares. Any Shares delivered in respect of Awards under the Plan shall consist of authorized and unissued shares, or treasury shares.

4.2 Share Replenishment. To the extent that any Award under the Plan is canceled, forfeited or otherwise terminated during an Award Cycle without delivery of Shares to the Participant, such Shares shall be available for future Awards under the Plan, provided that any Shares underlying RSUs that are forfeited within two-and-one-half (2 1/2) years of the first day of any Award Cycle may only be used to grant additional RSUs with respect to that Award Cycle and any forfeited RSUs after such two-and-one-half year period may not be used for Awards in that Award Cycle but shall be available for other award Cycles.

4.3 Adjustments. If any change with respect to the outstanding Shares occurs by reason of an recapitalization, reclassification, stock dividend, extraordinary dividend, stock split, reverse stock split or other distribution with respect to the Shares, or any merger, reorganization, consolidation, combination, spin-off, or other similar corporate transaction, or any other change affecting the Shares, the Committee shall, in the manner and to the extent it deems equitable adjust the number and kind of Shares subject to outstanding RSUs.

5. Eligibility and Terms.

5.1 Grants. During each Award Cycle, the Committee may grant Awards to any Eligible Person selected by it which Award shall be subject to such restrictions, terms and conditions as the Committee may in its discretion determine and set forth in an Award Agreement. Notwithstanding the foregoing, during each Award Cycle, the Company’s Chairman shall be entitled to grant Awards to any Eligible Person who is not a “named executive officer” (as such term is defined in the securities laws), provided that any such grant shall be subject to and consistent with guidelines previously agreed to by the Committee. The Chairman shall notify the Committee of any such Award, including the Eligible Person(s) to whom an Award has been made and the number of RSUs that were granted pursuant to the Award, at the Committee meeting following such grant.

5.2 Vesting. The RSUs shall vest at such time or times and on such terms and conditions as the Committee may determine and as are set forth in the Award Agreement.

5.3 Delivery of Shares. As RSUs vest, the Company shall deliver a corresponding number of Shares at the time or times set forth in the Award Agreement.

5.4 Dividend Equivalents. Restricted Stock Units may be credited with dividend equivalents with respect to the Shares subject to the Restricted Stock Units, as set forth in the Award Agreement. Such dividend equivalents will be paid at the time the underlying Restricted Stock Unit is payable. Dividend equivalent rights shall be subject to forfeiture under the same conditions as apply to the underlying Restricted Stock Units.

5.5 No Rights as Shareholder. Participants shall have no dividend, voting, or any other rights as a stockholder of the Company with respect to any Restricted Stock Units. The rights of the recipient of Restricted Stock Units to benefits under the Plan shall be solely those of a general, unsecured creditor of the Company.

6. Change in Control.

6.1 Effect of Change in Control. In the event of a Change in Control, the Committee is authorized (but not obligated) to make adjustments in the terms and conditions of outstanding Awards, including without limitation the following (or any combination thereof): (i) continuation or assumption of such outstanding Awards under the Plan by the Company (if it is the surviving company or corporation) or by the surviving company or corporation or its parent; and (ii) substitution by the surviving company or corporation or its parent of awards with substantially the same terms for such outstanding Awards.

6.2 Definition of Change in Control. For purposes of the Plan, unless otherwise defined in an Award Agreement, “Change in Control” shall mean:

(a) an acquisition (other than directly from the Company) of any voting securities of the Company (the “Voting Securities”) by any “person or group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act immediately after which such person or group has “Beneficial Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of the combined voting power of the Company’s then outstanding Voting Securities; or

(b) the consummation of (A) a merger, consolidation or reorganization involving the Company, unless the company resulting from such merger, consolidation or reorganization (the “Surviving Corporation”) shall adopt or assume this Plan and the shareholders of the Company immediately before such merger, consolidation or reorganization own, directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the Surviving Corporation in substantially the same proportion as their ownership immediately before such merger, consolidation or reorganization, or (B) a sale or transfer of all or substantially all of the assets of the Company.

7. Transfer Restrictions. No Award granted under the Plan may be sold, transferred, assigned, hypothecated or subject to any encumbrance, pledge, or charge until all applicable restrictions are removed or have expired, unless otherwise specifically approved by the Committee. Any such action shall be null and void and shall result in the immediate forfeiture of the entire Award made to the Participant who attempted to effect such transfer.

8. Restrictive Covenants.

8.1 Non-Disparagement/Non-Competition/Non-Solicitation. (1) (A) Non-Disparagement. During Grantee’s employment and thereafter, Grantee will not make any disclosure, issue any public statements or otherwise cause to be disclosed any information which is designed, intended or might reasonably be anticipated to discourage suppliers, customers or employees of the Company or otherwise have a negative impact or adverse effect on the Company. (B) Post-employment Assistance. Following Grantee’s employment, Grantee will provide assistance reasonably requested by the Company in connection with actions taken by Grantee while employed by the Company, including but not limited to assistance in connection with any lawsuits or other claims against the Company arising from events during the period in which Grantee was employed. (C) Confidential Information. In consideration of the Award, the Grantee agrees (i) not to disclose to any third party any trade secrets or any other confidential information of the Company (including but not limited to cost or pricing information, customer lists, commission plans, supply information, internal business procedures, market studies, expansion plans, potential acquisitions, terms of any acquisition or potential acquisition or the existence of any negotiations concerning the same or any similar non-public information relating to the Company’s internal operations, business policies or practices) acquired during Grantee’s employment by the Company or after the termination of such employment, or (ii) use or permit the use of any of the Company’s trade secrets or confidential information in any way to compete (directly or indirectly) with the Company or in any other manner adverse to the Company. (D) Non-Competition/Non-Solicitation. Without the prior written consent of the Company, signed by the Company’s Chairman, Grantee will not, during the term of Grantee’s employment by the Company or for a period of two (2) years thereafter accept employment with, serve as a consultant to, or accept compensation from any person, firm or corporation (including any new business started by Grantee, either alone or with others) whose products and or services compete with those offered by the Company, in any geographic market in which the Company is then doing business or to Grantee’s knowledge plans to do business. Without the prior written consent of the Company, signed by the Company’s Chairman, Grantee will not, during the term of

Grantee’s employment by the Company or for a period of five (5) years thereafter (i) contact or solicit any customers of the Company for the purposes of diverting any existing or future business of such customers to a competing source, (ii) contact or solicit any vendors to the Company (directly or indirectly) for the purpose of causing, inviting or encouraging any such vendor to alter or terminate his, her or its business relationship with the Company, or (iii) contact or solicit any employees of the Company (directly or indirectly) for the purpose of causing, inviting or encouraging any such employee to alter or terminate his, her or its employment relationship with the Company.

8.2 Enforcement of Rights. (A) The Company will be entitled to enforce its rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights to which it may be entitled. Grantee agrees and acknowledges that money damages may not be an adequate remedy for breach of the provisions of this Agreement and that the Company may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement. (B) Grantee agrees that this covenant is reasonable with respect to its duration, geographic area and scope. It is the desire and intent of the parties that the provisions of this Section 8 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this Section 8 shall be adjudicated to be invalid or unenforceable, this Section 8 shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable, such deletion to apply only with respect to the operation of this Section 8 in the particular jurisdiction in which such adjudication is made.

9. General Provisions.

9.1 Award Agreement. An Award under the Plan shall be evidenced by an Award Agreement in a written form approved by the Committee setting forth the principal terms of the Award. The grant of an Award under the Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan or as are expressly set forth in the Award Agreement.

9.2 No Right to Continued Employment. Nothing in the Plan, in the grant of any Award or in any Award Agreement shall confer upon any Eligible Person or any Participant any right to continue in the company’s employ or service; interfere in any way with the right of the Company to terminate such individual’s employment or service at any time; or give an Eligible Person or Participant any claim to be granted an Award under the Plan or to be treated uniformly with other Participants or employees.

9.3 Delivery of Shares. The Committee may determine, in its discretion, the manner of delivery of Shares, as the case may be, to be issued under the Plan, which may be by delivery of share certificates, electronic account entry into new or existing accounts or any other means as the Committee, in its discretion, deems appropriate.

9.4 Securities Law Compliance. No Shares will be issued or transferred pursuant to an Award unless and until all then applicable requirements imposed by securities laws, rules and regulations and by any regulatory agencies having jurisdiction, and by any exchanges upon

which the Shares may be listed, have been fully met. As a condition precedent to the issuance of Shares pursuant to the grant or exercise of an Award, the Company may require the Participant to take any reasonable action to meet such requirements. The Committee may impose such conditions on any Share issuable under the Plan as it may deem advisable, including, without limitation, restrictions under the Securities Act, under the requirements of any exchange upon which such shares of the same class are then listed, and under any blue sky or other securities laws applicable to such Share. The Committee may also require the Participant to represent and warrant at the time of issuance or transfer that Shares are being acquired only for investment purposes and without any current intention to sell or distribute such Share.

9.5 Tax Withholding. The Participant shall be responsible for payment of any federal, state or local taxes required by law to be paid or withheld as a result of an Award. Any required withholdings shall be paid or, in the discretion, and with the express written consent, of the Committee, otherwise satisfied by the Participant on or prior to the payment or other event that results in taxable income in respect of an Award. At the election of the Company, such withholding amounts may be paid by check payable to the Company, in previously-owned Shares, by the Company withholding Shares issuable or deliverable hereunder, or in any combination of the above, provided that the Company is not required to accept fractional shares in payment.

9.6 Severability. If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.

9.7 Governing Law. The Plan and all rights hereunder shall be subject to and interpreted in accordance with the laws of the State of Colorado without regard to the principles of conflicts of laws.

9.8 Amendment and Termination. The Board may from time to time and in any respect, amend, modify, suspend or terminate the Plan. Notwithstanding the foregoing, no amendment, modification, suspension or termination of the Plan shall adversely affect any Award theretofore granted without the consent of a majority of the RSUs held by Participants in a given Award Cycle.

9.9 Section 409A. To the extent any Award under this Plan is considered to be subject to Section 409A of the Internal Revenue Code of 1986, such Award is intended to comply, and shall be interpreted and applied consistent, with such section 409A. Any provision of the Plan document that is determined to violate Section 409A shall be void and without effect and any provision that is required to appear in this plan that is not expressly set forth herein shall be deemed to be set forth herein and the Plan shall be administered in all respects as if such provision(s) were expressly set forth herein.

EX-10.9

EXHIBIT 10.9

FORM OF

Gaia, Inc.

Restricted Stock Unit Award Agreement

This RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) made as of this             , 2015 , between Gaia, Inc., a Colorado corporation (the “Company”), and                     (the “Grantee”), is made pursuant to the terms of the Gaia, Inc. Long-Term Deferred Equity Compensation Plan (the “Plan”). Capitalized terms used herein but not defined shall have the meanings set forth in the Plan.

Section 1. Restricted Stock Unit Award. The Company hereby grants to the Grantee, on the terms and conditions hereinafter set forth, an Award of                      Restricted Stock Units, effective as of the Award Date. The RSUs are notional, non-voting units of measurement, which will entitle the Grantee to receive a payment, subject to the terms hereof, in Shares.

Section 2. Vesting of Awards. The RSUs will vest on             , provided that (A) the separation of the Company from Gaiam Inc. has occurred by that date and (B) the Grantee is still an employee or director of the Company on such date. The RSUs (including any Dividend Equivalents declared thereon) prior to vesting shall be forfeited and of no further force and effect if the separation does not occur or if the Grantee’s employment terminates for any reason before such date, including, but not limited to, involuntary termination.

Section 3. Rights of Grantee. Subject to the otherwise applicable provisions of this Agreement, the Grantee shall have no dividend, voting, or any other rights as a stockholder of the Company with respect to any RSUs. The grant of an Award of RSUs pursuant to the Plan shall not be deemed the grant of a property interest in any assets of the Company and the rights of the recipient of RSUs to benefits under the Plan shall be solely those of a general, unsecured creditor of the Company. Notwithstanding the foregoing, if the Company declares a dividend on its’ Shares, as of the record date for such dividend, the Grantee shall be credited with an additional number of RSUs equal to (A) the number of RSUs the Grantee holds on such record date, multiplied by (B) the amount paid as a dividend on each Share on such date, divided by the Fair Market Value of a Share on the record date.

Section 4. Payment of Award

(a) General. Payment with respect to the vested RSUs shall be made in Shares within sixty (60) days following the date on which such RSUs vest.

(b) Withholding. The payment of the RSUs is subject to withholding of all Federal, state and local income taxes and other amounts required by law to be paid or withheld in the amount determined by the Company (the “Withholding Tax Amount”). Unless you elect otherwise and the Company consents the Company shall satisfy the Withholding Tax Amount by withholding from the Shares to be delivered to the Grantee that number of Shares having an aggregate Fair Market Value on the relevant payment date equal to the Withholding Tax Amount. By the Grantee’s payment of the Withholding Tax Amount by (i) wire transfer to such account as the Company may direct, (ii) in Shares if the Company approves.

Section 5. Restrictions on Transfer. The RSUs covered hereby may not be sold, assigned, transferred, encumbered, hypothecated or pledged by the Grantee and such action shall be null and void and shall result in the immediate forfeiture of the entire award made to the Grantee who attempted to effect such transfer.

Section 6. Investment Representation. Upon the acquisition of the Shares at a time when there is not in effect a registration statement under the Securities Act of 1933 relating to the Shares, the Grantee hereby represents and warrants, and by virtue of such acquisition shall be deemed to represent and warrant, to the Company that the Shares shall be acquired for investment and not with a view to the distribution thereof, and not with any present intention of distributing the same, and the Grantee shall provide the Company with such further representations and warranties as the Company may require in order to ensure compliance with applicable federal and state securities, blue sky and other laws. No Share shall be acquired unless and until the Company and/or the Grantee shall have complied with all applicable federal or state registration, listing and/or qualification requirements and all other requirements of law or of any regulatory agencies having jurisdiction, unless the Compensation Committee of the Board has received evidence satisfactory to it that the Grantee may acquire the Shares pursuant to an exemption from registration under the applicable securities laws. Any determination in this connection by the Committee shall be final, binding and conclusive. The Company reserves the right to legend any certificate or book entry representation of the Shares conditioning sales of such shares upon compliance with applicable federal and state securities laws and regulations.

Section 7. Adjustments. The Award shall be subject to the provisions of Section 4.3 of the Plan relating to adjustments for recapitalizations, reclassifications and other changes in the Company’s corporate structure.

Section 8. No Right of Continued Employment. Nothing in this Agreement shall confer upon the Grantee any right to continue in the employment of the Company or any Subsidiary or to interfere in any way with any right of the Company to terminate the Grantee’s Service at any time.

Section 9. Construction. This Agreement and the Award hereunder are granted by the Company pursuant to the Plan and are in all respects subject to the terms and conditions of the Plan. The Grantee hereby acknowledges that a copy of the Plan has been delivered to the Grantee and accepts the RSUs hereunder subject to all terms and provisions of the Plan, which is incorporated herein by reference. In the event of a conflict or ambiguity between any term or provision contained herein and a term or provision of the Plan, the Plan will govern and prevail. The construction of and decisions under the Plan and this Agreement are vested in the Committee, whose determinations shall be final, conclusive and binding upon the Grantee and the Company.

Section 10. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Colorado, without regard to the principles of conflicts of laws.

Section 11. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

Section 12. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of the Grantee and the successors of the Company.

Section 13. Notices. Any notice that is required under this Agreement shall be in writing and delivered personally or by mail, addressed (a) if to the Company, at its corporate headquarters, attention: Jirka Rysavy and Paul Tarell, Jr. and (b) if to the Grantee, at the address in the Grantee’s then current personnel records. Such notice shall be deemed given upon receipt.

Section 14. Entire Agreement. This Agreement and the Plan constitute the entire agreement between the parties with respect to the subject matter hereof and thereof, merging any and all prior agreements.

Section 15. Unsecured Creditor Status. The grant of RSUs constitutes a mere promise by the Company to pay the Grantee the benefits described in the grant and the Grantee shall be a general unsecured creditor of the Company with respect to the benefits payable hereunder.

Section 16. Acceptance. The Grantee acknowledges receipt of a copy of the Plan and this Agreement and that he or she has read and understands the terms and provisions thereof, and accepts the RSUs subject to all of the terms and conditions of the Plan and this Agreement. If a Grantee does not return an executed copy of this Agreement within seven (7) days of delivery of this Agreement to such Grantee, the Award shall be null and void and of no effect.

Section 17. Section 409A. This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended and shall be construed and interpreted in a manner that is consistent with the requirements of that provision so as to avoid additional taxes or penalties thereunder.

Section18. Restrictive Covenants. (1) (A) Non-Disparagement. During Grantee’s employment and thereafter, Grantee will not make any disclosure, issue any public statements or otherwise cause to be disclosed any information which is designed, intended or might reasonably be anticipated to discourage suppliers, customers or employees of the Company or otherwise have a negative impact or adverse effect on the Company. (B) Post-employment Assistance. Following Grantee’s employment, Grantee will provide assistance reasonably requested by the Company in connection with actions taken by Grantee while employed by the Company, including but not limited to assistance in connection with any lawsuits or other claims against the Company arising from events during the period in which Grantee was employed. (C) Confidential Information. In consideration of the Award, the Grantee agrees (i) not to disclose to any third party any trade secrets or any other confidential information of the Company (including but not limited to cost or pricing information, customer lists, commission plans, supply information, internal business procedures, market studies, expansion plans, potential acquisitions, terms of any acquisition or potential acquisition or the existence of any negotiations concerning the same or any similar non-public information relating to the Company’s internal operations, business policies or practices) acquired during Grantee’s employment by the Company or after the termination of such employment, or (ii) use or permit the use of any of the Company’s trade secrets or confidential information in any way to compete (directly or indirectly) with the Company or in any other manner adverse to the Company. (D) Non-Competition/Non-Solicitation. Without the prior written consent of the Company, signed by the Company’s Chairman, Grantee will not, during the term of Grantee’s employment by the Company or for a period of two (2) years thereafter accept employment with, serve as a consultant to, or accept compensation from any person, firm or corporation (including any new business started by Grantee, either alone or with others) whose products and or services compete with those offered by the Company, in any geographic market in which the Company is then doing business or to Grantee’s knowledge plans to do business. Without the prior written consent

of the Company, signed by the Company’s Chairman, Grantee will not, during the term of Grantee’s employment by the Company or for a period of five (5) years thereafter (i) contact or solicit any customers of the Company for the purposes of diverting any existing or future business of such customers to a competing source, (ii) contact or solicit any vendors to the Company (directly or indirectly) for the purpose of causing, inviting or encouraging any such vendor to alter or terminate his, her or its business relationship with the Company, or (iii) contact or solicit any employees of the Company (directly or indirectly) for the purpose of causing, inviting or encouraging any such employee to alter or terminate his, her or its employment relationship with the Company.

(2) Enforcement of Rights. (A)The Company will be entitled to enforce its rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights to which it may be entitled. Grantee agrees and acknowledges that money damages may not be an adequate remedy for breach of the provisions of this Agreement and that the Company may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement. (B) Grantee agrees that this covenant is reasonable with respect to its duration, geographic area and scope. It is the desire and intent of the parties that the provisions of this Section 18 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular portion of this Section 18 shall be adjudicated to be invalid or unenforceable, this Section 18 shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable, such deletion to apply only with respect to the operation of this Section 18 in the particular jurisdiction in which such adjudication is made.

IN WITNESS WHEREOF, the Company and the Grantee have executed this Agreement, effective as of the date first above written.

GAIA, INC.

By:

Name:

Title:

GRANTEE

By:

Name:

EX-10.10

EXHIBIT 10.10

FORM OF PROPOSED

GAIA, INC.

2015 LONG-TERM INCENTIVE PLAN

Section 1. Purpose. The purpose of this Plan is to advance the interests of Gaia, Inc. and its shareholders by providing incentives to certain Eligible Persons (as defined below) who contribute significantly to the strategic and long-term performance objectives and growth of the Company.

Section 2. Definitions. Certain capitalized terms applicable to this Plan are set forth in Appendix A.

Section 3. Administration. The Committee shall administer this Plan and shall have all the powers vested in it by the terms of this Plan, such powers to include exclusive authority to select the Eligible Persons to be granted Awards under this Plan, to determine the type, size, terms and conditions of the Award to be made to each Eligible Person selected, to modify or waive the terms and conditions of any Award that has been granted, to determine the time when Awards will be granted, to establish performance objectives, to make any adjustments necessary or desirable as a result of the granting of Awards to Eligible Persons located outside the United States and to prescribe the form of the agreements evidencing Awards made under this Plan. Awards may, in the discretion of the Committee, be made under this Plan in assumption of, or in substitution for, outstanding Awards previously granted by the Company, or an entity acquired by the Company or with which the Company combines. The number of Class A Shares underlying such substitute Awards shall be counted against the aggregate number of Class A Shares available for Awards under this Plan.

The Committee is authorized to interpret this Plan and the Awards granted under this Plan, to establish, amend and rescind any rules and regulations relating to this Plan, and to make any other determinations that it deems necessary or desirable for the administration of this Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in this Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable to carry it into effect. Any decision of the Committee in the interpretation and administration of this Plan, as described in this Plan, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. The Committee may act only by a majority of its members in office, except that the Committee may authorize any one or more of its members or any officer of the Company to execute and deliver documents or to take any other ministerial action on behalf of the Committee with respect to Awards made to Participants or to be made to Eligible Persons. Notwithstanding the foregoing or any other provision of this Plan, the Committee shall not have the authority to accelerate the time or schedule of any payment in a manner which is not permitted under Code Section 409A, or to grant or amend any Award in any manner which would result in an inclusion of any amount in gross income under Code Section 409A(a)(1).

No member of the Committee and no officer of the Company shall be liable for anything done or omitted to be done by such member or officer, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under this Plan, except for such member’s or officer’s own willful misconduct or as expressly provided by law. In addition to all other rights of indemnification and reimbursement to which a member of the Committee and an officer of the Company may be entitled, Gaia shall indemnify and hold harmless each such member or officer who was or is a party or is threatened to be made a party to any threatened, pending or completed proceeding or suit in connection with the performance of duties under this Plan against expenses (including reasonable attorneys’ fees), judgments, fines, liabilities, losses and amounts paid in settlement actually and reasonably incurred by him in connection with such proceeding or suit, except for his own willful misconduct or as expressly provided otherwise by law. Expenses (including reasonable attorneys’ fees) incurred by such a member or officer in defending any such proceeding or suit shall be paid by Gaia in advance of the final disposition of such proceeding or suit upon receipt of a written affirmation by such member or officer of his good faith belief that he has met the standard of conduct necessary for indemnification and a written undertaking by or on behalf of such member or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by Gaia as authorized in this Section.

Section 4. Participation. Consistent with the purposes of this Plan, the Committee shall have exclusive power to select the Eligible Persons who may participate in this Plan and be granted Awards under this Plan. Eligible Persons may be selected individually or by groups or categories, as determined by the Committee in its discretion.

Section 5. Awards under this Plan.

(a) Types of Awards. Awards under this Plan may include, but need not be limited to, one or more of the following types, either alone or in any combination thereof: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv) Restricted Stock Units, (v) Performance Grants and (vi) any other type of Award deemed by the Committee in its discretion to be consistent with the purposes of this Plan (including, but not limited to, Awards of or options or similar rights granted with respect to unbundled stock units or components thereof, and Awards to be made to Participants who are foreign nationals or are employed or performing services outside the United States).

(b) Maximum Number of Shares that May be Issued. There may be issued under this Plan (as Restricted Stock, as Restricted Stock Units, in payment of Performance Grants, pursuant to the exercise of Stock Options or Stock Appreciation Rights or in payment of or pursuant to the exercise of such other Awards as the Committee, in its discretion, may determine) an aggregate of not more than                     (                    ) Class A Shares, subject to adjustment as provided in Section 15. No Eligible Person may receive Awards under this Plan for more than 100,000 Class A Shares in any one fiscal year of the Company, subject to adjustment as provided in Section 15. The maximum aggregate number of Class A Shares that may be issued pursuant to the exercise of Incentive Stock Options shall be                     (                    ), subject to adjustment as provided in Section 15. Class A Shares issued pursuant to this Plan may be either authorized but unissued

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shares, treasury shares, reacquired shares or any combination thereof. If any Class A Shares issued as Restricted Stock, Restricted Stock Units or otherwise subject to repurchase or forfeiture rights are reacquired by the Company pursuant to such rights or, if any Award is canceled, terminates or expires unexercised, any Class A Shares that would otherwise have been issuable pursuant thereto will be available for issuance under new Awards.

(c) Rights with Respect to Class A Shares and Other Securities. Except as provided in Section 8(d) with respect to Awards of Restricted Stock and unless otherwise determined by the Committee in its discretion, a Participant to whom an Award is made (and any person succeeding to such a Participant’s rights pursuant to this Plan) shall have no rights as a shareholder with respect to any Class A Shares or as a holder with respect to other securities, if any, issuable pursuant to any such Award until the date of the issuance of a book entry or stock certificate to such Participant for such Class A Shares or other instrument of ownership, if any. Except as provided in Section 15, no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities, other property or other forms of consideration, or any combination thereof) for which the record date is prior to the date such book entry or stock certificate or other instrument of ownership, if any, is required to be issued based upon the date any Award was exercised. In all events, a Participant with whom an Award agreement is made to issue Class A Shares in the future shall have no rights as a shareholder with respect to such Class A Shares related to such agreement until issuance to such Participant of a book entry or stock certificate representing such shares.

Section 6. Stock Options. The Committee may sell Purchased Options or grant other Stock Options either alone, or in conjunction with other Awards, either at the time of grant or by amendment thereafter; provided that an Incentive Stock Option may be granted only to Eligible Persons who are employees of Gaia (or any parent or subsidiary of Gaia as defined in Sections 424(e) and 424(f) of the Code) and who have other Awards only to the extent that such other Awards do not disqualify the Incentive Stock Option’s status as such under the Code. Each Stock Option granted or sold under this Plan shall be evidenced by an agreement in such form as the Committee shall prescribe from time to time in accordance with this Plan and shall comply with the applicable terms and conditions of this Plan, and with such other terms and conditions, including, but not limited to, restrictions upon the Stock Option or the Class A Shares issuable upon exercise thereof, as the Committee, in its discretion, shall establish.

(a) The exercise price of a Stock Option shall be equal to or greater than the Fair Market Value of the Class A Shares subject to such Stock Option at the time the Stock Option is granted, as determined by the Committee; provided, however, that, in the case of an Incentive Stock Option granted to a Ten Percent Employee, such exercise price shall not be less than 110% of such Fair Market Value at the time the Stock Option is granted. Notwithstanding the preceding sentence, a Stock Option, including an Incentive Stock Option, may be granted with an exercise price less than one hundred percent (100%) of the Fair Market Value of the Class A Shares subject to the Stock Option at the time the Stock Option is granted if such Stock Option is granted pursuant to an assumption or substitution for another option in a manner consistent with the applicable provisions of the Code.

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(b) The Committee shall determine the number of Class A Shares to be subject to each Stock Option. In the case of a Stock Option awarded in conjunction with another Award, the number of Class A Shares subject to an outstanding Stock Option may be reduced on an appropriate basis to the extent that the other Award has been exercised, paid to or otherwise received by the Participant, as determined by the Committee.

(c) Any Stock Option may be exercised during its term only at such time or times and in such installments as the Committee may establish.

(d) A Stock Option shall not be exercisable:

(i) in the case of any Incentive Stock Option granted to a Ten Percent Employee, after the expiration of five years from the date it is granted, and, in the case of any other Stock Option, after the expiration of ten years from the date it is granted; and

(ii) unless payment in full is made for the shares being acquired thereunder at the time of exercise as provided in Section 6(i).

(e) The Committee shall determine in its discretion and specify in each agreement evidencing a Stock Option the effect, if any, the termination of the Participant’s employment with or performance of services for the Company shall have on the exercisability of the Stock Option; provided, however, that an Incentive Stock Option shall not be exercisable at a time that is beyond the time an Incentive Stock Option may be exercised in order to qualify as such under the Code and provided, further, that if a Participant’s employment is terminated for a reason other than “cause” (as defined in such Participant’s Award agreement or employment agreement, if any), then such Participant’s right to exercise his or her Stock Options (to the extent that the Participant is entitled to exercise on the date employment terminates) shall continue until the earlier of the option expiration date or (i) at least six (6) months from the date of termination if termination was caused by death or disability and (ii) at least thirty (30) days from the date of termination if termination was caused other than by death or disability.

(f) It is the intent of Gaia that Nonqualified Stock Options granted under this Plan not be classified as Incentive Stock Options, that the Incentive Stock Options granted under this Plan be consistent with and contain or be deemed to contain all provisions required under Section 422 and the other appropriate provisions of the Code and any implementing regulations (and any successor provisions thereof), and that any ambiguities in construction shall be interpreted in order to effectuate such intent. If a Stock Option is intended to be an Incentive Stock Option, and if for any reason such Stock Option (or portion thereof) shall fail to qualify as an Incentive Stock Option, then, to the extent of such failure, such Stock Option (or portion thereof) shall be regarded as a Nonqualified Stock Option granted under this Plan; provided, that, such Stock Option (or portion thereof) otherwise complies with this Plan’s requirements relating to

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Nonqualified Stock Options. In no event shall any member of the Committee or the Company (or its employees, officers or directors) have any liability to any Participant (or any other person) due to the failure of a Stock Option to qualify for any reason as an Incentive Stock Option.

(g) To the extent that the aggregate Fair Market Value (determined at the time of grant) of the Class A Shares with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company) exceeds one hundred thousand dollars ($100,000), the Incentive Stock Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as Nonqualified Stock Options.

(h) A Purchased Option may contain such additional terms not inconsistent with this Plan, including but not limited to the circumstances under which the purchase price of such Purchased Option may be returned to the holder of the Purchased Option, as the Committee may determine in its sole discretion.

(i) For purposes of payments made to exercise Stock Options, such payment shall be made in such form (including, but not limited to, cash, Class A Shares, the surrender of all or part of an Award or another outstanding Award under this Plan or any combination thereof) as the Committee may determine in its discretion.

Section 7. Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights either alone, or in conjunction with other Awards, either at the time of grant or by amendment thereafter. Each Award of Stock Appreciation Rights granted under this Plan shall be evidenced by an agreement in such form as the Committee shall prescribe from time to time in accordance with this Plan and shall comply with the applicable terms and conditions of this Plan, and with such other terms and conditions, including, but not limited to, restrictions upon the Award of Stock Appreciation Rights or the Class A Shares issuable upon exercise thereof, as the Committee, in its discretion, shall establish.

(a) The Committee shall determine the number of Class A Shares to be subject to each Award of Stock Appreciation Rights. In the case of an Award of Stock Appreciation Rights awarded in conjunction with another Award, the number of Class A Shares subject to an outstanding Award of Stock Appreciation Rights may be reduced on an appropriate basis to the extent that the other Award has been exercised, paid to or otherwise received by the Participant, as determined by the Committee.

(b) The Committee shall determine in its discretion and specify in each agreement evidencing an Award of Stock Appreciation Rights the effect, if any, the termination of the Participant’s employment with or performance of services for the Company shall have on the exercisability of the Award of Stock Appreciation Rights.

(c) An Award of Stock Appreciation Rights shall entitle the holder to exercise such Award or to surrender unexercised another Award (or any portion of such other Award) to Gaia and to receive from Gaia in exchange thereof, without payment to Gaia, that number of Class A Shares having an aggregate value equal to (or, in the discretion of

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the Committee, less than) the excess of the Fair Market Value of one share, at the time of such exercise, over the exercise price, times the number of shares subject to the Award, or portion thereof, that is so exercised or surrendered, as the case may be. The Committee shall be entitled in its discretion to elect to settle the obligation arising out of the exercise of a Stock Appreciation Right by the payment of cash or Other Gaia Securities or property, or other forms of payment or any combination thereof, as determined by the Committee, equal to the aggregate value of the Class A Shares it would otherwise be obligated to deliver. Any such election by the Committee shall be made as soon as practicable after the receipt by the Committee of written notice of the exercise of the Stock Appreciation Right.

(d) A Stock Appreciation Right may provide that it shall be deemed to have been exercised at the close of business on the business day preceding the expiration date of the Stock Appreciation Right or of the related Stock Option (or other Award), or such other date as specified by the Committee, if at such time such Stock Appreciation Right has a positive value. Such deemed exercise shall be settled or paid in the same manner as a regular exercise thereof as provided in Section 7(c).

Section 8. Restricted Stock and Restricted Stock Units. The Committee may grant Awards of Restricted Stock and Restricted Stock Units either alone, or in conjunction with other Awards, either at the time of grant or by amendment thereafter. Each Award of Restricted Stock or Restricted Stock Units under this Plan shall be evidenced by an agreement in such form as the Committee shall prescribe from time to time in accordance with this Plan and shall comply with the applicable terms and conditions of this Section and this Plan, and with such other terms and conditions as the Committee, in its discretion, shall establish.

(a) The Committee shall determine:

(i) the number of Class A Shares to be issued to a Participant pursuant to an Award of Restricted Stock,

(ii) the number of Class A Shares to which an Award of Restricted Stock Units relates,

(b) The Committee, in its discretion, may allow for an Award of Restricted Stock or Restricted Stock Units to be settled in cash, other consideration, or both.

(c) Until the expiration of such period as the Committee shall determine from the date on which the Award is granted and subject to such other terms and conditions as the Committee in its discretion shall establish (the “Restricted Period”), a Participant to whom an Award of Restricted Stock is made shall be issued, but shall not be entitled to the delivery of, a book entry or stock certificate representing the Class A Shares subject to such Award.

(d) Unless otherwise determined by the Committee in its discretion, a Participant to whom an Award of Restricted Stock has been made (and any person succeeding to such a participant’s rights pursuant to this Plan) shall have, after issuance of a certificate for the number of Class A Shares awarded and prior to the expiration of

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the Restricted Period, ownership of such Class A Shares, including the right to vote such Class A Shares and to receive dividends or other distributions made or paid with respect to such Class A Shares (provided that such Class A Shares, and any new, additional or different shares, or Other Gaia Securities or property, or other forms of consideration that the Participant may be entitled to receive with respect to such Class A Shares as a result of a stock split, stock dividend or any other change in the corporation or capital structure of Gaia, shall be subject to the restrictions set forth in this Plan as determined by the Committee in its discretion), subject, however, to the options, restrictions and limitations imposed thereon pursuant to this Plan.

(e) The Committee shall determine in its discretion and specify in each agreement evidencing an Award of Restricted Stock or Restricted Stock Units the effect, if any, the termination of the Participant’s employment with or performance of services for the Company during the Restricted Period shall have on such Award of Restricted Stock.

(f) The Committee may grant Awards of Dividend Equivalents to Participants in connection with Awards of Restricted Stock Units. The Committee may provide, at the date of grant or thereafter, that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Class A Shares, or other investment vehicles as the Committee may specify; provided that, unless otherwise determined by the Committee, Dividend Equivalents shall be subject to all conditions and restrictions of the underlying Restricted Stock Units to which they relate.

Section 9. Performance Grants. The Committee may grant Awards of Performance Grants either alone, or in conjunction with other Awards, either at the time of grant or by amendment thereafter. The Award of a Performance Grant to a Participant will entitle him to receive a specified amount determined by the Committee (the “Actual Value”), if the terms and conditions specified in this Plan and in the Award are satisfied. Each Award of a Performance Grant shall be subject to the applicable terms and conditions of this Plan, and to such other terms and conditions, including but not limited to, restrictions upon any cash, Class A Shares, Other Gaia Securities or property, or other forms of payment, or any combination thereof, issued with respect to the Performance Grant, as the Committee, in its discretion, shall establish, and shall be embodied in an agreement in such form and substance as is determined by the Committee.

(a) The Committee shall determine the value or range of values of a Performance Grant to be awarded to each Participant selected for an Award and whether such a Performance Grant is granted in conjunction with another Award. As determined by the Committee, the maximum value of each Performance Grant (the “Maximum Value”) shall be: (i) an amount fixed by the Committee at the time the Award is made or amended thereafter, (ii) an amount that varies from time to time based in whole or in part on the then current value of the Class A Shares, Other Gaia Securities or property, or other securities or property, or any combination thereof or (iii) an amount that is determinable from criteria specified by the Committee. Performance Grants may be issued in different classes or series having different names, terms and conditions. In the case of a Performance Grant awarded in conjunction with another Award, the Performance Grant may be reduced on an appropriate basis to the extent that the other Award has been exercised, paid to or otherwise received by the Participant, as determined by the Committee.

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(b) The award period (“Award Period”) related to any Performance Grant shall be a period determined by the Committee. At the time each Award is made or within the first 90 days of any performance period, the Committee shall establish performance objectives to be attained within the Award Period as the means of determining the Actual Value of such a Performance Grant. The performance objectives shall be based on such measure or measures of performance, which may include, but need not be limited to, the performance of the Participant, the Company or one or more of its divisions or units, or any combination of the foregoing, as the Committee shall determine, and may be applied on an absolute basis or be relative to industry or other indices or any combination thereof. The Actual Value of a Performance Grant shall be equal to its Maximum Value only if the performance objectives are attained in full, but the Committee shall specify the manner in which the Actual Value of Performance Grants shall be determined if the performance objectives are met in part. Such performance measures, the Actual Value or the Maximum Value, or any combination thereof, may be adjusted in any manner by the Committee in its discretion at any time and from time to time during or as soon as practicable after the Award Period, if it determines that such performance measures, the Actual Value or the Maximum Value, or any combination thereof, are not appropriate under the circumstances.

(c) The Committee shall determine in its discretion and specify in each agreement evidencing a Performance Grant the effect, if any, the termination of the Participant’s employment with or performance of services for the Company during the Award Period shall have on such Performance Grant.

(d) The Committee shall determine whether the conditions of a Performance Grant have been met and, if so, shall ascertain the Actual Value of the Performance Grant. If the Performance Grant has no Actual Value, the Award and such Performance Grant shall be deemed to have been canceled and the any associated Award, if any, may be canceled or permitted to continue in effect in accordance with its terms. If the Performance Grant has any Actual Value and:

(i) was not awarded in conjunction with another Award, the Committee shall cause an amount equal to the Actual Value of the Performance Grant earned by the Participant to be paid to him or his permitted assignee or Beneficiary; or

(ii) was awarded in conjunction with another Award, the Committee shall determine, in accordance with criteria specified by the Committee (A) to cancel the Performance Grant, in which event no amount with respect thereto shall be paid to the Participant or his permitted assignee or Beneficiary, and the associated Award may be permitted to continue in effect in accordance with its terms, (B) to pay the Actual Value of the Performance Grant to the Participant or his permitted assignee or Beneficiary as provided below, in which event the associated Award may be canceled or (C) to pay to the Participant or his Beneficiary, the Actual Value of only a portion of the Performance Grants, in which event all or a portion of the associated Award may be permitted to continue in effect in accordance with its terms or be canceled, as determined by the Committee.

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Such determination by the Committee shall be made as promptly as practicable following the end of the Award Period or upon the earlier termination of employment or performance of services, or at such other time or times as the Committee shall determine, and shall be made pursuant to criteria specified by the Committee.

(e) Payment of any amount with respect to the Performance Grants that the Committee determines to pay as provided above shall be made by Gaia as promptly as practicable after the end of the Award Period or at such other time or times as the Committee shall determine, and may be made in cash, Class A Shares, Other Gaia Securities or property, or other forms of payment, or any combination thereof or in such other manner, as determined by the Committee in its discretion. Notwithstanding anything in this Section to the contrary, the Committee may, in its discretion, determine and pay out the Actual Value of the Performance Grants at any time during the Award Period.

Section 10. Deferral of Compensation. The Committee shall determine whether an Award shall be made in conjunction with the deferral of the Participant’s salary, bonus or other compensation, or any combination thereof, and whether such deferred amounts may be (i) forfeited to Gaia or to other Participants or any combination thereof, under certain circumstances (which may include, but need not be limited to, certain types of termination of employment or performance of services for the Company); (ii) subject to increase or decrease in value based upon the attainment of or failure to attain, respectively, certain performance measures; and/or; (iii) credited with income equivalents (which may include, but need not be limited to, interest, dividends or other rates of return) until the date or dates of payment of the Award, if any. Notwithstanding the foregoing or any other provision of this Plan, any deferral of compensation under this Section 10 must comply with the applicable provisions of Code Section 409A, and no deferral of compensation under this Section 10 which would result in an inclusion of any amount in gross income under Code Section 409A(a)(1) is permitted.

Section 11. Deferred Payment of Awards. The Committee may specify that the payment of all or any portion of cash, Class A Shares, Other Gaia Securities or property, or any other form of payment, or any combination thereof, under an Award shall be deferred until a later date. Deferrals shall be for such periods or until the occurrence of such events, and upon such terms, as the Committee shall determine in its discretion, provided however, that any such deferral shall comply with the applicable requirements of Code Section 409A. Deferred payments of Awards may be made by undertaking to make payment in the future based upon the performance of certain investment equivalents (which may include, but need not be limited to, government securities, Class A Shares, other securities, property or consideration, or any combination thereof), together with such additional amounts of income equivalents (which may be compounded and may include, but need not be limited to, interest, dividends or other rates of return or any combination thereof) as may accrue thereon until the date or dates of payment, such investment equivalents and such additional amounts of income equivalents to be determined by the Committee in its discretion.

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Section 12. Transferability of Awards. A Participant’s rights and interest under this Plan or any Award may not be assigned or transferred, hypothecated or encumbered in whole or in part either directly or by operation of law or otherwise, including, but not by way of limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner; provided, however, the Committee may permit such transfer to a Permitted Transferee; and provided, further, that, unless otherwise permitted by the Code, any Incentive Stock Option granted pursuant to this Plan shall not be transferable other than by will or the laws of descent and distribution and shall be exercisable during the Participant’s lifetime only by the Participant.

Section 13. Amendment or Substitution of Awards under this Plan. The terms of any outstanding Award under this Plan may be amended or modified from time to time by the Committee in its discretion in any manner that it deems appropriate (including, but not limited to, acceleration of the date of exercise of any Award and/or payments thereunder and repricing of any Award) if the Committee could grant such amended or modified Award under the terms of this Plan at the time of such amendment or modification; provided that no such amendment or modification shall adversely affect in a material manner any right of a Participant under the Award without such Participant’s written consent, unless the Committee determines in its discretion that there have occurred or are about to occur significant changes in the Participant’s position, duties or responsibilities, or significant changes in economic, legislative, regulatory, tax, accounting or cost/benefit conditions that are determined by the Committee in its discretion to have or to be expected to have a substantial effect on the performance of the Company, or any affiliate, division or department thereof, on this Plan or on any Award under this Plan and provided further that the Committee shall not have the authority to accelerate the time or schedule of any payment in a manner which is not permitted under Code Section 409A, or to grant or amend any Award in any manner which would result in an inclusion of any amount in gross income under Code Section 409A(a)(1). The Committee may, in its discretion, permit holders of Awards under this Plan to surrender outstanding Awards in order to exercise or realize the rights under other Awards, or in exchange for the grant of new Awards, or require holders of Awards to surrender outstanding Awards as a condition precedent to the grant of new Awards under this Plan.

Section 14. Termination of a Participant. For all purposes under this Plan, the Committee shall determine whether a Participant has terminated employment with, or the performance of services for, the Company, provided, however, an absence or leave approved by the Company, to the extent permitted by applicable provisions of the Code, shall not be considered an interruption of employment or performance of services for any purpose under this Plan.

Section 15. Dilution and Other Adjustments. If any change in the outstanding Class A Shares of the Company occurs by reason of any stock split, reverse stock split, stock dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, rights offering, reorganization, combination, subdivision or exchange of shares, any distribution to shareholders other than a normal cash dividend, or other extraordinary or unusual event, the Committee shall make such adjustment in: (i) the aggregate number of shares that may be delivered under the Plan as described in Section 5(b) and the individual Award maximums under Section 5(b); (ii) the number and exercise price of outstanding Stock Options and outstanding Stock Appreciation Rights; (iii) the number of outstanding Restricted Stock Units; and (iv) the number of shares

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subject to any other Awards granted under the Plan (provided that the number of shares of subject to Awards shall always be a whole number), in each case as may be determined to be appropriate by the Committee, and such adjustments shall be final, conclusive and binding for all purposes of the Plan. The Committee may also provide for the adjustment and settlement of outstanding Awards as it deems appropriate and consistent with the Plan’s purpose in the event of a change in control of Gaia, and such adjustments or settlements shall be final, conclusive and binding for all purposes of the Plan.

Section 16. Designation of Beneficiary by Participant. A Participant may name a beneficiary to receive any payment to which such Participant may be entitled with respect to any Award under this Plan in the event of death, on a written form to be provided by and filed with the Committee, and in a manner determined by the Committee in its discretion (a “Beneficiary”). The Committee reserves the right to review and approve Beneficiary designations. A Participant may change his Beneficiary from time to time in the same manner, unless such Participant has made an irrevocable designation. Any designation of a Beneficiary under this Plan (to the extent it is valid and enforceable under applicable law) shall be controlling over any other disposition, testamentary or otherwise, as determined by the Committee in its discretion. If no designated Beneficiary survives the Participant and is living on the date on which any amount becomes payable to such a Participant’s Beneficiary, such payment will be made to the legal representatives of the Participant’s estate, and the term “Beneficiary” as used in this Plan shall be deemed to include such person or persons. If there are any questions as to the legal right of any Beneficiary to receive a distribution under this Plan, the Committee in its discretion may determine that the amount in question be paid to the legal representatives of the estate of the Participant, in which event the Company, the Board, the Committee, the Designated Administrator (if any), and the members thereof, will have no further liability to anyone with respect to such amount.

Section 17. Financial Assistance. If the Committee determines that such action is advisable, the Company may assist any Participant in obtaining financing from the Company (or under any program of the Company approved pursuant to applicable law), or from a bank or other third party, on such terms as are determined by the Committee, and in such amount as is required to accomplish the purposes of this Plan, including, but not limited to, to permit the exercise of an Award, the participation therein, and/or the payment of any taxes with respect thereto. Such assistance may take any form that the Committee deems appropriate, including, but not limited to, a direct loan from the Company, a guarantee of the obligation by the Company or the maintenance by the Company of deposits with such bank or third party.

Section 18. Miscellaneous Provisions.

(a) Any proceeds from Awards shall constitute general funds of Gaia.

(b) Except as otherwise determined by the Committee, no fractional shares may be delivered under an Award, but in lieu thereof a cash or other adjustment may be made as determined by the Committee in its discretion.

(c) No Eligible Person or other person shall have any claim or right to be granted an Award under this Plan. Determinations made by the Committee under this

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Plan need not be uniform and may be made selectively among Eligible Persons under this Plan, regardless of whether such Eligible Persons are similarly situated. Neither this Plan nor any action taken hereunder shall be construed as giving any Eligible Person any right to continue to be employed by or perform services for the Company, and the Company’s right to terminate the employment of or performance of services by Eligible Persons at any time and for any reason is specifically reserved.

(d) No Participant or other person shall have any right with respect to this Plan, the Class A Shares reserved for issuance under this Plan or in any Award, contingent or otherwise, until written evidence of the Award shall have been delivered to the recipient and all the terms, conditions and provisions of this Plan and the Award applicable to such recipient (and each person claiming under or through him) have been met.

(e) No Class A Shares, Other Company Securities, other securities or property or other forms of payment shall be issued hereunder with respect to any Award unless counsel for Gaia shall be satisfied that such issuance will be in compliance with applicable law and any applicable rules of any stock exchange or other market quotation system on which Class A Shares are listed.

(f) It is the intent of Gaia that this Plan comply in all respects with any applicable provisions of Rule 16b-3 and Section 162(m) with respect to Awards granted to executive officers of Gaia, that any ambiguities or inconsistencies in construction of this Plan be interpreted and administered to give effect to such intention and that if any provision of this Plan is found not to be in compliance with any applicable provisions of Rule 16b-3 or Section 162(m), such provision shall be deemed null and void with respect to Awards granted to executive officers of the Company to the extent required to permit such Awards to comply with Rule 16b-3 and Section 162(m). It is also the intent of Gaia that this Plan comply in all respects with the provisions of the Code providing favorable treatment to Incentive Stock Options, that any ambiguities or inconsistencies in construction of this Plan be interpreted and administered to give effect to such intention and that if any provision of this Plan is found not to be in compliance with the Incentive Stock Option provisions of the Code, such provision shall be deemed null and void with respect to Incentive Stock Options granted to employees of Gaia (or any parent or subsidiary of Gaia) to the extent required to permit such Incentive Stock Options to receive favorable treatment under the Code.

It is the intent of Gaia that this Plan comply in all respects with any applicable provisions of Code Section 409A with respect to Awards granted under this plan and any amendment or revision of such Awards, that any ambiguities or inconsistencies in construction of this Plan be interpreted and administered to give effect to such intention and that if any provision of this Plan is found not to be in compliance with any applicable provisions of Code Section 409A such Plan provision shall be deemed null and void to the extent required to permit such Awards to comply with any applicable provisions of Code Section 409A. Specifically, the Committee shall not have the authority to accelerate the time or schedule of any payment in a manner which is not permitted under Code Section 409A or the regulations issued thereunder, or to grant or amend any Award in any manner which would result in an inclusion of any amount in gross income under Code Section 409A(a)(1).

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(g) The Company shall have the right to deduct from any payment made under this Plan any federal, state, local or foreign income or other taxes required by law to be withheld with respect to such payment. It shall be a condition to any obligation of Gaia to issue Class A Shares, Other Gaia Securities or property, other securities or property, or other forms of payment, or any combination thereof, upon exercise, settlement or payment of any Award under this Plan, that the Participant (or any Beneficiary or person entitled to act) pay to Gaia, upon its demand, such amount as may be required by the Company for the purpose of satisfying any liability to withhold federal, state, local or foreign income or other taxes. If the amount requested is not paid, Gaia may refuse to issue Class A Shares, Other Gaia Securities or property, other securities or property, or other forms of payment, or any combination thereof. Notwithstanding anything in this Plan to the contrary, the Committee may, in its discretion, permit a Participant (or any Beneficiary or person entitled to act) to elect to pay a portion or all of the amount requested by the Company for such taxes with respect to such Award, at such time and in such manner as the Committee shall deem to be appropriate (including, but not limited to, by authorizing Gaia to withhold, or agreeing to surrender to Gaia on or about the date such tax liability is determinable, Class A Shares, Other Gaia Securities or property, other securities or property, or other forms of payment, or any combination thereof, owned by such person or a portion of such forms of payment that would otherwise be distributed, or have been distributed, as the case may be, pursuant to such Award to such person, having a Fair Market Value equal to the amount of such taxes).

(h) The expenses of this Plan shall be borne by Gaia; provided, however, Gaia may recover from a Participant or his Beneficiary, heirs or assigns any and all damages, fees, expenses and costs incurred by the Company arising out of any actions taken by a Participant in breach of this Plan or any agreement evidencing such Participant’s Award.

(i) This Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Award under this Plan, and rights to the payment of Awards shall be no greater than the rights of the Company’s general creditors.

(j) By accepting any Award or other benefit under this Plan, each Participant and each person claiming under or through such Participant shall be conclusively deemed to have indicated his acceptance and ratification of, and consent to, any action taken under this Plan by the Company, the Board, the Committee or the Designated Administrator (if applicable).

(k) The appropriate officers of the Company shall cause to be filed any reports, returns or other information regarding Awards hereunder of any Class A Shares issued pursuant hereto as may be required by applicable law and any applicable rules of any stock exchange or other market quotation system on which Class A Shares are listed.

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(l) The validity, construction, interpretation, administration and effect of this Plan, and of its rules and regulations, and rights relating to this Plan and to Awards granted under this Plan, shall be governed by the substantive laws, but not the choice of law rules, of the State of Colorado.

(m) Records of the Company shall be conclusive for all purposes under this Plan or any Award, unless determined by the Committee to be incorrect.

(n) If any provision of this Plan or any Award is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Plan or any Award, but such provision shall be fully severable, and this Plan or Award, as applicable, shall be construed and enforced as if the illegal or invalid provision had never been included in this Plan or Award, as applicable.

(o) The terms of this Plan shall govern all Awards under this Plan and in no event shall the Committee have the power to grant any Award under this Plan that is contrary to any of the provisions of this Plan.

(p) For purposes of interpretation of this Plan, the masculine pronoun includes the feminine and the singular includes the plural wherever appropriate.

Section 19. Plan Amendment or Suspension. This Plan may be amended or suspended in whole or in part at any time from time to time by the Board. No amendment of this Plan shall adversely affect in a material manner any right of any Participant with respect to any Award previously granted without such Participant’s written consent, except as permitted under Section 13.

Section 20. Plan Termination. This Plan shall terminate upon the earlier of the following dates or events to occur:

(a) the adoption of a resolution of the Board terminating this Plan; or

(b) the close of business on the tenth anniversary of the Effective Date; provided, however, that the Board may, prior to such date, extend the term of this Plan for an additional period of up to five years for the grant of Awards other than Incentive Stock Options.

No termination of this Plan shall materially alter or impair any of the rights or obligations of any Participant, without such Participant’s consent, under any Award previously granted under this Plan, except that subsequent to termination of this Plan, the Committee may make amendments or modifications permitted under Section 13. Notwithstanding anything in this Plan to the contrary, the Committee shall not grant any Incentive Stock Options pursuant to this Plan after the tenth anniversary of the earlier to occur of (i) the date this Plan is adopted by the Board and (ii) the Effective Date.

Section 21. Effective Date. This Plan shall become effective on and Awards may be granted on and after the date this Plan is adopted by the Board, but no Award granted under this Plan may be exercised, and no shares shall be issued under this Plan, until the Effective Date. If the Effective Date does not occur within twelve months before or after the date on which this Plan is adopted by the Board, then all Awards previously granted under the Plan shall terminate, and no further Awards shall be granted and no shares shall be issued under this Plan.

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APPENDIX A

The following terms shall have the meaning indicated:

“Actual Value” has the meaning set forth in Section 9.

“Award” shall mean an award of rights to an Eligible Person under this Plan.

“Award Period” has the meaning set forth in Section 9(b).

“Beneficiary” has the meaning set forth in Section 16.

“Board” shall mean the board of directors of Gaia.

“Class A Shares” shall mean shares of Class A Common Stock, par value $.0001 per share, of Gaia and stock of any other class into which such shares may thereafter be changed.

“Code” shall mean the Internal Revenue Code of 1986, as it now exists or may be amended from time to time, and the rules, regulations, and guidance promulgated thereunder, as they may exist or may be amended from time to time.

“Code Section 409A” shall mean Section 409A of the Code, any rules, regulations and guidance promulgated thereunder, as they may exist or may be amended from time to time, and any successor to such section.

“Committee” shall mean the person or persons responsible for administering this Plan. The Board shall constitute the Committee until the Board appoints a Board Committee, after which time the Board Committee shall constitute the Committee, provided, however, that at any time the Board may designate itself as the Committee or designate itself to administer certain of the Committee’s authority under this Plan, including administering certain Awards under this Plan, subject to satisfying the requirements of Rule 16b-3 and Section 162(m), if applicable. The Board or the Board Committee may designate a Designated Administrator to constitute the Committee or to administer certain of the Committee’s authority under this Plan, including administering certain Awards under this Plan, subject to the right of the Board or the Board Committee, as applicable, to revoke such designation at any time and to make such designation on such terms and conditions as it may determine in its discretion. For purposes of this definition, the “Board Committee” shall mean a committee of the Board designated by the Board to administer this Plan. Except as otherwise determined by the Board, the Board Committee (i) shall be comprised of not fewer than two directors, (ii) shall meet any applicable requirements under Rule 16b-3, including any requirement that the Board Committee consist of “nonemployee directors” (as defined in Rule 16b-3), (iii) shall meet any applicable requirements under Section 162(m), including any requirement that the Board Committee consist of “outside directors” (as defined in Treasury Regulation §1.162-27(e)(3)(i) or any successor regulation), and (iv) shall meet any applicable requirements of any stock exchange or other market quotation system on which Class A Shares are listed. For purposes of this definition, the “Designated Administrator” shall mean one or more persons designated by the Board or a Board Committee to act as a Designated Administrator pursuant to this Plan. Except as otherwise determined by the Board, a Designated Administrator shall only be appointed if Rule 16b-3 and Section 162(m) permits such

appointment and the exercise of any authority without adversely affecting the ability of Awards to officers of Gaia to comply with the conditions for Rule 16b-3 or Section 162(m). The resolutions of the Board or Board Committee designating the authority of the Designated Administrator shall (i) specify the total number of Class A Shares subject to Awards that may be granted pursuant to this Plan by the Designated Administrator, (ii) may not authorize the Designated Administrator to designate him or herself as the recipient of any Awards pursuant to this Plan and (iii) shall otherwise comply with the requirements of applicable law.

“Company” shall mean Gaia and any parent, subsidiary or affiliate of Gaia.

“Dividend Equivalents” shall mean an Award of cash or other Awards with a Fair Market Value equal to the dividends which would have been paid on the Class A Shares underlying an outstanding Award of Restricted Stock Units had such Class A Shares been outstanding.

“Effective Date” shall mean the date this plan is adopted by shareholders of Gaia.

“Eligible Person(s)” shall mean those persons who are full or part-time employees of the Company or other individuals who perform services for the Company, including, without limitation, directors who are not employees of the Company and consultants and advisors who perform services for the Company.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as it now exists or may be amended from time to time, and the rules promulgated thereunder, as they may exist or may be amended from time to time.

“Fair Market Value” shall mean such value rounded up to the nearest cent as determined by the Committee by reasonable application of a reasonable valuation method in accordance with applicable law, including Code Section 409A.

“Gaia” shall mean Gaia, Inc., a Colorado corporation.

“Incentive Stock Option” shall mean a Stock Option that is an incentive stock option as defined in Section 422 of the Code. Incentive Stock Options are subject, in part, to the terms, conditions and restrictions described in Section 6.

“Maximum Value” has the meaning set forth in subsection 9(a).

“Nonqualified Stock Option” shall mean a Stock Option that is not an incentive stock option as defined in Section 422 of the Code. Nonqualified Stock Options are subject, in part, to the terms, conditions and restrictions described in Section 6.

“Other Gaia Securities” shall mean Gaia securities (which may include, but need not be limited to, unbundled stock units or components thereof, debentures, preferred stock, warrants, securities convertible into Class A Shares or other property) other than Class A Shares.

“Participant” shall mean an Eligible Person to whom an Award has been granted under this Plan.

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“Performance Grant” shall mean an Award subject, in part, to the terms, conditions and restrictions described in Section 9, pursuant to which the recipient may become entitled to receive cash, Class A Shares, Other Gaia Securities or property, or other forms of payment, or any combination thereof, as determined by the Committee.

“Permitted Transferee” means, except as otherwise determined by the Committee, (i) any person defined as an employee in the Instructions to Registration Statement Form S-8 promulgated by the Securities and Exchange Commission, as such Form may be amended from time to time, which persons include, as of the date of adoption of this Plan, executors, administrators or beneficiaries of the estates of deceased Participants, guardians or members of a committee for incompetent former Participants, or similar persons duly authorized by law to administer the estate or assets of former Participants, (ii) Participants’ family members who acquire Awards from the Participant other than for value, through a gift or a domestic relations order, and (iii) any trust established for the benefit of any person described in clause (i) above. For purposes of this definition, “family member” includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent of the voting interests. For purposes of this definition, neither (i) a transfer under a domestic relations order in settlement of marital property rights; nor (ii) a transfer to an entity in which more than fifty percent of the voting interests are owned by family members (or the Participant) in exchange for an interest in that entity is considered a transfer for “value”.

“Plan” shall mean this Gaia, Inc. 2015 Long-Term Incentive Plan.

“Purchased Option” shall mean a Stock Option that is sold to an Eligible Person at a price determined by the Committee. Purchased Options are subject, in part, to the terms, conditions and restrictions described in Section 6.

“Restricted Period” has the meaning set forth in Section 8(c).

“Restricted Stock” shall mean an Award of Class A Shares that is issued subject, in part, to the terms, conditions and restrictions described in Section 8.

“Restricted Stock Units” shall mean an Award of a right to receive Class A Shares that is issued subject, in part, to the terms, conditions and restrictions described in Section 8.

“Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act and any successor rule.

“Section 162(m)” shall mean §162(m) of the Code, any rules or regulations promulgated thereunder, as they may exist or may be amended from time to time, or any successor to such section.

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“Stock Appreciation Right” shall mean an Award of a right to receive (without payment to Gaia) cash, Class A Shares, Other Gaia Securities or property, or other forms of payment, or any combination thereof, as determined by the Committee, based on the increase in the value of the number of Class A Shares specified in the Stock Appreciation Right. Stock Appreciation Rights are subject, in part, to the terms, conditions and restrictions described in Section 7.

“Stock Option” shall mean an Award of a right to purchase Class A Shares. The term Stock Option shall include Nonqualified Stock Options, Incentive Stock Options and Purchased Options.

“Ten Percent Employee” shall mean an employee of the Company who owns stock representing more than ten percent of the voting power of all classes of stock of Gaia or any parent or subsidiary of Gaia.

“Treasury Regulation” shall mean a final, proposed or temporary regulation of the Department of Treasury under the Code and any successor regulation.

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EX-99.1

                    , 2015

Dear Gaiam, Inc. Shareholder:

I am pleased to inform you that Gaiam, Inc.’s board of directors has approved the pro-rata distribution of all of the common stock of Gaia, Inc. (“GTV”) to the shareholders of Gaiam, Inc. Giving effect to the distribution, our shareholders will own all of the outstanding shares of GTV and will continue to own all of the shares of Gaiam, Inc., which will continue to own and operate our Gaiam branded business.

At the time of the distribution, GTV will own and operate our subscription business which is doing business as Gaiam TV.

This distribution is being made pursuant to a plan approved by our board of directors in August 2014 to separate Gaiam, Inc. into two independent, publicly-traded companies. Our board of directors believes that creating independent, focused companies is the best way to manage our businesses for the benefit of our shareholders and each of the two businesses, in both the short and long term.

The distribution of common stock of GTV will occur on             ,             by way of a pro rata distribution of all the common stock of GTV to our shareholders. Each shareholder of Gaiam, Inc.’s Class A common stock will be entitled to receive one share of GTV’s Class A common stock for each              share(s) of Gaiam, Inc.’s Class A common stock held by such shareholder at the close of business on             ,             , the record date of the distribution, and each shareholder of Gaiam, Inc.’s Class B common stock will be entitled to receive one share of GTV’s Class B common stock for each              share(s) of Gaiam, Inc.’s Class B common stock held by such shareholder at the close of business on             ,             , the record date of the distribution. The distribution will be issued in book-entry form only, which means that no physical share certificates will be issued. No fractional shares of GTV will be issued. If you would otherwise have been entitled to a fractional share in the distribution, you will receive the net cash value of such fractional share instead. However no shareholder will receive cash in excess of the value of a single share.

Shareholder approval of the distribution is not required, nor are you required to take any action to receive your shares of GTV’s common stock. Following the distribution, you will own common stock in both Gaiam, Inc. and GTV. Gaiam, Inc. will change its Class A common stock ticker symbol to “YOGA” on             ,             , and will continue to be listed on the NASDAQ Global Market under the symbol “YOGA.” We expect GTV to have its Class A common stock listed on the NASDAQ Global Market under the symbol “GAIA.”

The enclosed information statement, which is being mailed to all of Gaiam, Inc.’s shareholders, describes the distribution of GTV’s common stock in detail and contains important information about GTV. We urge you to read this information statement carefully.

I want to thank you for your continued support of Gaiam, Inc. We look forward to your support of GTV in the future.

Yours sincerely,

Jirka Rysavy

Chairman

Gaiam, Inc.

                    , 2015

Dear Gaia, Inc. Shareholder:

It is our pleasure to welcome you as a shareholder of Gaia, Inc. (“we”, “our”, “us”, or “GTV”) a global digital video subscription service with approximately 7,000 titles, which caters to a unique and underserved subscriber base. Our digital content is available to our subscribers on virtually any Internet connected device anytime, anywhere commercial free. The subscription also allows our subscribers to download and view files from our library without being actively connected to the internet. Through our online Gaiam TV subscription service, our customers have unlimited access to a vast library of inspiring films, personal growth related content, cutting edge documentaries, interviews, yoga classes, and more – 90% of which is exclusively available to our subscribers for digital streaming on virtually any Internet connected device.

The consumption of streaming video is expanding rapidly. The first quarter of 2014 set a new record with 35.6 billion global browser-based, unauthenticated video starts (referred to as “online video starts”), representing a 43% increase compared to the first quarter of 2013, according to the U.S. Digital Video Benchmark report from Adobe. More and more, people are augmenting their use of, or replacing broadcast television and turning to, streaming video to watch their favorite content on services like Netflix, Amazon Prime, Hulu Plus, HBO Go and Gaiam TV.

We started our first subscription service in 2007 with our acquisition of a controlling interest in Spiritual Cinema Circle, Inc., which provided subscribers with a monthly curated selection of inspirational films. Beginning in 2009, with the growth of new technology allowing for digital distribution of video content, we saw an opportunity to expand our subscription through the new digital distribution channel which was being developed. We began to focus our investments in our subscription business on growing our library of unique digital video content and developing a technology platform to distribute that content to our subscribers. From 2009 through the present date, we have made significant investments in our technology platform, including our streaming video on demand capabilities, user interface, extension of our streaming service to even more Internet-connected devices, and secure downloads as a part of our service. We have also made significant strategic acquisitions, including a cable and satellite channel dedicated to content directed at independent and progressive thinkers, which is what we refer to as “conscious media,” and the largest streaming yoga media service in Canada, in furtherance of our evolution towards becoming one of the world’s largest online sources of transformational and inspirational media. Our available content is currently focused on yoga, health and longevity, seeking truth, spiritual growth and conscious films & series.

Gaiam TV’s position in the streaming video landscape is firmly supported by its wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services (for example over 50% of our U.S. subscribers also subscribe to Netflix). Proprietary and curated content lies at the core of our business model. Since 2007, we have developed or acquired a wide variety of exclusive and unique content. Our original content is developed and produced in-house in our state-of-the-art production studios near Boulder, Colorado. Over 90% of our content is exclusively available for streaming to virtually all devices that are connected to the Internet. By offering exclusive and unique content over a state-of-the-art streaming service, we believe that we will be able to significantly expand our target subscriber base.

We are able to leverage our content licensing and ownership advantage to enable “subscriber download” as part of our subscription. A current subscription allows access to download and view titles in our library without being actively connected to the Internet; a unique feature among streaming video providers.

Our mostly worldwide content rights – both through owned and licensed content – enable us to service an international audience without the international media rights acquisition challenges experienced by many of our streaming video competitors. While our service has been English language based and our marketing efforts have been focused on North America, we are currently serving subscribers in approximately 100 countries, and over 20% of our subscribers are outside the United States. In late 2014, we embarked on an initiative to expand our website functionality to attract non-English speakers, which we believe is an important growth opportunity for us.

As an independent, publicly-traded company, we believe we can more effectively and aggressively focus on our market segment and corporate objectives and thus bring more value to you as a shareholder than we could as an operating business unit of Gaiam, Inc. In addition, we will have the ability to offer our employees incentive opportunities linked to our performance as an independent, publicly-traded company, which we believe will enhance employee performance and retention.

Gaiam, Inc will change its Class A common stock ticker symbol to “YOGA” on             ,             , and will continue to be listed on the NASDAQ Global Market, under the symbol “YOGA.” We expect to have our Class A common stock listed on the NASDAQ Global Market under the symbol “GAIA” in connection with the distribution of our common stock.

We invite you to learn more about us by reviewing the enclosed information statement. We look forward to our future as an independent, publicly-traded company and to your support as a holder of our common stock. More information can be found on our website www.gaia.com.

Very truly yours,

Jirka Rysavy

Chairman

Gaia, Inc.

Information contained herein is subject to completion or amendment. A registration statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission.

PRELIMINARY AND SUBJECT TO COMPLETION, DATED SEPTEMBER 9, 2015

Exhibit 99.1

INFORMATION STATEMENT

Distribution of

GAIA, INC. CLASS A COMMON STOCK

(par value $.0001 per share)

GAIA, INC. CLASS B COMMON STOCK

(par value $.0001 per share)

By Gaia, Inc.

To Gaiam, Inc.’s Shareholders

In August 2014, Gaiam, Inc. announced that its board of directors had approved a plan to separate Gaiam, Inc. into two independent, publicly-traded companies (the “spin-off”). The company to be spun off will include Gaiam, Inc.’s subscription business and related assets (the “Subscription Business”) and Gaiam, Inc. will retain the remainder of its business which is comprised primarily of its branded business (the “Branded Business”). The Subscription Business will be spun off into Gaiam Inc.’s wholly-owned subsidiary Gaia, Inc. (“we,” “our,” “us” or “GTV”). Gaiam, Inc. intends to accomplish this separation through a tax-free distribution of GTV’s common stock to Gaiam, Inc.’s shareholders. Immediately following the spin-off of GTV, Gaiam, Inc.’s shareholders will own 100% of the equity in each of the two separate companies. The distribution should be tax-free for U.S. federal income tax purposes.

As a result of these transactions, Gaiam, Inc. will cease to own any shares of GTV’s common stock and you, as a holder of Gaiam, Inc.’s Class A or Class B common stock will receive, respectively, one share of GTV’s Class A common stock for each                  share(s) of Gaiam, Inc.’s Class A common stock held by you at the close of business on             ,             , the record date of the distribution, and one share of GTV’s Class B common stock for each                  share(s) of Gaiam, Inc.’s Class B common stock held by you at the close of business on such date.

We are sending you this information statement to describe the spin-off of GTV. We expect the spin-off to occur on             ,             . Effective as of that date, the distribution agent for the spin-off will distribute GTV’s Class A and Class B common stock to each eligible holder of Gaiam, Inc.’s Class A and Class B common stock, respectively, by crediting book-entry accounts with that holder’s proportionate number of whole shares of GTV’s Class A or Class B common stock, as the case may be. No fractional shares of GTV will be issued. If you would otherwise have been entitled to a fractional share in the distribution, you will receive the net cash value of such fractional share instead.

Shareholders who hold Gaiam, Inc.’s common stock as of the record date will not be required to take any action to receive GTV’s common stock in the distribution, which means that you do not need to pay any consideration to Gaiam, Inc. or to GTV, and you do not need to surrender any of Gaiam, Inc.’s common stock to receive your shares of GTV’s common stock. In addition, no shareholder vote is required for the spin-off to occur. Gaiam, Inc. and GTV are not asking you for a proxy and you are requested not to send a proxy to Gaiam, Inc. or GTV.

There has been no trading market for GTV’s common stock. GTV expects, however, that a limited market for its common stock, commonly known as a “when-issued” trading market, will develop on or shortly before the record date for the distribution. GTV intends to apply to have its Class A common stock listed on the NASDAQ Global Market under the ticker symbol “GAIA.”

GTV is an “emerging growth company” as well as a “smaller reporting company,” each as defined under the federal securities laws. For a discussion of the implications of GTV’s status as an “emerging growth company” and as a “smaller reporting company,” see “Summary – Status as an Emerging Growth Company and Smaller Reporting Company” and “Risk Factors” included elsewhere in this information statement.

As you review this information statement, you should carefully consider the matters described in “Risk Factors.”

The Securities Exchange Commission (referred to herein as the “SEC”) and state securities regulators have not approved or disapproved of these securities, or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this information statement is             ,             .

This information statement was first mailed to Gaiam, Inc.’s shareholders on or about             ,             .

Table of Contents

	Page
SUMMARY		1
Introduction		1
The Distribution		2
Our Company		2
Status as an Emerging Growth Company and Smaller Reporting Company		3
QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF		4
RISK FACTORS		12
Risks Relating to Our Business		12
Risks Relating to Separating GTV from Gaiam, Inc.		20
Risks Relating to Our Common Stock		23
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS		27
THE SPIN-OFF		28
Background for the Spin-Off		28
Reasons for the Spin-Off		28
Conditions to the Spin-Off		31
Manner of Effecting the Spin-Off		32
Material U.S. Federal Income Tax Consequences of the Distribution		33
Effect of the Spin-Off on Gaiam, Inc.’s Outstanding Equity Awards		36
Results of the Spin-Off		36
Listing and Trading of our Class A Common Stock		37
Trading Before the Record Date and Through the Distribution Date		37
Reason for Furnishing this Information Statement		38
OUR RELATIONSHIP WITH GAIAM, INC. AFTER THE SPIN-OFF		39
Overview		39
Reorganization Agreement		39
License Agreements		40
Transfer of Office Building		40
Transition Services Agreement		40
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA		42
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		45
Overview and Outlook		45
Planned Separation		45
Critical Accounting Policies		46
Results of Operations		48
Liquidity and Capital Resources		49

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Table of Contents

(continued)

	Page
Contractual Obligations		49
Off-Balance Sheet Arrangements		49
OUR BUSINESS		50
The Streaming Video Market and Gaiam TV		51
Competitive Strengths		51
Growth Drivers		52
Marketing		53
History		53
Regulatory Matters		54
Competition		54
Seasonality		55
Employees		55
Intellectual Property and Other Proprietary Rights		55
Status as an Emerging Growth Company and Smaller Reporting Company		55
OTHER INFORMATION		57
DESCRIPTION OF PROPERTY		58
LEGAL PROCEEDINGS		59
MANAGEMENT		60
Directors		60
Structure of the Board of Directors and Director Independence		61
Committees of the Board of Directors		61
Executive Officers		62
Family Relationships		62
Involvement in Certain Legal Proceedings		63
EXECUTIVE COMPENSATION		64
Summary Compensation Table		64
Risk Assessments		65
Outstanding Equity Awards at Fiscal Year-End		65
Employment Contracts and Termination of Employment and Change-in-Control Arrangements		66
Gaia, Inc. 2015 Long-Term Incentive Plan		66
Securities Authorized for Issuance Under Equity Compensation Plans		66
DIRECTOR COMPENSATION		68
Director Compensation Policy		68
Director Compensation Table		68
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		69

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Table of Contents

(continued)

	Page
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		71
DESCRIPTION OF OUR CAPITAL STOCK		72
General		72
Capital Stock		72
Voting Rights		73
Dividends and Liquidation		73
Anti-Takeover Effects of Our Articles of Incorporation and Bylaws		73
Transfer Agent and Registrar		74
Listing		74
INDEMNIFICATION OF DIRECTORS AND OFFICERS		75
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		76
WHERE YOU CAN FIND MORE INFORMATION		77
INDEX TO FINANCIAL STATEMENTS		F-1

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SUMMARY

This summary highlights selected information contained in this information statement relating to GTV, our separation from Gaiam, Inc. and our common stock being distributed in the distribution. For a more complete understanding of our business and the separation and distribution, you should read the entire information statement, including the risk factors, our historical consolidated financial statements, and our unaudited pro forma condensed consolidated financial statements and the respective notes to those historical and pro forma financial statements.

Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement assumes the completion of all the transactions referred to in this information statement in connection with the spin-off. Except as otherwise indicated or unless the context otherwise requires, “GTV” “we,” “us” and “our” refer to Gaia, Inc. and its consolidated subsidiaries, and “Gaiam, Inc.” refers to Gaiam, Inc. and its consolidated subsidiaries other than GTV.

Our historical consolidated financial information has been prepared on a “carve-out” basis to reflect the operations, financial condition and cash flows specifically allocable to the Subscription Business component of Gaiam, Inc. during all periods shown. Our pro forma consolidated financial information adjusts our historical consolidated financial information to give effect to our separation from Gaiam, Inc.

Introduction

In August of 2014, Gaiam, Inc. announced that its board of directors had approved a plan to separate Gaiam, Inc. into two independent, publicly-traded companies: one for Gaiam, Inc.’s Subscription Business, and one for its Branded Business. The spin-off will occur through a distribution to Gaiam, Inc.’s shareholders of all of our common stock. GTV will hold all of the assets and liabilities of the Subscription Business. The Branded Business will remain with Gaiam, Inc. after the distribution.

The Branded Business includes all of Gaiam, Inc.’s yoga, fitness, and wellness products and physical media distributed through its website, apps, retail network, and catalogs, and also includes Gaiam, Inc.’s eco-travel business. The Branded Business represented 94.0% of Gaiam, Inc.’s consolidated revenues for 2014 and 82.9% of its consolidated assets as of December 31, 2014. The Subscription Business represented 6.0% of Gaiam, Inc.’s consolidated revenues for 2014 and 17.1% of its consolidated assets as of December 31, 2014.

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Our Company

We operate a global digital video subscription service with approximately 7,000 titles which caters to a unique and underserved subscriber base. Our digital content is available to our subscribers on virtually any Internet connected device anytime, anywhere commercial free. The subscription also allows our subscribers to download and view files from our library without being actively connected to the internet. Through our online Gaiam TV subscription service, our customers have unlimited access to a vast library of inspiring films, personal growth related content, cutting edge documentaries, interviews, yoga classes, and more – 90% of which is exclusively available to our subscribers for digital streaming on virtually any Internet connected device.

The consumption of streaming video is expanding rapidly. The first quarter of 2014 set a new record with 35.6 billion global browser-based, unauthenticated video starts (referred to as “online video starts”), representing a 43% increase compared to the first quarter of 2013, according to the U.S. Digital Video Benchmark report from Adobe. More and more, people are augmenting their use of, or replacing broadcast television and turning to, streaming video to watch their favorite content on services like Netflix, Amazon Prime, Hulu Plus, HBO Go and Gaiam TV.

Gaiam TV’s position in the streaming video landscape is firmly supported by its wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services. Our original content is developed and produced in-house in our state-of-the-art production studios near Boulder, Colorado. Over 90% of our content is exclusively available for streaming to virtually all devices that are connected to the Internet. By offering exclusive and unique content over a state-of-the-art streaming service, we believe we will be able to significantly expand our target subscriber base.

Our available content is currently focused on yoga, health and longevity, seeking truth, spiritual growth and conscious films & series. This media content is specifically targeted to a unique customer base which is interested in alternatives and supplements to the content provided by mainstream media. We have been able to grow these content options both organically through our own productions and through strategic acquisitions. In addition, through our investments in our streaming video technology and our user interface, we have been able to expand the many ways our subscription customer base can access our unique library of media titles.

Our core strategy is to grow our subscription business domestically and internationally by expanding our unique and exclusive content library, enhancing our user interface, extending our streaming service to new Internet-connected devices as they are developed and creating a conscious community built on our content.

We have reported operating and net losses of $8.5 million and $10.0 million for fiscal years 2014 and 2013, respectively.

We will hold all of the assets and liabilities of Gaiam, Inc.’s Subscription Business as a result of an internal reorganization to be implemented by Gaiam, Inc. before the spin-off. We are a Colorado corporation. Our registered, principal and executive office is located at 833 West South Boulder Road, Louisville, CO 80027-2452. Our telephone number at that address is (303) 222-3999. We maintain an Internet website at www.gaia.com. The website address has been included only as a textual reference. Our website and the information contained on that website, or connected to that website, are not incorporated by reference into this information statement.

The Distribution

On             ,             , the distribution date, each holder of Gaiam, Inc.’s Class A common stock will receive one share of our Class A common stock for each              share(s) of Gaiam, Inc.’s Class A common stock held by such holder at the close of business on             ,             , the record date for the distribution, and each holder of Gaiam, Inc.’s Class B common stock will receive one share of our Class B common stock for each              share(s) of Gaiam, Inc.’s Class B common stock held by such holder at the close of business on             ,             , the record date for the distribution. Immediately following the distribution, Gaiam, Inc.’s shareholders will own 100% of our common stock. You will not be required to make any payment, surrender or exchange your shares of Gaiam, Inc.’s common stock or take any other action to receive your shares of our common stock.

After the spin-off, our Chairman and Chief Executive Officer, Jirka Rysavy will hold 100% of our outstanding Class B common stock and approximately 3.3% of our outstanding Class A common stock based on his current ownership of Gaiam, Inc. common stock. Each share of our Class B common stock has ten votes per share, and each share of our Class A common stock has one vote per share. Consequently, we expect that Mr. Rysavy will be able to vote approximately 74.6% of our voting stock after the spin-off.

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If you have any questions relating to the spin-off, you should contact Corporate Stock Transfer, our distribution agent. The contact information for our distribution agent is:             ,             .

You can also contact Gaiam, Inc. with any questions. Gaiam, Inc.’s contact information is: Gaiam, Inc., Investor Relations, 833 West South Boulder Road, Louisville, CO 80027-2452, Attn.: Steve Thomas. Gaiam, Inc.’s principal phone number at this address is (303) 222-3600.

After the spin-off, if you have questions relating to the spin-off, you can contact us directly. Our contact information is: Gaia, Inc., Investor Relations, 833 West South Boulder Road, Louisville, CO 80027-2452, Attn: Paul Tarell. Our principal phone number at this address is (303) 222-3997.

Gaiam, Inc. maintains an independent Internet website at www.gaiam.com. The website address has been included only as a textual reference. Gaiam, Inc.’s website and the information contained on that website, or connected to that website, are not incorporated by reference into this information statement.

Status as an Emerging Growth Company and Smaller Reporting Company

As a company with less than $1 billion in revenues during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). For as long as a company is deemed to be an emerging growth company, it may take advantage of certain reduced reporting and other regulatory requirements that are generally unavailable to other public companies.

In addition, we qualify as a “smaller reporting company” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a smaller reporting company, we enjoy many of the same exemptions as emerging growth companies, and those exemptions would continue to be available to us even after the emerging growth company status expires if we still are a smaller reporting company at such time. For a discussion of the implications of our status as an “emerging growth company” and as a “smaller reporting company,” see “Our Business – Status as an Emerging Growth Company and Smaller Reporting Company” and “Risk Factors”.

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QUESTIONS AND ANSWERS ABOUT THE SPIN-OFF

1.      What is the distributing company?	Gaiam, Inc. After the distribution, Gaiam, Inc. will not own any of our common stock.
2.      What is the separated company?	GTV, a Colorado corporation and a currently wholly-owned subsidiary of Gaiam, Inc. After the distribution, GTV will be an independent, publicly-traded company.
3.      What are the primary purposes of the spin-off?	Gaiam, Inc.’s board of directors regularly reviews the various businesses that Gaiam, Inc. conducts to ensure that Gaiam, Inc.’s resources are being put to use in a manner that is in the best interests of Gaiam, Inc. and its shareholders. Gaiam, Inc. has concluded that the combined operation of the Branded Business and the Subscription Business has made it difficult for analysts and the market generally to understand Gaiam, Inc.’s real value. Gaiam, Inc.’s board of directors evaluated a number of strategic alternatives to increase value and concluded that a separation would be the most feasible and the most financially attractive approach. Gaiam, Inc.’s board of directors believes that two independent and focused companies is the best way to grow and unlock the full value of Gaiam, Inc.’s businesses in both the short and long term. In determining whether to effect the spin-off, Gaiam, Inc.’s board of directors also has considered the costs and risks associated with the spin-off, and has concluded that the potential benefits of the spin-off outweigh its potential costs. For a discussion of additional reasons, factors, costs and risks associated with the spin-off which were considered by Gaiam, Inc.’s board of directors, see “The Spin-Off – Reasons for the Spin-Off” included elsewhere in this information statement.
4.      Why is the spin-off of GTV structured as a distribution?	Gaiam, Inc. believes that a tax-free distribution of shares of GTV to its shareholders is a tax-efficient way to separate the businesses.
5.      How will the spin-off of GTV work?	The spin-off will be accomplished through a transaction in which our common stock will be distributed by Gaiam, Inc. to its shareholders on a pro rata basis. At the time of the spin-off, GTV will hold all of the assets and liabilities of the Subscription Business.
6.      What securities will be distributed in the spin-off?	All of our common stock owned by Gaiam, Inc., which will be 100% of our common stock outstanding immediately before the distribution. Based on the approximately 19,199,061 shares of Gaiam Inc.’s Class A common stock, and 5,400,000 shares of Gaiam Inc.’s Class B common stock outstanding on September 3, 2015, applying the distribution ratios described below, and assuming no exercise of Gaiam, Inc.’s stock options, approximately             shares of our Class A common stock and             shares of our Class B common stock will be distributed to Gaiam, Inc.’s shareholders who hold Gaiam, Inc.’s common stock as of the record date. The number of shares of common stock that Gaiam, Inc. will distribute to its shareholders will be reduced to the extent that cash payments are to be made in lieu of the issuance of fractional shares. However, we do not expect that any shareholder will receive cash in excess of the value of a single share.

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7.      What will the distribution ratio be?	Each holder of Gaiam, Inc.’s Class A common stock will receive one share of our Class A common stock for each              share(s) of Gaiam, Inc.’s Class A common stock held by such holder at the close of business on             ,             , the record date of the distribution, and each holder of Gaiam, Inc.’s Class B common stock will receive one share of our Class B common stock for each              share(s) of Gaiam, Inc.’s Class B common stock held by such holder at the close of business on             ,             , the record date of the distribution. Cash will be distributed in lieu of any fractional share of our common stock you are entitled to, as described below.
8.      Will Gaiam, Inc. distribute fractional shares?	Gaiam, Inc. will not distribute any fractional shares of our common stock. Instead, if you would otherwise have been entitled to a fractional share in the distribution, you will receive the cash value of such fractional share instead. However the amount of cash received by each beneficial owner generally will not exceed the value of a single share. Recipients of cash in lieu of fractional shares will not be entitled to any interest on payments made in lieu of fractional shares. The receipt of cash in lieu of fractional shares generally will be taxable to the recipient shareholders that are subject to U.S. federal income tax as described in “The Spin-Off – Material U.S. Federal Income Tax Consequences of the Distribution,” included elsewhere in this information statement.
9.      When will the distribution occur?	We expect that Gaiam, Inc. will distribute our common stock on             ,              to holders of record of Gaiam, Inc.’s common stock on             ,             , the record date.
10.    When is the record date for the distribution?	The record date for the distribution is the close of business on             ,             .
11.    Who will be the distribution agent?	The distribution agent is Corporate Stock Transfer.
12.    What do shareholders need to do to participate in the distribution?	Nothing. Shareholders who hold Gaiam, Inc.’s common stock as of the record date will not be required to take any action to receive our common stock in the distribution. No shareholder approval of the distribution is required or sought. Gaiam, Inc. and GTV are not asking you for a proxy, and you are requested not to send either of them a proxy. You will not be required to make any payment, surrender or exchange your common stock in Gaiam, Inc. or take any other action to receive your shares of our common stock. However, Gaiam, Inc. and GTV urge you to read this entire document carefully.
13.    What are the conditions to the distribution?	The distribution is subject to the satisfaction or, if permissible under the reorganization agreement that we expect to adopt, waiver by Gaiam, Inc. of the following conditions:
	•   the SEC shall have declared effective GTV’s registration statement on Form 10, and no stop order shall be in effect;

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	•   all permits, registrations and consents required under the securities or blue sky laws in connection with the distribution shall have been received;
	•   all material governmental approvals and other consents necessary to consummate the distribution shall have been received;
	•   the listing of our Class A common stock on a NASDAQ market shall have been approved, subject to official notice of issuance;
	•   Gaiam, Inc. shall have received the opinion of Brownstein Hyatt Farber Schreck, LLP confirming that, among other things, the distribution should be tax-free for U.S. federal income tax purposes, discussed under “The Spin-Off – Material U.S. Federal Income Tax Consequences of the Distribution;” and
	•   no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the distribution or any of the transactions related thereto, including the transfers of assets and liabilities contemplated by the reorganization agreement, shall be in effect.
	The fulfillment of the foregoing conditions does not create any obligation on Gaiam, Inc.’s part to effect the distribution. Gaiam, Inc.’s board of directors has reserved the right, in its sole discretion, to amend, modify or abandon the distribution and related transactions at any time before the distribution date. Gaiam, Inc. has the right not to complete the distribution if, at any time, Gaiam, Inc.’s board of directors determines, in its sole discretion, that the distribution is not in the best interests of Gaiam, Inc. or its shareholders or that market conditions are such that it is not advisable to separate the Subscription Business from Gaiam, Inc.
14.    Can Gaiam, Inc. decide to cancel the distribution of GTV’s common stock even if all the conditions have been met?	Yes. The distribution is subject to the satisfaction or waiver of certain conditions. For a discussion of these conditions, see “The Spin-Off – Conditions to the Spin-Off,” included elsewhere in this information statement. Gaiam, Inc. has the right to terminate the distribution, even if all of the conditions are satisfied, if at any time Gaiam, Inc.’s board of directors determines that the distribution is not in the best interests of Gaiam, Inc. and its shareholders or that market conditions are such that it is not advisable to separate the Subscription Business from Gaiam, Inc.
15.    Does GTV plan to pay dividends?	No. GTV currently intends to retain earnings to support its growth strategy and does not anticipate paying cash dividends in the foreseeable future. In addition, GTV’s future indebtedness may limit or prohibit payment of any dividends to its shareholders.
16.    Will GTV have any debt at the time of the spin-off?	No. GTV’s subsidiary Boulder Road LLC has access to a $5.5 million revolving line of credit with a bank. GTV does not expect to draw on the line of credit before consummation of the spin-off. GTV currently anticipates having available cash and liquid assets of approximately $                 following the spin-off. For additional information relating to GTV’s existing and planned financing

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	arrangements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” and “Unaudited Pro Forma Condensed Consolidated Financial Statements” included elsewhere in this information statement.
17.    What will the spin-off cost, and who will pay the spin-off costs?	Gaiam, Inc. expects to incur pre-tax separation costs of approximately $400,000 to $500,000 in connection with the consummation of the spin-off, which costs are expected to consist of, among other things, legal, accounting, tax and other advisory fees. Gaiam, Inc. will pay the costs of separation incurred before the spin-off, consisting largely of tax restructuring, professional services and employee-related costs. Such costs relating to the spin-off incurred by Gaiam, Inc. after the distribution will be shared equally by Gaiam, Inc. and GTV. In addition, GTV also will incur costs as it implements organizational changes necessary to operate as an independent, publicly-traded company, which costs are expected to consist of, among other things, professional services and employee related costs for human resources, legal, accounting and tax functions, board of directors fees, transfer agent fees, insurance, and NASDAQ fees.
18.    What are the U.S. federal income tax consequences of the distribution to Gaiam, Inc.’s shareholders that are subject to U.S. federal income tax?	It is a condition to the spin-off that Gaiam, Inc. receive the opinion of Brownstein Hyatt Farber Schreck, LLP confirming that for U.S. federal income tax purposes (i) the spin-off should qualify as a tax-free transaction under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code (the “Code”), (ii) no gain or loss should be recognized by Gaiam, Inc. upon the distribution of our common stock in the spin-off, and (iii) no gain or loss should be recognized by, and no amount should be included in the income of, holders of Gaiam, Inc.’s common stock upon the receipt of shares of our common stock in the spin-off, except with respect to cash received in lieu of fractional shares. This condition, as well as all other conditions to the spin-off, may be waived by Gaiam, Inc.’s board of directors in its sole discretion. Gaiam, Inc. expects to receive the opinion of Brownstein Hyatt Farber Schreck, LLP on or before the distribution date.
	For additional information regarding the tax opinion and potential tax consequences to you after the spin-off, see “The Spin-Off – Material U.S. Federal Income Tax Consequences of the Distribution” and “Risk Factors – Risks Relating to Separating GTV from Gaiam, Inc.” included elsewhere in this information statement.

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19.    How will I determine the U.S. federal income tax basis I will have in GTV’s shares I receive in the distribution?	Shortly after the distribution is completed, Gaiam, Inc. will provide those shareholders who are U.S. taxpayers with information to enable them to allocate their U.S. federal income tax basis in their shares of Gaiam, Inc. to our common stock received in the distribution and other information they will need to report their receipt of our common stock on their 2015 U.S. federal income tax returns as a tax-free distribution. Generally, your aggregate tax basis in the common stock that you hold in Gaiam, Inc. and the new common stock of GTV received by you in the distribution, including any fractional share interest for which cash is received, will equal your tax basis in Gaiam, Inc.’s common stock immediately before the distribution. Your tax basis in your shares of Gaiam, Inc. will be allocated between Gaiam, Inc.’s common stock and our common stock, including any fractional share interest for which cash is received, in proportion to their relative fair market values on the date of the distribution.
	You should consult your tax advisor about the particular consequences of the distribution to you, including the application of state, local and non-U.S. tax laws
20.    What will the relationships between Gaiam, Inc. and GTV be following the spin-off?	Before the separation, GTV will enter into a reorganization agreement and other agreements with Gaiam, Inc. to effect the spin-off and provide a framework for our relationships with Gaiam, Inc. after the spin-off. These agreements will govern the relationships between GTV and Gaiam, Inc. subsequent to the completion of the spin-off and will provide for the allocation to GTV of certain of Gaiam, Inc.’s assets, liabilities and obligations attributable to periods before GTV’s separation from Gaiam, Inc. After the completion of the spin-off, GTV will be responsible for all liabilities related to the operation of the Subscription Business arising on and after the completion of the spin-off and Gaiam, Inc. will be responsible for all liabilities related to the operation of the Subscription Business arising before the completion of the spin-off. For a discussion of these arrangements, see “Our Relationship with Gaiam, Inc. after the Spin-Off” included elsewhere in this information statement.
21.    Will I receive physical certificates representing our common stock following the spin-off?	No. Following the spin-off, neither Gaiam, Inc. nor GTV will be issuing physical certificates representing common stock. Instead, Gaiam, Inc., with the assistance of Corporate Stock Transfer, the distribution agent, will electronically issue our common stock to you or to your bank or brokerage firm on your behalf by way of direct registration in book-entry form. Corporate Stock Transfer will mail a book-entry account statement to you that reflects your shares of our common stock, or your bank or brokerage firm will credit your account for the shares. A benefit of issuing shares electronically in book-entry form is that there will be none of the physical handling and safekeeping responsibilities that are inherent in owning physical share certificates.

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22.    What if I want to sell my shares of Gaiam, Inc.’s common stock or my shares of GTV’s common stock?	You should consult with your financial advisors, such as your stockbroker, bank or tax advisor. Neither Gaiam, Inc. nor GTV makes any recommendations on the purchase, retention or sale of Gaiam, Inc.’s common stock or our common stock to be distributed.
	If you decide to sell any shares before the distribution, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your shares of Gaiam, Inc.’s common stock, or our common stock you will receive in the distribution. If you sell shares of Gaiam, Inc.’s common stock in the “regular-way” market up to and including the distribution date, you will be selling your right to receive our common stock in the distribution.
23.    Where will I be able to trade GTV’s common stock?	There currently is no public market for our common stock. We intend to apply to have our Class A common stock listed on the NASDAQ Global Market under the symbol “GAIA.” We anticipate that trading in our common stock will begin on a “when-issued” basis on or shortly before the record date and will continue through the distribution date, and that “regular-way” trading in its common stock will begin on the first trading day following the distribution date. If trading begins on a “when-issued” basis, you may purchase or sell our common stock up to and including the distribution date, but your transaction will not settle until after the distribution date. For additional information, see “The Spin-Off – Trading Before the Record Date and Through the Distribution Date,” included elsewhere in this information statement. We cannot predict the trading prices for its common stock before, on or after the distribution date.
24.    Will the number of shares of Gaiam, Inc.’s common stock that I own change as a result of the distribution?	No. The distribution will not change the number of shares of Gaiam, Inc.’s common stock that you own.
25.    What will happen to the listing and trading of Gaiam, Inc.’s Class A common stock?	Nothing. Gaiam, Inc. will change its Class A common stock ticker symbol to “YOGA” on             ,             , and after the distribution of our common stock, Gaiam, Inc.’s Class A common stock will continue to be listed and traded on the NASDAQ Global Market under the symbol “YOGA.”

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26.    Will the distribution of our common stock affect the market price of my shares of Gaiam, Inc.?	Yes. As a result of the distribution, we expect the trading price of Gaiam, Inc.’s Class A common stock immediately following the distribution to be lower than the trading price immediately before the distribution because the trading price will no longer reflect the value of the Subscription Business. We also believe that, until the market has fully analyzed the value of Gaiam, Inc. without the Subscription Business, the market price of Gaiam, Inc.’s Class A common stock may fluctuate significantly. In addition, we believe that over time, following the spin-off, the common stock of Gaiam, Inc. and GTV should have a higher aggregate market value, assuming the same market conditions, than if Gaiam, Inc. were to remain under its current configuration because it should be easier for investors and analysts to better understand the strengths and future prospects of each company’s respective business. Further, we believe that separating the two businesses will make the respective common stock more attractive to investors as it will allow investors to make a more focused investment. However, we cannot assure you that this higher aggregate market value will be achieved. It is possible that the combined trading prices of Gaiam, Inc.’s Class A common stock of Gaiam, Inc. and our Class A common stock after the distribution may be equal to or less than the trading price of Gaiam, Inc.’s Class A common stock before the distribution.
27.    What are the risks associated with the spin-off?	There are a number of risks associated with the spin-off:
	•   The risk of GTV being unable to make, on a timely basis, the changes necessary to operate as an independent, publicly-traded company, including in respect of corporate services that have historically been performed by Gaiam, Inc.;
	•   The risk that we may need to obtain financing in the public or private markets in order to satisfy our capital needs as an independent company;
	•   The loss of economies of scope and scale from operating as one company;
	•   The risk that significant changes may occur in our cost structure, management, financing and business operations as a result of operating as an independent company;
	•   The potential tax liabilities that could arise if the spin-off were to fail to qualify as a tax-free transaction for U.S. federal income tax purposes;
	•   The risk of limitations on GTV’s ability to engage in desirable strategic transactions and equity issuances following the spin-off because of certain restrictions relating to requirements for tax-free distributions; and
	•   The risk of being unable to achieve the benefits expected from the spin-off.

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	For a more detailed discussion of the risk factors associated with the spin-off, see “Risk Factors” included elsewhere in this information statement. Gaiam, Inc. and GTV encourage you to read that section carefully.
28.    Will Gaiam, Inc.’s shareholders have any appraisal rights?	No. The holders of Gaiam, Inc.’s common stock will not have any appraisal rights in connection with the spin-off under Colorado law.
29.    Will GTV continue to maintain the www.gaiamtv.com url?	We intend to change our principal marketing url to www.gaia.com from www.gaiamtv.com within two years after consummation of the spin-off, and maintain www.gaiamtv.com as a redirect url.
30.    Where can Gaiam, Inc.’s shareholders get more information?	Before the spin-off, if you have any questions relating to the spin-off, you should contact:
	Gaiam, Inc. Investor Relations 833 West South Boulder Rd Louisville, CO 80027-2452 Tel: (303) 222-3600 www.gaiam.com
	After the spin-off, if you have any questions relating to our common stock, you should contact:
	Gaia, Inc. Investor Relations 833 West South Boulder Rd Louisville, CO 80027-2452 Tel: (303) 222-3997 www.gaia.com
	After the spin-off, if you have any questions relating to the distribution of Gaiam, Inc.’s shares, you should contact:
	Gaiam, Inc. Investor Relations 833 West South Boulder Rd Louisville, CO 80027-2452 Tel: (303) 222-3600 www.gaiam.com

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RISK FACTORS

Our business, the spin-off, and our common stock are subject to a number of risks and uncertainties. You should carefully consider each of the following risks, which we believe are the principal risks that we face, and all of the other information in this information statement. Some of the risks described below relate to our business, while others relate to our separation from Gaiam, Inc. Other risks relate principally to the securities markets and ownership of our common stock. Our business may be adversely affected by risks and uncertainties not known to us or risks that we currently believe to be immaterial.

Should any of the following risks and uncertainties develop into actual events, our business, financial condition, results of operations and cash flows could be materially and adversely affected, the trading price of our Class A common stock could decline and you could lose all or part of your investment.

Risks Relating to Our Business

We face the following risks in connection with the general conditions and trends of the industry in which we operate.

If our efforts to attract and retain subscribers are not successful, our business will be adversely affected.

We have experienced significant subscriber growth since we began operations in 2007. Our ability to continue to attract subscribers will depend in part on our ability to consistently provide our subscribers with a valuable and quality streaming experience. Furthermore, the relative service levels, content offerings, pricing and related features of competitors to our service may adversely impact our ability to attract and retain subscribers. We are competing for screen viewing time with many competing offerings, including multichannel video programming distributors providing free on demand content through authenticated Internet applications, Internet-based movie and TV content providers, including both those that provide legal and illegal (or pirated) streaming video content, and streaming video retail stores. If consumers do not perceive our service offering to be of value, or if we introduce new or adjust existing features or change the mix of content in a manner that is not favorably received by them, we may not be able to attract and retain subscribers. In addition, many of our subscribers are rejoining our service or originate from word-of-mouth advertising from existing subscribers. If our efforts to satisfy our existing subscribers are not successful, we may not be able to attract subscribers, and as a result, our ability to maintain and/or grow our business will be adversely affected. Subscribers cancel our service for many reasons, including a perception that they do not use the service sufficiently, the need to cut household expenses, the availability of content is unsatisfactory, competitive services provide a better value or experience and customer service issues are not satisfactorily resolved. We must continually add new subscribers both to replace subscribers who cancel and to grow our business beyond our current subscriber base. If too many of our subscribers cancel our service, or if we are unable to attract new subscribers in numbers sufficient to grow our business, our operating results will be adversely affected. If we are unable to successfully compete with current and new competitors in both retaining our existing subscribers and attracting new subscribers, our business will be adversely affected. Further, if excessive numbers of subscribers cancel our service, we may be required to incur significantly higher marketing expenditures than we currently anticipate in order to replace these subscribers with new subscribers.

If we are unable to compete effectively, our business will be adversely affected.

The market for streaming content is intensely competitive and subject to rapid change. New technologies and evolving business models for delivery of streaming content continue to develop at a fast pace. The growth of Internet-connected devices, including TVs, computers and mobile devices has increased the consumer acceptance of Internet delivery of streaming video. Through these new and existing distribution channels, consumers are afforded various means for consuming streaming content. The various economic models underlying these differing means of streaming content delivery include subscription, transactional, ad-supported and piracy-based models. All of these have the potential to capture meaningful segments of the streaming content market. Several competitors have longer operating histories, larger customer bases, stronger brand recognition and significant financial, marketing and other resources. They may secure better terms from suppliers, adopt more aggressive pricing and devote more resources to technology, fulfillment, and marketing. New entrants may enter the market with unique service offerings or approaches to providing streaming content and other companies also may enter into business combinations or

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alliances that strengthen their competitive positions. If we are unable to successfully or profitably compete with current and new competitors, programs and technologies, our business will be adversely affected, and we may not be able to increase market share and revenues, and achieve profitability.

We have had losses, and we cannot assure future profitability

We have reported operating and net losses of $8.5 million and $10.0 million for fiscal years 2014 and 2013, respectively. We cannot assure you that we will operate profitably in future periods and, if we do not, we may not be able to meet any future debt service requirements, working capital requirements, capital expenditure plans, production slate, acquisition and releasing plans or other cash needs. Our inability to meet those needs could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

If we are not able to manage change and growth, our business could be adversely affected.

We are expanding our operations internationally, scaling our streaming service to effectively and reliably handle anticipated growth in both subscribers and features related to our service, as well as continuing to provide our Spiritual Cinema Circle monthly DVD subscription offerings for an additional fee. As we expand internationally, we are managing our business to address varied content offerings, consumer customs and practices, in particular those dealing with e-commerce and Internet video, as well as differing legal and regulatory environments. As we scale our streaming service, we are developing technology and utilizing third-party Internet-based or “cloud” computing services. If we are not able to manage the growing complexity of our business, including improving, refining or revising our systems and operational practices related to our streaming operations, our business may be adversely affected.

If our efforts to build unique identity and improve subscriber satisfaction and loyalty are not successful, we may not be able to attract or retain subscribers, and our operating results may be adversely affected.

We must continue to build and maintain a unique identity. We believe that a unique identity will be important in attracting and retaining subscribers who have a number of choices from which to obtain streaming content. To build a unique identity we believe we must continue to offer content and service features that our subscribers value and enjoy. We also believe that these must be coupled with effective consumer communications, such as marketing, customer service and public relations. If our efforts to promote and maintain our identity are not successful, our ability to attract and retain subscribers may be adversely affected. Such a result may adversely affect our operating results.

With respect to our expansion into international markets, we will also need to establish our identity and to the extent we are not successful, our business in new markets may be adversely impacted.

Changes in our subscriber acquisition sources could adversely affect our marketing expenses and subscriber levels may be adversely affected.

We utilize a broad mix of marketing and public relations programs, including social media websites such as Facebook and Twitter, to promote our service to potential new subscribers. We may limit or discontinue use or support of certain marketing sources or activities if advertising rates increase or if we become concerned that subscribers or potential subscribers deem certain marketing practices intrusive or damaging to our brand. If the available marketing channels are curtailed, our ability to attract new subscribers may be adversely affected.

If companies that currently promote our service decide that we are negatively impacting their business, that they want to compete more directly with our business or enter a similar business or decide to exclusively support our competitors, we may no longer be given access to such marketing channels. We also acquired a number of subscribers who rejoin our service having previously cancelled their subscribership. If we are unable to maintain or replace our sources of subscribers with similarly effective sources, or if the cost of our existing sources increases, our subscriber levels and marketing expenses may be adversely affected.

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We face risks, such as unforeseen costs, and potential liability in connection with content we produce, license and/or distribute through our service.

As a distributor of content, we face potential liability for negligence, copyright, or trademark infringement or other claims based on the nature and content of materials that we produce, license and/or distribute. We also may face potential liability for content used in promoting our service, including marketing materials and features on our website such as subscriber reviews. We are responsible for production costs and other expenses related to our original content. We also take on risks associated with this production, such as completion and key talent risk. To the extent we do not accurately anticipate costs or mitigate risks, or if we become liable for content we produce, license and/or distribute, our business may suffer. Litigation to defend these claims could be costly and the expenses and damages arising from any liability or unforeseen production risks could harm our results of operations. We cannot assure that we are indemnified to cover claims or costs of these types and we may not have insurance coverage for these types of claims.

We rely upon a number of partners to offer instant streaming of content to various devices.

We currently offer subscribers the ability to receive streaming content through a host of Internet-connected devices, including Internet-enabled TVs, digital video players, game consoles and mobile devices. We intend to continue to broaden our capability to instantly stream content to other platforms and partners over time. If we are not successful in maintaining existing and creating new relationships, or if we encounter technological, content licensing or other impediments to our streaming content, our ability to grow our business could be adversely impacted. We have entered into agreements with certain consumer electronics partners, pursuant to which each makes available an “app” for viewing our content on its hardware platform. Our agreements with our consumer electronics partners are typically between one and three years in duration and our business could be adversely affected if, upon expiration, a number of our partners do not continue to provide access to our service or are unwilling to do so on terms acceptable to us, which terms may include the degree of accessibility and prominence of our service. Furthermore, the devices consumers use to access our content are manufactured and sold by entities other than GTV and while these entities should be responsible for the devices’ performance, the connection between these devices and our service may nonetheless result in consumer dissatisfaction that could result in claims against us or otherwise adversely impact our business. In addition, technology changes to our streaming functionality may require that partners update their devices. If partners do not update or otherwise modify their devices, our service and our subscribers’ use and enjoyment could be negatively impacted.

Any significant disruption in our computer systems or those of third parties that we utilize in our operations could result in a loss or degradation of service and could adversely impact our business.

Our reputation and ability to attract, retain and serve our subscribers is dependent upon the reliable performance of our computer systems and those of third parties that we utilize in our operations. These systems may be subject to damage or interruption from earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, power loss, telecommunications failures, computer viruses, computer denial of service attacks, or other attempts to harm these systems. Interruptions in these systems, or to the Internet in general, could make our service unavailable or degraded or otherwise hinder our ability to deliver content to our subscribers. Service interruptions, errors in our software or the unavailability of computer systems used in our operations could diminish the overall attractiveness of our subscribership service to existing and potential subscribers.

Our servers and those of third parties we use in our operations are vulnerable to computer viruses, physical or electronic break-ins and similar disruptions and periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of data. Any attempt by hackers to disrupt our service or otherwise access our systems, if successful, could harm our business, be expensive to remedy and damage our reputation. We have implemented certain systems and processes to thwart hackers and to date, hackers have not had a material impact on our service or systems. However, this is no assurance that hackers may not be successful in the future. Our insurance does not cover expenses related to such disruptions or unauthorized access. Efforts to prevent hackers from disrupting our service or otherwise accessing our systems are expensive to implement and may limit the functionality of or otherwise negatively impact our service offering and systems. Any significant disruption to our service or access to our systems could result in a loss of subscribers and adversely affect our business and results of operation.

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We utilize our own communications and computer hardware systems located either in our facilities or in that of a third-party data centers. In addition, we utilize third-party Internet-based or “cloud” computing services in connection with our business operations. We also utilize third-party content delivery networks to help us stream content in high volume to our subscribers over the Internet. Problems faced by us or our service providers, including technological or business-related disruptions, could adversely impact the experience of our subscribers.

We rely on our proprietary technology to stream content and to manage other aspects of our operations, and the failure of this technology to operate effectively could adversely affect our business.

We continually enhance or modify the technology used for our operations. We cannot be sure that any enhancements or other modifications we make to our operations will achieve the intended results or otherwise be of value to our subscribers. Future enhancements and modifications to our technology could consume considerable resources. If we are unable to maintain and enhance our technology to manage the streaming of content to our subscribers in a timely and efficient manner, our ability to retain existing subscribers and to add new subscribers may be impaired. In addition, if our technology or that of third parties we utilize in our operations fails or otherwise operates improperly, our ability to retain existing subscribers and to add new subscribers may be impaired. Also, any harm to our subscribers’ personal computers or other devices caused by software used in our operations could have an adverse effect on our business, results of operations and financial condition.

Changes in how network operators handle and charge for access to data that travel across their networks could adversely impact our business.

We rely upon the ability of consumers to access our service through the Internet. To the extent that network operators implement usage based pricing, including meaningful bandwidth caps, or otherwise try to monetize access to their networks by data providers, we could incur greater operating expenses and our subscriber acquisition and retention could be negatively impacted. Furthermore, to the extent network operators were to create tiers of Internet access service and either charge us for or prohibit us from being available through these tiers, our business could be negatively impacted.

Our reputation and relationships with subscribers would be harmed if our subscriber data, particularly billing data, were to be accessed by unauthorized persons.

We maintain personal data regarding our subscribers, including names and billing data. With respect to billing data, such as credit card numbers, we rely on licensed encryption and authentication technology to secure such information. We take measures to protect against unauthorized intrusion into our subscribers’ data. Despite these measures, we, or our payment processing services, could experience an unauthorized intrusion into our subscribers’ data. In the event of such a breach, current and potential subscribers may become unwilling to provide the information to us necessary for them to become subscribers. Additionally, we could face legal claims for such a breach. The costs relating to any data breach could be material, and we currently do not carry insurance against the risk of a data breach. For these reasons, should an unauthorized intrusion into our subscribers’ data occur, our business could be adversely affected.

Increases in payment processing fees, changes to operating rules, the acceptance of new types of payment methods or payment fraud could increase our operating expenses and adversely affect our business and results of operations.

Our subscribers pay for our services predominately using credit and debit cards (together, “payment cards”). Our acceptance of these payment methods requires our payment of certain fees. From time to time, these fees may increase, either as a result of rate changes by the payment processing companies or as a result of a change in our business practices which increase the fees on a cost-per-transaction basis. Such increases may adversely affect our results of operations.

We are subject to rules, regulations and practices governing our accepted payment methods. These rules, regulations and practices could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept these payment methods, and our business and results of operations would be adversely affected.

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We accept payment methods other than payment cards. As our service continues to evolve and expand internationally, we will likely continue to explore accepting various forms of payment, which may have higher fees and costs than our currently accepted payment methods. If more consumers utilize higher cost payment methods, our payment costs could increase and our results of operations could be adversely impacted.

In addition, we do not obtain signatures from subscribers in connection with their use of payment methods. To the extent we do not obtain subscribers’ signatures, we may be liable for fraudulent payment transactions, even when the associated financial institution approves payment of the orders. From time to time, fraudulent payment methods are used to obtain service. While we do have certain safeguards in place, we nonetheless experience some fraudulent transactions. We do not currently carry insurance against the risk of fraudulent payment transactions. A failure to adequately control fraudulent payment transactions would harm our business and results of operations.

If our trademarks and other proprietary rights are not adequately protected to prevent use or appropriation by our competitors, the value of our brand and other intangible assets may be diminished, and our business may be adversely affected.

We rely and expect to continue to rely on a combination of confidentiality and license agreements with our employees, consultants and third parties with whom we have relationships, as well as trademark, copyright and trade secret protection laws, to protect our proprietary rights. We may also seek to enforce our proprietary rights through court proceedings. We may file from time to time for trademark applications. Nevertheless, these applications may not be approved, third parties may challenge any trademarks issued to or held by us, third parties may knowingly or unknowingly infringe our trademarks and other proprietary rights, and we may not be able to prevent infringement or misappropriation without substantial expense to us.

We currently hold various domain names, including www.gaia.com and www.gaiamtv.com. Failure to protect our domain names could adversely affect our reputation and make it more difficult for users to find our website and our service. We may be unable, without significant cost or at all, to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.

Intellectual property claims against us could be costly and result in the loss of significant rights related to, among other things, our website, title selection processes and marketing activities.

Trademark, copyright, patent and other intellectual property rights are important to us and other companies. Our intellectual property rights extend to our technology, business processes and the content on our website. We use the intellectual property of third parties in marketing and providing our service through contractual and other rights. From time to time, third parties may allege that we have violated their intellectual property rights. If we are unable to obtain sufficient rights, successfully defend our use, or develop non-infringing technology and content or otherwise alter our business practices on a timely basis in response to claims against us for infringement, misappropriation, misuse or other violation of third-party intellectual property rights, our business and competitive position may be adversely affected. Many companies are devoting significant resources to developing patents that could potentially affect many aspects of our business. There are numerous patents that broadly claim means and methods of conducting business on the Internet. We have not searched patents relative to our technology. Defending ourselves against intellectual property claims, whether they are with or without merit or are determined in our favor, results in costly litigation and diversion of technical and management personnel. It also may result in our inability to use our current website, streaming technology, our recommendation and merchandising technology or inability to market our service or merchandise our products. As a result of a dispute, we may have to develop non-infringing technology, enter into royalty or licensing agreements, adjust our merchandising or marketing activities or take other actions to resolve the claims. These actions, if required, may be costly or unavailable on terms acceptable to us.

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Piracy of video, including digital and Internet piracy may reduce the gross receipts from the exploitation of our content.

Video piracy is extensive in many parts of the world and is made easier by technological advances and the conversion of video into digital formats. This trend facilitates the creation, transmission and sharing of high quality unauthorized copies of content on DVDs, Blu-ray discs, and the Internet. We may have to implement elaborate and costly security and anti-piracy measures, which could result in significant expenses and losses of revenue. We cannot assure you that security and anti-piracy measures will prevent the piracy of our content. The proliferation of unauthorized copies of these products could have an adverse effect on our business, because these products could reduce the revenues we receive from our subscription service.

Our online activities are subject to a variety of laws and regulations relating to privacy which, if violated, could subject us to an increased risk of litigation and regulatory actions.

In addition to our websites and applications, we use third-party applications, websites, and social media platforms to promote our service and engage consumers, as well as monitor and collect certain information about users of our service. There are a variety of laws and regulations governing individual privacy and the protection and use of information collected from such individuals, particularly in relation to an individual’s personally identifiable information (e.g., credit card numbers). Many foreign countries have adopted similar laws governing individual privacy, some of which are more restrictive than similar U.S. laws. If our online activities were to violate any applicable current or future laws and regulations, we could be subject to litigation and regulatory actions, including fines and other penalties.

We may be subject to litigation which, if adversely determined, could cause us to incur substantial losses.

From time to time during the normal course of operating our businesses, we are subject to various litigation claims and legal disputes. Some of the litigation claims may not be covered under our insurance policies, or our insurance carriers may seek to deny coverage. As a result, we might also be required to incur significant legal fees, which may have a material adverse effect on our financial position. In addition, because we cannot accurately predict the outcome of any action, it is possible that, as a result of current and/or future litigation, we will be subject to adverse judgments or settlements that could significantly reduce our earnings or result in losses.

We may face legal liability for the content contained on our websites.

We could face legal liability for defamation, negligence, copyright, patent or trademark infringement, personal injury or other claims based on the nature and content of materials that we publish or distribute on our websites. If we are held liable for damages for the content on our websites, our business may suffer. Further, one of our goals is for our websites to be trustworthy and dependable providers of information and services. Allegations of impropriety, even if unfounded, could therefore have a material adverse effect on our reputation and our business.

If government regulations relating to the Internet or other areas of our business change, we may need to alter the manner in which we conduct our business, or incur greater operating expenses.

The adoption or modification of laws or regulations relating to the Internet or other areas of our business could limit or otherwise adversely affect the manner in which we currently conduct our business. In addition, the continued growth and development of the market for online commerce may lead to more stringent consumer protection laws, which may impose additional burdens on us. If we are required to comply with new regulations or legislation or new interpretations of existing regulations or legislation, this compliance could cause us to incur additional expenses or alter our business model.

The adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, including laws impacting Internet neutrality, could decrease the demand for our service and increase our cost of doing business. For example, in late 2010, the Federal Communications Commission (“FCC”) adopted so-called “net neutrality” rules intended, in part, to prevent network operators from discriminating against legal traffic that transverse their networks. On January 14, 2014 the U.S. Court of Appeals for the District of Columbia struck down

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the FCC’s net neutrality rules, and on May 15, 2014, the FCC released a Notice of Proposed Rulemaking to consider the court’s decision and what actions the FCC should take in response. On February 26, 2015, the FCC adopted new net neutrality rules to replace those adopted in late 2010. The new rules, which went into effect on June 12, 2015, specifically prohibit broadband providers from blocking access to legal content, applications, services or non-harmful devices; impairing or degrading lawful Internet traffic on the basis of content, application, services or non-harmful devices; and would prohibit paid prioritization, e.g., the favoring of some lawful Internet traffic over other traffic in exchange for higher payments. The U.S. Court of Appeals for the District of Columbia Circuit is scheduled to hear arguments against the FCC’s new net neutrality rules on December 4, 2015.

We cannot predict whether the new rules will be overturned or vacated by legal action. If so, broadband internet access providers may be able to charge web-based services such as ours for priority access to customers, which could result in increased costs and a loss of existing users, impair our ability to attract new users, and materially and adversely affect our business and opportunities for growth. Additionally, as we expand internationally, government regulation concerning the Internet, and in particular, network neutrality, may be nascent or non-existent. Within such a regulatory environment, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.

Liability relating to environmental matters may impact the value of our real property.

We may be subject to environmental liabilities arising from our ownership of real property. Under various U.S. federal, state and local laws, an owner or operator of real property may become liable for the costs of removal of certain hazardous substances released on its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances.

The presence of hazardous substances on real property owned by us may adversely affect our ability to sell such real property and we may incur substantial remediation costs, thus harming our financial condition. The discovery of material environmental liabilities attached to such real property could adversely affect our results of operations and financial condition.

We could be subject to economic, political, regulatory and other risks arising from international operations.

Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks that may be different from and incremental to those in the United States. In addition to the risks that we face in the United States, our international operations may involve risks that could adversely affect our business, including:

• the need to adapt our content and user interfaces for specific cultural and language differences, including licensing a certain portion of our content library before we have developed a full appreciation for its performance within a given territory;

• difficulties and costs associated with staffing and managing foreign operations;

• management distraction;

• political or social unrest and economic instability;

• compliance with U.S. laws, such as the Foreign Corrupt Practices Act, export controls and economic sanctions, and local laws prohibiting corrupt payments to government officials;

• unexpected changes in regulatory requirements;

• less favorable foreign intellectual property laws;

• adverse tax consequences such as those related to repatriation of cash from foreign jurisdictions into the United States, non-income related taxes such as value-added tax or other indirect taxes, changes in tax laws or their interpretations, or the application of judgment in determining our global provision for income taxes and other tax liabilities given inter-company transactions and calculations where the ultimate tax determination is uncertain;

• fluctuations in currency exchange rates, which could impact revenues and expenses of our international operations and expose us to foreign currency exchange rate risk;

• profit repatriation and other restrictions on the transfer of funds;

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• differing payment processing systems as well as consumer use and acceptance of electronic payment methods, such as payment cards;

• new and different sources of competition;

• different and more stringent user protection, data protection, privacy and other laws; and

• availability of reliable broadband connectivity and wide area networks in targeted areas for expansion.

Our failure to manage any of these risks successfully could harm our international operations and our overall business, and results of our operations.

Our business is subject to reporting requirements that continue to evolve and change, which could continue to require significant compliance effort and resources.

Because our common stock will be publicly traded, we will be subject to certain rules and regulations of federal, state and financial market exchange entities charged with the protection of investors and the oversight of companies whose securities are publicly traded. These entities, including the Public Company Accounting Oversight Board (the “PCAOB”), the SEC and NASDAQ (after our Class A common stock has been approved for listing), periodically issue new requirements and regulations and legislative bodies also review and revise applicable laws. As interpretation and implementation of these laws and rules and promulgation of new regulations continues, we will continue to be required to commit significant financial and managerial resources and incur additional expenses.

Any of these events, in combination or individually, could disrupt our business and adversely affect our business, financial condition, results of operations and cash flows.

We may lose key employees or may be unable to hire qualified employees.

We rely on the continued service and performance of our senior management, including in particular our Chairman and founder of Gaiam, Inc., Jirka Rysavy. In our industry, there is substantial and continuous competition for highly skilled business, product development, technical and other personnel. Hiring qualified management is difficult due to the limited number of qualified professionals in the industry in which we operate. Failure to recruit, attract and retain personnel, particularly management personnel, could materially harm our business, financial condition, and results of operations.

We may face quarterly and seasonal fluctuations that could harm our business.

Our revenues and results of operations have fluctuated in the past, and will likely continue to fluctuate, on a quarterly basis. Such fluctuation is the result of a seasonal pattern that reflects variations when consumers buy Internet-connected devices and, as a result, tend to increase their viewing, similar to those of general video streaming services. Our member growth is generally greatest in the fourth and first quarters (October through March), and slowest in the May through August period.

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Risks Relating to Separating GTV from Gaiam, Inc.

We face the following risks in connection with our separation from Gaiam, Inc.:

Our historical and pro forma consolidated financial information is not necessarily representative of the results we would have achieved as an independent, publicly-traded company and may not be a reliable indicator of our future results.

The historical and pro forma consolidated financial information included in this information statement does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as an independent, publicly-traded company during the periods presented or those that we will achieve in the future, primarily as a result of the following factors:

• Before our separation, our business was operated by Gaiam, Inc. as part of its broader corporate organization, rather than as an independent, publicly-traded company. In addition, before our separation, Gaiam, Inc., or one of its affiliates, performed significant corporate functions for us, including tax and treasury administration and certain governance functions, including internal audit, external reporting and compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). Our historical and pro forma financial statements reflect allocations of corporate expenses from Gaiam, Inc. for these and similar functions, and these allocations might be more or less than the comparable expenses we would have incurred had we operated as a separate, publicly-traded company.

• Our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, historically have been satisfied as part of the company-wide cash management practices of Gaiam, Inc. Following the completion of the spin-off without the opportunity to obtain financing from Gaiam, Inc., we may need to draw from our credit line, to obtain additional financing from banks, through public offerings or private placements of debt or equity securities or other arrangements.

• Prior to December 31, 2014, our business was integrated with the direct business segment of Gaiam, Inc. As a result, we have historically shared economies of scope and scale in costs, employees, vendor relationships and certain customer relationships. While we expect to enter into a transitional operating agreement with Gaiam, Inc. that will govern certain commercial and other relationships between Gaiam, Inc. and us, those temporary arrangements may not capture the benefits our business has enjoyed as a result of being integrated with the other business segments of Gaiam, Inc. The loss of these benefits may have an adverse effect on our business, results of operations and financial condition following the spin-off.

• Other significant changes may occur in our cost structure, management, financing and business operations as a result of our operating as a company separate from Gaiam, Inc.

If the certain internal transactions undertaken in anticipation of the spin-off or the distribution are determined to be taxable for U.S. federal income tax purposes, we, our shareholders that are subject to U.S. federal income tax and Gaiam, Inc. could incur significant U.S. federal and state income tax liabilities.

Gaiam, Inc. will rely on an opinion of tax counsel substantially to the effect that the distribution, except for cash received in lieu of a fractional share of our common stock, and except for certain internal transactions taken in anticipation of the spin-off, should qualify as tax-free under Sections 368(a)(1)(D) and 355 of the Code. The Internal Revenue Service (“IRS”) will no longer rule on whether transactions under these sections qualify for non-recognition treatment. Therefore, Gaiam, Inc. has not applied for a private letter ruling from the IRS regarding the U.S. federal income tax consequences of the distribution of our common stock to Gaiam, Inc.’s shareholders. The opinion relies or will rely on certain facts and assumptions, and certain representations and undertakings, from us and Gaiam, Inc. regarding the past and future conduct of our respective businesses and other matters. Notwithstanding the opinion, the IRS could determine on audit that the internal transactions or the distribution should be treated as taxable transactions if it determines that any of these facts, assumptions, representations or undertakings is not correct or has been violated, or that the distribution should be taxable for other reasons, including as a result of significant changes in stock or asset ownership after the distribution. If the distribution ultimately is determined to be taxable, the distribution could be treated as a taxable dividend or capital gain to you for U.S. federal income tax purposes, and you could incur significant U.S. federal or state income tax liabilities. In addition, Gaiam, Inc. would recognize gain in an amount equal to the excess of the fair market value of our common stock distributed to Gaiam, Inc.’s shareholders on the distribution date over Gaiam, Inc.’s tax basis in such common stock. We and Gaiam, Inc. could incur significant U.S. federal or state income tax liabilities if it ultimately is determined that certain internal transactions undertaken in anticipation of the spin-off should be treated as taxable transactions. For additional information regarding the tax opinion and potential tax consequences to you after the spin-off, see “The Spin-Off – Certain Material U.S. Federal Income Tax Consequences of the Distribution.”

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We might not be able to engage in desirable strategic transactions and equity issuances for a period of time following the spin-off because of restrictions relating to U.S. federal income tax requirements for a tax-free distribution.

Our ability to engage in significant equity transactions resulting in a change of control could be limited or restricted after the distribution in order to preserve, for U.S. federal income tax purposes, the tax-free nature of the distribution by Gaiam, Inc. In addition, similar limitations and restrictions will apply to Gaiam, Inc. Even if certain internal transaction taken in anticipation of the spin-off, and the distribution otherwise qualify for tax-free treatment under Sections 368(a)(1)(D) and 355 of the Code, the distribution may result in corporate level taxable gain to Gaiam, Inc. under Section 355(e) of the Code if 50% or more, by vote or value, of our common stock or Gaiam, Inc.’s common stock is acquired or issued as part of a plan or series of related transactions that includes the distribution. For this purpose, any acquisitions or issuances of Gaiam, Inc.’s common stock within two years before the distribution, and any acquisitions or issuances of our common stock or Gaiam, Inc.’s common stock within two years after the distribution generally are presumed to be part of such a plan, although we or Gaiam, Inc. may be able to rebut that presumption. Gaiam, Inc. has not issued stock other than pursuant to equity compensation plans, and in connection with the acquisition of My Yoga Online which issuance was completed in November 2013. If an acquisition or issuance of our common stock or Gaiam, Inc.’s common stock triggers the application of Section 355(e) of the Code, Gaiam, Inc. would recognize taxable gain as described above; however, we expect that the distribution should remain tax-free to each of Gaiam, Inc.’s shareholders.

We expect that under the transitional operating agreement, there will be restrictions on Gaiam, Inc.’s and our ability to take actions that could cause the distribution or certain internal transactions undertaken in anticipation of the spin-off to fail to qualify as tax-favored transactions. These restrictions are expected to generally apply for the two-year period after the distribution. These restrictions may prevent us from entering into transactions which might be advantageous to our shareholders.

As an independent, publicly-traded company, we may not enjoy the same benefits that we did as a part of Gaiam, Inc.

There is a risk that, by separating from Gaiam, Inc., we may become more susceptible to market fluctuations and other adverse events than we would have been were we still a part of the current Gaiam, Inc. organizational structure. As part of Gaiam, Inc., we have been able to enjoy certain benefits from Gaiam, Inc.’s operating diversity, purchasing power, credit worthiness, available capital for operations and investments and opportunities to pursue integrated strategies with Gaiam, Inc. As an independent, publicly-traded company, we will not have similar diversity or integration opportunities and may not have similar purchasing power credit worthiness, or access to capital markets. This could result in insufficient liquidity to carry out our business plan.

In some cases, we might have received better terms from unaffiliated third parties than the terms we received in our agreements with Gaiam, Inc.

The agreements related to our separation from Gaiam, Inc., including the reorganization agreement, the license agreements and the transitional operating agreement have been and will continue to be negotiated in the context of our separation from Gaiam, Inc. while we were still part of Gaiam, Inc. and, accordingly, may not reflect terms that would have resulted from arm’s-length negotiations among unaffiliated third parties. The spin-off agreements will be approved in consideration of the best interests of Gaiam, Inc.’s shareholders and may conflict with your interests as a shareholder of GTV.

We may be unable to make the changes necessary to operate as an independent, publicly-traded company on a timely or cost-effective basis, and we may experience increased costs after the spin-off or as a result of the spin-off.

Following the completion of our separation, Gaiam, Inc. will be obligated contractually to provide to us transition services specified in agreements we will enter into with Gaiam, Inc. in preparation for the spin-off. We may be unable to replace in a timely manner or on comparable terms the services or other benefits that Gaiam, Inc. previously provided to us that are not specified in the transitional operating agreement. After the expiration of the transitional operating agreement, we may be unable to replace in a timely manner or on comparable terms the services specified in such agreement. Upon expiration of the transitional operating agreement, services that are covered in such

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agreement will have to be provided internally or by unaffiliated third parties. We may incur higher costs to obtain such services than we incurred previously. In addition, if Gaiam, Inc. does not continue to perform the transitional operating agreement and the other services that are called for under the transitional operating agreement, we may not be able to operate our business as effectively and our profitability may decline.

Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the spin-off. If we are unable to achieve and maintain effective internal controls, our business, financial position and results of operations could be adversely affected.

Our financial results previously were included within the consolidated results of Gaiam, Inc., and our reporting and control systems were the same as those of Gaiam, Inc. However, we were not directly subject to reporting and other requirements of the Exchange Act. As a result of the spin-off, we will be directly subject to reporting and other obligations under the Exchange Act, including the requirements of Section 404 of the Sarbanes-Oxley Act, which will require annual management assessments of and reporting on the effectiveness of our internal control over financial reporting. These reporting and other obligations will place significant demands on our management and administrative and operational resources, including accounting resources. To comply with these requirements, we anticipate that we will need to upgrade our systems, including information technology, implement additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff. If we are unable to upgrade our financial and management controls, reporting systems, information technology and procedures in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired. If we are unable to comply with these obligations or experience delays in reports of our management on our internal control over financial reporting, we might be unable timely to file with the SEC our annual or periodic reports and might be subject to regulatory and enforcement actions by the SEC and NASDAQ, including delisting from the NASDAQ market, securities litigation, events of default under our future credit agreements, debt rating agency downgrades or rating withdrawals and a general loss of investor confidence, any one of which would adversely affect the valuation of our common stock and could adversely affect our business prospects.

As an “emerging growth company” and as a “smaller reporting company,” we are excluded from Section 404(b) of the Sarbanes-Oxley Act, which otherwise would have required our auditors to formally attest to and report on the effectiveness of our internal control over financial reporting. If we cannot favorably assess the effectiveness of our internal control over financial reporting, or once we are no longer an emerging growth company or a smaller reporting company, our independent registered public accounting firm cannot provide an unqualified attestation report on the effectiveness of our internal control over financial reporting, investor confidence and, in turn, the market price of our common stock could decline.

The ownership by our executive officers and some of our directors of Gaiam, Inc.’s common stock, options or other equity awards may create, or may create the appearance of, conflicts of interest.

Because of their current or former positions with Gaiam, Inc., substantially all of our executive officers, including our Chairman and Chief Executive Officer, and our Chief Financial Officer, and some of our non-employee director nominees, own Gaiam, Inc.’s common stock and/or options to purchase Gaiam, Inc.’s common stock. Following Gaiam, Inc.’s distribution of GTV to its shareholders, these officers and non-employee directors will own common stock and options to purchase common stock in Gaiam, Inc. and GTV. The individual holdings of common stock or options to purchase common stock of Gaiam, Inc. and GTV may be significant for some of these persons compared to their total assets. These equity interests may create, or appear to create, conflicts of interest when these directors and officers are faced with decisions that could benefit or affect the equity holders of Gaiam, Inc. in ways that do not benefit or affect us in the same manner.

After the spin-off, certain of our directors may have actual or potential conflicts of interest because of their ongoing employment by or relationships with Gaiam, Inc.

We expect that certain our director nominees, Jirka Rysavy and             , will continue as directors of Gaiam, Inc. after the spin-off. In addition, Mr. Rysavy will continue to serve as Chairman of Gaiam, Inc. The holding of these positions by these persons could create, or appear to create, potential conflicts of interest when our and Gaiam, Inc.’s management and directors face

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decisions that could have different implications for us or Gaiam, Inc. For example, potential conflicts of interest could arise in connection with the resolution of any dispute between us and Gaiam, Inc. regarding the terms of the reorganization agreement, the license agreements, or the transitional operating agreement which we expect to enter into in connection with the spin-off. Potential conflicts of interest could also arise in the event our business operations compete with the business operations of Gaiam, Inc. or if we and Gaiam, Inc. enter into any commercial arrangements with each other in the future. Further, conflicts of interest may arise with regard to the allocation of time by these individuals between Gaiam, Inc. and us.

GTV may not realize the potential benefits from the spin-off in the near future or at all.

In this information statement, we describe the anticipated strategic and financial benefits that we expect to realize as a result of our separation from Gaiam, Inc., under the heading “The Spin-Off – Reasons for the Spin-Off.” In particular, we believe that the spin-off will better position us to take advantage of business opportunities, strategic alliances and other acquisitions through GTV’s enhanced acquisition currency and greater liquidity. We also expect the spin-off to enable GTV to provide its employees with more attractive equity incentive awards. However, no assurance can be given that the market will react favorably to the spin-off or that the current discount applied by the market to Gaiam, Inc.’s stock will not be applied in full to our common stock, thereby causing GTV’s equity to be less attractive to its employees as well as any potential acquisition counterparties. In addition, no assurance can be given that any investment, acquisition or other strategic opportunities will become available following the spin-off on terms that GTV finds favorable or at all. Given the added costs associated with the completion of the spin-off, including the separate accounting, legal and other compliance costs of being a separate public company and potential tax liabilities, our failure to realize the anticipated benefits of the spin-off in the near term or at all could adversely affect our company.

Gaiam, Inc.’s board of directors may abandon the spin-off at any time, and our board of directors may determine to amend the terms of any agreement we enter into relating to the spin-off.

No assurance can be given that the spin-off will occur, or if it occurs that it will occur on the terms described in this information statement. In addition to the conditions to the spin-off described herein (all of which may be waived by Gaiam, Inc.’s board of directors in its sole discretion), Gaiam, Inc.’s board of directors may abandon the spin-off at any time before the distribution date for any reason or for no reason. In addition, the agreements to be entered into by GTV in connection with the spin-off (including the reorganization agreement, transitional operating agreement and the license agreements) may be amended or modified before the distribution date in the sole discretion of Gaiam, Inc. If any condition to the spin-off is waived or if any material amendments or modifications are made to the terms of the spin-off or to such ancillary agreements before the spin-off, Gaiam, Inc. intends to promptly issue a press release and file a Form 8-K informing the market of the substance of such waiver, amendment or modification.

Risks Relating to Our Common Stock

We face the following risks in connection with the ownership of our common stock.

There is no existing market for our common stock and a trading market that will provide you with adequate liquidity may not develop for our common stock. In addition, once our Class A common stock begins trading, the market price of our Class A common stock may fluctuate widely.

There currently is no public market for our common stock. We anticipate that, on or before the record date for the distribution, trading of our Class A common stock will begin on a “when-issued” basis and will continue through the distribution date. We cannot assure you that an active trading market for our Class A common stock will develop as a result of the distribution or be sustained in the future. We do not expect to list our Class B common stock on any securities exchange or market and we do not expect that there will be any public market for our Class B common stock.

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We cannot predict the prices at which our Class A common stock may trade after the distribution. The combined trading prices of a share of our Class A common stock and a share of Gaiam, Inc.’s Class A common stock after the spin-off may not equal or exceed the trading price of a share of Gaiam, Inc.’s Class A common stock immediately before the spin-off. The market price of our Class A common stock may fluctuate widely, depending upon many factors, some of which are beyond our control. These factors include:

• a lack of trading history;

• a shift in our investor base;

• our business profile and market capitalization may not fit the investment objectives of Gaiam, Inc.’s shareholders;

• our capital structure;

• our quarterly or annual earnings, or those of other companies in our industry;

• actual or anticipated fluctuations in our operating results due to the seasonality of our business and other factors related to our business;

• the operating and stock price performance of other comparable companies;

• strategic moves by us or our competitors including significant acquisitions or dispositions;

• changes in governmental regulations or in the status of our regulatory approvals;

• changes in accounting standards, policies, guidance, interpretations or principles;

• the failure of securities analysts to cover our Class A common stock after the spin-off;

• recommendations by securities analysts or changes in earnings estimates, and our announcements about our earnings that are not in line with analyst expectations, the likelihood of which is enhanced because it is our policy not to give guidance on earnings;

• the volume of shares of our Class A common stock available for public sale and the liquidity of the market for our Class A common stock;

• short sales, hedging and other derivative transactions on shares of our Class A common stock;

• overall market fluctuations; and

• general economic conditions.

In addition, stock markets in general have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of a particular company. These broad market factors may seriously harm the market price of our Class A common stock, regardless of our actual operating performance. In the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against such companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Our Chairman and Chief Executive Officer Jirka Rysavy will control GTV

After the spin-off, Mr. Rysavy will hold 100% of our outstanding Class B common stock and approximately 3.3% of our outstanding Class A common stock based on his current ownership of Gaiam, Inc. common stock. The shares of our Class B common stock are convertible into shares of our Class A common stock at any time. Each share of our Class B common stock has ten votes per share, and each share of our Class A common stock has one vote per share. Consequently, we expect that Mr. Rysavy will be able to vote approximately 74.6% of our voting stock after the spin-off and, thus, will be able to

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exert substantial influence over GTV and to control matters requiring approval by our shareholders, including the election of directors, increasing our authorized capital stock, or a merger or sale of substantially all of our assets. As a result of Mr. Rysavy’s control, no change of control of GTV can occur without Mr. Rysavy’s consent.

Investors may be unable to accurately value our Class A common stock.

Investors often value companies based on the stock prices and results of operations of other comparable companies. Currently, there may be no public company in existence that is directly comparable to our size and scale and product offerings. For these reasons, investors may find it difficult to accurately value our Class A common stock, which may cause our Class A common stock to trade below our true value.

Substantial sales of our Class A common stock may occur in connection with this distribution, which could cause our share price to decline.

Our Class A common stock that Gaiam, Inc. distributes to its shareholders generally may be sold immediately in the public market. We expect that some of Gaiam, Inc.’s shareholders, including possibly some of our larger shareholders, will sell our Class A common stock received in the distribution because, among other reasons, our business profile or market capitalization as an independent, publicly-traded company does not fit their investment objectives. The sales of significant amounts of our Class A common stock or the perception in the market that these sales will occur could adversely affect the market price of our Class A common stock.

Your percentage ownership of our common stock may be diluted in the future.

Your percentage ownership of our common stock may be diluted in the future because of equity awards that we expect will be granted to our directors, officers and employees. On February 26, 2015, Gaiam, Inc., in its capacity as our sole shareholder, approved the Gaia, Inc. Long Term Deferred Equity Plan, which provides for grants of awards of restricted stock units to our directors, officers and employees, which is explained in greater detail under “Executive Compensation – Gaia, Inc. Long Term Deferred Equity Compensation Plan” included elsewhere in this information statement. Before the record date for the distribution, we expect that Gaiam, Inc.’s board of directors and our current sole shareholder will approve the Gaia, Inc. 2015 Long-Term Incentive Plan, which will provide for the grant of equity-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance grants and other equity-based awards to our directors, officers and other employees, advisors and consultants, and which is explained in greater detail under “Executive Compensation – Gaia, Inc. 2015 Long-Term Incentive Plan” included elsewhere in this information statement.

We currently do not intend to pay dividends on our common stock.

We have never paid dividends and we currently do not intend to pay dividends on our common stock. If we do not pay dividends, the price of our common stock that you receive in the distribution must appreciate for you to receive a gain on your investment in our common stock. This appreciation may not occur.

We are an emerging growth company and a smaller reporting company and cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies. See “Our Business – Status as an Emerging Growth Company and Smaller Reporting Company” for an explanation of these exemptions. Accordingly, the information that we provide stockholders in this information statement and in our other filings with the SEC may be different than what is available with respect to other public companies. We cannot predict if investors will find our Class A common stock less attractive because we will rely on these exemptions. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile and adversely affected.

Additionally, as an emerging growth company, we have elected to take advantage of the extended transition period for complying with new or revised accounting standards applicable to public companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards.

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We will remain an emerging growth company until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date on which we are deemed to be a “large accelerated filer,” as defined in Rule 12b-2 under the Exchange Act or any successor statute, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period, and (iv) the end of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement filed under the Securities Act.

We also qualify as a “smaller reporting company” under the Exchange Act. As a smaller reporting company, we enjoy many of the same exemptions and reduced disclosure requirements as emerging growth companies, and those exemptions would continue to be available to us even after the emerging growth company status expires if we still are a smaller reporting company at such time.

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CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS

We have made forward-looking statements in this information statement that involve risks and uncertainties, including in the sections entitled “Summary,” “Risk Factors,” “Questions and Answers About the Spin-Off,” “The Spin-Off,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Our Business.” Forward-looking statements include, but are not limited to, the information concerning GTV’s possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, benefits resulting from GTV’s separation from Gaiam, Inc., the effects of competition and the effects of future legislation or regulations.

Forward-looking statements include all statements that are not historical facts and can be identified by the use of words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “strive,” “future,” “intend,” “will” and similar expressions as they relate to GTV or its management and are intended to identify such forward-looking statements. GTV’s actual results could differ materially from the results anticipated in these forward-looking statements as a result of certain factors set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors” and elsewhere in this information statement.

Risks and uncertainties that could cause actual results to differ include, without limitation, our ability to successfully acquire and retain subscribers, the relative success of our competitors, our ability to achieve and maintain profitability as an independent company, our ability to manage change and growth, our ability to achieve subscriber satisfaction and loyalty, changes in subscriber acquisition sources, increases in marketing expenses, fluctuating subscriber levels, changing costs and liabilities in respect of content, reliance on strategic partners, disruption of our computer systems or those of our service providers, failure of our proprietary technology, changes in access to Internet and data services, data security breaches, changing costs and regulations with respect to payment processing, payment processing fraud, the adequacy of our intellectual property rights, intellectual property claims and other litigation brought against us, liability related to environmental factors effecting the value of our property, reduced profitability due to digital and Internet piracy, changes to Internet-related regulations, violations of privacy laws and regulations, risks arising from international operations, changing reporting requirements, loss of or inability to hire key personnel, quarterly or seasonal fluctuations in revenue, reliability of pro forma financial information, our needs for corporate services as an independent company, our capital needs as an independent company, the loss of economies of scope and scale as an independent company, potential changes to our business and operations as a result of operating as a company separate from Gaiam, Inc., tax treatment of the spin-off, restrictions on strategic transactions, increased susceptibility to market fluctuations and adverse events as an independent company, the terms of the agreements entered into in connection with the spin-off, our ability to successfully adapt our operations as an independent company, increased costs of operating as an independent company, the attractiveness of our common stock to investors, the adequacy of our accounting and management systems, actual or apparent conflicts of interest with our directors and executive officers, failure to realize the anticipated benefits of the spin-off, abandonment of the spin-off or changes to the terms, inadequate liquidity for and fluctuations in the price of our common stock, control of GTV by its founder, the ability for investors to accurately value our common stock, downward pressure on the share price of our common stock, future dilution of shareholders, whether we pay dividends on our common stock in the future, our status as an emerging growth company and as a smaller reporting company and the marketplace’s perception thereof, and other risks and uncertainties included in GTV’s filings with the SEC.

No forward-looking statement is a guarantee of future performance, and you should not place undue reliance on these forward-looking statements which reflect our management’s view only as of the date of this information statement. GTV and Gaiam, Inc. undertake no obligation to update any forward-looking information.

The risk factors discussed in “Risk Factors” could cause GTV’s results to differ materially from those expressed in forward-looking statements. There may be other risks and uncertainties that GTV is unable to predict at this time or that GTV currently does not expect to have a material adverse effect on GTV’s business.

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THE SPIN-OFF

Background for the Spin-Off

In August 2014, Gaiam, Inc. announced that its board of directors had approved the pursuit of the separation of Gaiam, Inc. into two independent, publicly-traded companies: one for Gaiam, Inc.’s Branded Business operations, and one for its Subscription Business. The spin-off will occur through distribution to Gaiam, Inc.’s shareholders of all of the shares of our common stock. Gaiam, Inc. will continue to own and operate its Branded Business operations after the spin-off.

Gaiam, Inc.’s board of directors and its senior leadership regularly review its prospects, business plan and business alternatives to confirm that its resources are being put to use in a manner that is in the best interests of its shareholders. In reaching the decision to pursue the spin-off, Gaiam, Inc.’s board of directors and its senior leadership, in consultation with its advisors, considered a wide range of transactions as alternatives to maximize shareholder value, including the continuation of Gaiam, Inc.’s current operating strategy, the issuance of a tracking stock, and potential divestitures, acquisitions and capital formation transactions. As a result of these evaluations, and after considering a variety of factors surrounding the operations and financial results of the Subscription Business and the Branded Business, Gaiam, Inc.’s management and its board of directors concluded that pursuing the separation of the businesses into two independent public companies in a distribution structured to be tax-free to shareholders was the course most likely to best position the Subscription Business and the Branded Businesses for success and create the greatest enhancement to shareholder value. We believe that following the spin-off, GTV will be able to better focus on the development of its core business and capital structure, and that GTV will realize enhanced market recognition and demand as an investment opportunity as set forth below under the heading “The Spin-Off–Reasons for the Spin-Off.”

In each of January, March and June of 2014, Gaiam, Inc.’s board of directors met to discuss the spin-off. In these meetings, Gaiam, Inc.’s board of directors considered, among other things, the benefits to the businesses and to Gaiam, Inc.’s shareholders that are expected to result from the spin-off, the capital allocation strategies and dividend policies for the separated companies, the allocation of Gaiam, Inc.’s existing assets, liabilities and businesses between the separated companies, the terms of certain commercial relationships between the separated companies that will exist following the spin-off, the corporate governance arrangements that will be in place at each company following the spin-off and the appropriate members of senior management at each company following the spin-off.

On                     ,         , the distribution date, each holder of Gaiam, Inc.’s Class A common stock will receive one share of our Class A common stock for each              share(s) of Gaiam, Inc.’s Class A common stock held by such holder at the close of business on                     ,         , the record date of the distribution, and each holder of Gaiam, Inc.’s Class B common stock will receive one share of our Class B common stock for each              share(s) of Gaiam, Inc.’s Class B common stock held by such holder at the close of business on                     ,         , the record date of the distribution, as described below. Immediately following the distribution, Gaiam, Inc.’s shareholders will own 100% of the outstanding shares of our common stock. You will not be required to make any payment, surrender or exchange your common stock of Gaiam, Inc. or take any other action to receive your shares of our common stock.

The distribution of our common stock as described in this information statement is subject to the satisfaction or waiver of certain conditions. For a more detailed description of these conditions, see “The Spin-Off – Conditions to the Spin-Off.”

Reasons for the Spin-Off

Gaiam, Inc.’s board of directors regularly reviews the various businesses that Gaiam, Inc. conducts to ensure that Gaiam, Inc.’s resources are being put to use in a manner that is in the best interests of Gaiam, Inc. and its shareholders. Gaiam, Inc. has concluded that the combined operation of the Branded Business and the Subscription Business has made it difficult for analysts and the market generally to understand the real value of each of these businesses. Gaiam, Inc.’s board of directors evaluated a number of strategic alternatives to increase value and concluded that a separation would be the most feasible and the most financially attractive approach. Gaiam, Inc.’s board of directors believes that creating independent, focused companies is the best way to unlock the full value of Gaiam, Inc.’s businesses in both the short and long term. After the spin-off, there will be one company that will operate Gaiam, Inc.’s Branded Business operations and one company that will operate Gaiam, Inc.’s Subscription Business.

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Gaiam, Inc. believes that the spin-off provides each separated company with certain opportunities and benefits. The following are some of the opportunities and benefits that Gaiam, Inc.’s board of directors considered in approving the spin-off:

• Business focus. Each separated company will be able to focus on its core business and growth opportunities. In addition, the management of each separated company will be able to design and implement corporate policies and strategies that are based primarily on the business characteristics of that company.

• Investment options. The spin-off will provide investors with two investment options that may be more attractive to investors than the investment option of one combined company. Investors will have the opportunity to invest individually in each of the independent, publicly-traded companies. Gaiam, Inc.’s board of directors believes that certain investors may want to invest only in one of the companies after the spin-off, and that the demand for the independent, publicly-traded companies by such investors may increase the demand for each company’s shares relative to the demand for Gaiam, Inc.’s common stock. The spin-off is intended to give current investors in Gaiam, Inc. the ability to choose how to diversify their Gaiam, Inc. holdings. We believe that the Subscription Business can attract Internet-oriented investors who may be less interested in the Branded Business.

• Market recognition. After the spin-off, Gaiam, Inc.’s board of directors believes the market will view GTV as a growth company expected to sustain losses as it continues to develop its core business, whereas the market will expect the established Branded Business to realize profit. The spin-off will allow the investment community, including analysts, shareholders and prospective investors in each company, to better evaluate the merits and future prospects of each company, thereby enhancing the likelihood that each company will receive appropriate market recognition of its performance and potential.

• Capital resources. Each independent, publicly-traded company is expected to have a capital structure adequate to meet its needs. As an independent, publicly-traded company, GTV’s capital structure is expected to facilitate selective acquisitions (possibly using GTV’s common stock as currency), strategic alliances and expansions that are important for us to remain competitive. After the spin-off, each independent, publicly-traded company will each have direct access to the capital markets, and will also no longer need to compete internally for capital resources. The separated companies will be able to concentrate their financial resources wholly on their own operations.

• Market value. Although there can be no assurance, Gaiam, Inc. believes that, over time, following the spin-off, the common stock of the independent, publicly-traded companies should have a higher aggregate market value, on a fully distributed basis and assuming the same market conditions, than if Gaiam, Inc. was not to complete the spin-off. Gaiam, Inc. believes that the public markets and securities analysts have a difficult time evaluating Gaiam, Inc. because its business consists of a combination of two distinct business lines. Gaiam, Inc. believes that the public market participants may not fully understand each of the business lines and that it is more difficult to compare Gaiam, Inc. to companies that primarily operate in only one of Gaiam, Inc.’s business lines. As a result, Gaiam, Inc. believes that the market price of Gaiam, Inc.’s Class A common stock does not accurately reflect the total value of its two business lines, and that, following the spin-off, it will be easier for public market participants to better understand the strengths and future prospects of each company’s respective business. Further, Gaiam, Inc. believes that separating the two businesses will make the respective common stock more attractive to investors as it will allow investors to make a more focused investment. Gaiam, Inc. expects that, over time, this will result in better stock market analysis and a higher aggregate stock price for Gaiam, Inc. and GTV. Gaiam, Inc.’s board of directors believes that this increase in the market value of the common stock, if achieved, should permit each independent, publicly-traded company to effect acquisitions with common stock in a manner that preserves capital with less dilution of the existing shareholders’ interests than would occur by issuing pre-distribution shares of Gaiam, Inc.’s common stock.

• Management incentives. The spin-off will permit the creation of equity securities, including options and restricted shares, for each of the independent, publicly-traded companies with a value that is expected to reflect more closely the efforts and performance of each company’s management. These equity securities should enable each independent, publicly-traded company to provide incentive compensation arrangements for its key employees that are directly related to the market performance of each company’s common stock. We believe these equity-based compensation arrangements should provide enhanced incentives for performance and improve the ability for each separate company to attract, retain and motivate qualified personnel.

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Gaiam, Inc.’s board of directors considered a number of potentially negative factors in evaluating the spin-off and concluded that the potential benefits of the spin-off outweighed these risks. The following are some of the negative factors and risks that Gaiam, Inc.’s board of directors considered in approving the spin-off:

• Potentially decreased capital for operations and investment. There is a risk that, by separating from Gaiam, Inc., we may become more susceptible to market fluctuations and other adverse events than we would have been were we still a part of the current Gaiam, Inc. organizational structure. As part of Gaiam, Inc., we have been able to enjoy certain benefits from Gaiam, Inc.’s operating diversity, purchasing power, creditworthiness, available capital for operations and investments and opportunities to pursue integrated strategies with Gaiam, Inc. As an independent, publicly-traded company, we will not have similar diversity or integration opportunities and may not have similar purchasing power, creditworthiness or access to capital markets. This could result in insufficient liquidity to carry out our business plan.

• Potential business disruptions. Gaiam, Inc.’s board of directors considered whether the spin-off would result in potential business disruptions. Specifically, the spin-off is a time-consuming and fairly resource intensive process that may divert efforts towards other aspects of the business. Furthermore, the separation of GTV from Gaiam, Inc. may cause temporary unanticipated issues with our customer base or shareholders, as a result of these changes.

• Risks of being unable to achieve the benefits of the spin-off. Although Gaiam, Inc. believes that over time, following the spin-off, the common stock of Gaiam, Inc. and GTV should have a higher aggregate market value, assuming the same market conditions, than if Gaiam, Inc. were to remain under its current configuration, we cannot assure you that this higher aggregate market value will be achieved. Over the short-term, we believe that there are a number of factors that could have the effect of causing an initial decline in the value of GTV common stock following the spin-off. These include the fact that some holders of Gaiam, Inc. common stock may sell shares in GTV immediately or within a short period after the spin-off and the perceived inability to appropriately value the GTV’s common stock due to lack of historical financial and performance data. Further, no assurance can be given that the market will react favorably to the spin-off or that the current discount applied by the market to Gaiam, Inc.’s common stock will not be applied in full to our common stock, thereby causing GTV’s equity to be less attractive to any potential acquisition counterparties. In addition, no assurance can be given that any investment, acquisition or other strategic opportunities will become available following the spin-off on terms that GTV finds favorable or at all. Neither we nor Gaiam, Inc. can assure you that, following the spin-off, any of the enumerated opportunities or benefits will be realized.

• The reaction of Gaiam, Inc.’s shareholders to the spin-off. Our Class A common stock that Gaiam, Inc. distributes to its shareholders generally may be sold immediately in the public market. We expect that some of Gaiam, Inc.’s shareholders, including possibly some of our larger shareholders, will sell our Class A common stock received in the distribution because, among other reasons, our business profile or market capitalization as an independent, publicly-traded company does not fit their investment objectives. The sales of significant amounts of our Class A common stock or the perception in the market that these sales will occur could adversely affect the market price of our Class A common stock.

• The risk that the spin-off might not be completed. No assurance can be given that the spin-off will occur, or if it occurs, that it will occur on the terms described in this information statement. In addition to the conditions to the spin-off described herein (all of which may be waived by Gaiam, Inc.’s board of directors in its sole discretion), Gaiam, Inc.’s board of directors may abandon the spin-off at any time before the distribution date for any reason or for no reason.

• One-time and ongoing costs of the spin-off. There are both one-time and ongoing costs associated with the completion of the spin-off, including the separate accounting, legal and other compliance costs of being a separate public company and potential tax liabilities. Gaiam, Inc.’s board of directors considered these costs in approving the spin-off. However, costs may be greater than expected, and there may be unanticipated costs that were not initially considered in the decision making process.

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Conditions to the Spin-Off

We expect that the distribution will be effective on             ,         , the distribution date, provided that, among other conditions described in this information statement, the following conditions shall have been satisfied or, if permissible under the reorganization agreement that we expect to adopt, waived by Gaiam, Inc.:

• the SEC shall have declared effective our registration statement on Form 10, of which this information statement is a part, under the Exchange Act, no stop order relating to the registration statement shall be in effect and this information statement shall have been mailed to holders of Gaiam, Inc.’s common stock;

• all permits, registrations and consents required under the securities or blue sky laws of states or other political subdivisions of the United States or of other non-U.S. jurisdictions in connection with the distribution shall have been received;

• all material governmental approvals and other consents necessary to consummate the distribution shall have been received;

• the listing of our Class A common stock on a NASDAQ market shall have been approved, subject to official notice of issuance;

• Gaiam, Inc. shall have received the opinion discussed below under “The Spin-Off – Certain Material U.S. Federal Income Tax Consequences of the Distribution” from the law firm of Brownstein Hyatt Farber Schreck, LLP, regarding the tax-free status of the distribution for U.S. federal income tax purposes; and

• no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing consummation of the distribution or any of the transactions related thereto, including the transfers of assets and liabilities contemplated by the reorganization agreement, shall be in effect.

The fulfillment of the foregoing conditions does not create any obligation on Gaiam, Inc.’s part to effect the distribution. Gaiam, Inc.’s board of directors has reserved the right to, in its sole discretion, amend, modify or abandon the distribution and related transactions at any time before the distribution date. Gaiam, Inc. has the right not to complete the distribution if, at any time, Gaiam, Inc.’s board of directors determines, in its sole discretion, that the distribution is not in the best interests of Gaiam, Inc. or its shareholders or that market conditions are such that it is not advisable to separate the Subscription Business from Gaiam, Inc.

Other than with respect to the registration of GTV’s Class A common stock under U.S. federal securities laws, GTV does not believe there are any governmental approvals required to complete this transaction.

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Manner of Effecting the Spin-Off

When and How You Will Receive the Distribution

We expect that Gaiam, Inc. will distribute our common stock on             ,             , the distribution date. Corporate Stock Transfer, will serve as transfer agent and registrar for our common stock. Corporate Stock Transfer will also serve as distribution agent in connection with the distribution. If you sell Gaiam, Inc.’s common stock in the “regular-way” market up to and including the distribution date, you will be selling your right to receive our common stock in the distribution.

If you own shares of Gaiam, Inc.’s common stock as of the close of business on the record date, our common stock that you are entitled to receive in the distribution will be issued electronically, as of the distribution date, to you or to your bank or brokerage firm on your behalf by way of direct registration in book-entry form. Registration in book-entry form refers to a method of recording share ownership when no physical share certificates are issued to shareholders, as is the case in this distribution.

If you hold physical share certificates that represent your shares of Gaiam, Inc.’s common stock and you are the registered holder of Gaiam, Inc. shares represented by those certificates, commencing on or shortly after the distribution date, the distribution agent will mail to you an account statement that indicates the number of shares of our common stock that have been registered in book-entry form in your name. If you have any questions concerning the mechanics of having our common stock registered in book-entry form, we encourage you to contact Corporate Stock Transfer at the address set forth on page 3 of this information statement.

Many of Gaiam, Inc.’s shareholders hold their shares of Gaiam, Inc.’s common stock through a bank or brokerage firm. In such cases, the bank or brokerage firm would be said to hold the shares in “street name” and ownership would be recorded on the bank or brokerage firm’s books. If you hold your shares of Gaiam, Inc.’s common stock through a bank or brokerage firm, your bank or brokerage firm will credit your account for our common stock that you are entitled to receive in the distribution. If you have any questions concerning the mechanics of having shares held in “street name,” we encourage you to contact your bank or brokerage firm.

The Number of Shares You Will Receive

Each holder of Gaiam, Inc.’s Class A common stock will receive one share of our Class A common stock for each              share(s) of Gaiam, Inc.’s Class A common stock held by such holder at the close of business on             ,             , the record date of the distribution, and each holder of Gaiam, Inc.’s Class B common stock will receive one share of our Class B common stock for each              share(s) of Gaiam, Inc.’s Class B common stock held by such holder at the close of business on             ,             , the record date of the distribution.

Gaiam, Inc. will not distribute any fractional shares to its shareholders. If you would otherwise have been entitled to a fractional share in the distribution, you will receive the net cash value of such fractional share instead. The transfer agent will aggregate all fractional shares of GTV’s Class A common stock into whole shares and sell them on the open market at the prevailing market prices on behalf of those registered holders who otherwise would be entitled to receive a fractional share. We anticipate that these sales will occur as soon as practicable after the distribution date. The transfer agent will then distribute the aggregate cash proceeds of such sale, in an amount equal to their pro rata share of the total proceeds of those sales. Any applicable expenses, including brokerage fees, will be paid by us. We do not expect the amount of any such fees to be material to us. We do not expect any fractional shares of our Class B common stock to exist after the spin-off.

The aggregate net cash proceeds of these sales generally will be taxable for U.S. federal income tax purposes. See “The Spin-Off – Material U.S. Federal Income Tax Consequences of the Distribution” for an explanation of the tax consequences of the distribution. The aggregate amount of cash to be received by each beneficial owner will not exceed the value of one share of Gaiam, Inc.’s common stock at the time of the distribution. If you physically hold certificates for Gaiam, Inc.’s common stock and are the registered holder, you will receive a check from the distribution agent in an amount equal to your pro rata share of the aggregate net cash proceeds. We estimate that it will take approximately two weeks from the distribution date for the distribution agent to complete the distribution

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of the aggregate net cash proceeds from the sale. If you hold your shares of Gaiam, Inc.’s common stock through a bank or brokerage firm, your bank or brokerage firm will receive, on your behalf, your pro rata share of the aggregate net cash proceeds of the sales and will electronically credit your account for your share of such proceeds.

Appraisal Rights

The holders of Gaiam, Inc’s common stock will not have any appraisal rights in connection with the spin-off under Colorado law.

Material U.S. Federal Income Tax Consequences of the Distribution

The following is a summary of the material U.S. federal income tax consequences of: (i) the contribution by Gaiam, Inc. of the assets of the Subscription Business to GTV; and (ii) the subsequent distribution by Gaiam, Inc. of our common stock to its shareholders (i.e., the separation). This summary is based on the Code, the Treasury Regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as in effect as of the date of this information statement and all of which are subject to differing interpretations and may change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below. This summary assumes that the separation will be consummated in accordance with the reorganization agreement that we expect to adopt in connection with the spin-off and as described in this information statement.

This summary is limited to holders of shares of Gaiam, Inc.’s common stock that are U.S. Holders, as defined immediately below, and does not apply to a holder that is not a U.S. Holder. For purposes of this summary, a U.S. Holder is a beneficial owner of Gaiam, Inc.’s common stock that is, for U.S. federal income tax purposes:

• an individual who is a citizen or a resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the substantial presence residency test under the federal income tax laws;

• a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States, any state thereof or the District of Columbia;

• an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust, if (i) a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or (ii) to the extent provided in United States Treasury Regulations, the trust was in existence on August 20, 1996 and has elected to be treated as a domestic trust.

This summary does not purport to be a complete description of all U.S. federal income tax consequences of the separation, nor does it address the consequences to shareholders subject to special treatment under the U.S. federal income tax laws, such as:

• dealers or traders in securities or currencies;

• tax-exempt entities;

• cooperatives;

• banks, trusts, financial institutions, or insurance companies;

• persons who acquired shares of Gaiam, Inc.’s common stock pursuant to the exercise of employee stock options or otherwise as compensation;

• shareholders who own, or are deemed to own, at least 10% or more, by voting power or value, of Gaiam, Inc. equity;

• holders owning Gaiam, Inc.’s common stock as part of a position in a straddle or as part of a hedging, conversion, constructive sale, synthetic security, integrated investment, or other risk reduction transaction for U.S. federal income tax purposes;

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• certain former citizens or former long-term residents of the U.S.;

• holders who are subject to the alternative minimum tax; or

• persons that own Gaiam, Inc.’s common stock through partnerships or other pass-through entities.

This summary does not address the U.S. federal income tax consequences to Gaiam, Inc. shareholders who do not hold shares of Gaiam, Inc.’s common stock as a capital asset. Moreover, this summary does not address any state, local, or foreign tax consequences or any estate, gift or other non-income tax consequences.

If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds shares of Gaiam, Inc.’s common stock, the tax treatment of a partner in that partnership generally will depend on the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to the tax consequences of the distribution.

YOU SHOULD CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE SEPARATION IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, WHICH CONSEQUENCES MAY DIFFER FROM THOSE DESCRIBED IN THIS INFORMATION STATEMENT (THESE DIFFERENCES MAY INCLUDE, AMONG OTHERS, TREATING THE DISTRIBUTION AS A TAXABLE TRANSACTION UNDER APPLICABLE NON-U.S. TAX LAWS), AND THE EFFECT OF POSSIBLE CHANGES IN LAW THAT MIGHT AFFECT THE TAX CONSEQUENCES DESCRIBED IN THIS INFORMATION STATEMENT.

Treatment of the Separation

It is a condition to the completion of the distribution that Gaiam, Inc. receive an opinion of Brownstein Hyatt Farber Schreck, LLP, tax counsel to Gaiam, Inc., substantially to the effect that, among other things, certain internal transaction taken in anticipation of the spin-off, consisting principally of the contribution by Gaiam, Inc. of certain assets to GTV, and the distribution should qualify as tax-free for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code.

Assuming the internal transactions and the distribution qualify as tax-free under Sections 368(a)(1)(D) and 355 of the Code, for U.S. federal income tax purposes:

• no gain or loss should be recognized by Gaiam, Inc. or GTV as a result of the separation except for possible gain or loss arising out of the internal reorganizations undertaken in connection with the separation and with respect to certain items required to be taken into account under Treasury Regulations relating to consolidated federal income tax returns;

• no gain or loss should be recognized by, or be includible in the income of, a holder of Gaiam, Inc.’s common stock solely as a result of the receipt of our common stock in the distribution, except with respect to any cash received in lieu of a fractional share of our common stock (as described below);

• the aggregate tax basis of the shares of Gaiam, Inc.’s common stock and shares of our common stock in the hands of each of Gaiam, Inc.’s shareholders immediately after the distribution (including any fractional share interest in our common stock for which cash is received) will be the same as the aggregate tax basis of the shares of Gaiam, Inc.’s common stock held by such holder immediately before the distribution, allocated between the shares of Gaiam, Inc.’s common stock and shares of our common stock, including any fractional share interest for which cash is received, in proportion to their relative fair market values immediately following the distribution;

• the holding period with respect to shares of our common stock received by Gaiam, Inc. shareholders (including any fractional share interest in our common stock for which cash is received) will include the holding period of their shares of Gaiam, Inc.’s common stock, provided that such shares of Gaiam, Inc.’s common stock are held as a capital asset immediately following the distribution; and

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• a Gaiam, Inc. shareholder who receives cash in lieu of a fractional share of our common stock in the distribution will be treated as having sold such fractional share for cash, and will recognize capital gain or loss in an amount equal to the difference between the amount of cash received and the shareholder’s adjusted tax basis in the fractional share. That gain or loss will be long-term capital gain or loss if the shareholder’s holding period for its shares of Gaiam, Inc.’s common stock exceeds one year at the time of the distribution.

Gaiam, Inc. shareholders that have acquired different blocks of Gaiam, Inc.’s common stock at different times or at different prices should consult their tax advisors regarding the allocation of their aggregate adjusted basis among, and their holding period of, GTV’s shares distributed with respect to such blocks of Gaiam, Inc.’s common stock.

The tax opinion is based on certain facts and assumptions, and certain representations and undertakings, from Gaiam, Inc. and GTV that certain necessary conditions to obtain tax-free treatment under the Code have been satisfied. An opinion of counsel represents counsel’s best legal judgment based on current law and is not binding on the IRS or any court. GTV cannot assure you that the IRS will agree with the conclusions set forth in the tax opinion, and it is possible that the IRS or another tax authority could adopt a position contrary to one or all of those conclusions and that a court could sustain that contrary position. If any of the facts, representations, assumptions, or undertakings described or made in connection with the tax opinion are not correct, are incomplete or have been violated, Gaiam, Inc.’s ability to rely on such tax opinion could be jeopardized. GTV is not aware of (and Gaiam, Inc. has informed GTV that Gaiam, Inc. is not aware of) any facts or circumstances, however, that would cause these facts, representations, or assumptions to be untrue or incomplete, or that would cause any of these undertakings to fail to be complied with, in any material respect.

Notwithstanding receipt by Gaiam, Inc. of the opinion of tax counsel, the IRS could assert that the distribution does not qualify for tax-free treatment for U.S. federal income tax purposes. If the IRS were successful in taking this position, Gaiam, Inc. shareholders and Gaiam, Inc. could be subject to significant U.S. federal income tax liability. In general, Gaiam, Inc. would recognize gain in an amount equal to the excess, if any, of the fair market value of our common stock distributed to Gaiam, Inc. shareholders on the distribution date over Gaiam, Inc.’s tax basis in such shares. In addition, each of Gaiam, Inc.’s shareholders that receives shares of our common stock in the separation could be treated as receiving a taxable distribution from Gaiam, Inc. in an amount equal to the fair market value of our common stock that was distributed to the shareholder, which generally would be taxed as a dividend to the extent of the shareholder’s pro rata share of Gaiam, Inc.’s current and accumulated earnings and profits, including Gaiam, Inc.’s taxable gain, if any, on the distribution, then treated as a non-taxable return of capital to the extent of the shareholder’s basis in Gaiam, Inc. stock and thereafter treated as capital gain from the sale or exchange of Gaiam, Inc. stock. Also, if the IRS were successful in taking this position, GTV may be required to indemnify Gaiam, Inc. under the circumstances set forth in the reorganization agreement, and such indemnification obligation could materially adversely affect GTV’s financial position. Even if the related internal transactions and the separation otherwise qualify for tax-free treatment under Sections 368(a)(1)(D) and 355 of the Code, the separation may result in corporate level taxable gain to Gaiam, Inc. under Section 355(e) of the Code if 50% or more, by vote or value, of GTV stock or Gaiam, Inc. stock is treated as acquired or issued as part of a plan or series of related transactions that includes the distribution. For this purpose, any acquisitions of Gaiam, Inc.’s common stock or our common stock within the period beginning two years before the distribution and ending two years after the distribution are presumed to be part of such a plan but such presumptions may be rebutted. If an acquisition or issuance of GTV stock or Gaiam, Inc. stock triggers the application of Section 355(e) of the Code, Gaiam, Inc. would recognize taxable gain as described above, but the distribution would be tax-free to each of Gaiam, Inc.’s shareholders; however, GTV may be required to indemnify Gaiam, Inc. for the resulting tax arising from an acquisition or issuance of GTV stock pursuant to the reorganization agreement to be entered into in connection with the separation. For a description of the reorganization agreement, see the section entitled “Our Relationship with Gaiam, Inc. After the Spin-Off – Reorganization Agreement.”

Treasury Regulations require certain shareholders that receive stock in a distribution to attach a detailed statement setting forth certain information relating to the distribution to their respective U.S. federal income tax returns for the year in which the distribution occurs. Within a reasonable period after the distribution, Gaiam, Inc. will provide

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shareholders who receive our common stock in the distribution with the information necessary to comply with such requirement. In addition, all shareholders are required to retain permanent records relating to the amount, basis and fair market value of our common stock received in the distribution and to make those records available to the IRS upon request of the IRS.

THE FOREGOING DOES NOT PURPORT TO ADDRESS ALL U.S. FEDERAL INCOME TAX CONSEQUENCES OR TAX CONSEQUENCES THAT MAY ARISE UNDER THE TAX LAWS OF OTHER JURISDICTIONS OR THAT MAY APPLY TO PARTICULAR CATEGORIES OF SHAREHOLDERS, WHICH CONSEQUENCES MAY DIFFER FROM THOSE DESCRIBED IN THE FOREGOING (THESE DIFFERENCES MAY INCLUDE, AMONG OTHERS, TREATING THE DISTRIBUTION AS A TAXABLE TRANSACTION UNDER APPLICABLE NON-U.S. TAX LAWS). EACH GAIAM, INC. SHAREHOLDER SHOULD CONSULT ITS TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF THE DISTRIBUTION TO SUCH SHAREHOLDER, INCLUDING THE APPLICATION OF U.S. FEDERAL, STATE AND LOCAL AND FOREIGN TAX LAWS AND THE EFFECT OF POSSIBLE CHANGES IN TAX LAWS THAT MAY AFFECT THE TAX CONSEQUENCES DESCRIBED ABOVE.

Effect of the Spin-Off on Gaiam, Inc.’s Outstanding Equity Awards

Gaiam, Inc. has granted options to purchase shares of Gaiam, Inc.’s Class A common stock granted to various directors, officers, employees and consultants of Gaiam, Inc. pursuant to the stock incentive plans administered by Gaiam, Inc.’s board of directors or the compensation committee thereof. Below is a description of the effect of the spin-off on these outstanding equity awards.

Except to the extent prohibited by applicable tax law, each holder of outstanding options to purchase shares of Gaiam, Inc.’s Class A common stock who is an employee or non-employee director of Gaiam, Inc. on the record date for the distribution (“original Gaiam, Inc. option”) will receive options to purchase shares of the corresponding series of our Class A common stock (“new GTV option”) and a corresponding adjustment to the existing Gaiam, Inc. option held by such holder (as so adjusted, an “adjusted Gaiam, Inc. option”). The exercise prices of the new GTV option and the related adjusted Gaiam, Inc. option will be determined based upon the exercise price of the original Gaiam Inc. option, the pre-spin-off trading price of Gaiam, Inc.’s Class A common stock (determined using the volume weighted average price of Gaiam, Inc.’s Class A common stock over the three-consecutive trading days immediately preceding the spin-off) and the relative values of Gaiam, Inc. and GTV, as determined by Gaiam, Inc.’s board of directors immediately prior to the spin-off, subject to applicable tax law, such that the pre-spin-off intrinsic value of the original Gaiam, Inc. option is allocated between the new GTV option and the adjusted Gaiam, Inc. option, which will be in the same ratio as Gaiam, Inc. common stock to GTV common stock at the time of the distribution. Each adjusted Gaiam, Inc. option will be subject to all of the terms and conditions of the Gaiam, Inc. Long-Term Incentive Plans, and each new GTV option will be subject to the terms and conditions of the Gaia, Inc. 2015 Long-Term Incentive Plan which we expect to adopt before the completion of the spin-off. Each GTV option will contain all of the terms of the original Gaiam, Inc. option to which it relates, except to the extent that they are rendered inoperative by reason of the spin-off and will not give the holder additional benefits that the holder did not have under the original Gaiam, Inc. option.

In the event that a holder of an option to purchase Gaiam, Inc. Class A common stock is prevented by applicable tax law from receiving options in our Class A common stock, the strike price and number of shares to be issued to such holders pursuant to their existing option will be adjusted to reflect the intrinsic value of the options which would have been received by such holder if it were able to receive options to purchase shares of GTV’s Class A common stock.

Results of the Spin-Off

After our separation from Gaiam, Inc., we will be an independent, publicly-traded company. Immediately following the distribution, we expect to have approximately             shareholders of record, based on the number of registered holders of Gaiam, Inc.’s common stock on             ,             , approximately             million shares of

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outstanding Class A common stock, and approximately             million shares of outstanding Class B common stock. The actual number of shares to be distributed will be determined on the record date and will reflect any exercise of Gaiam, Inc. options between the date that Gaiam, Inc.’s board of directors authorizes the distribution and the record date for the distribution. The distribution will not affect the number of outstanding shares of Gaiam, Inc.’s common stock or any rights of Gaiam, Inc.’s shareholders.

Before the spin-off, we will enter into a reorganization agreement and other agreements with Gaiam, Inc. to effect the spin-off and provide a framework for our relationships with Gaiam, Inc. after the spin-off. These agreements will govern the relationships between Gaiam, Inc. and us subsequent to the completion of the spin-off and provide for the allocation among Gaiam, Inc. and us of Gaiam, Inc.’s assets, liabilities and obligations attributable to periods before our separation from Gaiam, Inc.

For a more detailed description of these agreements, see “Our Relationship with Gaiam, Inc. After the Spin-Off.”

Listing and Trading of our Class A Common Stock

There currently is not and has never been a public market for our common stock. A condition to the distribution is the listing on a NASDAQ market of our Class A common stock. We intend to apply to have our Class A common stock listed on the NASDAQ Global Market under the symbol “GAIA.” Gaiam, Inc.’s Class B common stock is currently not listed on any public market and we will not have our Class B common stock listed following the spin-off.

Trading Before the Record Date and Through the Distribution Date

Beginning on or shortly before the record date and continuing through the distribution date, we expect that there will be two markets in Gaiam, Inc.’s Class A common stock: a “regular-way” market and an “ex-distribution” market. Gaiam, Inc.’s Class A common stock that trades on the regular-way market will trade with an entitlement to our Class A common stock to be distributed pursuant to the distribution. Shares that trade on the ex-distribution market will trade without an entitlement to our Class A common stock to be distributed pursuant to the distribution. Therefore, if you sell Gaiam, Inc.’s Class A common stock in the “regular-way” market up to and including the distribution date, you will not receive our Class A common stock in the distribution. If you own shares of Gaiam, Inc.’s Class A common stock at the close of business on the record date and sell those shares on the “ex-distribution” market, up to and including the distribution date, you will receive our Class A common stock that you would be entitled to receive pursuant to your ownership of Gaiam, Inc.’s common stock because you owned this common stock at the close of business on the record date.

Furthermore, we anticipate that, beginning on or shortly before the record date and continuing through the distribution date, there will be a “when-issued” market in our Class A common stock. “When-issued” trading refers to a sale or purchase made conditionally, because the security has been authorized but not yet issued. The “when-issued” trading market will be a market for our Class A common stock that will be distributed to Gaiam, Inc.’s shareholders on the distribution date. If you owned shares of Gaiam, Inc.’s Class A common stock at the close of business on the record date, you would be entitled to our Class A common stock distributed pursuant to the distribution. You may trade this entitlement to our Class A common stock, without Gaiam, Inc.’s common stock you own, on the “when-issued” market. On the first trading day following the distribution date, “when-issued” trading with respect to our common stock will end and “regular-way” trading will begin.

Gaiam, Inc.’s Class B common stock is not listed for trading and there is currently no public market for it. Further, Gaiam, Inc.’s Class B common stock may not be transferred unless converted into shares of our Class A common stock, other than certain transfers to affiliates and family members. Generally, however, if you transfer your shares of Gaiam, Inc.’s Class B common stock up to and including the distribution date, you will not receive our Class B common stock in the distribution.

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Reason for Furnishing this Information Statement

This information statement is being furnished solely to provide information to Gaiam, Inc.’s shareholders who are entitled to receive our common stock in the distribution. The information statement is not, and is not to be construed as, an inducement or encouragement to buy, hold or sell any of our securities. We believe that the information in this information statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither Gaiam, Inc. nor we undertake any obligation to update such information, except as required pursuant to applicable securities laws and our respective public disclosure obligations, if there have been material changes to the disclosures contained in this information statement.

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OUR RELATIONSHIP WITH GAIAM, INC. AFTER THE SPIN-OFF

Overview

This section summarizes material agreements between Gaiam, Inc. and us regarding the principal transactions necessary to separate us from Gaiam, Inc., governing certain ongoing relationships between the two companies after the spin-off and providing for an orderly transition to our status as an independent, publicly-traded company. Additional or modified agreements, arrangements and transactions may be entered into between Gaiam, Inc. and us after the spin-off. Before our separation from Gaiam, Inc., we will enter into a reorganization agreement to effect the spin-off and to provide for the allocation between Gaiam, Inc. and us of Gaiam, Inc.’s assets, liabilities and obligations attributable to periods before the separation of our business from Gaiam, Inc. and the distribution of our common stock to Gaiam, Inc.’s shareholders. In addition to the reorganization agreement, the parties also will enter into license agreements and a transitional operating agreement.

Anticipated organizational changes after the spin-off include staffing and other related changes to replace the services historically provided to us by Gaiam, Inc., and to be provided during a transitional period by Gaiam, Inc. under the transitional operating agreement, including, but not limited to, certain services such as accounting, tax, human resources, payroll, technical, and certain office and maintenance services as required from time to time in the ordinary course of our business. The cost of replacing the services provided by Gaiam, Inc. is estimated to be $110,000 to $130,000 per month. This will be offset by a corresponding reduction in the fees paid to Gaiam, Inc. under the transitional operating agreement, which are expected to be approximately $65,000 per month (net). We also expect to incur certain incremental costs as an independent, publicly-traded company as compared to the costs historically allocated to us by Gaiam, Inc. including, but not limited to, insurance, audit, board and governance related expenses and other compliance costs. These incremental expenses are estimated to range from $500,000 to $750,000 on an annual pre-tax basis.

The principal agreements described below will be filed as exhibits to the registration statement on Form 10 of which this information statement is a part, and the summaries of each of these agreements set forth certain terms of the agreements that we believe are material. The following summaries are qualified by reference to the full text of the agreements.

The terms of the agreements described below that will be in effect following our separation have not yet been finalized. Although we do not anticipate material changes to the agreements before the spin-off, any such changes may affect the respective parties’ rights and obligations described below. No changes may be made after our separation from Gaiam, Inc. without our consent if such changes would adversely affect us.

Reorganization Agreement

Before the effective time of the spin-off, GTV will enter into a reorganization agreement with Gaiam, Inc. to provide for, among other things, the principal corporate transactions required to effect the spin-off, certain conditions to the spin-off and provisions governing the relationship between GTV and Gaiam, Inc. with respect to and resulting from the spin-off.

The reorganization agreement will provide that, on or before the distribution date, Gaiam, Inc. will have transferred to GTV, or caused its other subsidiaries to have transferred to GTV, directly or indirectly, the assets and liabilities associated with the Subscription Business, that have not been transferred as of the date of this information statement. The reorganization agreement will also set forth, generally, the mechanics of the distribution.

The reorganization agreement will provide for mutual indemnification obligations and releases. The obligations and releases are designed to (a) make GTV financially responsible for (i) substantially all of the liabilities relating to the Subscription Business, (ii) taxes attributable to, or arising with respect to the Subscription Business or action by GTV reasonably expected to cause the distribution to lose its tax free status, (iii) assumed liabilities, and (iv) liabilities arising out of or resulting from any breach of, failure to perform or comply with any covenant, undertaking or obligation of GTV or any of its subsidiaries under the reorganization agreement or any other agreement to be entered into in connection with the spin-off, and (b) to make Gaiam, Inc. financially responsible for (i) all liabilities of Gaiam, Inc. that are not expressly assumed by GTV in the reorganization agreement, (ii) taxes of Gaiam, Inc. for any pre-spin-off period, (iii) taxes incurred that relate to any actions taken which are necessary or advisable to complete the transactions contemplated by the reorganization agreement, (iv) taxes arising due to any action of Gaiam, Inc. reasonably expected to cause the distribution to lose its tax free status, and (v) liabilities arising out of or resulting from any breach of, failure to perform or comply with any covenant, undertaking or obligation of Gaiam, Inc. or any of its subsidiaries under the reorganization agreement or any other agreement to be entered into in connection with the spin-off, as well as for all liabilities incurred by Gaiam, Inc. after the spin-off.

The reorganization agreement will also provide that, except to the extent prohibited by applicable law, the holders of options to purchase Gaiam, Inc. Class A common stock who are employees or non-employee directors of Gaiam, Inc. on the record date for the distribution will receive options to purchase shares of our Class A common stock. Additionally there will be a corresponding adjustment to the existing Gaiam, Inc. option held by such holder.

The spin-off will not constitute a change in control for purposes of Gaiam, Inc.’s equity plans, and therefore no vesting of awards will occur as a result of the spin-off. In the event that a holder of an option to purchase Gaiam, Inc. Class A common stock is prevented by applicable tax law from receiving options in our Class A common stock, the strike

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price and number of shares to be issued to such holders pursuant to their existing option will be adjusted to reflect the intrinsic value of the options which would have been received by such holder if it were able to receive options to purchase shares of GTV’s Class A common stock. See “The Spin-Off–Effect of the Spin-Off on Gaiam, Inc.’s Outstanding Equity Awards.”

In addition, the reorganization agreement will provide for each of GTV and Gaiam, Inc. to preserve the confidentiality of all confidential or proprietary information of the other party for five years following the spin-off, subject to customary exceptions, including disclosures required by law, court order or government regulation.

The reorganization agreement will also address the treatment of the various insurance policies held by Gaiam, Inc. and GTV after the spin-off.

Once executed, the reorganization agreement may be terminated and the spin-off may be abandoned at any time before the distribution date by and in the sole discretion of Gaiam, Inc.’s board of directors. In such event, Gaiam, Inc. will have no liability to any person under the reorganization agreement and no obligation to effect the spin-off.

This summary is qualified by reference to the full text of the reorganization agreement filed as an exhibit to the Form 10 of which this Information Statement is a part.

License Agreements

In connection with the internal restructuring in advance of the spin-off, we entered into multiple license agreements with Gaiam, Inc. and it subsidiary Gaiam Americas, Inc. (together the “Gaiam Brand Companies”), which includes a trademark license and domain name agreement, an agreement for the assignment of rights to certain audiovisual works, and a sub-license agreement for certain audiovisual works under license to Gaiam, Inc. Each such agreement is discussed in greater detail below.

Pursuant to the Trademark License and Domain Name Agreement (the “trademark agreement”), the Gaiam Brand Companies granted to GTV a nonexclusive right to certain marks in connection with the Subscription Business, including use of the “Gaiam TV” trade name, and an exclusive license to use domain names owned by the Gaiam Brand Companies solely for the purpose of redirecting users to www.gaiamtv.com, for a period of 24 months from the effective date of the spin-off. After the 24 month period following the effective date of the spin-off, GTV will agree to use www.gaiamtv.com in perpetuity solely for the purpose of redirecting users to new URL’s related to the Subscription Business.

Subject to certain limitations, pursuant to the Assignment of SVOD Rights in AV Works Owned by Gaiam Brand (the “assignment agreement”), the Gaiam Brand Companies granted to GTV all of Gaiam Brand Companies’ rights to exploit and distribute by means of the Gaiam TV on-demand video subscription service, all long-form audiovisual work relating to fitness yoga, wellness and personal development, which was produced by Gaiam Brand Companies prior to the date of the spin-off. In addition, GTV received an exclusive option to acquire such rights in work produced for a period of 24 months from the date of the effective date of the spin-off.

Subject to certain limitations, pursuant to the Sub-License Agreement of SVOD Rights in AV Works Under License Gaiam Brand (the “sub-license agreement”), the Gaiam Brand Companies granted to GTV an exclusive sublicense to exploit and distribute by means of the Gaiam TV on-demand video subscription service, all long-form audiovisual work relating to fitness yoga, wellness and personal development.

This summary is qualified by reference to the full text of the respective agreements filed as exhibits to the Form 10 of which this Information Statement is a part.

Transfer of Boulder Road LLC and Office Building

As a part of the internal restructuring, GTV and Gaiam, Inc. entered into as assignment and contribution agreement effective January 1, 2015, under which Gaiam, Inc. contributed to GTV its 100% membership interest in Boulder Road LLC, a Colorado limited liability company. Boulder Road LLC is the sole owner of the property located at 833 West South Boulder Road in Louisville, Colorado, which is the location for our operation, the principal executive offices of Gaiam, Inc. and various other companies.

In consideration for the contribution and assignment, upon a sale of all or substantially all of the property or the membership interest in Boulder Road LLC (other than to certain affiliated parties as set forth in the agreement), GTV will pay to Gaiam, Inc. (i) 100% of the first $5,000,000 of proceeds received in excess of $12,000,000, (ii) plus 50% of the proceeds above $17,000,000, if any, up to a maximum of $10,000,000. Until such time, no payment will be due or payable to Gaiam, Inc. in connection with the assignment and contribution of Boulder Road LLC.

This summary is qualified by reference to the full text of the assignment and contribution agreement filed as an exhibit to the Form 10 of which this Information Statement is a part.

Lease Agreement for Boulder Road Property

As discussed above, effective January 1, 2015, Gaiam, Inc. transferred all of its ownership interest in Boulder Road LLC to GTV, which resulted in Boulder Road LLC becoming a direct, wholly-owned subsidiary of GTV. Boulder Road LLC is the sole owner of the office buildings at 833 West South Boulder Road, Louisville, CO 80027 (the “Boulder Road Property”), in which Gaiam, Inc.’s and our headquarters are located. Boulder Road LLC and Gaiam Americas, Inc. entered into a ten year lease agreement, effective as of January 1, 2015, as further amended on September 3, 2015, at a base rate ranging from $6.00 to $14.00 per rentable square foot per year, or an effective rate of $12.22 per rentable square foot per year, under which Gaiam, Inc. occupies 41,423 square feet of the office building space. The lease is a triple net lease, which requires Gaiam Americas, Inc. to cover its respective share of operating expenses, and costs associated with, among other things, common area maintenance, insurance, taxes and utilities. Commencing on January 1, 2016, the lease includes an annual rent increase of the greater of (i) 3%, or (ii) the change in the consumer price index between the month of December and December of the previous calendar year. In addition, GTV will pay up to $87,000 of the cost for certain tenant improvements. Total payments due under the lease are expected to be $765,000 during 2015.

This summary is qualified by reference to the full text of the lease agreement filed as an exhibit to the Form 10 of which this Information Statement is a part.

Transitional Operating Agreement

We will enter into a transitional operating agreement with Gaiam, Inc. in connection with the separation. Under the transitional operating agreement, Gaiam, Inc. and GTV will agree to provide certain services to the other for a period of up to 24 months following the spin-off, or such other shorter period as may be provided in the transitional operating agreement. The services to be provided may include certain services including, but not limited to, accounting, tax, human resources, payroll, technical, and certain office and maintenance services as required from time to time in the ordinary course of our business.

We expect to pay to Gaiam, Inc. an agreed upon service charge for any services provided by Gaiam, Inc., and we expect to receive an agreed upon service charge for any services that we provide to Gaiam, Inc., each of which will generally reflect the actual cost of such services without premium or mark-up, although applicable administrative and other overhead costs associated with the services will be allocated and included in the service charge. Based upon the current personnel costs of the affected Gaiam, Inc. personnel and our anticipated usage thereof, the net fees payable to Gaiam, Inc. per month under the transitional operating agreement are expected to be approximately $65,000. Either party providing service for the other will be reimbursed the amount of out-of-pocket costs incurred in rendering such services, including an equitable portion of the costs of third-party service providers retained by Gaiam, Inc. Until December 31, 2017, the employees of GTV will remain eligible employees under certain employee benefit plans currently maintained by Gaiam, Inc., which will be managed under the transitional operating agreement.

The transitional operating agreement will provide that each of GTV and Gaiam, Inc. will generally retain responsibility for, and will pay and be liable for, all wages, bonuses and commissions, employee benefits for people providing such services, including severance and worker’s compensation, and the withholding and payment of applicable taxes relating to such employment through its existing payroll process, with respect to those employees performing services under the agreement.

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In addition, the transitional operating agreement will require each of GTV and Gaiam, Inc. to preserve the confidentiality of all confidential or proprietary information of the other party, subject to customary exceptions, including disclosures required by law, court order or government regulation.

This summary is qualified by reference to the full text of the transitional operating agreement filed as an exhibit to the Form 10 of which this Information Statement is a part.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA

The unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2015 was derived from our unaudited condensed consolidated financial statements included elsewhere in this Information Statement. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2014 was derived from our audited consolidated financial statements included elsewhere in this Information Statement.

These unaudited pro forma financial statements include adjustments to reflect our anticipated post spin-off capital structure, including the distribution of approximately              shares of our Class A common stock to holders of Gaiam, Inc. Class A common stock and              shares of our Class B common stock to holders of Gaiam, Inc. Class B common stock. On the distribution date each shareholder of Gaiam, Inc.’s Class A common stock will be entitled to receive one share of GTV’s Class A common stock for each              share(s) of Gaiam, Inc.’s Class A common stock held by such shareholder at the close of business on             ,         , the record date of the distribution, and each shareholder of Gaiam, Inc.’s Class B common stock will be entitled to receive one share of GTV’s Class B common stock for each              share(s) of Gaiam, Inc.’s Class B common stock held by such shareholder at the close of business on             ,         , the record date of the distribution.

We expect to experience changes in our ongoing cost structure when we become an independent, publicly-traded company. For example, our historical consolidated financial statements include allocations of certain expenses from Gaiam, Inc. including expenses related to senior management, legal, human resources, tax services, information technology, and centrally managed employee benefit arrangements. These costs may not be representative of the future costs we will incur as an independent, publicly-traded company. We also expect to incur certain incremental costs as an independent, publicly-traded company as compared to the costs historically allocated to us by Gaiam, Inc. These incremental costs, which are estimated to range from $500,000 to $750,000 on an annual pre-tax basis above those costs previously incurred by us as direct costs and as an allocation of certain general corporate costs incurred by Gaiam, Inc. have not been reflected in our unaudited pro forma condensed consolidated statements of operations. For a description of the allocation of expenses to us by Gaiam, Inc., see Note 1 to our audited consolidated financial statements as of December 31, 2014 and 2013 and for each of the two years in the period ended December 31, 2014 included elsewhere in this Information Statement.

The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information, and we believe such assumptions are reasonable under the circumstances. Such adjustments are subject to change based upon the finalization of the terms of the spin-off.

The following unaudited pro forma condensed consolidated financial statements should be read in conjunction with GTV’s historical consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this information statement. These unaudited pro forma condensed consolidated financial statements are not necessarily indicative of our results of operations or financial condition had the distribution and related transactions been completed on the dates assumed. Also, they may not reflect the results of operations or financial condition that would have resulted had we been operating as an independent, publicly-traded company during such periods. In addition, they are not necessarily indicative of our future results of operations or financial condition.

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GAIA, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2015

(unaudited in thousands)	As Reported			Pro Forma
Net revenues	$	6,767		$	6,767
Cost of revenues		1,379			1,379
Gross Profit		5,388			5,388
Expenses:
Selling and operating		7,787			7,787
Corporate, general and administrative		1,002			1,002
Acquisition-related costs		—			—
Total expenses		8,789			8,789
Loss from operations		(3,401	)		(3,401	)
Other expense		7			7
Loss before income taxes		(3,408	)		(3,408	)
Income tax expense		—			—
Net loss	$	(3,408	)	$	(3,408	)
Pro forma net income per common share:
Basic and diluted				$
Weighted-average shares outstanding
Basic and diluted			(a)

See accompanying notes to unaudited pro forma consolidated financials.

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GAIA, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2014

(in thousands)	As Reported			Pro Forma
Net revenues	$	10,134		$	10,134
Cost of revenues		2,261			2,261
Gross Profit		7,873			7,873
Expenses:
Selling and operating		13,318			13,318
Corporate, general and administrative		3,047			3,047
Acquisition-related costs		—			—
Total expenses		16,365			16,365
Loss from operations		(8,492	)		(8,492	)
Other expense		48			48
Loss before income taxes		(8,540	)		(8,540	)
Income tax expense		—			—
Net loss	$	(8,540	)	$	(8,540	)
Pro forma net income per common share:
Basic and diluted				$
Weighted-average shares outstanding
Basic and diluted			(a)

See accompanying notes to unaudited pro forma consolidated financials.

GAIA, INC.

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS

(a) The number of weighted-average Gaia, Inc. shares used to calculate basic and diluted net income per common share is based on the weighted-average number of Gaiam, Inc. common shares outstanding of 24,228 for the year ended December 31, 2014 and 24,501 for the six months ended June 30, 2015, respectively, including the effect of outstanding equity awards. On the distribution date, each shareholder of Gaiam, Inc.’s Class A common stock will be entitled to receive one share of GTV’s Class A common stock for each              share(s) of Gaiam, Inc.’s Class A common stock held by such shareholder at the close of business on             ,             , the record date of the distribution, and each shareholder of Gaiam, Inc.’s Class B common stock will be entitled to receive one share of GTV’s Class B common stock for each              share(s) of Gaiam, Inc.’s Class B common stock held by such shareholder at the close of business on             ,             , the record date of the distribution.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with the consolidated financial statements and the pro forma condensed consolidated financial data for GTV, included elsewhere in this information statement. The following discussion may contain forward-looking statements that involve risks and uncertainties. When used in this information statement, the words “anticipate,” “believe,” “plan,” “estimate,” “expect,” “strive,” “future,” “intend,” “will” and similar expressions as they relate to us or our management are intended to identify such forward-looking statements. Our actual results could differ materially from the results anticipated in these forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this information statement, particularly in the sections entitled “Risk Factors” and “Cautionary Statement Concerning Forward Looking Statements.”

Overview and Outlook

We operate a global digital video subscription service with approximately 7,000 titles which caters to a unique and underserved subscriber base. Our digital content is available to our subscribers on virtually any Internet connected device anytime, anywhere commercial free. The subscription also allows our subscribers to download and view files from our library without being actively connected to the internet. Through our online Gaiam TV subscription service, our customers have unlimited access to a vast library of inspiring films, personal growth related content, cutting edge documentaries, interviews, yoga classes, and more – 90% of which is exclusively available to our subscribers for digital streaming on virtually any Internet connected device.

The consumption streaming video is expanding rapidly. The first quarter of 2014 set a new record with 35.6 billion global online video starts, representing a 43% increase compared to the first quarter of 2013, according to the U.S. Digital Video Benchmark report from Adobe. More and more, people are augmenting their use of, or replacing broadcast television and turning to, streaming video to watch their favorite content on services like Netflix, Amazon Prime, Hulu Plus, HBO Go and Gaiam TV.

Our position in the streaming video landscape is firmly supported by our wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services. Our original content is developed and produced in-house in our state-of-the-art production studios near Boulder, Colorado. By offering exclusive and unique content over a state-of-the-art streaming service, we believe we will be able to significantly expand our target subscriber base.

In October 2013, we acquired My Yoga Online, the largest on-line yoga video streaming subscription business in Canada. With this acquisition we grew our content library by approximately 1,300 video titles and expanded our international subscriber base. We plan to continue investing in international expansion, both in terms of subscribers and content.

Before the planned separation GTV operated as a part of Gaiam, Inc. As a result of the separation, we will operate as an individual, publically traded company and will incur costs as we implement organizational changes necessary to operate as such. Therefore, our historical consolidated financial information included in this information statement does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as an independent, publicly-traded company during the periods presented or those that we will achieve in the future.

Anticipated organizational changes after the spin-off include staffing and other related changes to replace the services historically provided to us by Gaiam, Inc., and to be provided during a transitional period by Gaiam, Inc. under the transitional operating agreement, including, but not limited to, certain services such as accounting, tax, human resources, payroll, technical, and certain office and maintenance services as required from time to time in the ordinary course of our business. The cost of replacing the services provided by Gaiam, Inc. is estimated to be $110,000 to $130,000 per month. This will be offset by a corresponding reduction in the fees paid to Gaiam, Inc. under the transitional operating agreement, which are expected to be approximately $65,000 per month (net). We also expect to incur certain incremental costs as an independent, publicly-traded company as compared to the costs historically allocated to us by Gaiam, Inc. including, but not limited to, insurance, audit, board and governance related expenses and other compliance costs. These incremental expenses are estimated to range from $500,000 to $750,000 on an annual pre-tax basis.

Planned Separation

In August 2014, Gaiam, Inc. announced that its board of directors had approved the pursuit of the separation of Gaiam, Inc. into two independent, publicly-traded companies: one for Gaiam, Inc.’s Branded Business operations, and one for its Subscription Business. The spin-off will occur through distribution to Gaiam, Inc.’s shareholders of all of the shares of our common stock. Gaiam, Inc. will continue to own and operate its Branded Business operations after the spin-off. The Subscription Business of Gaiam, Inc., presented herein, represents a consolidated reporting entity comprised of the assets and liabilities used in managing and operating Gaiam, Inc.’s Subscription Business and any other operations that GTV will own as of the date of the separation.

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Critical Accounting Policies

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, which require us to make judgments, estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Note 2 to the consolidated financial statements included elsewhere in this information statement summarizes the significant accounting policies and methods used in the preparation of our consolidated financial statements. We believe the following to be critical accounting policies whose application has a material impact on our financial presentation, and involve a higher degree of complexity, as they require us to make judgments and estimates about matters that are inherently uncertain.

Business Combination Accounting

We account for the acquisition of a controlling interest in a business using the acquisition method. In determining the estimated fair value of certain acquired assets and liabilities, we make assumptions based upon many different factors, such as historical and other relevant information and analyses performed by independent parties. Assumptions may be incomplete, and unanticipated events and circumstances may occur that could affect the validity of such assumptions, estimates, or actual results.

Media Library

Media Library represents the lower of unamortized cost or net realizable value of digital media content acquired through business combinations, asset purchases, capitalized costs to produce our proprietary media content, and rights obtained through license arrangements.

The value of our acquired media library consists of the fair value of media assets obtained through asset acquisitions and business combinations recorded at the estimated fair value of the titles acquired, which is based on a number of factors, including the number of titles, the total hours of content, the production quality and age of the acquired media assets.

Our licensed media library is obtained through license arrangements, for which we pay an advance against a percentage royalty or an upfront license fee in exchange for the distribution rights for a specific license window, but can also be obtained for a fixed fee for perpetuity. These payments are capitalized at the time of payment. Certain agreements also include an ongoing royalty obligation, which entitles the licensor to a share of the revenues generated from the licensed works. These expenses are calculated and accrued on a monthly basis and included in costs of revenues. We pay these accrued royalties on a quarterly basis and therefore have included the related liability in accounts payable and accrued liabilities.

The value of our produced media library consists of capitalized costs incurred to produce original media content, including salary and overhead costs of our in-house production team and other third-party costs.

We amortize our media library in cost of revenues on a straight-line basis over the shorter of the license period or the estimated useful life of the titles, which typically ranges from 12 to 90 months. The amortization period begins with the first month of availability.

Management reviews content viewership to determine whether the viewing patterns correlate with initial estimates supporting the amortization period utilized. If current estimates indicate that viewing is significantly higher in earlier periods relative to the remaining amortization period, we will begin amortizing the respective titles on an accelerated basis over the amortization period. In 2014 and 2013, we recorded additional amortization of $0 and $903,000, respectively, based on this analysis.

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Our media library is reviewed for impairment when an event or change in circumstances indicates that the carrying amount of the media library may not be recoverable. Recoverability of the media library is measured by a comparison of the carrying amount of the media library to estimated undiscounted future cash flows expected to be generated by the media library. If the carrying amount of the media library exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value of the media library exceeds its fair value.

Goodwill and Other Intangibles

Goodwill represents the excess of the purchase consideration over the estimated fair value of assets acquired less liabilities assumed in a business acquisition. Our other intangibles consist of customer related assets and acquired domain names. We have only one reporting unit; therefore, goodwill is assessed at the enterprise level. We review goodwill for impairment annually on December 31. We have the option of first assessing qualitative factors to determine whether events and circumstances indicate that it is more likely than not that the fair value of goodwill is less than its carrying amount. If it is determined that the fair value for goodwill is more likely than not greater than the carrying amount for goodwill, then the two-step impairment test is unnecessary. If it is determined that the two-step impairment test is necessary, then for step one, we compare the estimated fair value of goodwill with its carrying amount, including goodwill. If the estimated fair value of goodwill exceeds its carrying amount, we consider the goodwill to not be impaired. If the carrying amount of goodwill exceeds its estimated fair value, we perform the second step of the goodwill impairment test to measure the amount of impairment loss. We use either a comparable market approach or a traditional present value method to test for potential impairment. The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment at many points during the analysis. Application of alternative assumptions and definitions could yield significantly different results. During 2014 and 2013, no impairment of goodwill or other intangibles was indicated.

Long-Lived Assets

We evaluate the carrying value of long-lived assets held and used, other than goodwill, when events or changes in circumstances indicate the carrying value may not be recoverable. We consider the carrying value of a long-lived asset impaired when the total projected undiscounted cash flows from such asset are separately identifiable and are less than the carrying value. We recognize a loss based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. We determine the estimated fair value primarily using the projected cash flows from the asset discounted at a rate commensurate with the risk involved. During 2014 and 2013, no impairment was recorded.

Revenues

Revenues primarily consist of monthly subscription fees paid by our customers and rental income from operating leases. We recognize revenues when the following four basic criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the seller’s price to the buyer is fixed or determinable; and (iv) collectability is reasonably assured. We recognize amounts billed to customers for postage and handling as revenues at the same time we recognize the revenues arising from the product sale. We present revenues net of taxes collected from customers. Revenues are recognized ratably over the subscription term. Deferred revenues consist of subscription fees collected from customers that have not been earned.

Marketing

Marketing costs consist primarily of advertising expenses, which include promotional activities such as online advertising and public relations expenditures. Advertising costs are expensed as incurred.

Share-Based Compensation

Before the spin-off, our employees participated in Gaiam, Inc.’s equity compensation plan. Share-based compensation has been allocated to GTV based on the awards and terms previously granted by Gaiam, Inc. to our employees. The principal awards issued under the equity compensation plan are non-qualified stock options. We

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measure compensation cost at the grant date based on the fair value of the award and recognize compensation cost upon the probable attainment of a specified performance condition or over a service period. We use the Black-Scholes option valuation model to estimate the grant date fair value. In estimating this fair value, there are certain assumptions that we use, as disclosed in Note 9 to the consolidated financial statements included elsewhere in this information statement, consisting of the expected life of the option, risk-free interest rate, dividend yield, and volatility. The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.

Income Taxes and Deferred Tax Balances

Our operations have historically been included in Gaiam, Inc.’s consolidated federal tax return and certain consolidated state returns. The income tax expense in GTV’s consolidated financial statements has been determined on a stand-alone return basis, which requires the recognition of income taxes using the liability method. Under this method, we are assumed to have historically filed a separate return, reporting our taxable income or loss and paying applicable tax based on our separate taxable income and associated tax attributes in each tax jurisdiction. The calculation of income taxes on the separate return basis requires considerable judgment and the use of both estimates and allocations. As a result, our effective tax rate and deferred tax balances will differ significantly from those in Gaiam, Inc.’s historic periods. Additionally, the deferred tax balances as calculated on the separate return basis will differ from our deferred tax balances, if legally separated.

Deferred income taxes reflect net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Periodically, management performs assessments of the realization of our net deferred tax assets considering all available evidence, both positive and negative. A significant piece of evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2014. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this assessment, a full valuation allowance was required for the 2014 and 2013 periods. As income is generated in future periods, we expect to reverse the valuation allowance and utilize the deferred tax assets. The assessment of the need for a valuation allowance requires considerable judgment on the part of management with respect to the benefits that could be realized from future taxable income, as well as other positive and negative factors.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We measure the tax benefits recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to our subjective assumptions and judgments which can materially affect amounts recognized in our consolidated balance sheets and consolidated statements of operations. The result of our assessment of our uncertain tax positions did not have a material impact on our consolidated financial statements. We recognize interest and penalties related to income tax matters in interest and other income (expense) and corporate, general and administration expenses, respectively.

Results of Operations

Six Months Ended June 30, 2015 Compared to Six Months Ended June 30, 2014

Net revenues. Net revenues for the six months ended June 30, 2015 increased $1.9 million to $6.8 million from $4.9 million for the same period in 2014 due primarily to an increase in subscription revenue and rental income related to the contribution of real estate assets in 2015.

Cost of revenues. Cost of revenues for the six months ended June 30, 2015 increased $0.3 million to $1.4 million from $1.1 million for the same period in 2014. As a percentage of revenues, cost of revenues decreased to 20.4% for the six months ended June 30, 2015 from 22.1% for the same period in 2014, primarily due to reductions in service delivery costs and increased revenues.

Selling and operating expenses. Selling and operating expenses for the six months ended June 30, 2015 increased $1.5 million to $7.8 million from $6.3 million for the same period in 2014 due primarily to a $1.0 million increase in marketing costs related to customer acquisition, $0.8 million in building operating expenses offset by a $0.3 million reduction in overall spending for outsourced services and technology costs. As a percentage of revenues, selling and operating expenses decreased to 115% for the six months ended June 30, 2015 from 128% as a result of operating efficiencies and increased revenues.

Corporate, general and administrative expenses. Corporate, general and administrative expenses for the six months ended June 30, 2015 decreased $0.5 million to $1 million from $1.5 million for the same period in 2014 and, as a percentage of revenue, decreased to 15% for the six months ended June 30, 2015 from 30% for the same period in 2014, due primarily to a reduction in expenses related to legal and other general corporate functions and increased revenues.

Net loss. As a result of the above factors, net loss for the six months ended June 30, 2015 decreased $0.6 million to $3.4 million from $4.0 million for the same period in 2014 and, as a percentage of revenues, decreased to 50% for the six months ended June 30, 2015 from 81% for the same period in 2014.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Net revenues. Net revenues increased $4.7 million to $10.1 million during 2014 from $5.5 million during 2013, due primarily to a 117% increase in average paid subscribers from 2013 to 2014, calculated using the number of paid subscribers at the end of each calendar quarter, averaged over the year. Approximately 32% of this increase was attributible to the acquisition of My Yoga Online.

Cost of revenues. Cost of revenues decreased $0.2 million, to $2.3 million during 2014 from $2.5 million during 2013 and, as a percentage of revenues, decreased to 22.3% during 2014 from 45.2% during 2013, due in part to a $0.9 million charge in the fourth quarter of 2013 to take accelerated amortization on certain titles of our licensed media library content based on analysis of content viewing patterns. Excluding this charge, our cost of revenue, as a percentage of revenues for 2013, was 29.1%.

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Selling and operating expenses. Selling and operating expenses increased $3.1 million, to $13.3 million during 2014 from $10.2 million during 2013 due primarily to a $1.3 million increase in employee related costs from the hiring of additional employees devoted to sales and marketing activities and an increase in marketing costs related to customer acquisition of $1.8 million, and as a percentage of revenues, decreased to 131.7% during 2014 from 185.5% during 2013 due primarily to an increase in revenues.

Corporate, general and administrative expenses. Corporate, general and administrative expenses increased $0.2 million, to $3.0 million during 2014 from $2.8 million during 2013 and, as a percentage of revenues, decreased to 29.7% during 2014 from 50.9% during 2013, due primarily to reduction in expenses related to legal and other general corporate functions.

Net loss. As a result of the above factors, net loss decreased $1.5 million, to $8.5 million during 2014 from $10.0 million during 2013 and, as a percentage of revenues, decreased to 84.2% during 2014 from 181.8% during 2013.

Liquidity and Capital Resources

Our capital needs arise from working capital required to fund operations, capital expenditures related to acquisition and development of media content, development and marketing of our service, acquisitions of new businesses, replacements, expansions and improvements to our infrastructure, and future growth. These capital requirements depend on numerous factors, including the rate of market acceptance of our service offering, our ability to expand our customer base, the cost of ongoing upgrades to our digital distribution infrastructure, the level of expenditures for marketing and other factors. The timing and amount of these capital requirements are variable and we cannot accurately predict them. Additionally, we will continue to pursue opportunities to expand our media library, evaluate possible investments in complementary businesses, products and technologies, and increase our marketing and customer acquisition efforts as needed.

On July 23, 2015, our wholly-owned subsidiary Boulder Road LLC entered into a revolving credit agreement (the “Credit Agreement”) with Great Western Bank, as lender (“Great Western”). Borrowings under the Credit Agreement are secured by a deed of trust on the real estate owned by Boulder Road LLC, with corporate guarantees from GTV and Gaiam, Inc. The Credit Agreement provides for a revolving line of credit for up to $5.5 million, which is reduced by $250,000 biannually, subject to certain covenants applicable to Boulder Road LLC. Subject to certain limitations, the principal amount of the loan is due and payable on the earlier of July 24, 2017 or the termination of the Credit Agreement. Upon completion of the spin-off, Gaiam, Inc. will automatically be released as a guarantor under the Credit Agreement and from all corresponding rights and obligations.

While there can be no assurances, we believe our cash on hand, cash expected to be generated from future operations, future cash contributions from Gaiam, Inc. prior to the planned separation, borrowings under the Credit Agreement and/or any new credit facilities, and available carried forward tax net operating losses of $39.2 million should be sufficient to fund our operations on both a short-term and long-term basis. However, our projected cash needs may change as a result of acquisitions, product development, unforeseen operational difficulties or other factors.

Contractual Obligations

Certain agreements related to our licensed media include fixed royalty percentages; however payments due under these agreements are dependent upon future viewership of the licensed content and are therefore not fixed obligations as of December 31, 2014. We do not have any other contractual obligations that require us to make future payments.

In consideration for the contribution and assignment, upon a sale of all or substantially all of the property or the membership interest in Boulder Road LLC (other than to certain affiliated parties as set forth in the agreement), GTV will pay to Gaiam, Inc. (i) 100% of the first $5,000,000 of proceeds received in excess of $12,000,000, (ii) plus 50% of the proceeds above $17,000,000, if any, up to a maximum of $10,000,000. Until such time, no payment will be due or payable to Gaiam, Inc. in connection with the assignment and contribution of Boulder Road LLC.

Off-Balance Sheet Arrangements

We do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as special purpose entities or variable interest entities, which have been established for the purpose of facilitating off-balance sheet arrangements or other limited purposes.

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OUR BUSINESS

GTV was incorporated in Colorado in 2006. We are currently a wholly-owned subsidiary of Gaiam, Inc. As discussed above under the heading “The Spin-Off,” only the Subscription Business of Gaiam, Inc. will be included in the business to be distributed in connection with our separation from Gaiam, Inc. Accordingly, the following description of our business describes only the Subscription Business of Gaiam, Inc.

Overview

We operate a global digital video subscription service with approximately 7,000 titles which caters to a unique and underserved subscriber base. Our digital content is available to our subscribers on virtually any Internet connected device anytime, anywhere commercial free. The subscription also allows our subscribers to download and view files from the library without being actively connected to the internet. Through our online Gaiam TV subscription service, our customers have unlimited access to a vast library of inspiring films, personal growth related content, cutting edge documentaries, interviews, yoga classes, and more – 90% of which is exclusively available to our subscribers for digital streaming on virtually any Internet connected device.

Our core strategy is to grow our subscription business domestically and internationally by expanding our unique and exclusive content library, increasing our subscriber base, enhancing our user interface, extending our streaming service to new Internet-connected devices as they are developed and creating a conscious community built on our content.

Our available content is currently focused on yoga, health and longevity, seeking truth, spiritual growth and conscious films & series. This media content is specifically targeted to a unique customer base which is interested in alternatives and supplements to the content provided by mainstream media. We have been able to grow these content options both organically through our own productions and through strategic acquisitions. In addition, through our investments in our streaming video technology and our user interface, we have been able to expand the many ways our subscription customer base can access our unique library of media titles.

Our Content – Gaiam TV, The Transformation Network

From the beginning, we have been focused on acquiring exclusive rights to unique content, which we believe will be attractive to our target customer base, both through licensing and strategic acquisitions. Today, our network of content consists of five primary channels:

Yoga – Through our Yoga channel, our subscribers enjoy unlimited access to thousands of streaming yoga, Pilates, Eastern arts, and other fitness classes. We believe Gaiam TV will benefit from Gaiam, Inc.’s longstanding status as a leader in yoga programming by featuring the same type of exclusive classes with top names and renowned instructors. Currently, we are one of the world’s largest providers of streaming yoga classes. Blending ancient philosophy with modern technology, our classes on Eastern arts like T’ai Chi, Qigong, Ayurveda and more encourage the holistic integration of body, mind and spirit.

Health and Longevity – Through our Health and Longevity channel, we feature a wealth of alternative health information which we believe makes it easier than ever for our subscribers to take charge of their health and live stronger, longer, and more productive lives. The channel empowers subscribers through programs about alternative medicines, holistic healing, and longevity practices.

Seeking Truth – As an alternative to mainstream media, our Seeking Truth channel leaves conventional wisdom behind to reveal new and enlightening perspectives for today’s changing world. Through thought-provoking topics like metaphysics, ancient wisdom, and the paranormal, we go beyond the boundaries of mainstream media, and encourage our viewers to find empowerment through knowledge and awareness. Through this channel, our subscribers have access to top names in the genre who conduct exclusive interviews and presentations our subscribers will not find anywhere else.

Spiritual Growth – We encourage the discovery of new perspectives, new philosophies and new spirituality through our Spiritual Growth channel. With our inspiring programs and engaging videos, subscribers learn

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valuable life lessons from top spiritual leaders, and watch uplifting programs that the entire family can enjoy. The Spiritual Growth channel exists to help manifest real-life changes through the following categories: personal development, self-improvement, spirituality, meditation, and philosophy.

Conscious Films & Series – Through our Conscious Films & Series channel, we allow the users to discover exclusive streaming inspirational movies, critically acclaimed documentaries and thought-provoking TV series. Gaiam TV has something for everyone – hard-to-find independent films, family-friendly movies, meaningful stories, transformative talks with today’s most influential teachers and much more. Our library of streaming inspirational films has been carefully curated for its entertaining and engaging content.

The Streaming Video Market and Gaiam TV

The consumption of streaming video is expanding rapidly. The first quarter of 2014 set a new record with 35.6 billion global online video starts, representing a 43% increase compared to the first quarter of 2013, according to the U.S. Digital Video Benchmark report from Adobe. More and more, people are augmenting their use of, or replacing broadcast television and turning to, streaming video to watch their favorite content on services like Netflix, Amazon Prime, Hulu Plus, HBO Go and Gaiam TV. The streaming video market includes various free, ad-supported and subscription service offerings, focused on various genres, including films, broadcast and original series, fitness and educational content.

Gaiam TV’s position in the streaming video landscape is firmly supported by its wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services. Our original content is developed and produced in-house in our state-of-the-art production studios near Boulder, Colorado. Over 90% of our content is exclusively available for streaming to virtually all devices that are connected to the Internet. By offering exclusive and unique content over a state-of-the-art streaming service, we believe we will be able to significantly expand our target subscriber base. Gaiam TV believes the current size of our potential target market represents approximately 15% of the global population with access to broadband.

Competitive Strengths

We believe that we differentiate ourselves from our competition and have been able to grow our business through the following demonstrated unique competitive strengths:

Exclusive Content and Ubiquitous Access – We have amassed a library of unique content in which we hold exclusive worldwide streaming distribution rights and have established exclusive relationships with certain key talent in our areas of focus. Over 90% of our titles are exclusive to GTV for streaming to our subscribers on virtually any Internet connected device.

Gaiam TV Unplugged – We are able to leverage our content licensing and ownership advantage to enable “subscriber download” as part of our subscription. A Gaiam TV subscription allows a subscriber to, without limitation, download and view titles in our library without being actively connected to the Internet as long as they remain a paying subscriber; a unique feature among large streaming-video providers.

Proprietary and Curated Content – Proprietary and curated content lies at the core of our business model. Our media offerings introduce customers to us and help establish us as an authority in the conscious media market. We intend to continue to expand our brand in the conscious media market, which incorporates inspirational and educational media. We believe we can become the leading source of media in these categories. Our in-house produced content represents approximately 75% of our subscribers viewing time. Our licensed content has terms ranging from 3 to 20 years. With the growth in demand for digital rights, we expect that our large library of produced and acquired content will be a key driver in our ability to grow efficiently and act as a hedge against the rising costs of digital rights.

International Rights – The strength of our proprietary content library created by our original content production strategy and unique approach to content licensing has provided us with a library of niche content in which we hold exclusive worldwide distribution rights, which we believe would be difficult to acquire in today’s market. By obtaining these rights, we have created a significant barrier to entry for

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competitors into our content niches and have given ourselves the potential to reach a worldwide subscriber base with no additional licensing costs. Based on current viewership, approximately 85% or our library is available worldwide.

Unique Subscriber Base – We believe that our unique and exclusive content allows us to cater to a subscriber base that traditional media companies have mostly ignored. We believe this subscriber base can be significantly expanded as more and more people begin accessing streaming content over the Internet.

Unique Content Strength – We believe that our unique focus, combined with our content exclusivity, positions us as a complementary service to larger streaming video providers who are primarily entertainment driven. In addition, this focus has allowed an opportunity for significant advantages:

• Yoga, we have an established consumer brand, a vast library of popular content, content knowledge and expertise. With our expansion through the acquisition of My Yoga Online, we have furthered our lead in this category and have a strong edge on competitors.

• Health & Longevity, we bring a unique focus to an otherwise crowded field. The channel empowers subscribers through programs about alternative and integrative medicines, holistic healing, and longevity practices, putting Gaiam TV in the center of a rapidly growing market.

• Spiritual Growth, we deliver years of experience and content, including Spiritual Cinema Circle, through which we have licensed hundreds of films in this category. Our original program hosts interview thought leaders in the Spiritual Growth community, adding to the credibility of the channel.

• Seeking Truth, Gaiam TV offers category-leading talent which enables us to draw the most popular and authentic speakers, authors and scholars in the alternative media world.

Growth Drivers

Our core strategy is to grow our streaming subscription business domestically and internationally using the following drivers:

Investment in Streaming Content – We believe that our investment in streaming content leads to more subscriber viewing and awareness of our unique content. This leads to subscriber acquisition and revenue growth, which allows us to invest in more streaming content, which enables the growth cycle to continue. By investing in our in-house studios, digital asset management system and digital delivery platforms, we can produce and distribute new digital content at low incremental costs. With our end-to-end production capabilities and unique, exclusive, relationships with thought leaders in our areas of focus, we can develop content much more efficiently than our competitors.

Continuous Service Improvements – We have found that incremental improvements in our service and quality enhance our subscriber satisfaction and retention. We continue to refine our technology, user interfaces, and delivery infrastructure to improve the customer experience. For example, using our licensed “adaptive streaming” technology we automatically and constantly optimize the streaming bit-rate to each user’s Internet bandwidth. This minimizes loading and buffering times, delivering the best click-and-watch experience.

Overall Adoption and Growth of Internet TV – Domestically, cable TV subscribers have been declining, while online video starts in the first quarter of 2014 increased 43% compared to the first quarter of 2013, according to the U.S Digital Video Benchmark report from Adobe. We believe these changes stem from consumers desire for more control and freedom in their ability to watch what they want, when they want, where they want, and how they want. We believe Gaiam TV provides this control and freedom demanded by the market today.

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Future of the Consumer Electronic Ecosystem: “Internet on Every Screen” – Gaiam TV is now accessible on a broad array of devices, including, but not limited to: Roku, XBOX, Amazon Fire TV, Apple TV, Google TV, iPad, Android Tablets, iOS or Android Phones, Kindle Fire HD and Fire HDX, Sony Playstation, Samsung Smart TV, Panasonic Smart TV, Sony Blu-ray, laptops, desktop computers and TVs through an HDMI cord. Through this accessibility, we believe that we enhance the value of our service to subscribers as well as position ourselves for continued growth as Internet and mobile delivery of content becomes more popular.

International Market Expansion – We believe the international streaming segment represents a significant long-term growth opportunity for us as people around the world begin to adopt the viewing behaviors of the US market. Our exclusive worldwide streaming rights allow us to expand internationally by adding foreign language support to our service without having to invest in local foreign operations. Today, over 20% of our subscribers are outside of the United States.

Complement our Existing Business with Selective Strategic Acquisitions – Our growth strategy is not solely dependent on acquisitions. However, we will consider strategic acquisitions that complement our existing business, increase our content library, expand our geographical reach, and add to our subscriber base. We will focus on companies with unique media content, a strong brand identity and customer databases that augment our existing databases.

Marketing

We market Gaiam TV through various channels, including organic search, paid search, digital advertising, email marketing, social media, retargeting, affiliate marketing, broad-based media, such as targeted video ads, as well as various strategic partnerships. In connection with marketing Gaiam TV, we offer free-trial subscriptions to new subscribers. Rejoining subscribers are an important source of subscriber additions, many of which come back to GaiamTV.com after receiving special offers via email.

We maintain websites at www.gaia.com and www.gaiamtv.com. The website address has been included only as a textual reference. Our website and the information contained on that website, or connected to that website, are not incorporated by reference into this information statement. We intend to change our principal marketing url to www.gaia.com from www.gaiamtv.com within two years after consummation of the spin-off, and maintain www.gaiamtv.com as a redirect url.

History

We started our first subscription club in 2007 with our acquisition of a controlling interest in Spiritual Cinema Circle, Inc. For an additional fee, Spiritual Cinema Circle now provides subscribers with a monthly curated selection of inspirational films. From 2007 through the present date, we have operated this component of our subscription services business which distributes our unique content to our subscribers via physical distribution of a monthly selection of DVDs.

We expanded the number of conscience media titles available to our subscription services with our acquisition of the entire content library of Wisdom Television. Wisdom historically operated for 20 years as a cable and satellite channel. With approximately $100 million invested before our acquisition, Wisdom was the only TV channel that remained dedicated, year after year, to conscience media and with our acquisition of their digital medial library we expanded our unique library content directed at independent and progressive thinkers.

Beginning in 2009, with the growth of new technology allowing for digital distribution of video content, we saw an opportunity to expand our subscription through the new digital distribution channel which was being developed. We saw that a digital subscription model would allow us to provide a significantly more robust content offering to our subscriber base. Accordingly, we began to focus our investments in our subscription business on growing our offering of unique digital video content and developing a technology platform to distribute that content to our subscribers. From 2009 through the present date, we have made significant investments in our technology platform including our streaming video on demand capabilities, user interface and extension of our streaming service to even more Internet-connected devices.

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In fall 2011, through the efforts that began with our investments in our video technology in 2009, we expanded our subscription offering to include a streaming video service available through our www.gaiamtv.com website. In late 2012 we brought our streaming video service out of beta-test status, and we now focus our efforts on growing our streaming subscription services domestically and internationally by expanding our streaming content, enhancing our user interface and extending our streaming content to even more Internet connected devices. Our expansion into the streaming video space has allowed us to significantly increase the number of titles available to our subscription audience and expand or original audience to include those customers interested in a streaming video service.

In 2011, we further invested in our subscription business video content library by building our Gaiam TV studios on our campus. These studios enable us to conduct, produce and edit content in-house and on site, near Boulder, Colorado.

In 2012, we further expanded our subscription library content through our acquisition of a small online media portal dedicated to sharing cutting-edge spiritual and scientific information with an international online community. With this strategic acquisition we expanded our unique library with content directed at viewers interested in the edges of consciousness and science.

In October 2013, we further expanded the digital yoga content available to our subscribers, and expanded our presence and subscriber base in the yoga community through our acquisition of My Yoga Online, the largest streaming yoga media service in Canada.

With the coalescence of these investments and expansions, GTV has grown its original physical distribution subscription business into a cutting edge digital distribution subscription business focused on our unique media content. In addition we have consolidated a grouping of specialized media content of particular interest to our unique consumer base under our Gaiam TV brand.

These investments in and expansions of our original subscription business have been instrumental to our ability to implement our strategic goal to grow our subscription business by expanding our streaming video on demand capabilities and to expand our unique content of transformational media, intended to awaken and inspire viewers around the world.

Regulatory Matters

A number of existing and proposed laws restrict disclosure of consumers’ personal information, which may make it more difficult for us to generate additional names for our direct marketing, and restrict our ability to send unsolicited electronic mail or printed materials. Although we believe we are generally in compliance with current laws and regulations and that these laws and regulations have not had a significant impact on our business to date, it is possible that existing or future regulatory requirements will impose a significant burden on us.

Competition

While our content offering is unique, the market for subscription based content delivered over the Internet is intensely competitive and subject to rapid change. Many consumers maintain simultaneous relationships with multiple providers and can easily shift spending from one provider to another. We are a focused provider within the streaming video market that is able to compete by providing exclusive content that is available on almost any device. Our principal competitors vary by world geographic region and include multichannel video programming distributors, Internet-based movie and TV content providers, including those that provide legal and illegal (pirated) streaming video content. We believe that due to the exclusivity of our content, we are positioning ourselves as a complementary service to large general content providers such as television broadcasters, cable television channels, and streaming services such as Netflix, Amazon Prime, Hulu Plus and HBO Go. For example over 50% of our U.S. subscribers also subscribe to Netflix.

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Seasonality

Our member growth exhibits a seasonal pattern that reflects variations when consumers buy Internet-connected devices and, as a result, tend to increase their viewing, similar to those of traditional TV and cable networks. Our member growth is generally greatest in the fourth and first quarter (October through March), and slowest in the May through August period. As we expand internationally, we expect regional seasonality trends to demonstrate more predictable seasonal patterns as our service offering in each market becomes more established and we have a longer history to assess such patterns.

Employees

As of June 30, 2015, we had approximately 67 employees, all of which are full-time employees. None of our employees are covered by a collective bargaining agreement.

Intellectual Property and Other Proprietary Rights

We regard our trademarks, service marks, copyrights, domain names, trade secrets, proprietary technologies and similar intellectual property as important to our success. We use a combination of trademark, copyright and trade secret laws and confidentiality agreements to protect our proprietary intellectual property. We have a license to use the name “Gaiam TV” from Gaiam, Inc. under the terms of the license agreement described under the heading “Our Relationship with Gaiam, Inc. After the Spin-Off – License Agreements.” Our ability to protect and enforce our intellectual property rights is subject to certain risks and from time to time we encounter disputes over rights and obligations concerning intellectual property. We cannot provide assurance that we will prevail in any intellectual property disputes. We intend to change our principal marketing url to www.gaia.com from www.gaiamtv.com within two years after consummation of the spin-off, and maintain www.gaiamtv.com as a redirect url.

Status as an Emerging Growth Company and Smaller Reporting Company

As a company with less than $1 billion in revenues during our last fiscal year, we qualify as an “emerging growth company” as defined in the JOBS Act. For as long as a company is deemed to be an emerging growth company, it may take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable to other public companies. These provisions include:

• an exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act;

• an exemption from the adoption of new or revised financial accounting standards until they would apply to private companies;

• an exemption from compliance with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;

• an exemption from compliance with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise;

• reduced disclosure about the emerging growth company’s executive compensation arrangements; and

• an exemption from the requirements of holding a nonbinding advisory vote on executive compensation and the requirement to obtain shareholder approval of any golden parachutes not previously approved.

We have elected to take advantage of the extended transition period with respect to new or revised financial accounting standards described in the second bullet above. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

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We would cease to be an emerging growth company upon the earliest of:

• the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement filed under the Securities Act;

• the last day of the fiscal year in which our total annual gross revenues exceed $1 billion;

• the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities; or

• the date on which we become a “large accelerated filer,” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter.

In addition, we qualify as a “smaller reporting company” under the Exchange Act. As a smaller reporting company, we enjoy many of the same exemptions as emerging growth companies, and those exemptions would continue to be available to us even after the emerging growth company status expires if we still are a smaller reporting company at such time.

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OTHER INFORMATION

We were incorporated in Colorado in 2006. Our principal executive offices are located at 833 West South Boulder Road, Louisville, Colorado 80027 and our telephone number is (303) 222-3999.

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DESCRIPTION OF PROPERTY

Effective as of January 1, 2015, Gaiam, Inc. transferred and contributed to GTV 100% of the ownership interests of Boulder Road LLC, a Colorado limited liability company, which owns real property located at 833 West South Boulder Road, Louisville, Colorado 80027 (the “Boulder Road Property”). The Boulder Road Property is the location of GTV’s operations, and consists of land and office building space totaling approximately 150,000 square feet. Approximately 128,419 square feet of the office building space is rented to third party tenants, including Gaiam, Inc., who occupies 41,423 square feet of the office building space pursuant to a lease between Boulder Road LLC and Gaiam, Inc.’s wholly-owned subsidiary Gaiam Americas, Inc. See “Our Relationship with Gaiam, Inc. after the Spin-Off—Lease of Boulder Road Property.”

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LEGAL PROCEEDINGS

From time to time we are involved in various legal proceedings that we consider to be in the normal course of business. We do not believe that any of these proceedings will have a material adverse effect on our business.

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MANAGEMENT

Directors

The following table sets forth the names and ages of the individuals who are expected to serve on our board of directors following the distribution. The nominees will be presented to our sole shareholder, Gaiam, Inc., for election before the separation. Kristin Frank, Chris Jaeb and                      are expected to resign as directors of Gaiam, Inc. at the time of the separation.

Name	Age		Position
Jirka Rysavy		61	Chairman of the Board of Directors and Chief Executive Officer
Kristin Frank		48	Director
Chris Jaeb		54	Director
Wendy Schoppert		48	Director
Paul Sutherland		59	Director

Jirka Rysavy – He has been GTV’s Chairman and Chief Executive Officer since our formation in 2006. He has been the Chairman of Gaiam, Inc. since its inception and served as the full-time Chief Executive Officer of Gaiam, Inc. from December 1998 to March 2009. In 1986, Mr. Rysavy founded Corporate Express, Inc., which, under his leadership, grew to become a Fortune 500 company, supplying office products and services. He was its Chairman and Chief Executive Officer until 1998. Mr. Rysavy also founded and served as Chairman and Chief Executive Officer of Crystal Market, a health foods market, which was sold in 1987 to become the concept and first Wild Oats Markets store. Since its inception until June 2013, Mr. Rysavy also served as the Chairman of Real Goods Solar, Inc., an alternative energy company Gaiam, Inc. founded in 1999 and of which Gaiam, Inc. sold virtually all of its equity interest in 2013.

Our board of directors believes that Mr. Rysavy brings to the board significant senior leadership, strategic focus, business development, sales and marketing and international experience from his past business experience in senior management roles and as a founder of several successful businesses.

Kristin Frank – She has served as a director of Gaiam, Inc. since October 2013. Ms. Frank has a long career at Viacom, a global entertainment company, where she currently serves as Executive Vice President of Viacom Music and Logo’s Connected Content division, with general management responsibilities for all non-linear brand properties for MTV, VH1, CMT and LOGO. Previously, from 2009 to 2012, Ms. Frank served as General Manager for MTV and VH1 Digital where she was instrumental to MTV’s growth to 140 million fans on Facebook. From 2005 to 2009 she served as Chief Operating Officer at LOGO TV. From 1996 to 2005 she has held multiple positions at Viacom Media Networks including serving as Senior Vice President, Multiplatform Distribution at LOGO TV as well as Regional Vice President, MTV Networks Content Distribution and Marketing Group overseeing distribution strategy for MTV, VH1, CMT, VH1 Classic, MTV 2 and Logo.

The board of directors believes that Ms. Frank brings to the board of directors significant experience with management, operations, branding, digital content delivery and social media.

Chris Jaeb – He has served as a director of Gaiam, Inc. since October 2013. Since 2007, Mr. Jaeb serves as the Chief Executive Officer of Common Ground Kauai, a sustainable resource center he founded. In 2006 he co-founded and until 2010 served as the President of Malama Kauai, a Hawaii based nonprofit organization. In 1995,

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Mr. Jaeb co-founded AudioNet (previously Cameron Broadcasting Systems), an Internet-based aggregator of digital media, which changed its name to Broadcast.com prior to its initial public offering in 1998. In 1999 Broadcast.com was sold to Yahoo for $5.4 billion. In 1995 Mr. Jaeb founded eAds, the first fee per click advertising company on the Internet.

In addition to Mr. Jaeb’s entrepreneurial experience, the board of directors believes that he brings to the board of directors a strong understanding of Internet marketing operations and the business aspect of sustainable living.

Wendy Schoppert – She has served as a director of Gaiam, Inc. since October 2013. From April 2005 to February 2014, Ms. Schoppert served on the Senior Executive Team of Select Comfort, the manufacturer, marketer, retailer and servicer of the Sleep Number^® line of beds, where she held the positions of Executive Vice President and Chief Financial Officer, Chief Information Officer, interim Chief Marketing Officer and Senior Vice President of International and New Channel Development. Prior to joining Select Comfort, Ms. Schoppert led US Bank’s Private Asset Management team and served as Head of Product, Marketing & Corporate Development for the bank’s asset management division. She began her career in the airline industry, serving in various financial, strategic, and general management leadership positions at American Airlines, Northwest Airlines and America West Airlines. Ms. Schoppert serves on the Board of Nina Hale Inc., a digital marketing agency, and she is also a member of Cornell University’s “President’s Council of Cornell Women.”

The board of directors believes that Ms. Schoppert brings to the board of directors vast experience in brand development and management, as well as significant senior financial leadership and expertise with the oversight of financial reporting and disclosure for public companies.

Paul Sutherland – He has served as a director of Gaiam, Inc. since June 2012. Mr. Sutherland has worked in the investment and financial advisory business since 1975. He is founder and President of Financial & Investment Management Group, Ltd. (“FIMgroup”), a registered investment adviser that manages investment portfolios on a discretionary basis for individuals, trusts, foundations and retirement plans that he founded in 1984. As the Chief Investment Officer for FIMgroup, he has been managing values driven, sustainably oriented, global total return, growth and income investment portfolios for more than 25 years. FIMgroup is the beneficial owner of approximately 8.7% of Gaiam, Inc.’s outstanding shares of Class A common stock. Mr. Sutherland served on the board of directors of the Utopia Funds, a registered investment company, between December 2005 and March 2009. Mr. Sutherland is Chairman and a founding board member of the Utopia Foundation and is author of various books including Virtues of Wealth and the AMA guide to Financial Planning. Mr. Sutherland is also owner of Spirituality and Health Media LLC, the publisher of Spirituality & Health magazine, part owner of Smartwired LLC, owner of Smart parenting revolution, which provides educational tools for parents, and educators, and Yen Yoga and Fitness LLC, the largest yoga, spinning and fitness studio in northern Michigan.

In addition to Mr. Sutherland’s significant senior leadership, global investment, business, entrepreneurial and financial experience, the board of directors believes that he brings to the board of directors a broad understanding of the business aspects of the sustainable health and wellbeing movement and market in which Gaiam operates.

Structure of the Board of Directors and Director Independence

After the spin-off, we expect to have a board of directors initially consisting of five directors. Our bylaws will provide that the number of members will be fixed from time to time by the Chairman or by a majority vote of the board of directors. Our articles of incorporation and bylaws will provide that the board of directors will consist of a single class, with our directors being elected each year by a plurality of the votes cast at our annual meeting of shareholders. Our bylaws will provide that a director may be removed with or without cause by a majority vote of shareholders. We anticipate that our board of directors will consist of a majority of independent directors and that committees of our board of directors will consist solely of independent directors, as required by the NASDAQ market rules. In addition to having independent directors meeting the NASDAQ market definition of independence, our board of directors may set its own standards of independence. We expect that our board of directors will determine that four of our non-employee directors satisfy NASDAQ market standards to qualify as independent directors as well as any additional independence standards that may be established by the board of directors. All such independence standards will be posted on our website at www.gaia.com. The website address has been included only as a textual reference. Our website and the information contained on that website, or connected to that website, are not incorporated by reference into this information statement. Mr. Rysavy is expected to serve as the Chairman of our board of directors.

Committees of the Board of Directors

At the time of the distribution, we anticipate that the board of directors will have two standing committees: audit and compensation. Assignments to, and chairs of, the committees are selected by the board of directors. Each of these committees will operate under a charter approved by the board of directors. The charters will be posted on our website at www.gaia.com, and we will provide a copy of the charters to shareholders upon request. All committees will report on their activities to the board of directors. The website address has been included only as a textual reference. Our website and the information contained on that website, or connected to that website, are not incorporated by reference into this information statement.

We do not expect to have a nominating committee, and we expect that nominations for directors will be made by our full board of directors or by Mr. Rysavy as majority shareholder. We anticipate that GTV will be exempt from NASDAQ rules with respect to nominating committees because GTV may be deemed to be a controlled company on the basis of Mr. Rysavy’s control of more than 50% of GTV’s voting power, and in light of Mr. Rysavy’s control, our board of directors does not believe a nominating committee would serve a purpose. Our bylaws will set forth certain procedures that will be required to be followed by non-majority shareholders in nominating persons for election to our board of directors. Generally, written notice of a proposed nomination is required to be received by GTV’s corporate Secretary no later than the 90^th day, or earlier than the 120^th day before the anniversary of the preceding year’s annual meeting.

Audit Committee. Our audit committee will be responsible for the appointment, compensation and oversight of GTV’s auditor and for approval of any non-audit services provided by the auditor. Our audit committee will also oversee: (i) management’s maintenance of the reliability and integrity of our accounting policies and financial reporting and disclosure practices; (ii) management’s establishment and maintenance of processes to assure that an adequate system of internal control over financial reporting is functioning; and (iii) management’s establishment and maintenance of processes to assure our compliance with all laws, regulations and company policies relating to financial reporting. The initial members of the audit committee are expected to be Ms. Frank, Ms. Schoppert and Mr. Sutherland, each of whom is expected to be independent within the meaning of the rules of the NASDAQ market and applicable SEC rules. Ms. Schoppert is expected to serve as the chair of the committee. We expect that Ms. Schoppert will qualify as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K.

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Compensation Committee. Our compensation committee will establish compensation amounts and policies applicable to our executive officers, establishes salaries, bonuses and other compensation plans and matters for GTV’s executive officers and administer GTV’s stock option plans and employee stock purchase plan. The initial members of the compensation committee are expected to be Ms. Frank, Ms. Schoppert and Mr. Jaeb, each of whom is expected to be independent under NASDAQ listing standards. Ms. Frank is expected to serve as the chair of the committee.

Executive Officers

The following table sets forth the names, ages and anticipated titles of the individuals who are expected to serve as our executive officers following the distribution. All of the individuals set forth below, other than Mr. Rysavy, are currently full-time employees of Gaiam, Inc or its subsidiaries. After the distributions, none of the individuals set forth below, other than Mr. Rysavy, will be employed by Gaiam, Inc. or any of its subsidiaries. Mr. Rysavy currently serves as Chairman of the board of directors of Gaiam, Inc. and we expect that he will continue in that role after the completion of the spin-off. Biographical information about Mr. Rysavy is set forth above under “Management – Directors.”

Name	Age		Position
Jirka Rysavy		61	Chairman and Chief Executive Officer
Brad Warkins		47	President and Chief Operating Officer
Paul C. Tarell, Jr.		34	Chief Financial Officer
Jaymi Bauer		45	Chief Marketing Officer

Brad Warkins – He has served as GTV’s Chief Operating Officer since December 2013 and was promoted to serve as GTV’s President in February 2015. Mr. Warkins previously held the position of Vice President of Gaiam, Inc. from 2007 to November 2013, responsible for the Subscription Business. From 1999 until 2007 he served as President of Conscious Media, Inc., a company majority owned by Gaiam, Inc., and purchased by Gaiam, Inc. in 2007.

Paul C. Tarell, Jr. – He has served as GTV’s Chief Financial Officer since May 2014. He previously served as GTV’s Vice President of Finance since September 2013. From January 2012 until August 2013, Mr. Tarell was Vice President of Finance and Operations of SET Media, Inc. (acquired by Conversant, Inc.), an online video technology company. From October 2010 until March 2012, Mr. Tarell was Senior Director of Finance at Velti, Inc., a mobile advertising technology company. From 2005 until September 2010, Mr. Tarell was a licensed CPA in California, working in public practice at Armanino LLP.

Jaymi Bauer – She has served as GTV’s Chief Marketing Officer since June 2014. From October 2013 to June 2014, Ms. Bauer founded and served as Chief Executive Officer of the marketing firm, Nectarly Consulting. From 2002 until October 2013 she served as Senior Director of Global Product Marketing, in charge of launching Xbox, for Microsoft Corporation and previously, she served as Director of Marketing of Microsoft Corporation, in charge of TV, Music and Video Business. From 1994 until 1999 she served in various capacities at Vivendi Universal Games including Global Brand Manager.

Family Relationships

None.

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Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in Item 401(f) of Regulation S-K.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table provides certain information concerning the compensation awarded to, earned by or paid to the individuals who we expect will be our “named executive officers” following the distribution for the fiscal years ended December 31, 2014 and 2013. We expect that our named executive officers will consist of our Chairman and Chief Executive Officer and three other individuals serving as our executive officers and who, based on employment with Gaiam, Inc., were the most highly compensated executive officers, other than our Chairman and Chief Executive Officer, during the year ended December 31, 2014. All of the information included in this table reflects compensation awarded to, earned by or paid to the named executive officers for services rendered to Gaiam, Inc. and its subsidiaries, including GTV. Unless the context suggests otherwise, references to “stock options” mean options to purchase Gaiam, Inc.’s Class A common stock. Amounts shown are for the individuals in their last position with Gaiam, Inc. and do not necessarily reflect the compensation these individuals will earn in their new capacities as our executive officers.

Name and principal position	Year		Salary (3) ($)		Bonus (3) ($)		Option awards (4) ($)		All other compensation (5) ($)		Total ($)
Jirka Rysavy (1)		2014	$	114,423		—		—		—	$	114,423
Chairman and Chief Executive Officer		2013	$	401,762	$	300,000		—		—	$	701,762
Brad Warkins (2)		2014	$	255,561		—	$	205,647	$	1,084	$	462,293
President and Chief Operating Officer		2013	$	231,889	$	60,000	$	91,078	$	2,401	$	385,368
Paul C. Tarell, Jr. (2)		2014	$	207,269		—		—	$	18,991	$	226,260
Chief Financial Officer		2013	$	46,749	$	14,025	$	90,973	$	15,792	$	167,538
Jaymi Bauer		2014	$	134,615	$	25,000	$	139,477	$	29,149	$	328,241
Chief Marketing Officer

(1) Mr. Rysavy has served as our Chairman and Chief Executive Officer and a director since our formation in 2006. He served as Gaiam, Inc.’s Chief Executive Officer until March 2009 and continues to serves as Gaiam, Inc.’s Chairman. Mr. Rysavy is Gaiam, Inc.’s largest shareholder and is expected to be our largest shareholder following the distribution. Gaiam, Inc.’s board of directors approved an annual base salary of $412,000 for Mr. Rysavy for 2013; however, he voluntarily requested that his salary rate be reduced during 2014 and 2013. As a result, Mr. Rysavy had a base salary of $85,000 during 2014 and $60,000 during 2012. Currently Mr. Rysavy expects to receive a salary of $85,000 from Gaiam, Inc. for fiscal year ending December 31, 2015.

(2) Mr. Tarell became Chief Financial Officer in May 2014. Mr. Warkins became Chief Operating Officer in December 2013 and was promoted to President in February 2015.

(3) The Salary and Bonus columns represent amounts when earned and, because of the timing of payments, do not represent amounts paid during each presented year. The annual salary for each named executive officer as of December 31, 2014 was $85,000 for Mr. Rysavy; $207,000 for Mr. Tarell; $250,000 for Mr. Warkins; and $250,000 for Mr. Bauer. Gaiam, Inc. generally gives bonuses at the discretion of its board of directors’ compensation committee and typically pays them in May of the year following the year earned. For 2013, Mr. Rysavy received a bonus related to services provided to Gaiam, Inc. and, for 2014, Ms. Bauer received a relocation bonus connected to her office of employment. No additional bonuses are planned to be awarded for 2014.

(4) The amounts in the Option Awards column reflect the grant date fair value awards given to Mr. Tarell, Ms. Bauer and Mr. Warkins during 2013 and 2014, as applicable, computed in accordance with FASB ASC Topic 718. Mr. Rysavy has previously requested from Gaiam, Inc. that he not receive any options. These awards were issued pursuant to Gaiam, Inc.’s 2009 Long-Term Incentive Plan. At Mr. Rysavy’s request, Gaiam, Inc. has not awarded him any option awards in the last ten years. Assumptions used in the calculation of the amounts are included in footnote 9 to our consolidated financial statements, included elsewhere in this Information Statement.

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(5) All Other Compensation includes for Mr. Warkins in 2013 and 2014 the cash payout of $2,401 and $1,084, respectively, of 401(k) company match. The amount for Mr. Tarell in 2013 and 2014 includes a cash payout of $15,361 and $18,991, respectively, as a moving reimbursement, and for 2013 and 2014 includes the cash payout of $431 and $1,500, respectively, of 401(k) company match. The amount for Ms. Bauer in 2014 includes a cash payout of $27,650 as a moving reimbursement, and for 2014 includes the cash payout of $1,500 of 401(k) company match.

Risk Assessments

With respect to risk related to compensation matters, we expect that our compensation committee will consider, in establishing and reviewing our executive compensation program, whether the program encourages unnecessary or excessive risk taking. Our executive officers’ base salaries are fixed in amount and thus do not encourage risk-taking. Bonuses are capped and are tied to overall business unit and corporate performance. We expect that a portion of compensation provided to the executive officers will be in the form of stock options that are important to help further align executives’ interests with those of our shareholders. We expect that our compensation committee will find that these awards do not encourage unnecessary or excessive risk-taking, as the value of the stock options fluctuate dollar for dollar with our stock price and do not represent significant downward/upward risk and reward.

Outstanding Equity Awards at Fiscal Year-End

GTV has not awarded any stock options or other equity or incentive awards. However, in connection with the spin-off, holders of options to purchase shares of Gaiam, Inc.’s Class A common stock who are employees or non-employee directors of Gaiam, Inc. on the record date for the distribution will receive options to purchase shares of our Class A common stock. For an explanation of the treatment of outstanding equity awards, see “The Spin-Off – Effect of the Spin-Off on Gaiam, Inc.’s Outstanding Equity Awards.” The new GTV options will be subject to the terms and conditions of the Gaia, Inc. 2015 Long-Term Incentive Plan which we expect to adopt before the spin-off and which is discussed in greater detail in “Executive Compensation – Gaia, Inc. 2015 Long-Term Incentive Plan,” included elsewhere in this information statement. The following table provides certain summary information concerning outstanding Gaiam, Inc. equity awards held by the executive officers named above in the Summary Compensation Table as of December 31, 2014.

	Option Awards
Name	Number of securities underlying unexercised options (#) Exercisable (1)		Number of securities underlying unexercised options (#) Unexercisable (1)		Option exercise price ($) (1)(2)		Option expiration date (1)
Jirka Rysavy		—		—		—		—
Paul C. Tarell Jr.		3,000		27,000	$	5.03		9/16/2023
Brad Warkins		15,000 18,000 2,000 —		—   2,000 23,000 50,000	$ $ $ $	5.00 5.66 6.18 7.71		1/15/2016 5/20/2016 10/30/2023 11/4/2024
Jaymi Bauer		—		30,000	$	7.82		6/16/2024

(1) This table reflects the status of option awards granted by Gaiam, Inc. pursuant to its 2009 Long-Term Incentive Plan. The options vest and become exercisable at 2% per month over the 50 months beginning in the 11th month after date of grant. The exercise price of the options is equal to or greater than the closing stock market price of Gaiam, Inc.’s Class A common stock on the date of grant. Options granted before 2011 expire seven years from the date of grant. Options granted during 2011 and thereafter expire ten years from the date of grant. Assumptions used in the calculation of the amounts are included in footnote 9 to our consolidated financial statements, included elsewhere in this Information Statement.

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Employment Contracts and Termination of Employment and Change-in-Control Arrangements

We do not have employment agreements or change of control agreements with any of our executive officers. Our directors, officers, and managers are required to sign a confidentiality agreement and, upon receiving a stock option grant, a two-year non-compete agreement commencing with the date they leave our company.

Gaia, Inc. Long Term Deferred Equity Compensation Plan

On February 26, 2015, Gaiam, Inc., in its capacity as our sole shareholder, approved the Gaia, Inc. Long-Term Deferred Equity Plan (the “deferred equity plan”), which will be administered by the compensation committee of GTV’s board of directors. The compensation committee or the board of directors will have the full power and authority to grant eligible persons restricted stock units under the deferred equity plan and to determine the terms and conditions under which any awards are made. The purpose of the plan is to help align the interests of eligible participants with those of our current and future shareholders and to help attract, retain and motive key personnel upon whose judgment, initiative and effort the successful conduct of GTV’s business is dependent. The number of shares with respect to which the awards of restricted stock units may be issued or delivered under the deferred equity plan may not exceed             shares of our Class A common stock. If any award is canceled, forfeited, or otherwise terminated, any shares of our Class A common stock that would otherwise have been issuable pursuant to such awards will be available for issuance under new awards so long as the shares underlying the restricted stock units are forfeited during the first two and one half years from the date the award is made. The compensation committee may grant restricted stock units (“RSUs”) under the deferred equity plan, each of which gives the holder the right to receive one share of our Class A common stock.

Each grant of RSUs will be made pursuant to the terms of individual restricted stock unit agreements. Each RSU will entitle the recipient to receive one share of our Class A common stock upon vesting. The RSUs will vest on at such date provided for in the agreement, provided that (a) the spin-off has occurred by that date and (b) the recipient is still an employee or director of the Company on such date. The RSUs are forfeited and of no further force and effect if the spin-off has not occurred on or before the vesting date or if the recipient’s employment terminates for any reason before such date, including, but not limited to, involuntary termination. The holder of an RSU will have no dividend, voting or any other rights as a shareholder with respect to any RSUs. However, if we declare a dividend on our Class A common stock, the holder of an RSU shall be credited with an additional number of RSUs equal to (a) the number of RSUs held on such record date, multiplied by (b) the amount paid as a dividend on each share of Class A common stock, divided by the fair market value of a share of our Class A common stock on the record date. Payment with respect to vested RSUs shall be made in shares of our Class A common stock within 60 days following the date on which such RSUs vested. In the restricted stock unit agreement, the recipient of an RSU agreed to certain non-disparagement, confidentiality, noncompetition and non-solicitation covenants. Before commencing the spin-off, we expect to grant RSUs to certain individuals expected to serve as our officers and employees after the spin-off.

Gaia, Inc. 2015 Long-Term Incentive Plan

In connection with the spin-off, it is expected that GTV will adopt the Gaia, Inc. 2015 Long-Term Incentive Plan (the “incentive plan”) which will be administered by the compensation committee of GTV’s board of directors. The incentive plan’s terms are substantially similar to the terms of the Gaiam, Inc. 2009 Long-Term Incentive Plan. The compensation committee will have the full power and authority to grant eligible persons the awards described below and to determine the terms and conditions under which any awards are made. The incentive plan is designed to provide additional remuneration to certain employees and independent contractors for exceptional service and to encourage their investment in GTV. The compensation committee may grant any combination of awards, including, but not limited to stock options, stock appreciation rights, restricted stock, restricted stock units, performance grants, or any combination of the foregoing under the incentive plan (collectively, the “awards”). The maximum number of Class A shares of our common stock with respect to which awards may be granted is            , subject to anti-dilution and other adjustment provisions of the incentive plan. If any Class A Shares issued as restricted stock, restricted stock units, or otherwise subject to repurchase or forfeiture rights are required by GTV pursuant to such rights, or if any award is canceled, terminates, or expires unexercised, any shares of our Class A common stock that would otherwise have been issuable pursuant to such awards will be available for issuance under new awards. With limited exceptions, under the incentive plan, no person may be granted in any calendar year awards covering more than            shares of our Class A common stock, subject to anti-dilution and other adjustment provisions of the incentive plan. Shares of our Class A common stock issuable pursuant to awards will be made available from authorized but unissued shares.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table summarizes the expected securities authorized for issuance under our equity compensation plans following the spin-off. As applicable, we based the values included in the table below on the actual number of awards issued to date by GTV to its officers and employees and the number of Gaiam, Inc.’s securities to be issued upon exercise of outstanding options on            ,             , giving effect to a distribution where each holder of Gaiam, Inc.’s options will receive options to purchase shares of the corresponding series of our Class A common stock as explained in greater detail in “The Spin-Off – Effect of the Spin-Off on Gaiam, Inc.’s Outstanding Equity Awards,” included elsewhere in this information statement.

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The actual number of options to purchase shares of our Class A common stock will be determined on the record date.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders (1)
Gaia, Inc. Long-Term Deferred Equity Compensation Plan
Gaia, Inc. 2015 Long-Term Incentive Plan
Total

(1) Each plan has been or will be approved by Gaiam, Inc. in its capacity as the sole shareholder of GTV prior to the spin-off.

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DIRECTOR COMPENSATION

Director Compensation Policy

In 2014, Gaiam, Inc. paid its directors who were not employees of Gaiam, Inc. or its affiliates a fee of $5,000 for each meeting of its board of directors that they attended, and a fee of $2,000 for each telephonic board meeting attended. In addition, non-employee directors were paid a fee of $2,000 for attendance at each committee meeting and $1,000 for each telephonic committee meeting attended. Members of each standing committee received an annual fee of $5,000 and chairpersons of each standing committee received an annual fee of $10,000.

Following the spin-off, we expect to adopt the same compensation structure for our directors. The amount and timing of any equity-based compensation to be paid to our directors following the spin-off (other than awards issued pursuant to the reorganization agreement) will be determined by our board of directors. We expect that any equity awards granted to our non-employee directors will be granted pursuant to the Gaia, Inc. 2015 Long-Term Incentive Plan.

Director Compensation Table

The following table contains compensation information concerning the 2014 compensation awarded by Gaiam, Inc. to its non-employee directors who are expected to become, following the spin-off, non-employee directors of GTV. All of the information included in this table reflects compensation awarded to, earned by or paid to the directors for services rendered to Gaiam, Inc. and its subsidiaries, including GTV. Unless the context suggests otherwise, references to “stock options” mean options to purchase Gaiam, Inc.’s Class A common stock. Amounts shown are for the individuals in their last position with Gaiam, Inc. and do not necessarily reflect the compensation these individuals will earn in their new capacities as our directors.

Name	Fees earned or paid in cash (2)		Stock awards (1)(2)(3)		Total
Kristin Frank	$	22,500	$	22,503	$	45,003
Chris Jaeb	$	15,000		—	$	15,000
Wendy Schoppert	$	34,000	$	34,005	$	68,005
Paul Sutherland		—	$	55,995	$	55,995

(1) Amounts in the Stock Awards column reflect the aggregate grant date fair value of awards granted during 2014 and have been computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of the amounts are included in footnote 9 to our consolidated financial statements, included elsewhere in this Information Statement.

(2) Amounts in the Fees Earned or Paid in Cash and Stock Awards columns include fees for services rendered during 2014, some of which were not administratively paid or issued until 2015.

(3) The directors received stock awards with the following fair values on the dates specified. Such awards represent 2014 compensation, in lieu of cash, for services as directors.

Name	September 30, 2014		December 31, 2014
Kristin Frank	$	11,003	$	11,500
Wendy Schoppert	$	19,003	$	15,002
Paul Sutherland	$	30,997	$	24,998

(4) Ms. Frank, Mr. Jaeb, Ms. Schoppert and Mr. Sutherland do not have any outstanding option awards at year end.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of the date of this information statement, all of the outstanding shares of our common stock are beneficially owned by Gaiam, Inc. Following the spin-off, Gaiam, Inc. will not own any shares of our common stock, which will be issued to our shareholders as either Class A common stock or Class B common stock. The following table provides information with respect to the anticipated beneficial ownership of our common stock, following consummation of the distribution, by: (i) each person (or group of affiliated persons) who is expected to beneficially own more than 5% of our outstanding common stock; (ii) each person expected to serve on our board of directors as of the distribution date; (iii) each person expected to be a named executive officer; and (iv) all of our executive officers and directors as a group.

Except as otherwise noted below, we based the share amounts included in the table on each person’s beneficial ownership of Gaiam, Inc. common stock on September 3, 2015, giving effect to a distribution ratio where each holder of Gaiam, Inc.’s Class A common stock will receive one share of our Class A common stock for each              share(s) of Gaiam, Inc.’s Class A common stock held by such holder at the close of business on the record date of the distribution, and each holder of Gaiam, Inc.’s Class B common stock will receive one share of our Class B common stock for each              share(s) of Gaiam, Inc.’s Class B common stock held by such holder at the close of business on the record date of the distribution. The distribution is explained further in “The Spin-Off – Background for the Spin-Off” included elsewhere in this information statement. Please note that these numbers will be updated in our final filing to reflect any equitable adjustments made to stock options and restricted stock units, as described elsewhere in this information statement.

To the extent our directors and executive officers own Gaiam, Inc.’s Class A or Class B common stock on the record date, they will participate in the distribution on the same terms as other holders of Gaiam, Inc. Class A and Class B common stock.

We estimate that immediately following the spin-off, and based on 19,199,061 shares of Gaiam, Inc.’s Class A common stock and 5,400,000 shares of Gaiam, Inc.’s Class B common stock outstanding on September 3, 2015, approximately                      shares of our Class A common stock and                      shares of our Class B common stock would be issued and outstanding. The actual number of shares of both classes of our common stock outstanding following the spin-off will be determined on the record date.

Because the distribution ratio has not yet been determined, the table of beneficial ownership reflects the beneficial owners’ ownership of Gaiam, Inc. common stock. The table of beneficial ownership will be updated in an amendment to this Form 10 and Information Statement.

Title of Class of Common Stock	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership (1)		Percent of Class (2)			Percent of All Classes of Common Stock (3)
Class A	Prentice Capital Management, LP (4)		2,566,323		13.37	%		10.43	%
	Michael Zimmerman (4)		2,578,028		13.43	%		10.48	%
	Columbia Wanger Asset Management, LLC (5)		2,216,229		11.54	%		9.01	%
	Royce & Associates, LLC (6)		1,914,070		9.97	%		7.78	%
	Financial & Investment Management Group, Ltd (7)		1,667,653		8.69	%		6.78	%
	Jirka Rysavy (8)		6,028,682		31.40	%		24.51	%
	Paul C. Tarell, Jr. (9)		9,600		*			*
	Brad Warkins (10)		54,500		*			*
	Jaymi Bauer (11)		4,200		*			*
	Kristin Frank (12)		7,931		*			*
	Chris Jaeb		0		*			*
	Wendy Lee Schoppert (13)		8,564		*			*
	Paul Sutherland(7)		1,703,306		8.87	%		6.92	%
	All directors and officers as a group (8 persons)		7,822,783		40.60	%		31.71	%
Class B	Jirka Rysavy (8)		5,400,000		100.00	%		100.00	%
	All directors and officers as a group (8 persons)		5,400,000		100.00	%		100.00	%

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* Indicates less than one percent ownership.

(1) This table is based upon information supplied by officers, directors and principal shareholders directly to us, Gaiam, Inc., or on Schedules 13D and 13G and Forms 3, 4 and 5 filed with the Securities and Exchange Commission, in each case, in connection with the respective officer’s, director’s, or principal shareholder’s ownership of Gaiam, Inc. As described previously, the percentage values of beneficial ownership of GTV will mirror the beneficial ownership in Gaiam, Inc. at the time of the separation. All beneficial ownership is direct and the beneficial owner has sole voting and investment power over the securities beneficially owned unless otherwise noted. Share amounts and percent of class include securities convertible into, and stock options exercisable for, shares of our Class A common stock and restricted stock vesting within 60 days after September 3, 2015.

(2) This column represents a beneficial owner’s percentage of ownership for a respective class of our outstanding common stock.

(3) This column represents a beneficial owners’ percentage ownership assuming that all outstanding shares of our Class B common stock have been converted into shares of our Class A common stock. Each share of our Class B common stock is convertible into one share of our Class A common stock.

(4) According to a report on Schedule 13D/A filed with the Securities and Exchange Commission on June 8, 2012 by Prentice Capital Management, LP and Michael Zimmerman, in connection with their ownership of Gaiam, Inc. According to the filing, the securities consist of (a) 2,566,323 shares of Gaiam, Inc.’s Class A common stock directly held by investment funds and in investment accounts managed by Prentice Capital Management, LP over which Prentice Capital Management, LP and Michael Zimmerman share voting and dispositive power; and (b) 11,705 shares of Gaiam, Inc.’s Class A common stock directly held by The Michael & Holly Zimmerman Family Foundation, Inc. over which Michael Zimmerman shares voting and dispositive power. Prentice Capital Management, LP and Michael Zimmerman disclaim beneficial ownership over the securities. The address for Prentice Capital Management, LP and Mr. Zimmerman is 33 Benedict Place, 2nd Floor, Greenwich, CT 06830.

(5) According to a report on Schedule 13G/A filed with the Securities and Exchange Commission on February 11, 2015 by Columbia Wanger Asset Management, LLC and Columbia Acorn Fund, in connection with their ownership of Gaiam, Inc. Columbia Wanger Asset Management, LLC is an investment adviser and the securities are owned by Columbia Acorn Fund and various other investment companies and managed accounts. Columbia Wanger Asset Management, LLC disclaims beneficial ownership over the securities. Columbia Acorn Fund has sole voting and investment power over 2,100,000 shares of Gaiam, Inc.’s Class A common stock. The address for Columbia Wagner Asset Management, LLC and Columbia Acorn Fund is 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606.

(6) According to a report on Schedule 13G/A filed with the Securities and Exchange Commission on February 5, 2015, Royce & Associates, LLC, is an investment adviser. Royce & Associates has sole voting and investment power over 1,914,070 shares of Gaiam Inc.’s Class A common stock. The address for Royce & Associates, LLC is 745 Fifth Avenue, New York, NY 10151.

(7) According to a report on Schedule 13G filed with the Securities and Exchange Commission on January 13, 2015 by Financial & Investment Management Group, Ltd. (“FIMgroup”) in connection with its ownership of Gaiam, Inc., and information provided by Mr. Sutherland as of August 25, 2015. The securities consist of (a) 1,661,753 shares of Gaiam, Inc.’s Class A common stock beneficially owned by FIMgroup in its capacity as investment adviser to its clients other than Mr. Sutherland; (b) 5,900 shares of Gaiam, Inc.’s Class A common stock directly owned by FIMgroup; (c) 4,000 shares of Gaiam, Inc.’s Class A common stock directly owned by FIMgroup’s 401(k) plan for the benefit of Mr. Sutherland; (d) 10,461 shares of Gaiam, Inc.’s Class A common stock directly owned by Mr. Sutherland; (e) 150 shares of Gaiam, Inc.’s Class A common stock jointly owned by Mr. Sutherland and his son; and (f) 21,042 shares of Gaiam, Inc.’s Class A common stock directly owned by a trust for which Mr. Sutherland serves as the trustee. FIMgroup is an investment adviser and shares voting and dispositive power over the securities beneficially owned with its clients. Mr. Sutherland, in his capacity as an officer of FIMgroup, has shared voting and shared dispositive control over the securities beneficially owned by FIMgroup. FIMgroup and Mr. Sutherland disclaim beneficial ownership of the shares of Class A common stock not directly owned by them, respectively. The address for FIMgroup and Mr. Sutherland is 111 Cass St., Traverse City, MI 49684.

(8) According to a report on Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2014. Includes 5,400,000 shares of Gaiam, Inc.’s Class A common stock issuable upon conversion of shares of Gaiam, Inc.’s Class B common stock held by Mr. Rysavy.

(9) Consists of 8,400 shares of Gaiam, Inc.’s Class A common stock issuable upon exercise of stock options that are currently exercisable, and 1,200 shares of Gaiam, Inc.’s Class A common stock issuable upon exercise of stock options exercisable within 60 days of September 3, 2015.

(10) Consists of 6,000 shares of Gaiam, Inc.’s Class A common stock, 51,500 shares of Gaiam, Inc.’s Class A common stock issuable upon exercise of stock options that are currently exercisable, and 3,000 shares of Gaiam, Inc.’s Class A common stock issuable upon exercise of stock options exercisable within 60 days of September 3, 2015.

(11) Consists of 3,000 shares of Gaiam, Inc.’s Class A common stock issuable upon exercise of stock options that are currently exercisable, and 1,200 shares of Gaiam, Inc.’s Class A common stock issuable upon exercise of stock options exercisable within 60 days of September 3, 2015.

(12) Consists of 7,931 shares of Gaiam, Inc.’s Class A common stock.

(13) Consists of 8,564 shares of our Class A common stock.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Before our separation from Gaiam, Inc., we will enter into a reorganization agreement to effect the spin-off and to provide for the allocation between Gaiam, Inc. and us of Gaiam, Inc.’s assets, liabilities and obligations attributable to periods before the separation of our business from Gaiam, Inc. and the distribution of our common stock to Gaiam, Inc.’s shareholders. In addition to the reorganization agreement, the parties also will enter into license agreements and a transitional operating agreement. For a discussion of these agreements, see “Our Relationship with Gaiam, Inc. after the Spin-off” included elsewhere in this information statement.

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DESCRIPTION OF OUR CAPITAL STOCK

General

Although we believe that the following summary description of our capital stock, our articles of incorporation and our bylaws covers all of the material provisions affecting the rights of holders of our capital stock, this summary is not intended to be complete and is qualified by reference to the provisions of applicable law and to our articles of incorporation and bylaws, both of which are included as exhibits to our registration statement on Form 10 of which this information statement is a part.

The authorized capital stock of GTV is 250,000,000 shares, and consists of 150,000,000 shares of Class A common stock, $.0001 par value per share, 50,000,000 shares of Class B common stock, $.0001 par value per share, and 50,000,000 shares of preferred stock, par value $.0001 per share. Based upon the share ownership of Gaiam, Inc. as of             ,             and assuming that each holder of Gaiam, Inc.’s Class A common stock will receive one share of our Class A common stock for each              share(s) of Gaiam, Inc.’s Class A common stock held by such holder at the close of business on the record date of the distribution, and each holder of Gaiam, Inc.’s Class B common stock will receive one share of our Class B common stock for each              share(s) of Gaiam, Inc.’s Class B common stock held by such holder at the close of business on the record date of the distribution, following the distribution we expect to have             shares of Class A common stock outstanding, and             shares of Class B common stock outstanding. There will be no shares of preferred stock outstanding. Following the distribution, we expect to have             shares of Class A common stock reserved for issuance upon the exercise of outstanding options.

Capital Stock

The following information reflects our articles of incorporation and bylaws as we expect them to be in effect at the time of the spin-off.

As of the record date for the distribution, the shares of Gaiam, Inc.’s Class A common stock were held of record by              shareholders, and the shares of Gaiam, Inc.’s Class B common stock were held by one shareholder. Following the distribution, we expect to have approximately the same number of holders of our Class A and Class B common stock as there were for Gaiam, Inc.’s common stock before the distribution.

We may not issue any additional shares of Class B common stock (except in connection with stock splits and stock dividends) and the rights of the holders of Class B common stock may not be amended except by the affirmative vote of the holders of a majority of the voting power of the shares of Class A common stock and of Class B common stock entitled to vote, each voting separately as a class. The shares of our Class B common stock will be convertible, one-for-one, into shares of our Class A common stock, at the option of the holder of the shares of our Class B common stock.

Our board of directors will be authorized, subject to any limitations prescribed by Colorado law, to issue at any time up to 50,000,000 shares of preferred stock. The board of directors will be able to provide for the issuance of the preferred stock in one or more series or classes with designations, preferences, limitations and relative rights determined by the board of directors without any vote or action by the shareholders, although the board of directors may not issue voting preferred stock without the consent or approval of a majority of our Class B common stock. As a result, the board of directors will have the power to issue preferred stock with voting, conversion and other rights and preferences that could adversely affect the voting power or other rights of the holders of the common stock. Although we have no current plans to issue any preferred stock, the issuance of preferred stock or of rights to purchase preferred stock could have the effect of making it more difficult for a third party to acquire us, or of discouraging a third party from attempting to acquire us. Such an issuance could also dilute the voting power or other incidents of ownership of holders of our common stock.

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Voting Rights

Each holder of shares of our Class A common stock will be entitled to one vote for each share held on all matters submitted to a vote of shareholders. Each share of our Class B common stock will be entitled to ten votes on all matters submitted to a vote of shareholders. There will be no cumulative voting rights. Except as otherwise provided in our articles of incorporation or as otherwise provided by law, all holders of shares of our Class A common stock and shares of our Class B common stock will vote as a single group on all matters that are submitted to the shareholders for a vote. Accordingly, holders of a majority of the shares of our Class A common stock and shares of our Class B common stock entitled to vote in any election of directors may elect all of the directors who stand for election, as well as take such other actions as are required or permitted to be taken at a meeting of the shareholders. A required number of shareholders having the minimum number of votes that would be necessary to authorize or take action at a meeting at which all of the shares entitled to vote thereon were present and voted may consent to an action in writing and without a meeting under certain circumstances.

Dividends and Liquidation

Shares of our Class A common stock and shares of our Class B common stock will be entitled to equal dividends, if any, as may be declared by our board of directors out of legally available funds. In the event of a liquidation, dissolution or winding up of GTV, the shares of our Class A common stock and shares of our Class B common stock would be entitled to share ratably in our assets remaining after the payment of all of our debts and other liabilities. Holders of shares of our Class A common stock and shares of our Class B common stock will have no preemptive, subscription or redemption rights, and there will be no redemption or sinking fund provisions applicable to the shares of our Class A common stock and our Class B common stock. The outstanding shares of our Class A common stock and shares of our Class B common stock will be, when issued following the distribution, fully paid and non-assessable.

Anti-Takeover Effects of Our Articles of Incorporation and Bylaws

The following provisions, which are expected to be contained in our articles of incorporation or bylaws, could have the effect of delaying, deferring or preventing a change in control of GTV.

Our articles of incorporation and bylaws will provide that shareholders holding the required number of shares may consent to an action in writing without the need to hold a meeting. More specifically, our articles of incorporation will provide that any action that is required or permitted under Articles 101 to 117 of the Colorado Business Corporation Act or under our articles of incorporation to be taken at a meeting of shareholders may be taken without a meeting, if shareholders who sign the written consent hold not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all of the shares entitled to vote thereon were present and voted.

Our articles of incorporation and bylaws provide that our board of directors may consist of any number of directors which may be fixed from time to time by the Chairman or the board of directors. Newly created directorships resulting from any increase in our authorized number of directors, as well as any vacancies on our board of directors resulting from death, resignation, retirement, disqualification, removal from office or other cause, will be filled by an action by written consent taken by the holders of a majority of the votes eligible to be cast in an election of directors, or if GTV has not received such written consent within thirty business days of such vacancy, by the affirmative vote of a majority of our board of directors then in office, even if less than a quorum is remaining in office.

Our bylaws will require advance notice by a non-majority shareholder of any proposal to be brought before an annual meeting of shareholders by a non-majority shareholder, including but not limited to any nomination for election of directors by any non-majority shareholder of GTV entitled to vote for the election of directors at the meeting.

Each holder of our Class A common stock will have one vote on all matters submitted to shareholders for each share of Class A common stock standing in the name of such holder on our books. Each holder of our Class B common stock will have ten votes on all matters submitted to shareholders for each share of Class B common stock standing in the name of such holder on our books. Except as otherwise provided in our articles of incorporation or as otherwise provided by law, all shares of our common stock entitled to vote will vote as a single group on all matters

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submitted to the shareholders. After the spin-off, Mr. Rysavy is expected to hold approximately 3.3% of our Class A common stock and 100% of our Class B common stock. Cumulative voting in the election of directors is not permitted under our articles of incorporation or bylaws.

Subject to repeal or change by action of our shareholders, our board of directors may amend, supplement or repeal our bylaws or adopt new bylaws.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock will be Corporate Stock Transfer, at the address set forth on page 3 of this information statement.

Listing

Following the spin-off, we expect to have our Class A common stock listed on the NASDAQ Global Market under the symbol “GAIA.”

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INDEMNIFICATION OF DIRECTORS AND OFFICERS

Colorado law provides for indemnification of directors, officers and other employees in certain circumstances (C.R.S. (§) 7-109-101 et. seq. (2009)) and for the elimination or limitation of the personal liability for monetary damages of directors under certain circumstances (C.R.S. (§) 7-108-402 (2009)). The articles of incorporation of GTV eliminate the personal liability for monetary damages of directors under certain circumstances and provide indemnification to GTV’s directors and officers the fullest extent permitted by the Colorado Business Corporation Act. Among other things, these provisions provide indemnification for officers and directors against liabilities for judgments in and settlements of lawsuits and other proceedings and for the advance and payment of fees and expenses reasonably incurred by the director or officer in defense of the lawsuit or proceeding.

GTV expects to maintain a directors and officers insurance policy providing insurance indemnifying GTV’s directors and executive officers for certain liabilities. This insurance policy insures GTV’s past, present and future directors and officers, with certain exceptions, from claims arising out of any error, misstatement, misleading statement, act, omission, neglect or breach of duty by any of the directors while acting in their capacities as such. Claims include claims arising from sales and purchases of GTV securities and shareholder derivative actions.

GTV expects to enter into substantively identical indemnification agreements with its directors and officers (the “Indemnitees”), which generally are expected to provide that, to the fullest extent permitted by Colorado law, GTV shall indemnify such Indemnitee if the Indemnitee was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the Indemnitee is or was or has agreed to serve at GTV’s request as a director, officer, employee or agent of GTV, or while serving as a director or officer of GTV, is or was serving or has agreed to serve at GTV’s request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity or by reason of the imposition upon such officer or director of any federal and/or state income tax obligation (inclusive of any interest and penalties, if applicable), that is imposed on such officer or director with respect to income, “phantom income,” rescinded or unconsummated transactions, or any other allegedly taxable event for which no benefit was received by such officer or director. The indemnification obligation is expected to include, without limitation, claims for monetary damages against an Indemnitee in respect of an alleged breach of fiduciary duties and generally covers expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by an Indemnitee or on an Indemnitee’s behalf in connection with such action, suit or proceeding and any appeal therefrom, but would only be provided if the Indemnitee acted in good faith; and, in the case of conduct in an official capacity with the corporation, if such conduct was in GTV’s best interests, and, in all other cases, if such conduct was at least not opposed to GTV’s best interests; and, with respect to any criminal action, suit or proceeding, if the Indemnitee had no reasonable cause to believe the Indemnitee’s conduct was unlawful.

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

EKS&H LLLP served as our independent registered public accounting firm for the year ended December 31, 2014, and our board of directors has engaged EKS&H LLLP to serve as our independent registered public accounting firm for the year ended December 31, 2015.

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WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form 10 with the SEC with respect to the shares of our common stock being distributed as contemplated by this information statement. This information statement is a part of, and does not contain all of the information set forth in, the registration statement and the exhibits and schedules to the registration statement. For further information with respect to our company and our common stock, please refer to the registration statement, including its exhibits and schedules. Statements made in this information statement relating to any contract or other document are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contract or document.

As a result of the foregoing, we have become subject to the information and reporting requirements of the Exchange Act and, in accordance with the Exchange Act, we will file periodic reports, proxy statements and other information with the SEC. You may read and copy any document that GTV files with the SEC, including the registration statement on Form 10, including its exhibits and schedules, at the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. You may also inspect such filings on the Internet website maintained by the SEC at www.sec.gov. The website address has been included only as a textual reference. Information contained on any website referenced in this information statement is not incorporated by reference in this information statement.

77

INDEX TO FINANCIAL STATEMENTS

Gaia, Inc.’s Consolidated Financial Statements for the Years Ended December 31, 2014 and 2013 (Audited)
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Equity	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7
Gaia, Inc.’s Consolidated Financial Statements for the Six Months Ended June 30, 2015 and 2014 (Unaudited)
Consolidated Balance Sheets	F-23
Consolidated Statements of Operations	F-24
Consolidated Statements of Equity	F-25
Consolidated Statements of Cash Flows	F-26
Notes to Consolidated Financial Statements	F-27
Gaiam, Inc. and Subsidiaries’ Consolidated Financial Statements for the Years Ended December 31, 2014 and for the Year Ended December 31, 2014 (Audited)
Report of Independent Registered Public Accounting Firm	F-30
Consolidated Balance Sheets	F-31
Consolidated Statements of Operations	F-32
Consolidated Statements of Equity	F-34
Consolidated Statements of Cash Flows	F-35
Notes to Consolidated Financial Statements	F-37
Gaiam, Inc. and Subsidiaries’ Consolidated Financial Statements for the Six Months Ended June 30, 2015 and for the Year Ended December 31, 2014 (Unadited)
Consolidated Balance Sheets	F-57
Consolidated Statements of Operations	F-58
Consolidated Statements of Equity	F-59
Consolidated Statements of Cash Flows	F-60
Notes to Consolidated Financial Statements	F-61
Fresh Eye Productions Inc. Financial Statements for the Period January 1, 2013 to August 31, 2013 and the Years Ended December 31, 2012 and 2011 (Audited)
Report of Independent Registered Public Accounting Firm	F-69
Statement of Financial Position	F-70
Statements of Income and Comprehensive Income	F-71
Statements of Shareholders’ Deficiency	F-72
Statements of Cash Flows	F-73
Notes to the Financial Statements	F-74

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Gaiam, Inc.

Louisville, Colorado

We have audited the accompanying consolidated balance sheets of Gaia, Inc. and subsidiaries (the “Company”) as of December 31, 2014 and 2013, and the related consolidated statements of operations, equity, and cash flows for each of the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Gaia, Inc. and subsidiaries as of December 31, 2014 and 2013, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ EKS&H LLLP

EKS&H LLLP

Denver, Colorado

February 20, 2015

F-2

Gaia, Inc.

Consolidated Balance Sheets

	December 31,
(in thousands)	2014		2013
ASSETS
Current assets:
Cash	$	1,362	$	1,519
Accounts receivable		31		36
Inventory, less allowances		172		261
Prepaid expenses and other current assets		1,443		608
Total current assets		3,008		2,424
Property, equipment and media library, net		8,377		5,176
Goodwill and other intangibles, net		10,816		11,487
Other assets		1,568		—
Total assets	$	23,769	$	19,087
LIABILITIES AND PARENT COMPANY EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,019	$	635
Deferred revenue		818		464
Total current liabilities		1,837		1,099
Commitments and contingencies
Parent Company Equity
Parent Company investment in Gaia, Inc.		21,932		17,988
Total liabilities and Parent Company equity	$	23,769	$	19,087

See accompanying notes to consolidated financial statements.

F-3

Gaia, Inc.

Consolidated Statements of Operations

	Years ended December 31,
(in thousands)	2014			2013
Net revenues	$	10,134		$	5,466
Cost of revenues		2,261			2,469
Gross Profit		7,873			2,997
Expenses:
Selling and operating		13,318			10,157
Corporate, general and administrative		3,047			2,766
Acquisition-related costs		—			76
Total expenses		16,365			12,999
Loss from operations		(8,492	)		(10,002	)
Other expense		48			—
Loss before income taxes		(8,540	)		(10,002	)
Income tax expense		—			—
Net loss	$	(8,540	)	$	(10,002	)

See accompanying notes to consolidated financial statements.

F-4

Gaia, Inc.

Consolidated Statements of Equity

(in thousands)	Parent Company Investment in Gaia, Inc.
Balance at January 1, 2013		4,506
Net transfers from Parent Company		23,484
Net loss		(10,002	)
Balance at December 31, 2013		17,988
Net transfers from Parent Company		12,484
Net loss		(8,540	)
Balance at December 31, 2014	$	21,932

See accompanying notes to consolidated financial statements.

F-5

Gaia, Inc.

Consolidated Statements of Cash Flows

	Years ended December 31,
(in thousands)	2014			2013
Operating activities:
Net loss	$	(8,540	)	$	(10,002	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,295			2,106
Share-based compensation expense		93			73
Changes in operating assets and liabilities, net of effects from acquisitions
Accounts receivable		5			(13	)
Inventory		89			(132	)
Prepaid expenses and other assets		(789	)		(339	)
Accounts payable and accrued liabilities		384			99
Deferred revenue		354			58
Net cash used in operating activities		(6,109	)		(8,150	)
Investing activities:
Additions to property, equipment and media library		(4,780	)		(2,943	)
Acquisition of businesses		—			(5,982	)
Purchase of intangibles, equity method investments and other assets		(1,659	)		(24	)
Net cash used in investing activities		(6,439	)		(8,949	)
Financing activities:
Net transfers from Parent Company		12,391			16,796
Net cash provided by financing activities		12,391			16,796
Net increase (decrease) in cash		(157	)		(303	)
Cash at beginning of year		1,519			1,822
Cash at end of year	$	1,362		$	1,519

See accompanying notes to consolidated financial statements.

F-6

Gaia, Inc.

Notes to Consolidated Financial Statements

Note 1: Basis of Presentation

In 2014, Gaiam, Inc. (“Gaiam”) announced that its board of directors authorized its management to proceed with a plan to separate its subscription business into a separately traded public company. The separation will occur through a distribution to Gaiam’s shareholders of all of the shares of common stock of Gaia, Inc. (“Gaia”), which holds all of the related businesses, assets and liabilities of the subscription business. Gaia was incorporated in Colorado in 2006 and is a wholly-owned subsidiary of Gaiam.

The authorized capital stock of Gaia is 250,000,000 shares, and consists of 150,000,000 shares of Class A common stock, $.0001 par value per share, 50,000,000 shares of Class B common stock, $.0001 par value per share, and 50,000,000 shares of preferred stock, par value $.0001 per share.

The accompanying consolidated financial statements, which include Gaia. and its wholly owned subsidiary, have been prepared on a stand-alone basis and are derived from Gaiam’s consolidated financial statements and accounting records. The consolidated financial statements represent Gaia’s financial position, results of operations, and cash flows as its business has been operated as part of Gaiam prior to the planned distribution, in conformity with U.S. generally accepted accounting principles.

Historically, stand-alone financial statements have not been prepared for Gaia. Management believes the assumptions underlying the allocations included in the financial statements are reasonable. However, the financial statements may not necessarily reflect Gaia’s results of operations, financial position and cash flows in the future or, what Gaia’s results of operations, financial position and cash flows would have been had Gaia been a stand-alone company during the periods presented herein.

The accompanying financial statements include allocations of costs that were incurred by Gaiam for functions such as corporate human resources, finance and legal, including the costs of salaries, benefits and other related costs. The total costs allocated to the accompanying financial statements for these functions totaled approximately $1.9 million, and $2.1 million for the years ended December 31, 2014 and 2013, respectively. These expenses have been allocated to Gaia based on direct usage or benefit where identifiable, with the remainder allocated on the basis of revenues, headcount, or other measures. As a stand-alone public company, our total costs related to such support functions may differ materially from the costs that were historically allocated to it from Gaiam. See Note 3 to the consolidated financial statements for additional information regarding related party transactions.

All intercompany transactions between the Gaia entities have been eliminated. Transactions between Gaia and Gaiam are reflected in equity in the consolidated balance sheet as “Parent Company investment in Gaia, Inc.” and in the consolidated statement of cash flows as a financing activity in “Net transfers from Parent Company.” See Note 3 for additional information regarding related party transactions.

Following the separation, Gaia and Gaiam will operate as separate publicly traded companies, and neither will have any stock ownership, beneficial or otherwise, in the other. In connection with the separation Gaia and Gaiam will enter into certain agreements, including a transition services agreement, in order to govern ongoing relationships between the two companies after the separation and provide for an orderly transition.

F-7

Gaia, Inc.

Notes to Consolidated Financial Statements

References in these Notes to Consolidated Financial Statements to “we”, “us”, “our” or “Gaia” refer to Gaia, Inc. and its consolidated subsidiaries, unless we indicate otherwise.

Note 2: Summary of Significant Accounting Policies

Description of Business

We operate a global digital video subscription service with approximately 7,000 titles which caters to a unique and underserved subscriber base. Our digital content is available to our subscribers on virtually any Internet connected device anytime, anywhere commercial free. The subscription also allows our subscribers to download and view files in the library without being actively connected to the Internet. Through our online Gaiam TV subscription service, our customers have unlimited access to a vast library of inspiring films, personal growth related content, cutting edge documentaries, interviews, yoga classes, and more – 90% of which is exclusively available to our subscribers for digital streaming on virtually any Internet connected device.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. These estimates may be adjusted due to changes in future economic, industry, or customer financial conditions, as well as changes in technology or demand. Estimates are used in accounting for, among other items, allowances for doubtful accounts receivable, inventory reserves, stock-based compensation, corporate allocations, useful lives for depreciation and amortization of long-lived assets, useful lives and amortization of the media library, future cash flows associated with impairment testing for goodwill, indefinite-lived intangible assets and other long-lived assets, deferred tax assets, uncertain income tax positions, and contingencies. Actual results may ultimately differ from estimates, although management does not believe such differences would materially affect the financial statements in any individual year. However, there are no assurances that such differences may not be materially different. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the period that they are determined.

Cash

Cash represents demand deposits with financial institutions. Cash balances are presented based on the cash on hand in Gaia controlled accounts. This does not necessarily reflect all the cash available to fund our operations prior to our separation from Gaiam.

While there can be no assurances, we believe our cash on hand, cash expected to be generated from future operations, future cash contributions from Gaiam prior to the planned separation and/or new credit facilities, and available carried forward tax net operating losses should be sufficient to fund our operations on both a short-term and long-term basis. However, our projected cash needs may change as a result of acquisitions, product development, unforeseen operational difficulties or other factors.

F-8

Gaia, Inc.

Notes to Consolidated Financial Statements

Concentration of Risk and Allowances for Doubtful Accounts

The majority of our sales are through credit cards, which are billed at the start of the subscription period. We evaluate the need for an estimate of expected losses based on financial condition of our customers, historical trends, and the time outstanding of specific balances to estimate the amount of accounts receivable that may not be collected in the future and record the appropriate provision.

Inventory

Inventory consists primarily of finished goods held for sale and is stated at the lower of cost (first-in, first-out method) or market. Management identifies the inventory items to be written down for obsolescence based on the item’s current sales status and condition. We write down discontinued or slow moving inventories based on an estimate of the markdown to retail price needed to sell through the current stock level of the inventories. As of December 31, 2014 and 2013, we estimated obsolete or slow-moving inventory to be approximately $52 thousand and $31 thousand, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses represent payments made for goods and services to be received in the near future. Other current assets include $967 thousand related to cash collected by Gaiam on our behalf that had not been transferred as of December 31, 2014 and was therefore a receivable from Gaiam. The receivable was fully settled in early 2015.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization. Included in property and equipment is the cost of internal-use software, including software used in connection with Gaia’s websites. All costs related to the development of internal-use software, other than those incurred during the application development stage, are expensed as incurred. Costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software, which is typically three years. Depreciation of property and equipment is computed on the straight-line method over estimated useful lives, generally three to five years. We amortize leasehold and building improvements over the shorter of the estimated useful lives of the assets or the remaining term of the lease or remaining life of the building, respectively.

Business Combination Accounting

The attainment of a controlling interest in a business is accounted for using the acquisition method. In determining the estimated fair value of certain acquired assets and liabilities, management makes assumptions based upon many different factors, such as historical and other relevant information and analyses performed by independent parties. Assumptions may be incomplete, and unanticipated events and circumstances may occur that could affect the validity of such assumptions, estimates, or actual results.

F-9

Gaia, Inc.

Notes to Consolidated Financial Statements

Media Library

Our media library represents the lower of unamortized cost or net realizable value of digital media content acquired through business combinations, asset purchases, capitalized costs to produce our proprietary media content, and rights obtained through license arrangements, all of which we make available to our customers.

Our acquired media library consists of the fair value of media assets obtained through asset acquisitions and business combinations recorded at the estimated fair value of the titles acquired, which is based on a number of factors, including: the number of titles, the total hours of content, the production quality and age of the acquired library.

Our licensed media library is obtained through license arrangements, for which we pay an advance against future royalties or an upfront license fee, in exchange for the distribution rights for a specific license window, but can also be obtained for a fixed fee for perpetuity. These payments are capitalized at the time of payment. Certain agreements also include an ongoing royalty obligation, which entitles the licensor to a share of the revenues generated from the licensed works. These expenses are calculated and accrued on a monthly basis and included in costs of revenues. We pay these accrued royalties on a quarterly basis and therefore have included the related liability in accounts payable and accrued liabilities.

Our produced media library content consists of capitalized costs incurred to produce original media content, including salary and overhead costs of our in house production team and other third-party costs.

We amortize our media library in cost of revenues on a straight-line basis over the shorter of the license period or the estimated useful life of the titles, which typically ranges from 12 to 90 months. The amortization period begins with the first month of availability.

Management reviews content viewership to determine whether the viewing patterns correlate with initial estimates supporting the amortization period utilized. If current estimates indicate that viewing is significantly higher in earlier periods relative to the remaining amortization period, we will begin amortizing the respective titles on an accelerated basis over the amortization period. In 2014 and 2013, we recorded additional amortization of $0 and $903 thousand, respectively, based on this analysis.

Our media library is reviewed for impairment when an event or change in circumstances indicates that the carrying amount of the library may not be recoverable. Recoverability of the media library is measured by a comparison of the carrying amount of the media library to estimated undiscounted future cash flows expected to be generated by the media library. If the carrying amount of the media library exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value of the media library exceeds its fair value.

Goodwill and Other Intangibles

Goodwill represents the excess of the purchase consideration over the estimated fair value of assets acquired less liabilities assumed in a business acquisition. Our other intangibles consist of customer related assets and acquired domain names. We have only one reporting unit; therefore, goodwill is assessed at the enterprise level. We review goodwill for impairment annually on December 31. We have the option of first assessing qualitative factors to determine whether events and circumstances indicate that it is more likely than not that the fair value of a goodwill reporting unit is less than its carrying amount. If it is determined that the fair value for a goodwill reporting unit is more likely than not greater than the carrying amount for that goodwill reporting unit, then the two-step impairment test is unnecessary. If it is determined that the two-step impairment test is necessary, then for step one, we compare the estimated fair value of a goodwill reporting unit with its

F-10

Gaia, Inc.

Notes to Consolidated Financial Statements

carrying amount, including goodwill. If the estimated fair value of a goodwill reporting unit exceeds its carrying amount, we consider the goodwill of the reporting unit not impaired. If the carrying amount of a goodwill reporting unit exceeds its estimated fair value, we perform the second step of the goodwill impairment test to measure the amount of impairment loss. We use either a comparable market approach or a traditional present value method to test for potential impairment. The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment at many points during the analysis. Application of alternative assumptions and definitions could yield significantly different results. During 2014 and 2013, no impairment of goodwill or other intangibles was indicated.

Long-Lived Assets

We evaluate the carrying value of long-lived assets held and used, other than goodwill, when events or changes in circumstances indicate the carrying value may not be recoverable. We consider the carrying value of a long-lived asset impaired when the total projected undiscounted cash flows from such asset are separately identifiable and are less than the carrying value. We recognize a loss based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. We determine the estimated fair value primarily using the projected cash flows from the asset discounted at a rate commensurate with the risk involved. During 2014 and 2013, no impairment was recorded.

Revenues

Revenues primarily consist of subscription fees paid by our customers. We recognize revenues when the following four basic criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. We recognize amounts billed to customers for postage and handling as revenues at the same time we recognize the revenues arising from the product sale. We present revenues net of taxes collected from customers. Revenues are recognized ratably over the subscription term. Deferred revenue consists of subscription fees collected from customers that have not been earned.

Marketing

Marketing costs consist primarily of advertising expenses, which include promotional activities such as online advertising and public relations expenditures. Advertising costs are expensed as incurred. Advertising expenses were $4.5 million and $3.4 million for the years ended December 31, 2014 and 2013, respectively.

Share-Based Compensation

Our employees have historically participated in Gaiam’s share-based compensation plans. Share-based compensation has been allocated to Gaia based on the awards and terms previously granted to our employees. The principal awards issued under the share-based compensation plans are non-qualified stock options. We recognize compensation cost for share-based awards based on the estimated fair value of the award on date of grant. We measure compensation cost at the grant date

F-11

Gaia, Inc.

Notes to Consolidated Financial Statements

based on the estimated fair value of the award and recognize compensation cost upon the probable attainment of a specified performance condition or over a service period. We use the Black-Scholes option valuation model to estimate the fair value of the award. In estimating this fair value, we use certain assumptions, as disclosed in Note 9 Share-Based Compensation, consisting of the expected life of the option, risk-free interest rate, dividend yield, and volatility. The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.

Income Taxes

Our operations have historically been included in Gaiam’s consolidated federal tax return and certain consolidated state returns. The income tax expense in these financial statements has been determined on a stand-alone return basis, which requires the recognition of income taxes using the liability method. Under this method, Gaia is assumed to have historically filed a separate return, reporting our taxable income or loss and paying applicable tax based on its separate taxable income and associated tax attributes in each tax jurisdiction. The calculation of income taxes on the separate return basis requires considerable judgment and the use of both estimates and allocations. As a result, our effective tax rate and deferred tax balances will differ significantly from those in Gaiam’s historic periods. Additionally, the deferred tax balances as calculated on the separate return basis will differ from the deferred tax balances of Gaia, if legally separated. See Note 8 for additional information on Gaia’s income taxes and unrecognized tax benefits.

Defined Contribution Plan

Gaia’s employees have historically participated in Gaiam’s defined contribution retirement plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (“Internal Revenue Code”). Eligible employees may contribute amounts to the plan, via payroll withholding, subject to certain limitations. The 401(k) plan permits, but does not require, Gaia to make additional matching contributions to the 401(k) plan on behalf of all participants in the 401(k) plan. We match 50% of an employee’s contribution, up to an annual maximum matching contribution of $1,500. We made matching contributions to the 401(k) plan of $42 thousand and $31 thousand in each of the years ended December 31, 2014 and 2013, respectively.

Fair Value of Financial Instruments

The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate their fair values.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration to be received in exchange for those goods or services. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. We are currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, but do not expect the impact to be material.

F-12

Gaia, Inc.

Notes to Consolidated Financial Statements

Note 3: Related Party Transactions

Gaiam provided Gaia certain services, which included the administration of employee compensation and benefits, public and investor relations, corporate income tax and legal services. In addition, we historically paid Gaiam for our utilization of the building and facilities. Some of these services will continue to be provided to Gaia on a temporary basis following the distribution. The financial information in these consolidated financial statements does not necessarily include all the expenses that would have been incurred had we been a separate, stand-alone entity. As such, the financial information herein may not necessarily reflect our consolidated financial position, results of operations, and cash flows in the future or what they would have been had we been a separate, stand-alone entity during the period presented. Management believes that the methods used to allocate expenses to Gaia are reasonable.

As disclosed in Note 12 Subsequent Events, Gaiam contributed 100% of its ownership interest of the building to Gaia in January 2015.

Transactions between Gaia and Gaiam are reflected in equity in the consolidated balance sheet as “Parent Company investment in Gaia, Inc.” and in the consolidated statement of cash flows as a financing activity in “Net transfers from Parent Company.”

As part of the acquisition of My Yoga Online, we entered into a transition services agreement with the sellers to perform certain services to maintain operations, including marketing activities, during the transition period. Due to the shares issued as purchase consideration the sellers were shareholders of Gaiam during the period these services were provided. The terms of this arrangement provided for cost reimbursement only with no markup. During 2014 we reimbursed the seller $988 thousand for costs incurred under the agreement. As of December 31, 2014 the transition services agreement has been terminated.

Note 4: Business Combinations

On October 31, 2013, Gaia acquired 100% of the outstanding common stock of My Yoga Online, ULC (“My Yoga Online”). The purchase price was funded through a cash transfer from Gaiam to Gaia, and the issuance of Gaiam stock. My Yoga Online was the largest on-line yoga video streaming subscription business in Canada with a content library of over 1,300 video titles and an active on-line, international community. As a result of the acquisition, we grew our subscriber base and expanded the content offering to the existing subscribers of both companies.

In 2013, we incurred $76 thousand of third-party acquisition-related costs. The expenses are included in acquisition-related costs for 2013.

Goodwill of $10.6 million arising from the acquisition is primarily due to the domain expertise of the assembled workforce that has demonstrated an ability to generate new content, subscriber growth and revenues from future subscribers. The total amount is expected to be deductible for tax purposes.

F-13

Gaia, Inc.

Notes to Consolidated Financial Statements

The following table summarizes the consideration paid for My Yoga Online and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date based on a third-party valuation of certain intangible assets. The purchase price was determined based on a multiple of 2014 pre-tax earnings.

(in thousands)
Fair Value of Consideration Transferred (including for 1,300 video titles)
Cash	$	5,982
Gaiam common shares		6,615
Recognized amounts of identifiable assets acquired and liabilities assumed
Property and equipment		65
Media library		1,270
Identified intangible assets
Customer relationships		860
Domain names		130
Deferred revenue		(337	)
Total identifiable net assets		1,988
Goodwill	$	10,609

The fair value of the common shares issued was determined based on published market price of Gaiam common stock at the date of the acquisition.

The acquired business contributed revenues of approximately $500 thousand and net loss of $195 thousand to Gaia for the period from October 31, 2013 to December 31, 2013. The following unaudited pro forma summary presents consolidated information of Gaia as if the business combination had occurred on January 1, 2013:

(in thousands)	Pro Forma Year Ended December 31, 2013
Net revenues	$	7,744
Net loss	$	(9,120	)

These pro forma results of operations have been prepared for comparative purposes only, and they do not purport to be indicative of the results of operations that actually would have resulted had the acquisitions occurred on the date indicated or that may result in the future.

F-14

Gaia, Inc.

Notes to Consolidated Financial Statements

Note 5: Property, Equipment and Media Library

Property, equipment and Media Library consisted of the following at December 31:

(in thousands)	2014			2013
Building improvements	$	175		$	101
Website development costs and other software		2,891			1,257
Studio, computer and telephone equipment		290			237
Media library		6,980			4,177
		10,336			5,772
Accumulated depreciation and amortization		(1,959	)		(596	)
	$	8,377		$	5,176

Depreciation and amortization expense for property and equipment totaled $1,579 thousand and $1,903 thousand, for the years ended December 31, 2014 and 2013, respectively.

Estimated depreciation and amortization expense for future years is as follows:

(in thousands)
2015	$	2,021
2016		1,727
2017		1,271
2018		934
2019		917
Thereafter		1,507
	$	8,377

Note 6: Goodwill and Other Intangible Assets

The following table sets forth the changes in goodwill for the period January 1, 2013 through December 31, 2014.

(in thousands)	2014		2013
Balance, January 1	$	10,609	$	—
Acquisitions		—		10,609
Balance, December 31	$	10,609	$	10,609

F-15

Gaia, Inc.

Notes to Consolidated Financial Statements

The following table represents our other intangibles by major class as of December 31:

(in thousands)	2014			2013
Amortized intangible assets
Customer related
Gross carrying amount	$	860		$	957
Accumulated amortization		(860	)		(241	)
	$	—		$	716
Unamortized intangible assets
Domain names	$	207		$	162

The customer related intangible assets are being amortized on the straight-line basis over periods ranging from 12 to 18 months. Amortization expense for the years ended December 31, 2014 and 2013 was $716 thousand and $203 thousand, respectively.

Note 7: Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following as of December 31:

(in thousands)	2014		2013
Accounts payable	$	545	$	—
Accrued compensation		387		333
Other accrued liabilities		84		299
Income taxes payable		3		3
	$	1,019	$	635

F-16

Gaia, Inc.

Notes to Consolidated Financial Statements

Note 8: Income Taxes

Our operations have historically been included in Gaiam’s U.S. consolidated federal and state income tax returns. Income tax expense and deferred tax balances are presented in these financial statements as if we filed our own tax returns in each jurisdiction. These statements include tax losses and tax credits that may not reflect the tax positions taken by Gaiam. In many cases, tax losses and tax credits generated by Gaia have been used by Gaiam.

Income taxes have been based on the following components of “Loss from operations and loss before income taxes” in the consolidated statements of operations:

(in thousands)	2014			2013
Domestic	$	(8,540	)	$	(9,807	)
International		—			(195	)
	$	(8,540	)	$	(10,002	)

Variations from the federal statutory rate are as follows:

(in thousands)	2014			2013
Expected federal income tax expense (benefit) at statutory rate of 34%	$	(2,904	)	$	(3,400	)
Establishment of valuation allowance on net deferred tax assets		3,109			3,573
Effect of permanent other differences		9			7
State income tax expense (benefit), net of federal benefit		(128	)		(150	)
Other		(86	)		(30	)
Income tax expense (benefit)	$	—		$	—

F-17

Gaia, Inc.

Notes to Consolidated Financial Statements

Deferred income taxes reflect net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the net accumulated deferred income tax assets as of December 31:

(in thousands)	2014			2013
Deferred tax assets (liabilities):
Current:
Inventory-related expense	$	23		$	13
Accrued liabilities		374			273
Total current deferred tax assets		397			286
Valuation allowance		(397	)		(286	)
Total current deferred tax assets, net of valuation allowance		—			—
Non-current:
Depreciation and amortization		28			245
Section 181 qualified production expense		(1,306	)		(616	)
Net operating loss carryforward		14,961			11,048
Media library		—			8
Tax credits		9			9
Total non-current deferred tax assets		13,692			10,694
Valuation allowance		(13,692	)		(10,694	)
Total non- current deferred tax assets, net of valuation allowance		—			—
Net deferred tax asset	$	—		$	—

Periodically, management performs assessments of the realization of our net deferred tax assets considering all available evidence, both positive and negative. A significant piece of evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2014. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this assessment, a full valuation allowance was required for the 2014 and 2013 periods. As income is generated in future periods, we expect to reverse the valuation allowance accordingly and utilize the deferred tax assets.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We measure the tax benefits recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to its subjective assumptions and judgments which can materially affect amounts recognized in its consolidated balance sheets and consolidated statements of operations. The result of our assessment of our uncertain tax positions did not have a material

F-18

Gaia, Inc.

Notes to Consolidated Financial Statements

impact on our consolidated financial statements. We recognize interest and penalties related to income tax matters in interest and other income (expense) and corporate, general and administration expenses, respectively.

Note 9: Share-Based Compensation

Gaiam granted share-based awards to its officers and other key employees, including certain Gaia individuals. The following disclosures reflect the portion of Gaiam’s programs in which our employees participated. All awards granted under the programs consist of shares of Gaiam’s Class A common stock and are not necessarily indicative of the results that we would have experience as an independent, publicly-traded company for the period presented. Upon separation, we will issue Gaia options to our employees under our own incentive programs.

During 2009, Gaiam adopted the Gaiam, Inc. 2009 Long-Term Incentive Plan (the “Plan”). The purpose of the Plan is to advance Gaiam’s interests and those of its shareholders by providing incentives to certain persons, who contribute significantly to its strategic and long-term performance objectives and growth. An aggregate of not more than 3 million of Gaiam’s Class A common shares, subject to certain adjustments, may be issued under the Plan, and the Plan terminates no later than April 23, 2019. The authority to grant new options under Gaiam’s 1999 Long-Term Incentive Plan expired on June 1, 2009. Gaiam has generally granted options under both of its incentive plans with an exercise price equal to the closing market price of its stock at the date of the grant and the options normally vest and become exercisable at 2% per month for the 50 months beginning in the eleventh month after date of grant. Compensation expense related to share-based payment awards is recognized on a straight-line basis over the requisite service periods of the awards, which are generally five years for employee options and two years for board members’ options. Commencing with options granted during 2011, Gaiam extended the expiration date for grants from seven to ten years from the date of grant.

The determination of the estimated fair value of share-based payment awards on the date of grant using the Black-Scholes option-pricing model is affected by Gaiam’s stock price as well as assumptions regarding a number of complex and subjective variables. Gaiam derives the expected terms from the historical behavior of participant groupings. Gaiam bases expected volatilities on the historically realized volatility of Gaiam’s stock over the expected term. Gaiam’s use of historically realized volatilities is based upon the expectation that future volatility over the expected term is not likely to differ from historical results. Gaiam bases the risk-free interest rate used in the option valuation model on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. Gaiam’s dividend yield assumes no annual cash dividends. In accordance with FASB share-based compensation guidance, Gaiam is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. Gaiam primarily uses historical data by participant groupings to estimate option forfeitures and record share-based compensation expense only for those awards that are expected to vest.

F-19

Gaia, Inc.

Notes to Consolidated Financial Statements

In 2014 and 2013, Gaiam issued share options to our employees covering 170,000 and 112,500 shares, respectively. The following are the variables Gaiam used in the Black-Scholes option pricing model to determine the estimated grant date fair value for options granted under Gaiam’s 2009 and 1999 Long-Term Incentive Plans for each of the years presented:

	2014	2013
Expected volatility	48% - 59%	57% - 61%
Weighted-average volatility	55%	58%
Expected dividends	—  %	—  %
Expected term (in years)	1.1 - 7.8	5.1 - 7.8
Risk-free rate	0.14% - 2.37%	1.33% - 2.32%

The table below presents a summary of option activity granted to our employees under the Gaiam 2009 and 1999 Long-Term Incentive Plans as of December 31, 2014 and 2013, and changes during the years then ended:

(in thousands, except share and per share data)	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2013		75,000		$	5.50
Granted		112,500			4.85
Excercised		—			—
Cancelled or forfeited		(2,500	)		3.91
Outstanding at December 31, 2013		185,000		$	5.12		7.2	$	285
Granted		170,000			7.48
Excercised		(13,026	)		4.34
Cancelled or forfeited		(20,000	)		5.20
Outstanding at December 31, 2014		321,974		$	6.49		8.1	$	331
Exerecisable at December 31, 2014		64,074		$	5.64		1.4	$	98

Our employees exercised 13,026 options during 2014. No options were exercised during 2013. The weighted-average grant-date fair value of options granted during the years 2014 and 2013 was $4.11, and $2.87, respectively. The total fair value of shares granted to Gaia employees that vested was $61 thousand and $35 thousand during 2014 and 2013, respectively.

Our share-based compensation cost charged against income was $93 thousand and $73 thousand during 2014 and 2013, respectively, and is shown in corporate, general and administration expenses. As of December 31, 2014, there was $444 thousand of unrecognized cost related to nonvested shared-based compensation arrangements granted to our employees under the Gaiam 2009 and 1999 Long-Term Incentive Plans. We expect this cost to be recognized over a weighted-average period of 4.18 years.

F-20

Gaia, Inc.

Notes to Consolidated Financial Statements

Note 10: Commitments and Contingencies

Operating Leases

We currently occupy space in the building that was historically owned by Gaiam as noted in Note 3 Related Party Transactions. During 2014 and 2013, we did not have a formal lease agreement in place, however Gaiam allocated rent expense to us at what we believe to be market rate. Rent expense during 2014 and 2013 was $477 thousand and $518 thousand, respectively. With the contribution of the real estate to Gaia, we have no future lease obligation.

Risks and Uncertainties

We are subject to risks and uncertainties in the normal course of our business, including legal proceedings; governmental regulation, such as the interpretation of tax and labor laws; and consumer sensitivity to changes in general economic conditions. We have accrued for probable and estimable costs that may be incurred with respect to identified risks and uncertainties based upon the facts and circumstances currently available to us. Due to uncertainties in the estimating process, actual amounts incurred upon settlement could vary from those accruals.

Note 11: Geographic and Segment Information

Our chief operating decision maker reviews operating results on a consolidated basis and therefore have one reportable segment. All of our operations are located in the United States, while our customers are located around the world. No individual foreign location represents greater than 10% of revenues. The following represents the geographical data for our operations as of and for the years ended December 31:

(in thousands)	2014		2013
Net Revenues:
United States	$	7,436	$	4,646
International		2,698		820
	$	10,134	$	5,466

F-21

Gaia, Inc.

Notes to Consolidated Financial Statements

	As of December 31,
(in thousands)	2014		2013
Long-Lived Assets:
United States	$	8,584	$	6,054
Components of Long-Lived Assets (a)
Property, equipment and media library, net	$	8,377	$	5,176
Other intangibles, net		207		878
	$	8,584	$	6,054

(a) Excludes goodwill of $10.6 million.

Note 12: Subsequent Events

In January 2015, Gaiam contributed cash of $2.5 million and real estate assets with a book value of $18.0 million to Gaia, which will be recorded as capital contributions. We intend to enter into a lease agreement with Gaiam for their portion of the office space.

F-22

Gaia, Inc.

Consolidated Balance Sheets

	June 30,		December 31,
(in thousands)	2015		2014
	(unaudited)
ASSETS
Current assets:
Cash	$	675	$	1,362
Accounts receivable		263		31
Inventory, less allowances		98		172
Prepaid expenses and other current assets		684		1,443
Total current assets		1,720		3,008
Property, equipment and media library, net		27,839		8,377
Goodwill and other intangibles, net		10,816		10,816
Other assets		1,536		1,568
Total assets	$	41,911	$	23,769
LIABILITIES AND PARENT COMPANY EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,669	$	1,019
Deferred revenue		1,252		818
Total current liabilities		2,921		1,837
Commitments and contingencies
Parent Company Equity
Parent Company investment in Gaia, Inc.		38,990		21,932
Total liabilities and Parent Company equity	$	41,911	$	23,769

See accompanying notes to interim consolidated financial statements.

F-23

Gaia, Inc.

Consolidated Statements of Operations

	Six months ended June 30,
(unaudited in thousands)	2015			2014
Net revenues	$	6,767		$	4,888
Cost of revenues		1,379			1,081
Gross Profit		5,388			3,807
Expenses:
Selling and operating		7,787			6,280
Corporate, general and administrative		1,002			1,474
Acquisition-related costs		—			33
Total expenses		8,789			7,787
Loss from operations		(3,401	)		(3,980	)
Other expense		7			—
Loss before income taxes		(3,408	)		(3,980	)
Income tax expense		—			—
Net loss	$	(3,408	)	$	(3,980	)

See accompanying notes to interim consolidated financial statements.

F-24

Gaia, Inc.

Consolidated Statement of Equity

	Parent
	Company
	Investment
(in thousands)	in Gaia, Inc.
Balance at December 31, 2014	$	21,932
Net transfers from Parent Company		20,466
Net loss		(3,408	)
Balance at June 30, 2015	$	38,990

See accompanying notes to interim consolidated financial statements.

F-25

Gaia, Inc.

Consolidated Statements of Cash Flows

	Six months ended June 30,
(unaudited in thousands)	2015			2014
Operating activities:
Net loss	$	(3,408	)	$	(3,980	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,514			1,113
Share-based compensation expense		78			(39	)
Changes in operating assets and liabilities, net of effects from acquisitions
Accounts receivable		(232	)		3
Inventory		74			(2	)
Prepaid expenses and other assets		791			(369	)
Accounts payable and accrued liabilities		650			1,030
Deferred revenue		434			209
Net cash used in operating activities		(99	)		(2,035	)
Investing activities:
Additions to property, equipment and media library		(2,738	)		(2,320	)
Purchase of intangibles, equity method investments and other assets		—			(115	)
Net cash used in investing activities		(2,738	)		(2,435	)
Financing activities:
Net transfers from Parent Company		2,150			10,449
Net cash provided by financing activities		2,150			10,449
Net increase (decrease) in cash		(687	)		5,979
Cash at beginning of period		1,362			1,519
Cash at end of period	$	675		$	7,498
Non-cash transfers from Parent Company	$	18,238		$	—

See accompanying notes to interim consolidated financial statements.

F-26

Gaia, Inc.

Notes to Interim Consolidated Financial Statements

Note 1: Basis of Presentation

In 2014, Gaiam, Inc. (“Gaiam”) announced that its board of directors authorized its management to proceed with a plan to separate its subscription business into a separately traded public company. The separation is planned to occur through a distribution to Gaiam’s shareholders of all of the shares of common stock of Gaia, Inc. (“Gaia”), which holds all of the related businesses, assets and liabilities of the subscription business. Gaia was incorporated in Colorado in 2006 and is a wholly-owned subsidiary of Gaiam.

The accompanying unaudited interim consolidated financial statements, which include Gaia and its wholly owned subsidiary, have been prepared on a stand-alone basis and are derived from Gaiam’s interim consolidated financial statements and accounting records. The unaudited interim consolidated financial statements represent Gaia’s financial position, results of operations, and cash flows as its business has been operated as part of Gaiam prior to the planned distribution, in conformity with U.S. generally accepted accounting principles. Our accompanying unaudited interim consolidated financial statements have been prepared in accordance with the interim financial reporting instructions and, therefore, do not include all information and footnotes which are normally included in an annual report to shareholders. In our opinion, the unaudited interim consolidated financial statements reflect all adjustments, which are of a normal recurring nature, that are necessary for a fair presentation of results for the interim periods presented. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated annual financial statements.

Historically, stand-alone financial statements have not been prepared for Gaia. Management believes the assumptions underlying the allocations included in the financial statements are reasonable. However, the financial statements may not necessarily reflect Gaia’s results of operations, financial position and cash flows in the future or, what Gaia’s results of operations, financial position and cash flows would have been had Gaia been a stand-alone company during the periods presented herein.

The accompanying interim financial statements include allocations of costs that were incurred by Gaiam for functions such as corporate, human resources, finance and legal, including, but not limited to, the costs of salaries, benefits and other related costs. The total costs allocated to the accompanying financial statements for these functions totaled approximately $377,000, and $982,000 for the six months ended June 30, 2015 and 2014, respectively. These expenses have been allocated to Gaia based on direct usage or benefit where identifiable, with the remainder allocated on the basis of revenues, headcount, or other measures. As a stand-alone public company, our total costs related to such support functions may differ materially from the costs that were historically allocated to it from Gaiam.

All intercompany transactions between the Gaia entities have been eliminated. Transactions between Gaia and Gaiam are reflected in equity in the consolidated balance sheet as “Parent Company investment in Gaia, Inc.” and in the consolidated statement of cash flows as a financing activity in “Net transfers from Parent Company.” See Note 2 for additional information regarding related party transactions.

Following the planned separation, Gaia and Gaiam will operate as separate publicly traded companies, and neither will have any stock ownership, beneficial or otherwise, in the other. In connection with the separation Gaia and Gaiam will enter into certain agreements, including a transition services agreement, in order to govern ongoing relationships between the two companies after the separation and provide for an orderly transition.

References in these Notes to Interim Consolidated Financial Statements to “we”, “us”, “our” or “Gaia” refer to Gaia, Inc. and its consolidated subsidiary, unless we indicate otherwise.

F-27

Gaia, Inc.

Notes to Interim Consolidated Financial Statements

Note 2: Summary of Significant Accounting Policies

Concentration of Risk and Allowances for Doubtful Accounts

The majority of our sales are through credit cards, which are billed at the start of the subscription period. We evaluate the need for an estimate of expected losses based on financial condition of our customers, historical trends, and the time outstanding of specific balances to estimate the amount of accounts receivable that may not be collected in the future and record the appropriate provision.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization. Included in property and equipment is the cost of internal-use software, including software used in connection with Gaia’s websites. All costs related to the development of internal-use software, other than those incurred during the application development stage, are expensed as incurred. Costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software, which is typically three years. Depreciation of property and equipment is computed on the straight-line method over estimated useful lives, generally three to five years. We amortize leasehold and building improvements over the shorter of the estimated useful lives of the assets or the remaining term of the lease or remaining life of the building, respectively.

Media Library

Our media library represents the lower of unamortized cost or net realizable value of digital media content acquired through business combinations, asset purchases, capitalized costs to produce our proprietary media content, and rights obtained through license arrangements, all of which we make available to our customers.

Our acquired media library consists of the fair value of media assets obtained through asset acquisitions and business combinations recorded at the estimated fair value of the titles acquired, which is based on a number of factors, including: the number of titles, the total hours of content, the production quality and age of the acquired library.

Our licensed media library is obtained through license arrangements, for which we pay an advance against future royalties or an upfront license fee in exchange for the distribution rights for a specific license window, but can also be obtained for a fixed fee for perpetuity. These payments are capitalized at the time of payment. Certain agreements also include an ongoing royalty obligation, which entitles the licensor to a share of the revenues generated from the licensed works. These expenses are calculated and accrued on a monthly basis and included in costs of revenues. We pay these accrued royalties on a quarterly basis and therefore have included the related liability in accounts payable and accrued liabilities.

Our produced media library content consists of capitalized costs incurred to produce original media content, including salary and overhead costs of our in house production team and other third-party costs.

We amortize our media library in cost of revenues on a straight-line basis over the shorter of the license period or the estimated useful life of the titles, which typically ranges from 12 to 90 months. The amortization period begins with the first month of availability.

Management reviews content viewership to determine whether the viewing patterns correlate with initial estimates supporting the amortization period utilized. If current estimates indicate that viewing is significantly higher in earlier periods relative to the remaining amortization period, we will begin amortizing the respective titles on an accelerated basis over the amortization period.

Our media library is reviewed for impairment when an event or change in circumstances indicates that the carrying amount of the library may not be recoverable. Recoverability of the media library is measured by a comparison of the carrying amount of the media library to estimated undiscounted future cash flows expected to be generated by the media library. If the carrying amount of the media library exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value of the media library exceeds its fair value.

Goodwill and Other Intangibles

Goodwill represents the excess of the purchase consideration over the estimated fair value of assets acquired less liabilities assumed in a business acquisition. Our other intangibles consist of customer related assets and acquired domain names. We have only one reporting unit; therefore, goodwill is assessed at the enterprise level. We review goodwill for impairment annually on December 31. We have the option of first assessing qualitative factors to determine whether events and circumstances indicate that it is more likely than not that the fair value of a goodwill reporting unit is less than its carrying amount. If it is determined that the fair value for a goodwill reporting unit is more likely than not greater than the carrying amount for that goodwill reporting unit, then the two-step impairment test is unnecessary. If it is determined that the two-step impairment test is necessary, then for step one, we compare the estimated fair value of a goodwill reporting unit with its carrying amount, including goodwill. If the estimated fair value of a goodwill reporting unit exceeds its carrying amount, we consider the goodwill of the reporting unit not impaired. If the carrying amount of a goodwill reporting unit exceeds its estimated fair value, we perform the second step of the goodwill impairment test to measure the amount of impairment loss. We use either a comparable market approach or a traditional present value method to test for potential impairment. The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment at many points during the analysis. Application of alternative assumptions and definitions could yield significantly different results.

Long-Lived Assets

We evaluate the carrying value of long-lived assets held and used, other than goodwill, when events or changes in circumstances indicate the carrying value may not be recoverable. We consider the carrying value of a long-lived asset impaired when the total projected undiscounted cash flows from such asset are separately identifiable and are less than the carrying value. We recognize a loss based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. We determine the estimated fair value primarily using the projected cash flows from the asset discounted at a rate commensurate with the risk involved.

Revenues

Revenues primarily consist of subscription fees paid by our customers and rental income from operating leases with our tenants. We recognize revenues when the following four basic criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. We recognize amounts billed to customers for postage and handling as revenues at the same time we recognize the revenues arising from the product sale. We present revenues net of taxes collected from customers. Revenues are recognized ratably over the subscription term. Deferred revenue consists of subscription fees collected from customers that have not been earned.

Marketing

Marketing costs consist primarily of advertising expenses, which include promotional activities such as online advertising and public relations expenditures. Advertising costs are expensed as incurred.

Share-Based Compensation

Our employees have historically participated in Gaiam’s share-based compensation plans. Share-based compensation has been allocated to Gaia based on the awards and terms previously granted to our employees. The principal awards issued under the share-based compensation plans are non-qualified stock options. We recognize compensation cost for share-based awards based on the estimated fair value of the award on date of grant. We measure compensation cost at the grant date based on the estimated fair value of the award and recognize compensation cost upon the probable attainment of a specified performance condition or over a service period. We use the Black-Scholes option valuation model to estimate the fair value of the award. In estimating this fair value, we use certain assumptions, consisting of the expected life of the option, risk-free interest rate, dividend yield, and volatility. The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.

Income Taxes

Our operations have historically been included in Gaiam’s consolidated federal tax return and certain consolidated state returns. The income tax expense in these financial statements has been determined on a stand-alone return basis, which requires the recognition of income taxes using the liability method. Under this method, Gaia is assumed to have historically filed a separate return, reporting our taxable income or loss and paying applicable tax based on its separate taxable income and associated tax attributes in each tax jurisdiction. The calculation of income taxes on the separate return basis requires considerable judgment and the use of both estimates and allocations. As a result, our effective tax rate and deferred tax balances will differ significantly from those in Gaiam’s historic periods. Additionally, the deferred tax balances as calculated on the separate return basis will differ from the deferred tax balances of Gaia, if legally separated.

Defined Contribution Plan

Gaia’s employees have historically participated in Gaiam’s defined contribution retirement plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (“Internal Revenue Code”). Eligible employees may contribute amounts to the plan, via payroll withholding, subject to certain limitations. The 401(k) plan permits, but does not require, Gaia to make additional matching contributions to the 401(k) plan on behalf of all participants in the 401(k) plan. We match 50% of an employee’s contribution, up to an annual maximum matching contribution of $1,500.

Fair Value of Financial Instruments

The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate their fair values.

Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. In July 2015, the FASB approved a one-year deferral of the effective date of changes to Topic 606. We are required to adopt the standard in the first quarter of 2018 and retroactively apply it to our 2016 and 2017 financial results at the time of adoption. We are currently in the process of evaluating the impact of adoption of the ASU on our consolidated financial statements, but do not expect the impact to be material.

Note 3: Related Party Transactions

Gaiam historically provided Gaia certain services, which included the administration of employee compensation and benefits, public and investor relations, corporate income tax and legal services. In addition, we historically paid Gaiam for our utilization of the building and facilities. Some of these services will continue to be provided to Gaia on a temporary basis following the distribution.

The financial information in these unaudited interim consolidated financial statements does not necessarily include all the expenses that would have been incurred had we been a separate, stand-alone entity. As such, the financial information herein may not necessarily reflect our interim consolidated financial position, results of operations, and cash flows in the future or what they would have been had we been a separate, stand-alone entity during the period presented. Management believes that the methods used to allocate expenses to Gaia are reasonable.

Transactions between Gaia and Gaiam are reflected in equity in the consolidated balance sheet as “Parent Company investment in Gaia, Inc.” and in the consolidated statement of cash flows as a financing activity in “Net transfers from Parent Company.”

In January 2015, Gaiam contributed 100% of its ownership interest in the entity which owns our corporate facilities to Gaia. The following table sets forth the details of contribution:

(in thousands)	January 1, 2015
Building	$	16,674
Land		4,829
Land improvements		773
		22,276
Accumulated depreciation and amortization		(4,038	)
Net book value of building	$	18,238

On January 1, 2015, we entered into a lease agreement with Gaiam under similar terms as the other non-affiliated tenants of the building. These leases are accounted for as operating leases. Total rental income received from these lease agreements was $928 thousand for the period ended June 30, 2015, of which $375 thousand was from Gaiam.

In consideration for the contribution and assignment, upon a sale of all or substantially all of the property or the membership interest in Boulder Road LLC (other than to certain affiliated parties as set forth in the agreement), GTV will pay to Gaiam, Inc. (i) 100% of the first $5,000,000 of proceeds received in excess of $12,000,000, (ii) plus 50% of the proceeds above $17,000,000, if any, up to a maximum of $10,000,000. Until such time, no payment will be due or payable to Gaiam, Inc. in connection with the assignment and contribution of Boulder Road LLC.

F-28

Gaia, Inc.

Notes to Interim Consolidated Financial Statements

Note 4: Property, Equipment and Media Library

Property, equipment and media library consisted of the following at June 30, 2015 and December 31, 2014:

	June 30,			December 31,
(in thousands)	2015			2014
	(unaudited)
Buildings and land		22,668			175
Website development costs and other software		3,750			2,891
Studio, computer and telephone equipment		354			290
Media library		8,454			6,980
		35,226			10,336
Accumulated depreciation and amortization		(7,387	)		(1,959	)
	$	27,839		$	8,377

Depreciation and amortization expense for property, equipment and media library totaled $1,514 thousand and $1,113 thousand, for the six months ended June 30, 2015 and 2014, respectively.

Estimated depreciation and amortization expense for the future years is as follows:

(in thousands)
2015	$	1,676
2016		2,986
2017		2,499
2018		1,842
2019		1,692
Thereafter		12,315
	$	23,010

Note 5: Subsequent Events

On July 23, 2015, our subsidiary entered into a revolving line of credit agreement with a bank in the amount of $5.5 million. The note bears interest at the prime rate plus 3.25%, is guaranteed by Gaia and Gaiam, and is secured by a Deed of Trust filed against the real property on which the principal offices of the Company are located. There have been no borrowings under the line of credit as of September 9, 2015.

F-29

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Gaiam, Inc.

Louisville, Colorado

We have audited the accompanying consolidated balance sheets of Gaiam, Inc. and subsidiaries (the “Company”) as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive loss, changes in equity, and cash flows for each of the years in the three year period ended December 31, 2014. Our audits also included the consolidated financial statement schedule II for the years ended December 31, 2014, 2013, and 2012. We have also audited the Company’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control-Integrated Framework issued in 2003 by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Criteria”). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management’s report on internal control over financial reporting. Our responsibility is to express an opinion on these consolidated financial statements and the effectiveness of the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Gaiam, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America. In our opinion, the related consolidated financial statement schedule II for the years ended December 31, 2014, 2013, and 2012, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. Also in our opinion, Gaiam, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO Criteria.

EKS&H LLLP

March 13, 2015

Denver, Colorado

F-30

GAIAM, INC.

Consolidated Balance Sheets

	December 31,
(in thousands, except share and per share data)	2014			2013
ASSETS
Current assets:
Cash	$	15,772		$	32,229
Accounts receivable, net		30,266			26,207
Inventory, less allowances		20,154			20,275
Other current assets		11,998			9,470
Current assets of discontinued operations		582			1,889
Total current assets		78,772			90,070
Property and equipment, net		23,231			22,540
Media library, net		7,691			5,211
Goodwill		15,448			13,999
Other intangibles, net		823			1,155
Other assets		12,667			8,711
Total assets	$	138,632		$	141,686
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	18,837		$	13,381
Accrued liabilities		19,859			17,503
Participations payable		377			3,916
Current liabilities of discontinued operations		—			1,596
Total current liabilities		39,073			36,396
Commitments and contingencies
Equity:
Gaiam, Inc. shareholders’ equity:
Class A common stock, $.0001 par value, 150,000,000 shares authorized, 19,084,958 and 18,595,121 shares issued and outstanding at December 31, 2014 and 2013, respectively		2			2
Class B common stock, $.0001 par value, 50,000,000 shares authorized, 5,400,000 shares issued and outstanding at December 31, 2014 and 2013		1			1
Additional paid-in capital		171,315			167,875
Accumulated other comprehensive loss		(200	)		(33	)
Accumulated deficit		(76,329	)		(66,413	)
Total Gaiam, Inc. shareholders’ equity		94,789			101,432
Noncontrolling interest		4,770			3,858
Total equity		99,559			105,290
Total liabilities and equity	$	138,632		$	141,686

See accompanying notes to consolidated financial statements.

F-31

GAIAM, INC.

Consolidated Statements of Operations

(in thousands, except per share data)	2014			2013			2012
Consolidated Statements of Operations Data:
Net revenues	$	166,694		$	155,463		$	127,242
Cost of goods sold		91,189			90,155			70,723
Gross profit		75,505			65,308			56,519
Expenses:
Selling and operating		68,723			64,657			56,292
Corporate, general and administration		11,161			11,249			10,400
Transaction-related costs		707			76			—
Other general income and expense		—			10,967			—
Total expenses		80,591			86,949			66,692
Loss from operations		(5,086	)		(21,641	)		(10,173	)
Interest and other (expense) income		(600	)		2,421			(86	)
Gain on sale of investments		1,480			25,096			—
Loss from equity method investment		(55	)		—			(18,410	)
(Loss) income before income taxes		(4,261	)		5,876			(28,669	)
Income tax expense (benefit)		1,369			25,974			(9,444	)
Net loss from continuing operations		(5,630	)		(20,098	)		(19,225	)
(Loss) income from discontinued operations, net of tax		(3,327	)		(1,995	)		6,648
Net loss		(8,957	)		(22,093	)		(12,577	)
Net income attributable to noncontrolling interest		(959	)		(659	)		(305	)
Net loss attributable to Gaiam, Inc.	$	(9,916	)	$	(22,752	)	$	(12,882	)
Net loss per share attributable to Gaiam, Inc. common shareholders—basic and diluted:
From continuing operations	$	(0.27	)	$	(0.90	)	$	(0.86	)
From discontinued operations		(0.14	)		(0.09	)		0.29
Basic and diluted net loss per share attributable to Gaiam, Inc.	$	(0.41	)	$	(0.99	)	$	(0.57	)
Weighted-average shares outstanding:
Basic and diluted		24,228			22,972			22,703

See Accompanying Notes to Consolidated Financial Statements.

F-32

GAIAM, INC.

Consolidated Statements of Comprehensive Loss

	Years Ended December 31,
(in thousands)	2014			2013			2012
Net loss	$	(8,957	)	$	(22,093	)	$	(12,577	)
Other comprehensive income (loss):
Foreign currency translation (loss) gain		(62	)		(292	)		10
Unrealized gain on equity securities		202			116			—
Reclassification of gain on equity securities to net income		(319	)		—			—
Other comprehensive (loss) income		(179	)		(176	)		10
Comprehensive loss		(9,136	)		(22,269	)		(12,567	)
Less: comprehensive income attributable to the noncontrolling interest		947			634			310
Comprehensive loss attributable to Gaiam, Inc.	$	(10,083	)	$	(22,903	)	$	(12,877	)

See Accompanying Notes to Consolidated Financial Statements.

F-33

GAIAM, INC.

Consolidated Statement of Changes in Equity

							Gaiam, Inc. Shareholders
(in thousands, except shares)	Total Equity			Total Gaiam Equity			Accumulated Deficit			Accumulated Other Comprehensive Income			Common Stock Amount		Additional Paid-in Capital			Common Stock Shares		Noncontrolling Interest
Balance at December 31, 2011	$	131,174		$	128,110		$	(30,779	)	$	113		$	3	$	158,773			22,697,844	$	3,064
Issuance of Gaiam, Inc. common stock and share-based compensation		1,011			1,011			—			—			—		1,011			32,620		—
Adjustment due to subsidiary’s acquisition of a noncontrolling interest		(163	)		(170	)		—			—			—		(170	)		—		7
Subsidiary’s dividend to noncontrolling interest		(583	)		—			—			—			—		—			—		(583	)
Comprehensive income (loss)		(12,567	)		(12,877	)		(12,882	)		5			—		—			—		310
Balance at December 31, 2012		118,872			116,074			(43,661	)		118			3		159,614			22,730,464		2,798
Issuance of Gaiam, Inc. common stock in conjunction with an acquisition and share-based compensation		8,261			8,261			—			—			—		8,261			1,264,657		—
Noncontrolling interest portion of subsidiary’s business combinations		426			—			—			—			—		—			—		426
Comprehensive (loss) income		(22,269	)		(22,903	)		(22,752	)		(151	)		—		—			—		634
Balance at December 31, 2013	$	105,290		$	101,432		$	(66,413	)	$	(33	)	$	3	$	167,875			23,995,121	$	3,858
Issuance of Gaiam, Inc. common stock in conjunction with an acquisition and share-based compensation		3,440			3,440			—			—			—		3,440			489,837		—
Noncontrolling interest portion of subsidiary’s business combinations		115			—			—			—			—		—			—		115
Subsidiary’s dividend to noncontrolling interest		(150	)		—			—			—			—		—			—		(150	)
Comprehensive income (loss)		(9,136	)		(10,083	)		(9,916	)		(167	)		—		—			—		947
Balance at December 31, 2014	$	99,559		$	94,789		$	(76,329	)	$	(200	)	$	3	$	171,315			24,484,958	$	4,770

See Accompanying Notes to Consolidated Financial Statements.

F-34

GAIAM, INC.

Consolidated Statements of Cash Flows

	Years ended December 31,
(in thousands)	2014			2013 (a)			2012 (b)
Operating activities:
Net loss	$	(8,957	)	$	(22,093	)	$	(12,577	)
Loss (income) from discontinued operations		3,327			1,995			(6,648	)
Net loss from continuing operations		(5,630	)		(20,098	)		(19,225	)
Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities:
Depreciation		1,989			2,301			2,107
Amortization		2,223			1,659			1,946
Share-based compensation expense		839			809			913
Deferred income tax expense (benefit)		28			23,861			(6,120	)
Loss (gain) on translation of foreign currency		564			42			(76	)
Gain on sale of investments		(1,480	)		(25,096	)		—
Loss on equity method investment		55			—			18,410
Gain from collection of note receivable		—			(2,300	)		—
Impairment and other losses		—			9,194			—
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable, net		(3,872	)		(2,072	)		(3,628	)
Inventory, net		56			1,097			1,645
Deferred advertising costs		(250	)		508			42
Advances		(1,514	)		(44	)		2,847
Other current assets		(2,425	)		(2,843	)		(6,228	)
Accounts payable		5,535			(4,407	)		1,463
Participations payable		(3,539	)		1,045			(4,674	)
Accrued liabilities		(1,406	)		789			9,472
Net cash used in operating activities – continuing operations		(8,827	)		(15,555	)		(1,106	)
Net cash (used in) provided by operating activities – discontinued operations		(142	)		(7,569	)		17,582
Net cash (used in) provided by operating activities		(8,969	)		(23,124	)		16,476
Investing activities:
Net proceeds from the sale of investments		2,646			25,096			—
Collection from (loan to) related party		—			2,100			(830	)
Purchase of property, equipment and media rights		(5,590	)		(3,386	)		(3,723	)
Proceeds from sale of business		—			47,500			—
Purchase of businesses and equity-method investments, net of cash acquired		(5,493	)		(6,333	)		(146	)
Net cash (used in) provided by investing activities – continuing operations		(8,437	)		64,977			(4,699	)
Net cash used in investing activities – discontinued operations		—			—			(13,491	)
Net cash (used in) provided by investing activities		(8,437	)		64,977			(18,190	)
Financing activities:
Net proceeds from issuance of stock		1,806			777			—
Payment of dividends		(150	)		—			(583	)
Net cash provided by (used in) financing activities – continuing operations		1,656			777			(583	)
Net cash used in financing activities – discontinued operations		—			(19,967	)		(2,472	)
Net cash provided by (used in) financing activities		1,656			(19,190	)		(3,055	)
Effect of exchange rates on cash		(707	)		(292	)		82
Net (decrease) increase in cash		(16,457	)		22,371			(4,687	)
Cash at beginning of year		32,229			9,858			14,545
Cash at end of year	$	15,772		$	32,229		$	9,858
Supplemental cash flow information:
Interest paid	$	14		$	442		$	468
Income taxes paid		1,114			577			673
Liabilities and debt assumed from acquisitions		466			337			14,277
Stock issued in connection with business acquisitions	$	840		$	7,303		$	—

F-35

(a) Cash flows in 2013 include the $25.0 million gain from the sale of RGSE stock, the sale of GVE and the discontinuation of the DRTV Business Unit.

(b) Net cash provided by operating activities for discontinued operations during 2012 includes approximately $18.7 million of net cash provided by purchased Vivendi Entertainment (“Vivendi”) working capital, which was used to partially fund the acquisition of Vivendi. Excluding the net cash flows from the purchased Vivendi working capital, net cash used by operating activities for discontinued operations would have been zero during 2012.

See Accompanying Notes to Consolidated Financial Statements.

F-36

Notes to Consolidated Financial Statements

References in this report to “we”, “us”, “our” or “Gaiam” refer to Gaiam, Inc. and its consolidated subsidiaries, unless we indicate otherwise.

1. Organization, Nature of Operations, and Principles of Consolidation

Gaiam, Inc. and its consolidated subsidiaries (“the Company”) provide a broad selection of yoga, fitness, and well-being products, with media, subscription and travel services to customers who value personal development, wellness, ecological lifestyles, responsible media, and conscious community. We were incorporated under the laws of the State of Colorado on July 7, 1988.

We have prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP, and they include our accounts and those of our subsidiaries, over which we exercise control. Intercompany transactions and balances have been eliminated.

Discontinued Operations

During 2013, we sold our non-Gaiam-branded entertainment media distribution operation and discontinued our DRTV operations. Accordingly, the assets and liabilities, operating results, and cash flows for these businesses are presented as discontinued operations, separate from our continuing operations, for all periods presented in these consolidated financial statements and footnotes, unless indicated otherwise. See Note 15. Discontinued Operations.

2. Significant Accounting Policies

Cash

Cash represents on-demand accounts with financial institutions that are denominated in U.S. dollars and foreign currencies. At each balance sheet date, cash on hand that is denominated in a foreign currency is adjusted to reflect the exchange rate that existed at the balance sheet date. The difference is reported as a gain or loss in our statement of operations each period. Historically, such gains or losses have been immaterial.

Concentration of Risk and Allowances for Doubtful Accounts

We have a concentration of credit risk in our accounts receivable because our top customer, Target, accounted for 44.1% and 43.6% of accounts receivable, net as of December 31, 2014 and 2013, respectively. Target is a major retailer in the United States to which we make significant sales during the year-end holiday season.

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We make estimates of the collectability of our accounts receivable by analyzing historical bad debts, specific customer creditworthiness, and current economic trends. The allowance for doubtful accounts was $0.4 million and $0.6 million as of December 31, 2014 and 2013, respectively. If the financial condition of our customers were to deteriorate such that their ability to make payments to us was impaired, additional allowances could be required.

Product Returns

We record allowances for product returns to be received in future periods at the time we recognize the original sale. We base the amounts of the returns allowances upon historical experience and future expectations. Our allowance for product returns was $0.8 million and $1.6 million as of December 31, 2014 and 2013, respectively.

Inventory

Inventory consists primarily of finished goods held for sale and is stated at the lower of cost (first-in, first-out method) or market. We identify the inventory items to be written down for obsolescence based on the item’s current sales status and condition. We write down discontinued or slow moving inventories based on an estimate of the markdown required to sell off the inventory. As of December 31, 2014 and 2013, we estimated obsolete or slow-moving inventory to be $1.2 million and $2.1 million, respectively.

Advertising Costs

Deferred advertising costs relate to the preparation, printing, advertising and distribution of catalogs. We defer such costs for financial reporting purposes until the catalogs are distributed, and then we amortize these costs over succeeding periods on the basis of estimated direct relationship sales. We amortize our seasonal catalogs within six months. Forecasted sales are the principal factor we use in estimating the amortization rate. We expense other advertising and promotional costs as incurred. Amounts recorded as advertising expense were $16.4 million, $15.3 million, and $13.6 million for the years ended December 31, 2014, 2013, and 2012, respectively, and we include these amounts in selling and operating expense. As we have announced the intention to significantly reduce production of catalogs in 2015, we expect future deferred advertising costs to be minimal.

F-37

We record sales discounts or other sales incentives as a reduction to revenue. We identify and record any cooperative advertising expenses we pay, which are for advertisements meeting the separable benefit and fair value tests, as part of selling and operating expense.

Property and Equipment

We state property and equipment at cost less accumulated depreciation and amortization. We include in property and equipment the cost of internal-use software, including software used in connection with our websites. We expense all costs related to the development of internal-use software other than those incurred during the application development stage. We capitalize the costs we incur during the application development stage and amortize them over the estimated useful life of the software, which is typically three years. We compute depreciation of property and equipment on the straight-line method over estimated useful lives, generally three to forty-five years. We amortize leasehold and building improvements over the shorter of the estimated useful lives of the assets or the remaining term of the lease or remaining life of the building, respectively. Depreciation expense is included in Selling and operating expense, and Corporate, general and administration expense in the accompanying statements of operations.

Investments

We account for investments in equity securities that have readily determinable fair values that are not trading securities as available-for-sale securities. Unrealized changes in the fair value of an available-for-sale security are reported in accumulated other comprehensive income, net of tax, until disposed of or determined to be other-than-temporarily impaired, at which time the realized changes are reported in our statement of operations.

Purchase Accounting

We account for the attainment of a controlling interest in a business using the acquisition method. In determining the estimated fair value of certain acquired assets and liabilities, we make assumptions based upon many different factors, such as historical and other relevant information and analyses performed by independent parties. Assumptions may be incomplete, and unanticipated events and circumstances may occur that could affect the validity of such assumptions, estimates, or actual results.

Media Library

Our media library asset represents the fair value of libraries of media acquired through business combinations, the purchase price of media rights to both video and audio titles, and the capitalized cost to produce media products, all of which we market to retailers and to e-commerce and subscription customers. Our media library is shown in the accompanying balance sheets net of accumulated amortization of $14.5 million and $13.6 million at December 31, 2014 and 2013, respectively, and is amortized over the estimated useful lives of the titles, which range from five to fifteen years.

Capitalized media library production costs consist of costs incurred to produce the media content, net of accumulated amortization. We recognize these costs, as well as participation costs, as expenses on an individual title basis equal to the ratio that the current year’s gross revenues bear to our estimate of total ultimate gross revenues from all sources to be earned over a maximum seven-year period. We state capitalized production costs at the lower of unamortized cost or estimated fair value on an individual title basis. We continually review revenue forecasts, based primarily on historical sales statistics, and revise these forecasts when warranted by changing conditions. When estimates of total revenues and other events or changes in circumstances indicate that a title has an estimated fair value that is less than its unamortized cost, we recognize an impairment loss in the current period for the amount by which the unamortized cost exceeds the title’s estimated fair value.

During 2014, capitalized production cost for released titles was approximately $2.0 million, and for those titles not yet released was $0.5 million. Additionally, as of December 31, 2014, we estimate that approximately $2.4 million or 42.8% of the unamortized costs for released titles will be amortized during 2015, and approximately 84.5% of the unamortized costs for released titles will be amortized within the next three years. Amortization expense for capitalized produced media content is shown in the table below.

F-38

Our acquired media rights have $1.6 million of remaining unamortized costs as of December 31, 2014 that will be amortized on a straight-line basis over 12 to 84 months. Amortization expense for acquired media rights is shown in the table below.

	For the Years Ended December 31,
(in thousands)	2014		2013		2012
Capitalized produced media content	$	767	$	788	$	900
Acquired media rights		254		553		772
Total media amortization expense	$	1,021	$	1,341	$	1,672

Based on total media library costs at December 31, 2014 and assuming no subsequent impairment of the underlying assets or a material increase in the video productions or media acquired, we expect the amortization expense for the next five years to be approximately $1.0 million per annum. Additionally, during 2015 we anticipate incurring approximately $2.5 million in royalties related to acquired and produced media content.

Goodwill and Other Intangibles

Goodwill represents the excess of the purchase consideration over the estimated fair value of assets acquired less liabilities assumed in a business acquisition. Our other intangibles consist of customer related assets. We review goodwill for impairment annually or more frequently if impairment indicators arise on a goodwill reporting unit level. We have the option of first assessing qualitative factors to determine whether events and circumstances indicate that it is more likely than not that the fair value of a goodwill reporting unit is less than its carrying amount. If it is determined that the fair value for a goodwill reporting unit is more likely than not greater than the carrying amount for that goodwill reporting unit, then the two-step impairment test is unnecessary. If it is determined that the two-step impairment test is necessary, then for step one, we compare the estimated fair value of a goodwill reporting unit with its carrying amount, including goodwill. If the estimated fair value of a goodwill reporting unit exceeds its carrying amount, we consider the goodwill of the reporting unit not impaired. If the carrying amount of a goodwill reporting unit exceeds its estimated fair value, we perform the second step of the goodwill impairment test to measure the amount of impairment loss. We use either a comparable market approach or a traditional present value method to test for potential impairment. The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment at many points during the analysis. Application of alternative assumptions and definitions could yield significantly different results.

Long-Lived Assets

We evaluate the carrying value of long-lived assets held and used, other than goodwill, when events or changes in circumstances indicate the carrying value may not be recoverable. We consider the carrying value of a long-lived asset impaired when the total projected undiscounted cash flows from such asset are separately identifiable and are less than the carrying value. We recognize a loss based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. We determine the estimated fair value primarily using the projected cash flows from the asset discounted at a rate commensurate with the risk involved.

Participations Payable

Participations payable represents amounts owed to talent involved with our media productions based on royalty or distribution agreements. Certain agreements include minimum royalty payments. All amounts due under such agreements are accrued at the time the related revenue is recognized.

Income Taxes

We provide for income taxes pursuant to the liability method. The liability method requires recognition of deferred income taxes based on temporary differences between financial reporting and income tax bases of assets and liabilities, using current enacted income tax rates and regulations. These differences will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively. Considerable judgment is required in determining when these events may occur and whether recovery of an asset, including the utilization of a net operating loss or other carryforward prior to its expiration, is more likely than not. Due to historical losses, we established a full valuation allowance on our deferred tax assets at the end of 2013.

F-39

Revenue

We recognize revenue in our Gaiam Brand segment when the goods are shipped to the customer and collection is either probable or has occurred. The amount of revenue recognized is net of estimated returns and other chargebacks (or channel credits), which are estimated using historical return and credit rates. If the actual amount of returns and chargebacks were to vary significantly from our estimates, it could materially impact our results of operations in subsequent periods. We recognize amounts billed to customers for postage and handling as revenue at the same time we recognize the revenue arising from the product sale. Travel revenues are recognized in the period which the trip begins. We recognize revenue in our Gaiam TV segment ratably over the subscription period after collection has occurred. We present revenue net of taxes collected from customers.

Share-Based Compensation

We recognize compensation cost for share-based awards based on the estimated fair value of the award on date of grant. We measure compensation cost at the grant date based on the estimated fair value of the award and recognize compensation cost upon the probable attainment of a specified performance condition over the estimated performance period or for time based awards over the service period. We use the Black-Scholes option valuation model to estimate the fair value of the award. In estimating this fair value, we use certain assumptions, as disclosed in Note 11. Share-Based Compensation, consisting of the expected life of the option, risk-free interest rate, dividend yield, and volatility. The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.

Defined Contribution Plan

We have adopted a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (“Internal Revenue Code”), which covers substantially all employees. Eligible employees may contribute amounts to the plan, via payroll withholding, subject to certain limitations. The 401(k) plan permits, but does not require, us to make additional matching contributions to the 401(k) plan on behalf of all participants in the 401(k) plan. We match 50% of an employee’s contribution, up to an annual maximum matching contribution of $1,500. We made matching contributions to the 401(k) plan of $0.2 million, $0.3 million, and $0.2 million in each of the years ended December 31, 2014, 2013, and 2012, respectively.

Foreign Currency Translation

Our foreign subsidiaries use their local currency as their functional currency. We translate assets and liabilities into U.S. dollars at exchange rates in effect at the balance sheet date. We translate income and expense accounts at the average monthly exchange rates during the year. We record resulting translation adjustments, net of income taxes, as a separate component of accumulated other comprehensive income.

Comprehensive Income (Loss)

Our comprehensive income (loss) is comprised of our net income (loss), noncontrolling interest net income (loss), foreign currency translation adjustments, net of tax, and unrealized changes in the fair value of an equity security, net of tax.

The tax effects allocated to our accumulated other comprehensive income (loss) components were as follows:

	For the Years Ended December 31,
(in thousands)	2014			2013			2012
Before-tax amount	$	(268	)	$	(262	)	$	14
Tax expense (benefit)		(89	)		(86	)		4
Net-of-tax amount	$	(179	)	$	(176	)	$	10

Net Income (Loss) Per Share Attributable To Gaiam, Inc. Common Shareholders

Basic net income (loss) per share attributable to Gaiam, Inc. common shareholders excludes any dilutive effects of options. We compute basic net income (loss) per share attributable to Gaiam, Inc. common shareholders using the weighted average number of common shares outstanding during the period. We compute diluted net income (loss) per share attributable to Gaiam, Inc. common shareholders using the weighted average number of common shares and common stock equivalents outstanding during the period. We excluded weighted average common stock equivalents of 725,000, 1,440,000 and 1,387,000 from the computation of diluted net income (loss) per share attributable to Gaiam, Inc. common shareholders for 2014, 2013 and 2012, respectively, because their effect was antidilutive.

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The following table sets forth the computation of basic and diluted net (loss) income per share attributable to Gaiam, Inc. common shareholders:

	For the Years Ended December 31,
(in thousands, except per share data)	2014			2013			2012
Net (loss) income attributable to Gaiam, Inc. common shareholders:
(Loss) income from continuing operations	$	(6,589	)	$	(20,757	)	$	(19,530	)
(Loss) income from discontinued operations		(3,327	)		(1,995	)		6,648
Net loss attributable to Gaiam, Inc.	$	(9,916	)	$	(22,752	)	$	(12,882	)
Weighted average shares for basic and diluted net (loss) income per share		24,228			22,972			22,703
Net (loss) income per share attributable to Gaiam, Inc. common shareholders—basic and diluted:
Loss from continuing operations	$	(0.27	)	$	(0.90	)	$	(0.86	)
(Loss) income from discontinued operations		(0.14	)		(0.09	)		0.29
Basic and diluted net loss per share attributable to Gaiam, Inc.	$	(0.41	)	$	(0.99	)	$	(0.57	)

Fair Value of Financial Instruments

The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate their fair values.

Recently Issued Accounting Pronouncements

In April of 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in the ASU change the criteria for reporting discontinued operations and expand the related disclosures. Under the new guidance, only disposals representing a strategic shift in operations are presented as discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. The ASU requires prospective adoption and is effective for us in the first quarter of 2015. The new ASU is not expected to have a material impact on our reported financial position or results of operations.

In May of 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The new standard supersedes most previously existing revenue recognition rules, and will become effective for us in the first quarter of 2017. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Our revenue transactions typically consist of one, distinct, fixed-price performance obligation which is delivered to the customer at a single point in time, or over a subscription period. While we are still assessing the full impact of the new standard, we do not expect that it will have a material impact on our reported financial position or results of operations.

Use of Estimates and Reclassifications

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and disclosures. Although we base these estimates on our best knowledge of current events and actions that we may undertake in the future, actual results may be different from the estimates. We have made certain reclassifications to prior period amounts to conform to the current period presentations.

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3. Related Party Transactions

Real Goods Solar, Inc. (“RGSE”) was a division of our company, until it was spun off in an initial public offering in 2008. On December 31, 2011, we converted our RGSE Class B common shares, which had ten votes per share, to RGSE Class A common shares, which have one vote per share. As a result of this conversion, our voting ownership decreased to approximately 37.5% and, thus, we no longer had financial control of RGSE. Accordingly, we deconsolidated RGSE and reported it as an equity method investment on our consolidated statement of operations for year ended December 31, 2012.

At December 31, 2012, we had two loans receivable from RGSE totaling $2.7 million, bearing interest at an annual rate of 10%. The loans had zero carrying value. On April 23, 2013, we agreed to convert $0.1 of the loan balance into 62,111 shares of RGSE’s Class A common stock. On November 5, 2013, we collected $2.1 million in cash from RGSE and $0.2 million of tenant improvements in settlement of the two outstanding loans made. The $2.3 million gain resulting from the collection of these loans is reported in Interest and other income on our consolidated statement of operations for the year ended December 31, 2013.

During 2013, we also sold the majority of our investment in RGSE for total net proceeds of approximately $25 million. Following the sale of the majority of our position in May 2013, our voting ownership percentage declined to below 20% and our Chairman resigned as Chairman of RGSE’s board of directors and, thus, we no longer had significant influence over RGSE. Therefore, we changed our accounting for our investment in RGSE from the equity method to the cost method. From that time forward, we have not reported any portion of RGSE’s net income or loss in our results.

During 2012 we billed RGSE $0.3 million under our Intercorporate Services Agreement. The agreement was terminated and billing ceased after 2012.

Effective January 1, 2012, we entered into an Industrial Building Lease Agreement with RGSE for office space located in our owned building in Colorado. The five year lease commenced on January 1, 2012 and has a monthly payment of approximately $36,000 plus common area maintenance and tax expenses.

As specified by our Tax Sharing Agreement with RGSE, to the extent RGSE becomes entitled to utilize certain loss carryforwards relating to periods prior to its initial public offering, it will distribute to us the tax effect (estimated to be 34% for federal income tax purposes) of the amount of such tax loss carryforwards so utilized. These net operating loss carryforwards expire beginning in 2018 if not utilized, and are subject to IRS limitations. As of December 31, 2014, $4.4 million of these net operating loss carryforwards remained available for current and future utilization, meaning that RGSE’s potential future payments to us, which would be made over a period of several years, could therefore aggregate to approximately $1.6 million based on current tax rates. These tax assets have a full valuation allowance (See Note 13 Income Taxes) based on RGSE’s current financial performance.

4. Other Current Assets

Other current assets consist of the following as of December 31:

(in thousands)	2014		2013
Prepaid travel deposits	$	5,216	$	3,880
Advances		2,592		1,078
Deferred advertising costs		—		311
Other current assets		4,190		4,201
	$	11,998	$	9,470

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5. Property and Equipment and Other Assets

Property and equipment, stated at lower of cost or estimated fair value, consists of the following as of December 31:

(in thousands)	2014			2013
Land	$	5,603		$	5,603
Buildings		16,809			16,637
Furniture, fixtures and equipment		7,327			6,839
Leasehold improvements		1,622			1,622
Website development costs and other software		11,678			9,919
Studios, computer and telephone equipment		9,293			9,182
Warehouse and distribution equipment		1,765			1,765
		54,097			51,567
Accumulated depreciation and amortization		(30,866	)		(29,027	)
	$	23,231		$	22,540

Other Assets consists of the following as of December 31:

(in thousands)	2014		2013
Working capital and related receivables, net (See Note 8)	$	7,250	$	6,875
Other assets		5,417		1,836
	$	12,667	$	8,711

6. Acquisitions

Yoga Studio

In September 2014, our Gaiam Brand segment acquired all the outstanding stock of Modern Lotus Limited (“Yoga Studio”), the number-one-ranked paid yoga app on the U.S. App Store. The aggregate consideration paid by us exceeded the aggregate estimated fair value of the assets acquired and the liabilities assumed by $1.5 million which we have recognized as goodwill. We attribute the goodwill to the recognized market position of the app.

My Yoga Online

In October 2013, our Gaiam TV segment acquired all of the outstanding common stock of My Yoga Online, ULC (“My Yoga Online”), an on-line yoga video streaming subscription business in Canada. The aggregate consideration paid by us exceeded the aggregate estimated fair value of the assets acquired and liabilities assumed by $10.6 million, which we have recognized as goodwill. This goodwill is attributable to the domain expertise of the assembled workforce that has demonstrated an ability to generate new content, subscriber growth and revenues from future subscribers.

The following table sets forth the changes in goodwill for the period December 31, 2012 through December 31, 2014 by segment.

(in thousands)	Gaiam Brand Segment		Gaiam TV Segment		Total
Balance at December 31, 2012	$	2,673	$	—	$	2,673
Acquisitions		717		10,609		11,326
Balance at December 31, 2013		3,390		10,609		13,999
Acquisitions		1,449		—		1,449
Balance at December 31, 2014	$	4,839	$	10,609	$	15,448

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The following table represents our intangibles assets by major class as of December 31, 2014 and 2013.

	As of December 31,
(in thousands)	2014			2013
Indefinite Lived Intangibles	$	340		$	—
Intangibles Subject to Amortization
Customer related:
Gross carrying amount	$	978		$	1,038
Accumulated amortization		(636	)		(582	)
	$	342		$	456
Marketing related:
Gross carrying amount	$	1,588		$	1,436
Accumulated amortization		(1,447	)		(737	)
	$	141		$	699

The amortization periods range from 24 to 60 months. Amortization expense for the years ended December 31, 2014, 2013, and 2012 was $0.7 million, $0.3 million, and $0.2 million, respectively.

7. Accrued Liabilities

Accrued liabilities consist of the following as of December 31:

(in thousands)	2014		2013
Accrued compensation	$	3,323	$	5,500
Customer travel deposits		11,370		8,478
Accrued legal expense and related reserves		3,000		—
Other accrued liabilities		2,166		3,525
	$	19,859	$	17,503

Accrued compensation at December 31, 2014 included severance and termination benefits of $1.8 million.

8. Commitments and Contingencies

Working Capital Arbitration

On August 13, 2014, Cinedigm Corp. and Cinedigm Entertainment Holdings, LLC (together, “Cinedigm”) initiated an arbitration proceeding with the American Arbitration Association under the Membership Interest Purchase Agreement, dated October 17, 2013, by and among Cinedigm and the Company and one of its subsidiaries (the “MIPA”). Cinedigm’s arbitration demand alleges that the Company owes Cinedigm approximately $12.9 million under the working capital adjustment mechanism included in the MIPA. In addition, Cinedigm has claimed that Gaiam materially breached its representations and warranties under the MIPA, that the Company engaged in fraudulent and tortious acts in connection with the sale, and that the Company breached the terms of other agreements related to the transaction. The aggregate relief requested by Cinedigm exceeds $30.0 million and includes unspecified compensatory damages, attorneys’ fees, costs and interest, and other relief.

The Company believes that Cinedigm’s arbitration claims are without merit and represent a post-closing attempt to renegotiate the MIPA purchase price, and the Company intends to assert its positions vigorously through the legal process. Moreover, the Company believes that if the working capital mechanism is properly applied, Cinedigm owes the Company over $7.0 million, and the Company has initiated an arbitration process against Cinedigm. In addition to its working capital claim, the Company is pursuing a claim of approximately $700,000 against Cinedigm in connection with the Transition Services Agreement executed as part of the MIPA transaction, and is reviewing other claims that it may pursue against Cinedigm. The dispute outcome cannot be predicted at this time.

In view of the inherent difficulty of predicting the outcome of any asserted claim, particularly where large or indeterminate damages are sought, the Company cannot predict the outcome of any pending matter, the timing of ultimate resolution, or the eventual gain or loss (in each case, if any). However, in light of the uncertainty of litigation generally and the uncertainty of collection with regard to any judgment that the Company seeks, as well as the more certain substantial legal fees and costs that the Company expects to expend in the matter (which may continue into 2016), the Company has accrued a litigation-related reserve in the fourth quarter of 2014 of $3.0 million to cover such anticipated expenses and related reserves.

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Risks and Uncertainties

From time to time, we are involved in legal proceedings that we consider to be in the normal course of business. Claimed amounts against us may be substantial but may not bear any reasonable relationship to the merits of the claim or the extent of any real risk of court or arbitral awards. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Although it is not feasible to predict the outcome of these matters with certainty, it is reasonably possible that some legal proceedings may be disposed of or decided unfavorably to us and in excess of the amounts currently accrued. Based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, which are considered probable of being rendered against us in litigation or arbitration in existence at December 31, 2014 and can be reasonably estimated are reserved against or would not have a material adverse effect on our financial condition, results of operations or cash flows.

Operating Leases

We lease office and warehouse space through operating leases. Some of the leases have renewal clauses, which range from 3 to 6 years.

The following schedule represents the annual future minimum payments under these commitments, as of December 31, 2014:

(in thousands)	Operating Leases
2015	$	769
2016		299
2017		—
Total minimum lease payments	$	1,068

We incurred rent expense of $1.1 million, $1.0 million and $1.0 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Media Distribution Payments

In 2014, we entered into exclusive media distribution agreements which require that we make periodic minimum payments (against future distribution liabilities) through 2017. The following schedule shows the annual future minimum payments under these agreements, as of December 31, 2014:

(in thousands)	Distribution Payments
2015	$	3,350
2016		2,325
2017		300
Total media distribution payments	$	5,975

Spinoff of Gaiam TV

The potential spinoff of Gaiam TV will have a significant impact on our financial statements if it occurs. See further discussion in Note 17 to our consolidated financial statements.

9. Equity

Our common stock has two classes, Class A and Class B. Each holder of our Class A common shares is entitled to one vote for each share held on all matters submitted to a vote of shareholders. Each of our Class B common shares is entitled to ten votes on all matters submitted to a vote of shareholders. There are no cumulative voting rights. All holders of our Class A common shares and our Class B common shares vote as a single class on all matters that are submitted to the shareholders for a vote. Shareholders may consent to an action in writing and without a meeting under certain circumstances. Jirka Rysavy, our chairman, holds 100% of our 5,400,000 outstanding shares of class B common stock and also owns 648,682 shares of Class A common stock. Consequently, our chairman holds approximately 75% of our voting stock and thus is able to exert substantial influence over us and to control matters requiring approval by our shareholders, including the election of directors, increasing our authorized capital stock, or a merger or sale of substantially all of our assets. As a result of Mr. Rysavy’s control of us, no change of control can occur without Mr. Rysavy’s consent.

Our Class A common shares and our Class B common shares are entitled to receive dividends, if any, as may be declared by the board of directors out of legally available funds. In the event of a liquidation, dissolution or winding up of our Company, our Class A common shares and our Class B common shares are entitled to share ratably in our assets remaining after the payment of all of our debts and other liabilities. Holders of our Class A common shares and our Class B common shares have no preemptive, subscription or redemption rights, and there are no redemption or sinking fund provisions applicable to our Class A common shares or our Class B common shares.

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Our Class B common shares may not be transferred unless converted into our Class A common shares, other than certain transfers to affiliates, family members, and charitable organizations. Our Class B common shares are convertible one-for-one into our Class A common shares, at the option of the holder of the Class B common shares.

During 2014, 2013 and 2012, we issued shares of our Class A common stock as shown in the table below under our 2009 Long-Term Incentive Plan. We recorded the shares issued to our directors at their estimated fair value based on the market’s closing price of our stock on the date the shares were issued, which by policy is the last trading day of each quarter in which the services were rendered.

	For the Years Ended December 31,
	2014		2013		2012
Shares issued to independent directors for services rendered, in lieu of cash compensation		19,542		49,187		32,620
Shares issued to employees upon exercise of stock options		354,926		160,470		—

On October 11, 2013, we issued 15,759 shares of our Class A common stock under restricted stock award agreements of the same date to certain former members of our board of directors.

As of December 31, 2014, we had the following Class A common shares reserved for future issuance:

Conversion of Class B common shares	5,400,000
Awards under the 2009 and 1999 Long-Term Incentive Plans:
Stock options outstanding	1,448,684
Total shares reserved for future issuance	6,848,684

During May 2013, as a result of a decrease in our voting ownership to less than 20% and the resignation of our chairman from his position as Chairman of the Board for RGSE, we changed the accounting for our investment in RGSE from the equity to cost method. Thus, our consolidated balance sheet data at December 31, 2013 and our consolidated statement of operations data for 2013 after the change report RGSE as a cost method investment.

10. Non-Controlling Interests

We own 51.4% of our eco-travel subsidiary, Natural Habitat Adventures (“Natural Habitat”). The balance is owned by its founder. In addition, some of Natural Habitat’s subsidiaries also have minority shareholders. We own 50.01% of our Australian subsidiary, Gaiam Pty. The amount of these non-controlling interests is reflected separately in our consolidated financial statements, and all intercompany transactions have been eliminated.

During 2014 and 2012, Natural Habitat paid its shareholders dividends of $0.3 million and $1.2 million, respectively, and, as a result, the noncontrolling interests decreased by $0.2 million and $0.6 million, respectively. No dividends were declared or paid by Natural Habitat during 2013.

11. Share-Based Compensation

We are currently issuing options under the 2009 Long-Term Incentive Plan (the “Plan”). We previously issued options under the 1999 Long-Term Incentive Plan, which was replaced with the Plan. The purpose of the Plan is to advance our interests and those of our shareholders by providing incentives to certain persons who contribute significantly to our strategic and long-term performance objectives and growth. An aggregate of not more than 3 million of our Class A common shares, subject to certain adjustments, may be issued under the Plan, and the Plan terminates no later than April 23, 2019. The exercise price for our options is generally equal to the closing market price of our stock at the date of the grant, and the options normally vest at 2% per month for the 50 months beginning in the eleventh month after the grant date. Follow on option grants begin vesting in the first month after grant. We recognize the compensation expense related to share-based payment awards on a straight-line basis over the requisite service periods of the awards, which are generally five years for employees, and two years for board members. Commencing with options granted during 2012, we extended the exercise period from seven to ten years.

The determination of the estimated fair value of share-based payment awards on the date of grant using the Black-Scholes option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. We derive the expected terms from the historical behavior of participant groupings. We base expected volatilities on the historically realized volatility of our stock over the expected term. Our use of historically realized volatilities is based upon the expectation that future volatility over the expected term is not likely to differ significantly from historical results. We base the risk-free interest rate used in the option valuation model on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We primarily use historical data by participant groupings to estimate option forfeitures and record share-based compensation expense only for those awards that are expected to vest.

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The following are the variables we used in the Black-Scholes option pricing model to determine the estimated grant date fair value for options granted under the Plan for each of the years presented:

	2014	2013	2012
Expected volatility	48% - 59%	57% - 61%	59%
Weighted-average volatility	55%	58%	59%
Expected dividends	—  %	—  %	—  %
Expected term (in years)	1.1 - 7.8	5.1 - 7.8	7.1
Risk-free rate	0.14% - 2.37%	1.33% - 2.32%	1.36% - 1.61%

The table below presents a summary of option activity under both our plans as of December 31, 2014, and changes during the year then ended:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2014		1,662,450		$	5.65
Granted		617,500			6.54
Exercised		(354,926	)		5.09
Cancelled or forfeited		(476,340	)		5.64
Outstanding at December 31, 2014		1,448,684		$	6.17		6.3	$	1,573,978
Exercisable at December 31, 2014		615,084		$	5.79		2.9	$	896,466

During 2014, 2013 and 2012, we extended the exercise period on the options of certain former board members and key employees and recognized an additional immediate expense of $0.1 million, $0.1 million and $0.1 million, respectively. On October 11, 2013, we issued 15,759 shares of our Class A common stock under restricted stock award agreements to certain former board members. The estimated fair value of these restricted stock awards was $0.1 million and was based on the closing market price of our stock on October 11, 2013. These restricted stock awards vested 100% on April 10, 2014.

We issue new shares upon the exercise of options. We received $1.8 million and $0.8 million in cash from stock options exercised during 2014 and 2013, respectively. No options were exercised during 2012. The weighted-average grant-date fair value of options granted during the years 2014, 2013, and 2012 was $ 2.98, $3.14, and $2.39, respectively. The total intrinsic value of options exercised during 2014 and 2013 was $0.9 million and $0.1 million, respectively. The total fair value of shares vested was $0.6 million, $0.6 million, and $0.8 million during 2014, 2013, and 2012.

Our share-based compensation cost charged against income was $0.8 million, $0.8 million, and $1.0 million during 2014, 2013, and 2012, respectively, and is included in corporate, general and administration expenses. The total income tax benefit recognized for share-based compensation was $0.3 million, $0.3 million, and $0.4 million for 2014, 2013, and 2012, respectively. As of December 31, 2014, there was $1.6 million of unrecognized cost related to nonvested shared-based compensation arrangements granted under our 2009 and 1999 Long-Term Incentive Plans. We expect that cost to be recognized over a weighted-average period of 3.57 years.

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12. Asset Impairments and Exit Activity Costs

During 2013, as a result of the reorganization and re-focus of our continuing businesses following the discontinuation of our non-Gaiam-branded entertainment media distribution and direct response television marketing operations, we impaired $4.4 million of media libraries and capitalized production costs, $1.5 million of advances, and $1.3 million of property, plant, and equipment, net of accumulated depreciation, and other investments. These noncash impairments reduced the carrying value of assets for our Gaiam Brand segment by $7.2 million. We estimated the fair value of each impaired asset category using a traditional present value technique, relying upon various sources of information for our assumptions, such as estimated future sales, internal budgets and projections, and judgment about the related product’s future earnings potential (level 3 of the fair value hierarchy). We also recorded termination benefits of $2.5 million related to the termination of certain employees associated with our restructuring and future retirement benefits for one of our executive officers. These asset impairment and termination benefit charges were recorded in other general expense on our consolidated statement of operations. Also included in other general expenses on our 2013 consolidated statement of operations are $1.3 million of expenses related to a brand study, recruiting for a new CEO, and other operating expenses that management believes are not ongoing expenses related to the operations of the Company.

Changes in the accrual liability associated with termination benefits were as follows:

Charges	$	2,472
Payments, net		(298	)
Balance December 31, 2013		2,174
Payments, net		(308	)
Reversals and Adjustments		(101	)
Balance December 31, 2014	$	1,765

The $1.8 million accrual balance at December 31, 2014 is expected to be paid $0.8 million in 2015, $ 0.5 million in 2016 and $0.5 million in 2017.

13. Income Taxes

Our provision for income tax expense (benefit) is comprised of the following:

	For the Years Ended December 31,
(in thousands)	2014		2013			2012
Current:
Federal	$	887	$	536		$	184
State		157		(68	)		(88	)
International		175		223			196
		1,219		691			292
Deferred:
Federal		—		22,418			(5,590	)
State		—		1,538			(374	)
International		—		73			(3	)
		—		24,029			(5,967	)
Total income tax expense (benefit)	$	1,219		24,720			(5,675	)

Because our eco-travel subsidiary is not part of the consolidated tax group, the provision includes Federal taxes associated with its income. The state provision consists of the taxes due for subsidiaries of Gaiam which file taxes on a separate basis, and are not able to utilize combined group net operating losses.

The components of our income taxes consisted of the following:

(in thousands)	2014			2013			2012
Income tax expense (benefit) from continuing operations	$	1,369		$	25,974		$	(9,444	)
Income tax (benefit) expense from discontinued operations		(150	)		209			3,769
Income tax benefit from loss on disposal of discontinued operations		—			(1,463	)		—
Total income tax expense (benefit)	$	1,219			24,720			(5,675	)

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Variations from the federal statutory rate are as follows:

(in thousands)	2014			2013		2012
Expected federal income tax (benefit) expense at statutory rate of 34%	$	(2,631	)	$	898	$	(807	)
Effect of 2008 State NOL’s and option forfeitures		—			49		—
Effect of permanent enhanced charitable donation differences		—			—		(31	)
Effect of permanent other differences		37			213		106
Effect of change in financial statement carrying value of investment		—			—		(5,077	)
State income tax expense (benefit), net of federal benefit		(150	)		24		(40	)
Establishment of valuation allowance on net deferred tax assets		4,071			23,153		—
Other		(70	)		278		209
Effect of differences between U.S. taxation and foreign taxation		(38	)		105		(35	)
Total income tax expense (benefit)	$	1,219			24,720		(5,675	)

Deferred income taxes reflect net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the net accumulated deferred income tax assets as of December 31, 2014 and 2013 are as follows:

	December 31,
(in thousands)	2014			2013
Deferred tax assets (liabilities):
Current:
Provision for doubtful accounts	$	1,211		$	171
Inventory-related expense		483			950
Accrued liabilities		2,641			3,341
Net operating loss carryforward		—			820
Worthless stock deduction		206			3,055
Prepaid and deferred catalog costs		—			(103	)
Other		263			35
Exit activity accruals		—			1,603
Total current deferred tax assets		4,804			9,872
Valuation allowance		(4,804	)		(9,872	)
Total current deferred tax assets, net of valuation allowance	$	—		$	—
Non-current:
Depreciation and amortization	$	(1,506	)	$	(825	)
Section 181 qualified production expense		(2,770	)		(850	)
Net operating loss carryforward		26,966			15,297
Charitable carryforward		1,414			1,567
Loss (gain) from change in financial statement carrying value of investment, net		48			55
Gain from foreign business acquisition		(347	)		(347	)
Impairment of intangibles		367			—
Tax credits		921			920
Other		(3	)		69
Total non-current deferred tax assets		25,090			15,886
Valuation allowance		(25,090	)		(15,886	)
Total non-current deferred tax assets, net of valuation allowance		—			—
Total net deferred tax assets	$	—		$	—

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As of December 31, 2014, our gross net operating losses were $69.0 million and $35.2 million for federal and state, respectively. The sources of income (loss) before income taxes are as follows:

(in thousands)	2014			2013		2012
Domestic	$	(4,947	)	$	5,503	$	(29,162	)
International		686			373		493
	$	(4,261	)	$	5,876	$	(28,669	)

Income tax benefit for 2012 includes $6.0 million due to the reducing of a deferred tax liability related to the carrying value of our equity method investment in RGSE and the reduction of the carrying value of our loans to RGSE. See Note 3. Related Party Transactions.

Certain of our subsidiaries, namely those for which we own less than 80% of their shares and voting rights and/or are foreign entities, file tax returns separately from Gaiam’s consolidated tax group. At December 31, 2014, we had made a provision for U.S. federal and state income taxes on approximately $0.3 million of undistributed foreign earnings, which are not expected to remain outside of the U.S. indefinitely. Deferred tax liabilities have been established for future taxes on distribution of foreign earnings in the form of dividends or otherwise, in order to derive, for financial statement purposes, the U.S. income taxes (net of tax on foreign tax credits), state income taxes, and withholding taxes payable to the various foreign countries.

Periodically, we perform assessments of the realization of our net deferred tax assets considering all available evidence, both positive and negative. On the basis of this assessment, we recorded a charge of $23.2 million to income tax expense to record a full valuation allowance against our deferred tax assets as of December 31, 2013. A significant piece of evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2013. Because the valuation allowance will remain in place until we return to profitability, we did not record any tax benefit in 2014 associated with our net loss or other deferred tax assets. We continue to be optimistic about our future, and expect to return to operating profitability. When that happens, we expect to reverse the valuation allowance and record the related tax benefit for future use of our net operating loss carryforwards we expect to realize.

Based on RGSE’s establishment of a valuation allowance for all its net deferred tax assets at December 31, 2012, we established a valuation allowance, by charging loss from equity method investment, for our entire $1.6 million deferred tax asset related to our Tax Sharing Agreement with RGSE. See Note 3. Related Party Transactions. We concluded that no other changes to our existing valuation allowances were necessary. We expect our net deferred tax assets, less the valuation allowances, at December 31, 2014 to be fully recoverable through the reversal of taxable temporary differences and normal business activities in future years.

We realized $1.3 million in tax benefits recorded to additional paid-in capital as a result of the exercise of stock options for the year ended December 31, 2014. We did not realize any tax deductions associated with stock exercises in 2014. We realized $0.5 million in tax deductions and $0.7 million in tax benefits recorded to additional paid-in capital as a result of the exercise of stock options for the year ended December 31, 2013. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We measure the tax benefits recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over time and may result in changes to our subjective assumptions and judgments which can materially affect amounts recognized in our consolidated balance sheets and consolidated statements of operations. The result of our assessment of our uncertain tax positions did not have a material impact on our consolidated financial statements. Our federal and state tax returns for all years after 2010 are subject to future examination by tax authorities for all our tax jurisdictions. We recognize interest and penalties related to income tax matters in interest and other income (expense) and corporate, general and administration expenses, respectively.

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14. Segment and Geographic Information

Segment Information

During the fourth quarter of 2014, the information reviewed by our Chief Operating Decision Makers evolved with changes in our organization and new initiatives. These changes include our planned spin-off of Gaiam TV, and the migration of our legacy catalog business to a mobile-and social-centric digital model. Accordingly, we have revised our segment groupings in the fourth quarter of 2014.

As of December 31, 2014, we are reporting two business segments which are aligned based on their products or services:

Gaiam Brand:	This segment includes all our branded yoga, fitness, and well-being products. It combines our previous Business segment with the Gaiam.com and catalog portions of our former Direct to Consumer segment. It also includes our eco-travel subsidiary, which was previously included in our former Direct to Consumer segment.
Gaiam TV:	This segment includes our digital video streaming service. This segment is also called Gaiam TV, and was previously included in our former Direct to Consumer segment. We previously announced that we are pursuing the potential spin off of this segment into a separate company.

The comparative information below has been restated to conform to the new segment structure.

Amounts shown as “Other unallocated corporate” in the table below represents a portion of our revenues, expenses and assets that we do not allocate to our segments. Portions of the unallocated corporate amounts may be included in the spin-off with Gaiam TV, if and when that occurs.

Although we are able to track sales by channel, the management, allocation of resources, and analysis and reporting of expenses are presented on a combined basis, at the reportable segment level. Segment contribution margin is defined as net revenue less cost of goods sold and total operating expenses. Financial information for our segments is as follows:

	Year Ended December 31,
(in thousands)	2014			2013			2012
Net revenue:
Gaiam Brand	$	156,784		$	149,812		$	123,545
Gaiam TV		9,910	(c)		5,651			3,697
Consolidated net revenue		166,694			155,463			127,242
Contribution margin (loss):
Gaiam Brand		6,640			(9,394	)(a)		(1,810	)
Gaiam TV		(8,718	)		(10,144	)(b)		(5,762	)
Segment contribution loss		(2,078	)		(19,538	)		(7,572	)
Other unallocated corporate expenses		(3,008	)		(2,103	)		(2,601	)
Consolidated contribution loss		(5,086	)		(21,641	)		(10,173	)
Reconciliation of contribution loss to net loss attributable to Gaiam, Inc.:
Interest and other (expense) income		(600	)		2,421			(86	)
Gain on sale of investments		1,480			25,096			—
Loss from equity method investment		(55	)		—			(18,410	)
Income tax expense (benefit)		1,369			25,974			(9,444	)
(Loss) income from discontinued operations, net of tax		(3,327	)		(1,995	)		6,648
Net income attributable to noncontrolling interest		(959	)		(659	)		(305	)
Net loss attributable to Gaiam, Inc.	$	(9,916	)	$	(22,752	)	$	(12,882	)

(a) During 2013 we recognized impairment and severance charges of $9.2 million.

(b) During 2013 we recognized impairment charges of $1.8 million.

(c) As discussed in Note 17 Subsequent Events, Gaiam TV filed a Form 10 with the SEC on February 20, 2015. The segment amounts presented here and discussed elsewhere in this Form 10-K vary insignificantly from the amounts in the Form 10, as the Form 10 required that certain items be recast for stand-alone presentation. As reported in Form 10 revenues were $10.1 million for 2014 and $5.5 million for 2013 and contribution loss was $8.5 million for 2014 and $10.0 for 2013.

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The following is a reconciliation of reportable segments’ assets to our consolidated total assets. Other unallocated corporate amounts are comprised of cash, current and deferred income taxes, and property and equipment.

	As of December 31,
(in thousands)	2014		2013		2012
Total assets – Continuing Operations:
Gaiam Brand	$	114,388	$	120,604	$	117,167
Gaiam TV		23,662		19,193		5,850
	$	138,050	$	139,797	$	123,017
Total assets – Discontinued Operations:
Gaiam Brand	$	582	$	1,889	$	74,214
	$	138,632	$	141,686	$	197,231

Major Customer

Sales to our largest Gaiam Brand segment customer, Target Corporation (“Target”) accounted for 29.3%, 32.1% and 22.9% of our total net revenue during 2014, 2013, and 2012, respectively. The loss of Target as a customer would have a material adverse effect on our business. No other customer accounted for10% or more of our total net revenue.

Geographic Information

We sell and distribute essentially the same products in the United States and several foreign countries. The major geographic territories are the U.S., Canada, Australia and the U.K., and are based on the location of the customer. The following represents geographical data for our operations as of and for the years ended December 31, 2014, 2013 and 2012:

(in thousands)	2014		2013		2012
Revenue:
United States	$	156,284	$	147,527	$	118,931
International		10,410		7,936		8,311
	$	166,694	$	155,463	$	127,242
Long-Lived Assets:
United States	$	34,123	$	29,072	$	33,827
International		243		246		626
	$	34,366	$	29,318	$	34,453
	As of December 31,
(in thousands)	2014		2013		2012
Components of Long-Lived Assets (a):
Property and equipment, net	$	23,231	$	22,540	$	23,544
Media Library, net		7,691		5,211		10,441
Other Intangibles, net		823		1,155		190
Other assets		2,621		412		278
	$	34,366	$	29,318	$	34,453

(a) Excludes other non-current assets (non-current deferred tax assets, net, goodwill, investments, notes receivable, security deposits and noncurrent assets from discontinued operations) of $25.5 million, $22.3 million, and $33.0 million for 2014, 2013, and 2012, respectively.

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15. Discontinued Operations

On October 21, 2013, we consummated the sale of GVE Newco, LLC (“GVE”), a wholly-owned subsidiary representing our non-Gaiam-branded entertainment media business, to Cinedigm for $51.7 million, comprised of cash, stock and other assets and liabilities. The sale was subject to customary adjustments, including a post-closing working capital adjustment, which is currently in dispute as discussed on previous pages. After the sale was consummated, we continued providing extensive administrative and accounting services to the buyer through May 2014. Since May 2014, our services have been limited to collection of outstanding receivables on their behalf.

During the fourth quarter of 2013, we discontinued our DRTV operations. In connection with these discontinued operations, we recognized certain exit activity and asset impairment charges. Accordingly, the assets and liabilities, operating results, and cash flows for these businesses, and their related exit activity and asset impairment charges, are presented as discontinued operations in our financial statements and footnotes presented herein.

During 2014, the Class A shares of Cinedigm’s common stock which we received in the GVE sale increased in value and were sold. The unrealized gains were reflected in ‘accumulated other comprehensive income’ prior to the sale, and were reclassified into ‘gain on sale of investments’ in the accompanying consolidated statements of operations after the sale.

The major components of assets and liabilities of our discontinued operations were as follows:

	December 31,
(in thousands)	2014		2013
Current assets:
Accounts receivable, net	$	—	$	835
Inventory, less allowances		282		818
Other current assets		300		236
Total current assets	$	582	$	1,889
Current liabilities:
Accounts payable	$	—	$	1,121
Accrued liabilities		—		475
Total current liabilities	$	—	$	1,596

With regards to our DRTV discontinued operations, we commenced wind-down activities in December 2013, and we expect to sell the remaining assets in the near term. The expected proceeds from the disposition of this business unit are not expected to be material.

On July 31, 2012, each of our subsidiaries Gaiam Americas, Inc., SPRI Products, Inc., GT Direct, Inc., and Gaiam Vivendi Entertainment (collectively the “Borrowers”) entered into a Revolving Credit and Security Agreement (the “PNC Credit Agreement”) with PNC Bank, N.A. (“PNC”), for the use and benefit of GVE’s operations, which were subsequently discontinued. Borrowings were secured by a pledge of the Borrowers’ assets. The PNC Credit Agreement provided for a revolving line of credit of up to $35 million, subject to borrowing base and related limitations. Subject to certain limitations, the principal amount of the revolving loan was due and payable on the earlier of July 30, 2015 or upon the termination of the PNC Credit Agreement.

On October 21, 2013, the Borrowers paid in full the outstanding balance owed to PNC of $19,621,941 (inclusive of principal and interest and other fees), and terminated the underlying PNC Credit Agreement. The Borrowers also paid an early termination fee of $350,000. Upon termination, PNC released all liens granted in its favor on the collateral pledged under the PNC Credit Agreement. All interest charges under the PNC Credit Agreement have been allocated to discontinued operations.

F-53

The income from discontinued operations amounts as reported on our consolidated statements of operations were comprised of the following amounts:

	Years Ended December 31,
(in thousands)	2014			2013			2012
Net revenue	$	2,516		$	53,539		$	75,232
(Loss) income from operations before income taxes		(3,477	)		2,386			10,417
Exit activity and asset impairment charges before income taxes (a)		—			(1,776	)		—
Income tax benefit (expense)		150			(209	)		(3,769	)
Income from operations of discontinued operations		(3,327	)		401			6,648
Gain (loss) on disposal of discontinued operations:
Gain on sale of GVE before income taxes (b)		—			5,622			—
Impairment of DRTV before income taxes (b)		—			(9,481	)		—
Income tax benefit		—			1,463			—
Loss from disposal of discontinued operations		—			(2,396	)		—
(Loss) income from discontinued operations.	$	(3,327	)	$	(1,995	)	$	6,648

(a) In direct conjunction with the discontinuing of our GVE and DRTV operations, during 2013 we recognized exit activity charges of $0.8 million for employee termination benefits and $1.0 million for non-cancellable facility leases, of which $0.3 million had been paid as of December 31, 2013, the balance of these amounts was paid in 2014.

(b) As a direct result of the discontinuance of our GVE and DRTV operations, we recognized impairment charges of $2.5 million for inventory, $3.8 million for deferred advertising costs, $0.8 million for advances, $0.4 million for property and equipment, $2.1 million for media library, $6.7 million for goodwill, and $3.5 million for other intangibles.

16. Quarterly Results of Operations (Unaudited)

The following tables set forth our unaudited results of operations for each of the quarters in 2014 and 2013. During 2013, we sold our non-Gaiam-branded entertainment media distribution operations and discontinued our DRTV operations. We now report these businesses as discontinued operations, and, accordingly, we have reclassified their results of operations for all periods presented to reflect them as such. In our opinion, this unaudited financial information includes all adjustments, consisting solely of normal recurring accruals and adjustments, necessary for a fair presentation of the results of operations for the quarters presented.

	Year 2014 Quarters Ended
(in thousands, except per share data)	March 31			June 30			September 30			December 31
Net revenue	$	37,611		$	32,451		$	41,256		$	55,376
Gross profit		17,020			15,468			18,018			24,999
Gain on sale of investment (a)		438			1,042			—			—
(Loss) income from continuing operations		(2,098	)		(2,216	)		(2,559	)		1,243
Income (loss) from discontinued operations		26			2			(82	)		(3,273	)
Net loss		(2,072	)		(2,214	)		(2,641	)		(2,030	)
Net loss attributable to Gaiam, Inc.		(2,134	)		(2,388	)		(3,026	)		(2,368	)
Diluted net loss per share attributable to Gaiam, Inc.	$	(0.09	)	$	(0.10	)	$	(0.12	)	$	(0.10	)
Weighted average shares outstanding-diluted		24,006			24,090			24,340			24,470

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	Year 2013 Quarters Ended
(in thousands, except per share data)	March 31			June 30			September 30			December 31 (b)
Net revenue	$	36,679		$	31,897		$	36,128		$	50,759
Gross profit		15,750			13,314			14,693			21,551
Gain on sale of investment (a)		—			16,429			1,975			6,692
(Loss) income from continuing operations		(2,203	)		8,112			(700	)		(25,307	)
Income (loss) from discontinued operations		1,981			(129	)		1,004			(4,851	)
Net (loss) income		(222	)		7,983			304			(30,158	)
Net (loss) income attributable to Gaiam, Inc.		(277	)		7,848			120			(30,444	)
Net (loss) income per share attributable to Gaiam, Inc. common shareholders – diluted:
From continuing operations	$	(0.10	)	$	0.36		$	(0.03	)	$	(1.08	)
From discontinued operations		0.09			(0.01	)		0.04			(0.21	)
Diluted net (loss) income per share attributable to Gaiam, Inc.	$	(0.01	)	$	0.35		$	0.01		$	(1.29	)
Weighted average shares outstanding-diluted		22,732			22,741			22,765			23,668

(a) We reported gains on the sale of our RGSE stock during 2014 and 2013, the carrying value for which had previously been reduced to zero through the recognition of our portion of RGSE’s net losses.

(b) We recorded a charge of $11.0 million to exit certain businesses, to restructure certain operations, and a net loss of $2.0 million after selling GVE and discontinuing DRTV in the fourth quarter. We also recorded a $23.2 million valuation allowance for our deferred tax assets in the fourth quarter of 2013.

17. Subsequent Events

On January 7, 2015, we appointed Bart Foster, age 39, to serve as President of Gaiam starting January 12, 2015. We entered into a written agreement with Mr. Foster effective January 7, 2015 outlining the terms of his employment as President. Mr. Foster will report to our Chief Executive Officer and will receive an annual salary of $350,000. Mr. Foster will participate in our performance-based bonus plan and will be eligible to receive a bonus of up to 100% of his base salary based on criteria to be mutually agreed to by Mr. Foster and our compensation committee. Mr. Foster has agreed to a 2-year non-compete covenant and a 5-year non-solicitation covenant. On January 12, 2015, we granted Mr. Foster options to purchase 130,000 shares of our Class A common stock at an exercise price of $7.15 per share pursuant to the terms of our 2009 Long-Term Incentive Plan. The options vest 2% per month for 50 months starting in December 2015.

On February 20, 2015, our wholly-owned subsidiary Gaia, Inc. (“Gaiam TV”) filed a registration statement on Form 10 in connection with the previously announced proposed separation of the Gaiam TV segment from the Gaiam Brand segment into two separate publicly traded companies. The proposed tax-free spin-off will occur through a distribution to Gaiam, Inc.’s shareholders of all the stock of Gaiam TV. Gaiam TV will hold all of the assets and liabilities of the Gaiam TV segment. The Gaiam Brand segment will remain with Gaiam, Inc. after the distribution. The completion of the separation is subject to satisfaction of several conditions. Furthermore, our board of directors has the right and ability, in its sole discretion, to abandon the proposed separation at any time before the distribution date. As a result, there can be no assurance that the separation will occur.

In connection with the proposed spin-off, Gaiam TV anticipates entering into a reorganization agreement with Gaiam, Inc. to provide for, among other things, the principal corporate transactions required to effect the spin-off, certain conditions to the spin-off and provisions governing the relationship between Gaiam TV and Gaiam, Inc. with respect to and resulting from the spin-off. The reorganization agreement will also provide that the holders of options to purchase Gaiam, Inc. Class A common stock who are employees or non-employee directors of Gaiam, Inc. on the record date for the distribution will receive options to purchase shares of Gaiam TV’s Class A common stock in the same ratio as shareholders. Additionally there will be a corresponding adjustment to the existing Gaiam, Inc. option held by such holder. The spin-off will not constitute a change in control for purposes of Gaiam, Inc.’s equity plans, and therefore no vesting of awards will occur as a result of the spin-off. In addition, the reorganization agreement will address the treatment of the various insurance policies held by Gaiam, Inc. and Gaiam TV after the spin-off. Gaiam TV will enter into multiple license agreements with Gaiam, Inc. including a license agreement for the use of the “Gaiam TV” trade name, and related trademarks and service marks following the spin-off.

Providing the spin-off is completed, Gaiam TV anticipates entering into a transition services agreement with Gaiam, Inc. in connection with the separation. Under the transition services agreement, Gaiam, Inc. and Gaiam TV will agree to provide certain services to the other for a period of up to 24 months following the spin-off, or such other shorter period as may be provided in the transition services agreement. The services to be provided may include certain corporate services including, but not limited to, management, financial, accounting, tax, human resources, payroll, technical, fulfillment, software quality control, and certain office

F-55

services as required from time to time in the ordinary course of our business. Charges for these services will be based on the actual cost of such services without premium or mark-up, although applicable administrative and other overhead costs associated with the services will be allocated and included in the service charge. The employees of Gaiam TV will remain eligible employees under certain employee benefit plans currently maintained by Gaiam, Inc., which will be managed under the transition services agreement.

Effective January 1, 2015, Gaiam, Inc. contributed to Gaiam TV its 100% membership interest in Boulder Road LLC, a Colorado limited liability company. Boulder Road LLC is the sole owner of the property located at 833 West South Boulder Road in Louisville, Colorado, which is the location for our operations and the principal executive offices of Gaiam, Inc., Gaiam TV and various other companies. The Gaiam, Inc. business unit has entered into a lease agreement with Boulder Road LLC effective with the contribution.

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GAIAM, INC.

Condensed consolidated balance sheets

(in thousands, except share and per share data)	June 30, 2015			December 31, 2014
	(unaudited)
ASSETS
Current assets:
Cash	$	18,426		$	15,772
Accounts receivable, net		16,075			30,266
Inventory, less allowances		16,845			20,154
Other current assets		19,835			11,998
Current assets of discontinued operations		300			582
Total current assets		71,481			78,772
Property and equipment, net		24,516			23,231
Media library, net		8,319			7,691
Goodwill		15,448			15,448
Other intangibles, net		728			823
Other assets		12,576			12,667
Total assets	$	133,068		$	138,632
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	11,786		$	18,837
Accrued liabilities		26,670			20,236
Total current liabilities		38,456			39,073
Commitments and contingencies
Equity:
Gaiam, Inc. shareholders’ equity:
Class A common stock, $.0001 par value, 150,000,000 shares authorized, 19,122,148 and 19,084,958 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively		2			2
Class B common stock, $.0001 par value, 50,000,000 shares authorized, 5,400,000 issued and outstanding at June 30, 2015 and December 31, 2014		1			1
Additional paid-in capital		171,939			171,315
Accumulated other comprehensive loss		(227	)		(200	)
Accumulated deficit		(81,338	)		(76,329	)
Total Gaiam, Inc. shareholders’ equity		90,377			94,789
Noncontrolling interest		4,235			4,770
Total equity		94,612			99,559
Total liabilities and equity	$	133,068		$	138,632

See accompanying notes to the interim condensed consolidated financial statements.

F-57

GAIAM, INC.

Condensed consolidated statements of operations

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(in thousands, except per share data)	2015			2014			2015			2014
	(unaudited)						(unaudited)
Net revenue	$	41,146		$	32,451		$	78,784		$	70,062
Cost of goods sold		22,939			16,983			43,330			37,574
Gross profit		18,207			15,468			35,454			32,488
Expenses:
Selling and operating		14,493			15,160			31,213			31,523
Corporate, general and administration		3,602			2,852			7,014			5,962
Other general expense		89			611			89			636
Total expenses		18,184			18,623			38,316			38,121
Income (loss) from operations		23			(3,155	)		(2,862	)		(5,633	)
Interest and other income (expense)		114			27			(370	)		65
Gain on sale of investments		—			1,042			—			1,480
Income (loss) before income taxes and noncontrolling interest		137			(2,086	)		(3,232	)		(4,088	)
Income tax expense		125			130			174			226
Net income (loss) from continuing operations		12			(2,216	)		(3,406	)		(4,314	)
(Loss) income from discontinued operations, net of tax		(1,121	)		2			(1,587	)		28
Net loss		(1,109	)		(2,214	)		(4,993	)		(4,286	)
Net income attributable to noncontrolling interest		(8	)		(174	)		(16	)		(236	)
Net loss attributable to Gaiam, Inc.	$	(1,117	)	$	(2,388	)	$	(5,009	)	$	(4,522	)
Net loss per share attributable to Gaiam, Inc. common shareholders—basic and diluted:
From continuing operations	$	0.00		$	(0.10	)	$	(0.14	)	$	(0.19	)
From discontinued operations	$	(0.05	)	$	0.00		$	(0.06	)	$	0.00
Basic and diluted net loss per share attributable to Gaiam, Inc.	$	(0.05	)	$	(0.10	)	$	(0.20	)	$	(0.19	)
Weighted-average shares outstanding:
Basic		24,511			24,090			24,501			24,048
Diluted		24,610			24,090			24,501			24,048

See accompanying notes to the interim condensed consolidated financial statements.

F-58

GAIAM, INC.

Condensed consolidated statements of comprehensive loss

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(in thousands, except per share data)	2015			2014			2015			2014
	(unaudited)						(unaudited)
Net loss	$	(1,109	)	$	(2,214	)	$	(4,993	)	$	(4,286	)
Accumulated other comprehensive (loss) income:
Foreign currency translation (loss) gain, net of tax		(25	)		26			(92	)		37
Unrealized (loss) gain on equity security, net of tax		—			(30	)		—			202
Reclassification of gain on equity security to net income, net of tax		—			(319	)		—			(319	)
Comprehensive loss		(1,134	)		(2,537	)		(5,085	)		(4,366	)
Less: comprehensive loss (income) attributable to the noncontrolling interest		35			(9	)		49			(25	)
Comprehensive loss attributable to Gaiam, Inc.	$	(1,099	)	$	(2,546	)	$	(5,036	)	$	(4,391	)

See accompanying notes to the interim condensed consolidated financial statements

F-59

GAIAM, INC.

Condensed consolidated statements of cash flows

	For the Six Months Ended June 30,
(in thousands)	2015			2014
	(unaudited)
Operating activities
Net loss	$	(4,993	)	$	(4,286	)
Loss (income) from discontinued operations		1,587			(28	)
Net loss from continuing operations		(3,406	)		(4,314	)
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities—continuing operations:
Depreciation		1,156			982
Amortization		1,229			1,239
Share-based compensation expense		473			715
Gain on sale of investments		—			(1,480	)
Loss (gain) on remeasurement of foreign currency		343			(36	)
Other		25			—
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net		14,326			8,157
Inventory, less allowances		3,264			2,015
Other current and long term assets		(7,668	)		(5,235	)
Accounts payable		(7,207	)		(2,199	)
Accrued liabilities		6,311			(1,917	)
Net cash provided by (used in) operating activities—continuing operations		8,846			(2,073	)
Net cash used in operating activities—discontinued operations		(1,305	)		(818	)
Net cash provided by (used in) operating activities		7,541			(2,891	)
Investing activities
Proceeds from sale of investments		—			2,646
Purchase of property, equipment and media rights		(4,213	)		(2,411	)
Net cash (used in) provided by investing activities		(4,213	)		235
Financing activities
Proceeds from issuance of stock		151			1,326
Dividends paid to noncontrolling interest		(486	)		(150	)
Net cash (used in) provided by financing activities		(335	)		1,176
Effect of exchange rates on cash		(339	)		101
Net change in cash		2,654			(1,379	)
Cash at beginning of period		15,772			32,229
Cash at end of period	$	18,426			30,850
Supplemental cash flow information
Income taxes paid	$	594		$	424
Interest paid	$	2		$	22

See accompanying notes to the interim condensed consolidated financial statements

F-60

Notes to interim condensed consolidated financial statements

References in this report to “we”, “us”, “our” or “Gaiam” refer to Gaiam, Inc. and its consolidated subsidiaries, unless we indicate otherwise.

1. Organization, Nature of Operations, and Principles of Consolidation

Gaiam, Inc. and its consolidated subsidiaries (“the Company”) provide a broad selection of yoga, fitness, and wellness products, content, and eco-travel services. Our products are sold through major retailers in the United States, Canada, Europe and other countries. We also sell our products through digital partners, websites and ecommerce channels. Gaiam TV, our global subscription video streaming service, provides our members with access to conscious media on virtually any internet-connected device anytime, anywhere. We were incorporated under the laws of the State of Colorado on July 7, 1988.

We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP, and they include our accounts and those of our subsidiaries. Intercompany transactions and balances have been eliminated.

The unaudited condensed consolidated financial position, results of operations and cash flows for the interim periods disclosed in this report are not necessarily indicative of future financial results.

Use of Estimates and Reclassifications

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying financial statements and disclosures. Although we base these estimates on our best knowledge of current events and actions that we may undertake in the future, actual results may be different from the estimates. We have made certain reclassifications to prior period amounts to conform to the current period presentations.

2. Spin-off of Gaiam TV

On February 20, 2015, our wholly-owned subsidiary Gaia, Inc. (“Gaiam TV”) filed a registration statement on Form 10 with the Securities and Exchange Commission in connection with the previously announced proposed separation of the Gaiam TV segment from the Gaiam Brand segment into two separate publicly traded companies. Gaiam TV filed an amended Form 10 with the Securities and Exchange Commission on May 29, 2015. The proposed tax-free spin-off will occur through a distribution to Gaiam, Inc.’s shareholders of all the stock of Gaiam TV. Gaiam TV will hold all of the assets and liabilities of the Gaiam TV segment. The Gaiam Brand segment will remain with Gaiam, Inc. after the distribution. The completion of the separation is subject to satisfaction of several conditions. Furthermore, our board of directors has the right and ability, in its sole discretion, to abandon the proposed separation at any time before the distribution date. As a result, there can be no assurance that the separation will occur.

In connection with the proposed spin-off, Gaiam TV anticipates entering into a reorganization agreement with Gaiam, Inc. to provide for, among other things, the principal corporate transactions required to effect the spin-off, certain conditions to the spin-off and provisions governing the relationship between Gaiam TV and Gaiam, Inc. with respect to and resulting from the spin-off. The reorganization agreement will also provide that the holders of options to purchase Gaiam, Inc. Class A common stock who are employees or non-employee directors of Gaiam, Inc. on the record date for the distribution will receive options to purchase shares of Gaiam TV’s Class A common stock in the same ratio as shareholders. Additionally there will be a corresponding adjustment to the existing Gaiam, Inc. option held by such holder. The spin-off will not constitute a change in control for purposes of Gaiam, Inc.’s equity plans, and therefore no vesting of awards will occur as a result of the spin-off. In addition, the reorganization agreement will address the treatment of the various insurance policies held by Gaiam, Inc. and Gaiam TV after the spin-off. Gaiam TV will enter into multiple license agreements with Gaiam, Inc. including a license agreement for the use of the “Gaiam TV” trade name, and related trademarks and service marks following the spin-off.

Providing the spin-off is completed, Gaiam TV anticipates entering into a transition services agreement with Gaiam, Inc. in connection with the separation. Under the transition services agreement, Gaiam, Inc. and Gaiam TV will agree to provide certain services to the other for a period of up to 24 months following the spin-off, or such other shorter period as may be provided in the transition services agreement. The services to be provided may include certain corporate services including, but not limited to, management, financial, accounting, tax, human resources, payroll, technical, fulfillment, software quality control, and certain office services as required from time to time in the ordinary course of our business. Charges for these services will be based on the actual cost of such services without premium or mark-up, although applicable administrative and other overhead costs associated with the services will be allocated and included in the service charge. The employees of Gaiam TV will remain eligible employees under certain employee benefit plans currently maintained by Gaiam, Inc., which will be managed under the transition services agreement.

F-61

Effective January 1, 2015, Gaiam, Inc. contributed to Gaiam TV its 100% membership interest in Boulder Road LLC, a Colorado limited liability company. Boulder Road LLC is the sole owner of the property located at 833 West South Boulder Road in Louisville, Colorado, which is the location for our operations and the principal executive offices of Gaiam, Inc., Gaiam TV and various other companies. The Gaiam, Inc. business unit and the Gaiam TV business unit have entered into lease agreements with Boulder Road LLC effective with the contribution. The intercompany transactions have been eliminated in the accompanying condensed consolidated financial statements.

3. Investments

We did not sell any investments or recognize any gains on sales of investments during the six months ended June 30, 2015.

During the six months ended June 30, 2014, we reported a gain of $1.0 million on the sale of our Real Goods Solar, Inc. (“RGSE”) class A common stock. The value of the stock had been previously reduced to zero through the recognition of our portion of RGSE’s net losses.

In connection with the sale of our non-branded entertainment media business to Cinedigm Corp. in October 2013, we received shares of Cinedigm Corp.’s Class A common stock with a fair value of $1.2 million. During June 2014, we sold all of these shares and realized a gain of $0.5 million.

4. Equity

During the first six months of 2015, we issued 10,000 shares of our Class A common stock under our 2009 Long-Term Incentive Plan to our independent directors, in lieu of cash compensation, for services rendered in 2015. We valued the shares issued to our independent directors at estimated fair value based on the closing price of our shares on the date the shares were issued, which by policy is the last trading day of each quarter in which the services were rendered.

During the first six months of 2015, we issued 27,000 shares of our Class A common stock with net proceeds of $0.2 million in connection with option exercises. The following is a reconciliation from December 31, 2014 to June 30, 2015 of the carrying amount of total equity, equity attributable to Gaiam, Inc., and equity attributable to the noncontrolling interest.

							Gaiam, Inc. Shareholders
(in thousands)	Total			Comprehensive Loss			Accumulated Deficit			Accumulated Other Comprehensive Loss			Class A and Class B Common Stock		Paid-in Capital		Noncontrolling Interest
Balance at December 31, 2014	$	99,559					$	(76,329	)	$	(200	)	$	3	$	171,315	$	4,770
Issuance of Gaiam, Inc. common stock for stock option exercises and share-based compensation		624						—			—			—		624		—
Dividends paid to noncontrolling interest		(486	)					—			—			—		—		(486	)
Comprehensive loss:
Net (loss) income		(4,993	)		(4,993	)		(5,009	)		—			—		—		16
Foreign currency translation adjustment, net of taxes of $40		(92	)		(92	)		—			(27	)		—		—		(65	)
Comprehensive loss				$	(5,085	)
Balance at June 30, 2015	$	94,612					$	(81,338	)	$	(227	)	$	3	$	171,939	$	4,235

5. Share-Based Payments

During the first six months of 2015 and 2014, we extended the term of certain options granted under our 2009 Long-Term Incentive Plan to a member of our executive team for an additional year, and recognized $0.1 and $0.4 million of associated stock compensation expense. Total share-based compensation expense is reported in corporate, general and administration expenses on our condensed consolidated statements of operations.

F-62

6. Net Loss per Share Attributable To Gaiam, Inc. Common Shareholders

Basic net loss per share attributable to Gaiam, Inc. common shareholders excludes any dilutive effects of options. We compute basic net loss per share attributable to Gaiam, Inc. common shareholders using the weighted average number of shares of common stock outstanding during the period. We compute diluted net loss per share attributable to Gaiam, Inc. common shareholders using the weighted average number of shares of common stock and common stock equivalents outstanding during the period. We excluded common stock equivalents of 985,000 and 659,000 from the computation of diluted net loss per share attributable to Gaiam, Inc. common shareholders for the three months ended June 30, 2015 and 2014, respectively, and 987,000 and 1,531,000 for the six months ended June 30, 2015 and 2014, respectively, because their effect was antidilutive.

The following table sets forth the computation of basic and diluted net loss per share attributable to Gaiam, Inc. common shareholders:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share data)	2015			2014			2015			2014
Net loss attributable to Gaiam, Inc. common shareholders:
Income (loss) from continuing operations	$	4		$	(2,390	)	$	(3,422	)	$	(4,550	)
(Loss) income from discontinued operations		(1,121	)		2			(1,587	)		28
Net loss attributable to Gaiam, Inc.	$	(1,117	)	$	(2,388	)	$	(5,009	)	$	(4,522	)
Weighted average shares for basic net loss per share		24,511			24,090			24,501			24,048
Effect of dilutive securities		99			—			—			—
Weighted average shares for diluted net loss per share		24,610			24,090			24,501			24,048
Net loss per share attributable to Gaiam, Inc. common shareholders—basic and diluted:
Income (loss) from continuing operations	$	0.00		$	(0.10	)	$	(0.14	)	$	(0.19	)
(Loss) income from discontinued operations	$	(0.05	)	$	0.00		$	(0.06	)	$	0.00
Basic and diluted net loss per share attributable to Gaiam, Inc.	$	(0.05	)	$	(0.10	)	$	(0.20	)	$	(0.19	)

During the three and six months ended June 30, 2014, we recognized gains on the sales of investments (see Note 3) of $1.0 million and $1.5 million, respectively. Excluding the impact of these gains, net loss per share for the three and six months ended June 30, 2014 would have increased by $0.04 and $0.06 per share, respectively. There were no similar gains recognized in 2015.

7. Income Taxes

During the fourth quarter of 2013, we determined that a full valuation allowance against our deferred tax assets was necessary due to the cumulative loss incurred over the three-year period ended December 31, 2013. Since that time, we have continued to provide a full valuation allowance against deferred tax assets. As income is generated in future periods, the Company expects to reverse the valuation allowance as utilization of the deferred tax assets occurs.

8. Segment Information

We manage our company and aggregate our operational and financial information in accordance with two reportable segments, which are aligned based on their products or services:

Gaiam Brand:	This segment includes all our branded yoga, fitness, and wellness products. It also includes our eco-travel subsidiary.
Gaiam TV:	This segment includes our digital video streaming service. We previously announced that we are pursuing the potential spin off of this segment into a separate company.

F-63

Amounts shown as “Other unallocated corporate expenses” in the table below, are primarily expenses of being a public company, and legal costs associated with the proposed spin-off of Gaiam TV, which we do not allocate to our segments. Although we are able to track sales by channel, the management, allocation of resources, and analysis and reporting of expenses are presented on a combined basis, at the reportable segment level. Contribution margin is defined as net revenue less cost of goods sold and total operating expenses. Financial information for our segments is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2015			2014			2015			2014
Net revenue:
Gaiam Brand	$	37,861		$	30,035		$	72,393		$	65,351
Gaiam TV		3,285			2,416			6,391			4,711
Consolidated net revenue		41,146			32,451			78,784			70,062
Contribution income (loss):
Gaiam Brand		2,107			380			2,118			506
Gaiam TV		(1,078	)		(1,938	)		(3,436	)		(4,145	)
Segment contribution income (loss)		1,029			(1,558	)		(1,318	)		(3,639	)
Other unallocated corporate expenses		(1,006	)		(1,597	)		(1,544	)		(1,994	)
Consolidated contribution income (loss)		23			(3,155	)		(2,862	)		(5,633	)
Reconciliation of contribution income (loss) to net loss attributable to Gaiam, Inc.:
Interest and other income (expense)		114			27			(370	)		65
Gain on sale of investment		—			1,042			—			1,480
Income tax expense		(125	)		(130	)		(174	)		(226	)
(Loss) income from discontinued operations		(1,121	)		2			(1,587	)		28
Net income attributable to noncontrolling interest		(8	)		(174	)		(16	)		(236	)
Net loss attributable to Gaiam, Inc.	$	(1,117	)	$	(2,388	)	$	(5,009	)	$	(4,522	)

As discussed in Note 2, Gaiam TV filed an amended registration statement on Form 10 with the SEC on May 29, 2015. The segment amounts presented here and discussed elsewhere in this Form 10-Q vary insignificantly from the amounts reported by Gaiam TV in the Form 10, as the Form 10 requires that certain items be recast for stand-alone presentation.

9. Commitments and Contingencies

On August 13, 2014, Cinedigm Corp. and Cinedigm Entertainment Holdings, LLC (together, “Cinedigm”) initiated an arbitration proceeding with the American Arbitration Association under the Membership Interest Purchase Agreement, dated October 17, 2013, by and among Cinedigm and the Company and one of its subsidiaries (the “MIPA”). Cinedigm’s arbitration demand alleges that the Company owes Cinedigm approximately $12.9 million under the working capital adjustment mechanism included in the MIPA. In addition, Cinedigm has claimed that Gaiam materially breached its representations and warranties under the MIPA, that the Company engaged in fraudulent and tortious acts in connection with the sale, and that the Company breached the terms of other agreements related to the transaction. The aggregate relief requested by Cinedigm exceeds $30.0 million and includes unspecified compensatory damages, attorneys’ fees, costs and interest, and other relief.

The Company believes that Cinedigm’s arbitration claims are without merit and represent a post-closing attempt to renegotiate the MIPA purchase price, and the Company intends to assert its positions vigorously through the legal process. Moreover, the Company believes that if the working capital mechanism is properly applied, Cinedigm owes the Company over $8.0 million, and this amount is reflected in other assets on the accompanying condensed consolidated balance sheet. The Company has initiated an arbitration process against Cinedigm. In addition to its working capital claim, the Company is pursuing a claim of approximately $700,000 against Cinedigm in connection with the Transition Services Agreement executed as part of the MIPA transaction, and is reviewing other claims that it may pursue against Cinedigm. The dispute outcome cannot be predicted at this time.

In view of the inherent difficulty of predicting the outcome of any asserted claim, particularly where large or indeterminate damages are sought, the Company cannot predict the outcome of any pending matter, the timing of ultimate resolution, or the eventual gain or

F-64

loss (in each case, if any). However, in light of the uncertainty of litigation generally and the uncertainty of collection with regard to any judgment that the Company seeks, as well as the more certain substantial legal fees and costs that the Company expects to expend in the matter (which may continue into 2016), the Company accrued a litigation-related reserve in the fourth quarter of 2014 of $3.0 million. Costs associated with the dispute are being recorded as a component of discontinued operating expenses.

F-65

From time to time, we are involved in legal proceedings that we consider to be in the normal course of business. Claimed amounts against us may be substantial but may not bear any reasonable relationship to the merits of the claim or the extent of any real risk of court or arbitral awards. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Although it is not feasible to predict the outcome of these matters with certainty, it is reasonably possible that some legal proceedings may be disposed of or decided unfavorably to us and in excess of the amounts currently accrued. Based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, which are considered probable of being rendered against us in litigation or arbitration in existence at June 30, 2015 and can be reasonably estimated are reserved against or would not have a material adverse effect on our financial condition, results of operations or cash flows.

10. Discontinued Operations

During the fourth quarter of 2013, we consummated the sale of GVE Newco, LLC (“GVE”), a wholly-owned subsidiary of ours representing our non-branded entertainment media business and discontinued our direct response television operations (“DRTV”). Accordingly, the assets and liabilities, operating results, and cash flows for these businesses are presented as discontinued operations separate from our continuing operations, for all periods presented in these consolidated condensed financial statements and footnotes, unless indicated otherwise.

The sale of GVE to Cinedigm was subject to customary adjustments, including a post-closing working capital adjustment, which is currently in dispute (see Note 9). The losses from discontinued operations generated during 2015 are mainly attributable to legal costs associated with the dispute. After the sale was consummated, we continued providing extensive administrative and accounting services to the buyer through May 2014. We have not provided any significant services since that time.

The (loss) income from discontinued operations amounts as reported on our consolidated statements of operations were comprised of the following amounts:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2015			2014		2015			2014
Net revenue	$	—		$	255	$	—		$	2,509
(Loss) income from operations before income taxes		(1,121	)		2		(1,587	)		28
(Loss) income from operations of discontinued operations	$	(1,121	)	$	2	$	(1,587	)	$	28

11. Exit Activity Costs

During the fourth quarter of 2013, as a result of the sale of GVE and the discontinuation of DRTV, we recorded impairment charges on certain media and assets; and recorded accruals for termination benefits. Those accruals are included in accrued expenses in our condensed consolidated balance sheets. The activity in the accrual for termination benefits for the six months ended June 30, 2015 is as follows:

Balance, December 31, 2014	$	1,765
Payments made		(113	)
Balance, June 30, 2015	$	1,652

F-66

12. Subsequent Events

On July 23, 2015, Boulder Road LLC, a subsidiary of Gaiam TV, entered into a revolving line of credit agreement with a bank in the amount of $5.5 million. The note bears interest at the prime rate plus 3.25%, is guaranteed by Gaiam, Inc. and Gaiam TV, and is secured by a Deed of Trust filed against the real property on which the principal offices of the Company are located. No amounts were outstanding under the line of credit at June 30, 2015.

On July 24, 2015, the Company formed a partnership with a third party to jointly market a fitness-based infomercial and its associated products. Under the arrangement, the Company will provide an infomercial which it has developed, and the third party will provide the necessary working capital to advertise and market the infomercial worldwide.

F-67

Fresh Eye Productions Inc.

Financial Statements

For the period January 1, 2013 to

August 31, 2013 and the years ended

December 31, 2012 and 2011

(Expressed in United States Dollars)

F-68

Independent Auditor’s Report

To the Directors of Fresh Eye Productions Inc.

We have audited the accompanying financial statements of Fresh Eye Productions Inc., which comprise the statements of financial position as at August 31, 2013, December 31, 2012 and December 31, 2011, and the statements of income and comprehensive income, statements of shareholders’ deficiency and statements of cash flows for the period from January 1, 2013 to August 31, 2013 and for the years ended December 31, 2012 and December 31, 2011, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Fresh Eye Productions Inc. as at August 31, 2013, December 31, 2012 and December 31, 2011, and its financial performance and its cash flows for the period from January 1, 2013 to August 31, 2013 and for the years ended December 31, 2012 and December 31, 2011 in accordance with accounting principles generally accepted in the United States of America.

	“D&H Group LLP”
Vancouver, B.C.
October 21, 2013	Chartered Accountants
D+H Group LLP Chartered Accountants	+ Understanding, Advising, Guiding

10th Floor, 1333 West Broadway Vancouver, British Columbia Canada V6H 4C1 Telephone: 604 731 5881 Facsimile: 604 731 9923 Email: info@dhgroup.ca www.DHgroup.ca A.B.C. Limited Liability Partnership of Corporations

Member of BHD^TM an Association of Independent Accounting Firms Located Across Canada and Internationally

F-69

Fresh Eye Productions Inc.

Statements of Financial Position

(Expressed in United States dollars)

	August 31,			December 31,			December 31,
	2013			2012			2011
	$			$			$
Assets
Current assets
Cash		219,167			99,013			179,620
Accounts receivable		321			—			—
Deferred income taxes (Note 10)		46,097			32,536			16,486
Prepaid expenses		11,228			1,972			—
Due from shareholders		103,423			354,755			325,331
		380,236			488,276			521,437
Media library (Note 4)		362,872			179,682			—
Property and equipment (Note 5)		433,407			187,305			12,675
Deposit		15,511			5,290			—
		1,192,026			860,553			534,112
Liabilities
Current liabilities
Accounts payable		63,396			14,381			11,462
Income taxes payable		69,125			35,643			32,609
Deferred revenue		341,460			241,016			122,118
Redeemable preferred shares (Note 6)		2,370,167			2,243,047			2,294,982
		2,844,148			2,534,087			2,461,171
Deferred income taxes (Note 10)		89,434			37,743			744
		2,933,582			2,571,830			2,461,915
Shareholders’ Deficiency
Share capital (Note 7)		53			53			53
Accumulated other comprehensive income		498,755			593,739			550,614
Deficit		(2,240,364	)		(2,305,069	)		(2,478,470	)
		(1,741,556	)		(1,711,277	)		(1,927,803	)
		1,192,026			860,553			534,112

Nature of operations (Note 1)

Commitments (Note 8)

The accompanying notes are an integral part of these financial statements.

These financial statements were approved for issue by the Board of Directors on October 21, 2013 and signed on its behalf by:

/S/ Jason Jacobson	, Director	/S/ Michelle Trantina	, Director
Jason Jacobson		Michelle Trantina

F-70

Fresh Eye Productions Inc.

Statements of Income and Comprehensive Income

(Expressed in United States dollars)

	Period from
	January 1, 2013		Year ended			Year ended
	to August 31,		December 31,			December 31,
	2013		2012			2011
	$		$			$
Revenue		1,863,985		1,612,527			874,963
Expenses
Accounting and legal		29,884		19,936			20,504
Amortization of property and equipment		113,200		59,633			10,320
Advertising and promotion		452,665		452,007			23,733
Bank charges and interest		86,664		75,406			45,673
Filming		1,283		3,057			111,446
Foreign exchange loss (gain)		6,569		(15,995	)		—
Insurance		9,627		9,262			3,817
Meals and entertainment		6,624		13,658			12,770
Office and miscellaneous		40,830		64,744			28,957
Rent		51,202		32,569			19,421
Royalties (Note 8)		30,909		17,820			6,181
Sub-contractors		174,594		134,070			66,163
Telephone and utilities		6,895		10,420			7,566
Travel		10,165		24,514			5,379
Website and computer		20,793		26,537			114,009
		1,041,904		927,638			475,939
Income before income taxes		822,081		684,889			399,024
Income taxes (recovery)
Current		67,055		63,410			65,813
Deferred		36,702		20,653			(15,259	)
		103,757		84,063			50,554
Net income for the period		718,324		600,826			348,470
Translation adjustments		94,984		(43,125	)		33,333
Comprehensive income for the period		623,340		643,951			315,137

The accompanying notes are an integral part of these financial statements.

F-71

Fresh Eye Productions Inc.

Statements of Shareholders’ Deficiency

(Expressed in United States dollars)

							Class A
			Number of		Common		preferred		Other
	Number of		class A		shares		shares		comprehensive
	common		preferred		amount		amount		income			Deficit			Total
	shares		shares		$		$		$			$			$
Balance at December 31, 2010		30		2,250		30		23		583,947			(2,826,940	)		(2,242,940	)
Net income for the year		—		—		—		—		—			348,470			348,470
Other comprehensive income		—		—		—		—		(33,333	)		—			(33,333	)
Balance at December 31, 2011		30		2,250		30		23		550,614			(2,478,470	)		(1,927,803	)
Net income for the year		—		—		—		—		—			600,826			600,826
Other comprehensive income		—		—		—		—		43,125			—			43,125
Dividends		—		—		—		—		—			(427,425	)		(427,425	)
Balance at December 31, 2012		30		2,250		30		23		593,739			(2,305,069	)		(1,711,277	)
Net income for the period		—		—		—		—		—			718,324			718,324
Other comprehensive income		—		—		—		—		(94,984	)		—			(94,984	)
Dividends		—		—		—		—		—			(653,619	)		(653,619	)
Balance at August 31, 2013		30		2,250		30		23		498,755			(2,240,364	)		(1,741,556	)

The accompanying notes are an integral part of these financial statements.

F-72

Fresh Eye Productions Inc.

Statements of Cash Flows

(Expressed in United States dollars)

	Period from
	January 1, 2013			Year ended			Year ended
	to August 31,			December 31,			December 31,
	2013			2012			2011
	$			$			$
Cash flows from operating activities
Net income for the year		702,953			600,945			352,476
Items not affecting cash
Amortization of property and equipment		110,778			59,645			10,439
Deferred income taxes		35,917			20,657			(15,434	)
Changes in non-cash working capital
Decrease (increase) in
Accounts receivable		(305	)		—			1,100
Income taxes receivable		—			—			3,049
Prepaid expenses		(8,681	)		(1,978	)		—
Deposit		(9,419	)		(5,306	)		—
Increase (decrease) in
Accounts payable		45,756			3,189			(3,089	)
Income taxes payable		29,867			3,783			31,970
Deferred revenue		82,385			122,039			119,724
		989,251			802,974			500,235
Cash flows from (used in) investing activities
Media library		(204,576	)		(200,265	)		—
Property and equipment		(293,984	)		(215,078	)		(9,852	)
		(498,560	)		(415,343	)		(9,852	)
Cash flows from (used in) financing activities
Due to (from) shareholders		257,676			(36,900	)		(350,814	)
Dividends paid		(639,632	)		(427,510	)		—
		(381,956	)		(464,410	)		(350,814	)
Effects of foreign exchange differences		11,419			(3,828	)		3,514
Increase (decrease) in cash during the period		120,154			(80,607	)		143,083
Cash, beginning of period		99,013			179,620			36,537
Cash, end of period		219,167			99,013			179,620
Supplemental cash flow information
Income taxes paid		36,535			59,628			34,207

The accompanying notes are an integral part of these financial statements.

F-73

Fresh Eye Productions Inc.

Notes to the Financial Statements

Period from January 1, 2013 to August 31, 2013 and the years ended December 31, 2012 and 2011

(Expressed in United States dollars)

1. Nature of operations

The Company was incorporated in British Columbia as KMJ Online Productions Inc. on February 8, 2005 and changed its name to Fresh Eye Productions Inc. on March 14, 2008. The Company does business under the name My Yoga Online and sells memberships that provide access to the Company’s extensive media library of recorded sessions of trained individuals leading sessions of various types and levels of yoga.

The business operations are located in Vancouver, British Columbia, Canada with membership sales in both Canada and the United States of America.

2. Basis of presentation and use of estimates

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The preparation of these financial statements in accordance with US GAAP requires management to make judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant areas requiring the use of management judgements and estimates include:

i. Management determined that the functional currency of the Company is the Canadian dollar (“CDN”). In concluding that the Canadian dollar is the functional currency, management considered the currency of the primary economic environment in which the entity operates; including the currency of the environment in which an entity primarily generates and expends cash. The Company’s presentation currency is the United States dollar (“USD”).

ii. Provisions for income taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxation authorities. Where the final outcome of these tax-related matters is different from the amounts that were originally recorded, such differences will affect the tax provisions in the period in which such determination is made.

iii. The determination of whether an expenditure, relating to the media library and property and equipment, requires capitalization involves judgements made by management.

iv. Management reviews revenue forecasts from its video and digital recording of yoga sessions included in the Company’s media library. When estimates of total revenues and other events or changes in circumstances indicate that a title has an estimated fair value that is less than its unamortized cost, an impairment loss is recognized in the current period for the amount by which the unamortized cost exceeds the title’s estimated fair value. Management has determined no impairment is required as at August 31, 2013, December 31, 2012 and December 31, 2011.

v. The estimated useful lives of the media library and property and equipment and the related amortization included in the statements of income and comprehensive income involves judgements and estimates by management.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

F-74

Fresh Eye Productions Inc.

Notes to the Financial Statements

Period from January 1, 2013 to August 31, 2013 and the years ended December 31, 2012 and 2011

(Expressed in United States dollars)

3. Summary of significant accounting policies

Revenue

Revenue primarily consists of membership fees and the sale of downloadable videos. Revenue is recognized when the following four basic criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectability is reasonably assured. Revenue from membership fees is recognized during the month that access to the media library is available to the holder of a membership. When membership fees are received in advance for multiple months, revenue is deferred and recognized on a straight-line basis over the months of the membership. Other revenue, including revenue generated from downloadable videos is recognized when received.

Property and equipment

Property and equipment is stated at cost less accumulated amortization. Costs of internal use software, including software used in connection with the website, are included in property and equipment. Internal costs incurred during the application development stage are capitalized while all other costs related to the software are expensed.

The costs of property and equipment are amortized over their estimated useful lives.

Media library

Media library is stated at cost less accumulated amortization and consists of video and digital recordings of yoga sessions presented by various highly skilled yoga practitioners. The direct costs of producing the recordings are capitalized and then amortized on a straight-line basis over five years.

Income taxes

Income taxes are provided for pursuant to the liability method. The liability method requires recognition of deferred income taxes based on temporary differences between financial reporting and income tax bases of assets and liabilities, using current enacted income tax rates and regulations. These differences will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively. Considerable judgement is required in determining when these events may occur and whether recovery of an asset, including the utilization of a net operating loss or other carryforward prior to its expiration, is more likely than not.

Foreign currency translation

Transactions occurring in a foreign currency (primarily the US dollar) are translated into the Canadian dollar at the Bank of Canada average monthly rate of exchange and recorded at the translated amount. Any required adjustments are made on a monthly basis. At the date the transaction is recognized, each asset, liability, revenue, expense, gain, or loss arising from the transaction is measured and recorded in the functional currency by use of the exchange rate in effect at that date.

Gains and losses arising from the translation of foreign currency are included in the determination of net income.

Related party transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party’s financial and operating decisions. Parties are also considered to be related if they are subject to common control. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

F-75

Fresh Eye Productions Inc.

Notes to the Financial Statements

Period from January 1, 2013 to August 31, 2013 and the years ended December 31, 2012 and 2011

(Expressed in United States dollars)

3. Summary of significant accounting policies - continued

Financial instruments

Financial assets

The Company classifies its financial assets in the following four categories: held-for-trading (“HFT”), held-to-maturity investments, loans and receivables, and available-for-sale (“AFS”). The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of assets at recognition. All financial instruments are required to be measured at fair value on initial recognition. Measurement in subsequent periods is dependent upon the classification of the financial instrument.

Held-for-trading

A financial asset is classified as HFT when it has been acquired principally for the purpose of selling in the near future, it is a part of an identified portfolio of financial instruments that the Company manages and has an actual pattern of short-term profit-taking or if it is a derivative that is not designated and effective as a hedging instrument. Upon initial recognition, attributable transaction costs are recognized in profit or loss when incurred. Financial instruments at HFT are measured at fair value, and changes therein are recognized in profit or loss. Cash is included in this category of financial assets.

Held-to-maturity investments

HTM financial assets are non-derivative financial assets, measured at amortized cost, that management has the intention and ability to hold to maturity.

Loans and receivables

Accounts receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are initially recognized at the transaction value and subsequently carried at amortized cost less impairment losses. The impairment loss on receivables is based on a review of all outstanding amounts at the end of each reporting period. Bad debts are written off during the year in which they are identified. Interest income is recognized by applying the effective interest method. Accounts receivable and due from shareholders are classified as loans and receivables.

Available-for-sale

AFS financial assets are non-derivative financial assets that are either designated as AFS or not classified in any of the other financial asset categories. Changes in the fair value of AFS financial assets other than impairment losses are recognized as other comprehensive income (loss) and classified as a component of equity.

Effective interest method

The effective interest method calculates the amortized cost of a financial asset and allocates interest income over the corresponding period. The effective interest rate is the rate that discounts estimated future cash receipts over the expected life of the financial asset or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

F-76

Fresh Eye Productions Inc.

Notes to the Financial Statements

Period from January 1, 2013 to August 31, 2013 and the years ended December 31, 2012 and 2011

(Expressed in United States dollars)

3. Summary of significant accounting policies - continued

Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the assets have been impacted.

Objective evidence of impairment could include the following:

• significant financial difficulty of the issuer or counterparty;

• default or delinquency in interest or principal payments; or

• it has become probable that the borrower will enter bankruptcy or financial reorganization.

For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of the estimated future cash flows, discounted at the financial asset’s original effective interest rate.

The carrying amount of all financial assets, excluding accounts receivables, is directly reduced by the impairment loss. The carrying amount of accounts receivables is reduced through the use of an allowance account. When an accounts receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss.

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease relates to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss. On the date of impairment reversal, the carrying amount of the financial asset cannot exceed its amortized cost had impairment not been recognized.

Financial liabilities

The Company classifies its financial liabilities as HFT or other financial liabilities.

Financial liabilities at HFT

Fair value changes on financial liabilities classified as HFT are recognized in profit or loss.

Other financial liabilities

Other financial liabilities are non-derivatives and are recognized initially at fair value, net of transaction costs incurred, and are subsequently stated at amortized cost using the effective interest rate method. Any difference between the amounts originally received, net of transaction costs, and the redemption value is recognized in profit or loss over the period to maturity using the effective interest method. Other financial liabilities include accounts payable and redeemable preferred shares.

Derivative financial liabilities

Derivatives, including separated embedded derivatives, are classified as HFT and recognized at fair value with changes in fair value recognized in profit or loss unless they are designated as effective hedging instruments.

F-77

Fresh Eye Productions Inc.

Notes to the Financial Statements

Period from January 1, 2013 to August 31, 2013 and the years ended December 31, 2012 and 2011

(Expressed in United States dollars)

3. Summary of significant accounting policies - continued

Fair value hierarchy

Fair value measurements of financial instruments are required to be classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The levels of the fair value hierarchy are defined as follows:

Level 1:	Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2:	Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3:	Inputs for assets or liabilities that are not based on observable market data

4. Media library

Media library, stated at cost less accumulated amortization, consists of the following:

	August 31			December 31,			December 31,
	2013			2012			2011
	$			$			$
Cost		409,275			200,225			—
Accumulated amortization		61,687			(20,022	)		—
Effects of foreign exchange differences		(108,090	)		(521	)		—
Net carrying value		362,872			179,682			—

5. Property and equipment

Property and equipment, stated at cost less accumulated amortization, consists of the following:

	August 31,			December 31,			December 31,
	2013			2012			2011
	$			$			$
Computer hardware		69,700			52,447			24,742
Computer software and database		375,062			161,390			44,317
Equipment		41,837			24,535			—
Leasehold improvements		97,909			45,722			—
		584,508			284,094			69,059
Accumulated amortization		(168,213	)		(96,236	)		(56,625	)
Effects of foreign exchange differences		17,112			(553	)		241
Net carrying value		433,407			187,305			12,675

F-78

Fresh Eye Productions Inc.

Notes to the Financial Statements

Period from January 1, 2013 to August 31, 2013 and the years ended December 31, 2012 and 2011

(Expressed in United States dollars)

5. Property and equipment - continued

Amortization of property and equipment is as follows:

• Computer hardware, on a declining balance basis at 55%

• Computer software and database, on the straight line basis over 3 years

• Equipment, on a declining balance basis at 20%

• Leasehold improvements, over the term of the leases (5 years)

6. Redeemable preferred shares

The Company has issued 2,250 class A preferred shares that are redeemable for $ 1,000 CDN ($ 949) (December 31, 2012 - $ 1,003; December 31, 2011 - $ 980) for each preferred share, at the option of the holder after rendering 60 days notice of a redemption request to the Company. As there are no other conditions applicable to the holder, the Company has recorded a liability of $ 2,250,000 CDN ($ 2,370,167) (December 31, 2012 - $ 2,243,047; December 31, 2011 - $ 2,294,982) that is unsecured, non-interest bearing and is due 60 days after notice of a redemption request by the holder.

It should be noted that the common shares of the Company and 750 preferred shares are held by the parent company and the holders of the remaining 1,500 Class A preferred shares are the sole shareholders of that parent company.

7. Share capital

Authorized

Common shares:	an unlimited number without par value
Preferred shares:	Class A - an unlimited number with a par value of $ 0.01 per share, with a redemption price of $ 1,000 CDN ($ 949) (December 31, 2012 - $ 1,003; December 31, 2011 - $ 980) per share upon redemption at the option of either the Company with 21 days notice, or the holder with 60 days notice
	Class B - an unlimited number with a par value of $ 0.01 per share, with a redemption price of $ 1,000 CDN ($ 949) (December 31, 2012 - $ 1,003; December 31, 2011 - $ 980) per share upon redemption at the option of either the Company with 21 days notice, or the holder with 60 days notice

8. Commitments

Lease

The Company has a lease commitment on its office and production facility that expires on July 31, 2017. The lease contains a renewal option for a further five year term at fair market value.

The remaining annual future minimum payments under the lease commitment are as follows:

	$
Remainder of fiscal 2013		21,940
2014		65,821
2015		65,821
2016		65,821
2017		38,396
		257,799

F-79

Fresh Eye Productions Inc.

Notes to the Financial Statements

Period from January 1, 2013 to August 31, 2013 and the years ended December 31, 2012 and 2011

(Expressed in United States dollars)

8. Commitments - continued

Royalties

The Company has royalty agreements with individuals who are featured on the My Yoga Online website in instructional yoga videos. Royalties range from 40% to 80% of net revenues from sales of downloaded videos. Net revenues consist of gross revenue less 10% to cover expenses. During the period ended August 31, 2013 the Company incurred $ 30,909 (December 31, 2012 - $ 17,820; December 31, 2011 - $ 6,181) in royalty fees associated with downloaded video sales.

9. Financial Instruments

Financial instruments are agreements between two parties that result in promises to pay or receive cash or equity instruments. The Company classifies its financial instruments as follows: cash is classified as HFT, accounts receivable and due from shareholders are classified as loans and receivables and accounts payable and redeemable preferred shares liability are classified as other financial liabilities. The carrying value of these instruments approximates their fair values due to their short term to maturity.

The Company has exposure to the following risks from its use of financial instruments:

• Credit risk;

• Liquidity risk; and

• Market risk.

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Cash is held with a major Canadian financial institution. The Company considers the credit risk related to due from shareholders to be minimal.

Liquidity risk

Liquidity risk is the risk that the Company will be unable to meet its financial obligations as they fall due. The Company’s approach to managing liquidity risk is to ensure, that it will have sufficient liquid funds to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. At August 31, 2013 the Company has $ 219,167 (December 31, 2012 - $ 99,013; December 31, 2011 - $ 179,620) of cash to settle current liabilities with the following due dates: accounts payable of $ 63,396 (December 31, 2012 - $ 14,381; December 31, 2011 - $ 11,462) are due within three months and income taxes payable of $ 69,125 (December 31, 2012 - $ 35,643; December 31, 2011 - $ 32,609) are due within 7 months (December 31, 2012 and 2011 - 3 months). The redeemable preferred share liability is due 60 days after a request for redemption if such a request was to occur.

Market risk

Market risk is comprised of interest rate risk, currency risk and other price risk.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in market interest rates. The Company is not exposed to significant interest rate risk.

F-80

Fresh Eye Productions Inc.

Notes to the Financial Statements

Period from January 1, 2013 to August 31, 2013 and the years ended December 31, 2012 and 2011

(Expressed in United States dollars)

9. Financial Instruments - continued

Foreign exchange risk

The Company’s functional currency is the Canadian dollar and major transactions occur in Canadian dollars and the United States dollars. The Company maintains a USD bank account to support the cash needs of its foreign operation. Management believes the foreign exchange risk related to currency conversions are minimal and therefore does not hedge its foreign exchange risk. At August 31, 2013, $ 1.00 CDN was equal to $ 0.95 USD (December 31, 2012 - $ 1.01 USD; December 31, 2011 - $ 0.96 USD).

Balances as follows:

	August 31, 2013						December 31, 2012				December 31, 2011
	$						$				$
				CDN					CDN				CDN
	USD			equivalent			USD		equivalent		USD		equivalent
Cash		167,212			176,013			139,991		136,605		126,677		129,262
Accounts payable		(13,406	)		(14,112	)		—		—		—		—
		153,806			161,901			139,991		136,605		126,677		129,262

Based on the net exposures as of August 31, 2013, and assuming that all other variables remain constant, a 10% fluctuation of the CDN against the USD would result in the Company’s net income being approximately $ 15,000 higher (or lower) (December 31, 2012 - $ 14,000; December 31, 2011 - $ 13,000).

Other price risk

Other price risk is the risk that the future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign exchange risk. The Company is not exposed to other price risk.

10. Income taxes

Deferred income tax assets and liabilities of the Company are as follows:

	August 31,			December 31,			December 31,
	2013			2012			2011
	$			$			$
Current
Deferred revenue		46,097			32,536			16,486
Non-current
Media library		(48,987	)		(24,257	)		(744	)
Property and equipment		(40,447	)		(13,486	)		—
		(89,434	)		(37,743	)		(744	)

F-81

Fresh Eye Productions Inc.

Notes to the Financial Statements

Period from January 1, 2013 to August 31, 2013 and the years ended December 31, 2012 and 2011

(Expressed in United States dollars)

10. Income taxes - continued

The income taxes shown in the statements of income and comprehensive income differs from the amounts obtained by applying statutory rates to the loss before provision for income taxes due to the following:

	August 31,			December 31,			December 31,
	2013			2012			2011
	$			$			$
Income tax rate reconciliation
Combined federal and provincial income tax rate		13.5	%		13.5	%		13.5	%
Expected income tax expense		110,981			92,460			53,871
Other		(7,224	)		(8,397	)		(3,317	)
Actual income tax expense		103,757			84,063			50,554

11. Capital management

The Company considers its capital to be comprised of shareholders’ equity.

The Company’s objectives in managing its capital are to maintain its ability to further develop its business. To effectively manage the Company’s capital requirements, the Company has a planning and budgeting process in place to meet its strategic goals.

In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. Management reviews the capital structure on a regular basis to ensure that the above objectives are met. There have been no changes to the Company’s approach to capital management during the year. There are no externally-imposed restrictions on the Company’s capital.

F-82