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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

 

(Mark One)

 

QUARTERLY Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2022

 

TRANSITION Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from _____________ to _______________

 

Commission File Number 001-33937

 

Live Ventures Incorporated

(Exact name of registrant as specified in its charter)

 

Nevada

85-0206668

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

 

 

325 E. Warm Springs Road, Suite 102

Las Vegas, Nevada

89119

(Address of principal executive offices)

(Zip Code)

 

(702) 997-5968

(Registrant’s telephone number, including area code)

 

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

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.001 par value per share

 

LIVE

 

The Nasdaq Stock Market LLC (The Nasdaq Capital Market)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

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,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 ☐

Accelerated filer

 ☐

Non-accelerated filer

 ☒

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

 

The number of shares of the issuer’s common stock, par value $0.001 per share, outstanding as of August 8, 2022 was 3,079,656.

 


 

INDEX TO FORM 10-Q FILING

FOR THE NINE MONTHS ENDED JUNE 30, 2022

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

PART I

 

 

 

 

 

 

 

 

 

FINANCIAL INFORMATION

 

3

 

 

 

 

 

Item 1.

 

Financial Statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2022 (Unaudited) and September 30, 2021

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended June 30, 2022 and 2021

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended June 30, 2022 and 2021

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended June 30, 2022 and 2021

 

6

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Statements (Unaudited)

 

7

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

23

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

34

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

34

 

 

 

 

 

 

 

PART II

 

 

 

 

 

 

 

 

 

OTHER INFORMATION

 

36

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

36

 

 

 

 

 

Item 1A.

 

Risk Factors

 

36

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

36

 

 

 

 

 

Item 3.

 

Defaults upon Senior Securities

 

36

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

37

 

 

 

 

 

Item 5.

 

Other Information

 

37

 

 

 

 

 

Item 6.

 

Exhibits

 

38

 

 

 

 

 

SIGNATURES

 

39

 

2


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

LIVE VENTURES INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts)

 

 

 

June 30, 2022

 

 

September 30, 2021

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Cash

 

$

3,625

 

 

$

4,664

 

Trade receivables, net of allowance for doubtful accounts of approximately $56,000 at June 30, 2022 and $61,000 at September 30, 2021

 

 

24,974

 

 

 

21,559

 

Inventories, net of reserves of approximately $2.3 million at June 30, 2022, and approximately $1.8 million at September 30, 2021

 

 

95,961

 

 

 

70,747

 

Prepaid expenses and other current assets

 

 

4,596

 

 

 

1,640

 

Debtor in possession assets

 

 

 

 

 

180

 

Total current assets

 

 

129,156

 

 

 

98,790

 

Property and equipment, net of accumulated depreciation of approximately $24.4 million at June 30, 2022, and approximately $20.6 million at September 30, 2021

 

 

52,437

 

 

 

35,632

 

Right of use asset - operating leases

 

 

31,487

 

 

 

30,466

 

Deposits and other assets

 

 

1,043

 

 

 

682

 

Intangible assets, net of accumulated amortization of approximately $2.9 million at June 30, 2022, and approximately $2.2 million at September 30, 2021

 

 

4,991

 

 

 

4,697

 

Goodwill

 

 

43,653

 

 

 

41,471

 

Total assets

 

$

262,767

 

 

$

211,738

 

Liabilities and Stockholders Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

17,016

 

 

$

10,644

 

Accrued liabilities

 

 

13,689

 

 

 

17,048

 

Income taxes payable

 

 

395

 

 

 

876

 

Current portion of lease obligations - operating leases

 

 

7,293

 

 

 

7,202

 

Current portion of lease obligations - finance leases

 

 

376

 

 

 

 

Current portion of long-term debt

 

 

18,418

 

 

 

16,055

 

Current portion of notes payable related parties

 

 

 

 

 

2,000

 

Debtor-in-possession liabilities

 

 

 

 

 

11,135

 

Total current liabilities

 

 

57,187

 

 

 

64,960

 

Long-term debt, net of current portion

 

 

58,475

 

 

 

37,559

 

Lease obligation long term - operating leases

 

 

31,014

 

 

 

29,343

 

Lease obligation long term - finance leases

 

 

7,803

 

 

 

 

Notes payable related parties, net of current portion

 

 

4,000

 

 

 

2,000

 

Deferred taxes

 

 

5,326

 

 

 

2,796

 

Other non-current liabilities

 

 

997

 

 

 

 

Total liabilities

 

 

164,802

 

 

 

136,658

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders equity:

 

 

 

 

 

 

Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized,
   
0 and 315,790 shares issued and outstanding at June 30, 2022 and September 30, 2021, respectively

 

 

 

 

 

 

Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840
  shares issued and outstanding at June 30, 2022 and September 30, 2021, respectively, with a
  liquidation preference of $
0.30 per share outstanding

 

 

 

 

 

 

Common stock, $0.001 par value, 10,000,000 shares authorized, 3,081,456 and 1,582,334 shares issued
   and outstanding at June 30, 2022 and September 30, 2021, respectively

 

 

2

 

 

 

2

 

Paid in capital

 

 

65,321

 

 

 

65,284

 

Treasury stock common 614,348 shares as of June 30, 2022 and 534,520 shares as of September 30, 2021, respectively

 

 

(7,047

)

 

 

(4,519

)

Treasury stock Series E preferred 50,000 shares as of June 30, 2022 and
   of September 30, 2021, respectively

 

 

(7

)

 

 

(7

)

Retained earnings

 

 

40,144

 

 

 

14,768

 

Equity attributable to Live stockholders

 

 

98,413

 

 

 

75,528

 

Non-controlling interest

 

 

(448

)

 

 

(448

)

Total stockholders equity

 

 

97,965

 

 

 

75,080

 

Total liabilities and stockholders equity

 

$

262,767

 

 

$

211,738

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


 

LIVE VENTURES INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(dollars in thousands, except per share)

 

 

 

For the Three Months Ended June 30,

 

 

For the Nine Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

68,269

 

 

$

69,095

 

 

$

213,133

 

 

$

202,439

 

Cost of revenue

 

 

45,920

 

 

 

44,029

 

 

 

138,215

 

 

 

128,614

 

Gross profit

 

 

22,349

 

 

 

25,066

 

 

 

74,918

 

 

 

73,825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

13,407

 

 

 

13,794

 

 

 

40,718

 

 

 

38,638

 

Sales and marketing expenses

 

 

3,078

 

 

 

3,040

 

 

 

9,480

 

 

 

8,539

 

Total operating expenses

 

 

16,485

 

 

 

16,834

 

 

 

50,198

 

 

 

47,177

 

Operating income

 

 

5,864

 

 

 

8,232

 

 

 

24,720

 

 

 

26,648

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(674

)

 

 

(938

)

 

 

(2,549

)

 

 

(4,057

)

Gain on Payroll Protection Program loan forgiveness

 

 

 

 

 

4,768

 

 

 

 

 

 

6,150

 

Gain (loss) on debt extinguishment

 

 

279

 

 

 

 

 

 

(84

)

 

 

 

Loss on disposal of fixed assets

 

 

(443

)

 

 

 

 

 

(444

)

 

 

(132

)

Loss on write-off of ROU asset

 

 

(522

)

 

 

 

 

 

(522

)

 

 

 

Gain on bankruptcy settlement

 

 

 

 

 

650

 

 

 

11,352

 

 

 

1,765

 

Other income (expense)

 

 

333

 

 

 

(76

)

 

 

751

 

 

 

914

 

Total other income (expense), net

 

 

(1,027

)

 

 

4,404

 

 

 

8,504

 

 

 

4,640

 

Income before provision for income taxes

 

 

4,837

 

 

 

12,636

 

 

 

33,224

 

 

 

31,288

 

Provision for income taxes

 

 

1,365

 

 

 

2,703

 

 

 

7,848

 

 

 

7,381

 

Net income

 

 

3,472

 

 

 

9,933

 

 

 

25,376

 

 

 

23,907

 

Net income attributable to non-controlling interest

 

 

 

 

 

5

 

 

 

 

 

 

178

 

Net income attributable to Live stockholders

 

$

3,472

 

 

$

9,938

 

 

$

25,376

 

 

$

24,085

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.12

 

 

$

6.35

 

 

$

8.11

 

 

$

15.41

 

Diluted

 

$

1.11

 

 

$

3.01

 

 

$

8.01

 

 

$

7.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,090,321

 

 

 

1,566,064

 

 

 

3,128,813

 

 

 

1,563,025

 

Diluted

 

 

3,130,925

 

 

 

3,297,854

 

 

 

3,169,258

 

 

 

3,294,815

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

LIVE VENTURES INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(dollars in thousands)

 

 

 

 

For the Nine Months Ended June 30,

 

 

 

2022

 

 

2021

 

Operating Activities:

 

 

 

 

 

 

Net income

 

$

25,376

 

 

$

23,907

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

4,616

 

 

 

5,089

 

Loss on disposal of property and equipment

 

 

443

 

 

 

132

 

Gain on Payroll Protection Program loan forgiveness

 

 

 

 

 

(6,150

)

Gain on bankruptcy settlement

 

 

(11,501

)

 

 

(1,765

)

Amortization of debt issuance cost

 

 

(95

)

 

 

635

 

Stock based compensation expense

 

 

37

 

 

 

230

 

Amortization of right-of-use assets

 

 

8,517

 

 

 

125

 

Write-off of ROU asset

 

 

522

 

 

 

 

Change in reserve for uncollectible accounts

 

 

(6

)

 

 

451

 

Change in reserve for obsolete inventory

 

 

431

 

 

 

1,137

 

Changes in assets and liabilities:

 

 

 

 

 

 

Trade receivables

 

 

(362

)

 

 

295

 

Inventories

 

 

(18,582

)

 

 

934

 

Income taxes payable/receivable

 

 

(481

)

 

 

5,214

 

Prepaid expenses and other current assets

 

 

(450

)

 

 

430

 

Change in deferred income taxes

 

 

2,529

 

 

 

1,340

 

Deposits and other assets

 

 

(362

)

 

 

(359

)

Accounts payable

 

 

3,741

 

 

 

3,010

 

Accrued liabilities

 

 

(3,553

)

 

 

(1,972

)

Change in other

 

 

24

 

 

 

(484

)

Net cash provided by operating activities

 

 

10,844

 

 

 

32,199

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Investment in SW

 

 

 

 

 

(6,000

)

Investment in Kinetic

 

 

(24,355

)

 

 

 

Purchase of property and equipment

 

 

(8,304

)

 

 

(8,470

)

Net cash used in investing activities

 

 

(32,659

)

 

 

(14,470

)

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Net borrowings (payments) under revolver loans

 

 

18,179

 

 

 

(3,247

)

Stock option exercise

 

 

 

 

 

181

 

Proceeds from issuance of notes payable

 

 

20,292

 

 

 

2,258

 

Purchase of common treasury stock

 

 

(2,528

)

 

 

(409

)

Payments on related party notes payable

 

 

 

 

 

(5,500

)

Debtor-in-possession cash

 

 

75

 

 

 

128

 

Payments on financing leases

 

 

(120

)

 

 

 

Payments on notes payable

 

 

(15,122

)

 

 

(9,559

)

Net cash provided by (used in) financing activities

 

 

20,776

 

 

 

(16,148

)

 

 

 

 

 

 

 

Increase (decrease) in cash

 

 

(1,039

)

 

 

1,581

 

Cash, beginning of period

 

 

4,664

 

 

 

8,984

 

Cash, end of period

 

$

3,625

 

 

$

10,565

 

 

 

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

 

 

Interest paid

 

$

2,496

 

 

$

3,481

 

Income taxes paid

 

$

5,795

 

 

$

736

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


 

LIVE VENTURES INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(dollars in thousands)

 

 

 

Series B
Preferred Stock

 

 

Series E
Preferred Stock

 

 

Common Stock

 

 

 

 

 

Series E
Preferred
Stock

 

 

Common
Stock

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-In
Capital

 

 

Treasury
Stock

 

 

Treasury
Stock

 

 

Retained Earnings

 

 

Non-controlling Interest

 

 

Total
Equity

 

Balance, September 30, 2021

 

 

315,790

 

 

$

 

 

 

47,840

 

 

$

 

 

 

1,582,334

 

 

$

2

 

 

$

65,284

 

 

$

(7

)

 

$

(4,519

)

 

$

14,768

 

 

$

(448

)

 

$

75,080

 

Stock based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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