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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 December 31, 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 February 3, 2023 was 3,165,890.

 


 

INDEX TO FORM 10-Q FILING

FOR THE THREE MONTHS ENDED DECEMBER 31, 2022

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

PART I

 

 

 

 

 

 

 

 

 

FINANCIAL INFORMATION

 

3

 

 

 

 

 

Item 1.

 

Financial Statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of December 31, 2022 (Unaudited) and September 30, 2022

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Income (Unaudited) for the Three Months Ended December 31, 2022 and 2021

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended December 31, 2022 and 2021

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three Months Ended December 31, 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

 

30

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

30

 

 

 

 

 

 

 

PART II

 

 

 

 

 

 

 

 

 

OTHER INFORMATION

 

31

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

31

 

 

 

 

 

Item 1A.

 

Risk Factors

 

32

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

32

 

 

 

 

 

Item 3.

 

Defaults upon Senior Securities

 

32

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

32

 

 

 

 

 

Item 5.

 

Other Information

 

32

 

 

 

 

 

Item 6.

 

Exhibits

 

33

 

 

 

 

 

SIGNATURES

 

34

 

2


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

LIVE VENTURES INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts)

 

 

 

December 31, 2022

 

 

September 30, 2022

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Cash

 

$

12,765

 

 

$

4,600

 

Trade receivables, net of allowance for doubtful accounts of $152 at December 31, 2022, and $132 at September 30, 2022

 

 

20,579

 

 

 

25,665

 

Inventories, net of reserves of $2.4 million at December 31, 2022, and September 30, 2022

 

 

97,484

 

 

 

97,659

 

Income taxes receivable

 

 

3,845

 

 

 

4,403

 

Prepaid expenses and other current assets

 

 

2,377

 

 

 

2,477

 

Total current assets

 

 

137,050

 

 

 

134,804

 

Property and equipment, net of accumulated depreciation of $29.1 million at December 31, 2022, and $26.7 million at September 30, 2022

 

 

63,474

 

 

 

64,590

 

Right of use asset - operating leases

 

 

33,388

 

 

 

33,659

 

Deposits and other assets

 

 

820

 

 

 

647

 

Intangible assets, net of accumulated amortization of $2.4 million at December 31, 2022 and $2.1 million at September 30, 2022

 

 

3,591

 

 

 

3,844

 

Goodwill

 

 

40,781

 

 

 

41,093

 

Total assets

 

$

279,104

 

 

$

278,637

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

7,483

 

 

$

10,899

 

Accrued liabilities

 

 

15,124

 

 

 

16,486

 

Income taxes payable

 

 

 

 

 

 

Current portion of lease obligations - operating leases

 

 

8,071

 

 

 

7,851

 

Current portion of lease obligations - finance leases

 

 

214

 

 

 

217

 

Current portion of long-term debt

 

 

26,064

 

 

 

18,935

 

Current portion of notes payable related parties

 

 

2,000

 

 

 

2,000

 

Total current liabilities

 

 

58,956

 

 

 

56,388

 

Long-term debt, net of current portion

 

 

59,889

 

 

 

62,704

 

Lease obligation long term - operating leases

 

 

29,890

 

 

 

30,382

 

Lease obligation long term - finance leases

 

 

19,631

 

 

 

19,568

 

Notes payable related parties, net of current portion

 

 

2,000

 

 

 

2,000

 

Deferred taxes

 

 

8,874

 

 

 

8,818

 

Other non-current obligations

 

 

1,479

 

 

 

1,615

 

Total liabilities

 

 

180,719

 

 

 

181,475

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840
  shares issued and outstanding at December 31, 2022 and September 30, 2022, respectively, with a
  liquidation preference of $
0.30 per share outstanding

 

 

 

 

 

 

Common stock, $0.001 par value, 10,000,000 shares authorized, 3,050,123 and 3,074,833 shares issued
   and outstanding at December 31, 2022 and September 30, 2022, respectively

 

 

2

 

 

 

2

 

Paid in capital

 

 

65,321

 

 

 

65,321

 

Treasury stock common 645,681 and 620,971 shares as of December 31, 2022 and September 30, 2022, respectively

 

 

(7,836

)

 

 

(7,215

)

Treasury stock Series E preferred 50,000 shares as of December 31, 2022 and
   of September 30, 2022, respectively

 

 

(7

)

 

 

(7

)

Retained earnings

 

 

41,353

 

 

 

39,509

 

Equity attributable to Live stockholders

 

 

98,833

 

 

 

97,610

 

Non-controlling interest

 

 

(448

)

 

 

(448

)

Total stockholders' equity

 

 

98,385

 

 

 

97,162

 

Total liabilities and stockholders' equity

 

$

279,104

 

 

$

278,637

 

 

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 December 31,

 

 

 

 

2022

 

 

2021

 

Revenues

 

 

$

68,986

 

 

$

75,158

 

Cost of revenues

 

 

 

47,042

 

 

 

47,542

 

Gross profit

 

 

 

21,944

 

 

 

27,616

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

General and administrative expenses

 

 

 

14,600

 

 

 

14,157

 

Sales and marketing expenses

 

 

 

2,777

 

 

 

3,052

 

Total operating expenses

 

 

 

17,377

 

 

 

17,209

 

Operating income

 

 

 

4,567

 

 

 

10,407

 

Other (expense) income:

 

 

 

 

 

 

 

Interest expense, net

 

 

 

(2,047

)

 

 

(1,017

)

Loss on bankruptcy settlement

 

 

 

 

 

 

(10

)

Other income (expense)

 

 

 

(61

)

 

 

126

 

Total other expense, net

 

 

 

(2,108

)

 

 

(901

)

Income before provision for income taxes

 

 

 

2,459

 

 

 

9,506

 

Provision for income taxes

 

 

 

615

 

 

 

2,960

 

Net income

 

 

 

1,844

 

 

 

6,546

 

Net income attributable to non-controlling interest

 

 

 

 

 

 

 

Net income attributable to Live stockholders

 

 

$

1,844

 

 

$

6,546

 

 

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

 

 

Basic

 

 

$

0.60

 

 

$

4.14

 

Diluted

 

 

$

0.60

 

 

$

2.04

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

 

 

3,059,035

 

 

 

1,582,334

 

Diluted

 

 

 

3,089,741

 

 

 

3,202,057

 

 

 

 

 

 

 

 

 

Dividends declared - series B convertible preferred stock

 

 

$

 

 

$

 

Dividends declared - series E convertible preferred stock

 

 

$

 

 

$

 

Dividends declared - common stock

 

 

$

 

 

$

 

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 Three Months Ended December 31,

 

 

 

2022

 

 

2021

 

Operating Activities:

 

 

 

 

 

 

Net income

 

$

1,844

 

 

$

6,546

 

Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition:

 

 

 

 

 

 

Depreciation and amortization

 

 

2,651

 

 

 

1,549

 

Loss on bankruptcy settlement

 

 

 

 

 

10

 

Amortization of debt issuance cost

 

 

16

 

 

 

24

 

Stock based compensation expense

 

 

 

 

 

18

 

Amortization of right-of-use assets

 

 

540

 

 

 

68

 

Change in reserve for uncollectible accounts

 

 

20

 

 

 

 

Change in reserve for obsolete inventory

 

 

(48

)

 

 

(59

)

Changes in assets and liabilities:

 

 

 

 

 

 

Trade receivables

 

 

5,066

 

 

 

2,413

 

Inventories

 

 

223

 

 

 

(3,016

)

Income taxes payable/receivable

 

 

558

 

 

 

(142

)

Prepaid expenses and other current assets

 

 

100

 

 

 

(431

)

Change in deferred income taxes

 

 

56

 

 

 

1,550

 

Deposits and other assets

 

 

(173

)

 

 

(663

)

Accounts payable

 

 

(3,416

)

 

 

(981

)

Accrued liabilities

 

 

(1,050

)

 

 

(2,655

)

Other Liabilities

 

 

(133

)

 

 

13

 

Net cash provided by operating activities

 

 

6,254

 

 

 

4,244

 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,282

)

 

 

(3,070

)

Net cash used in investing activities

 

 

(1,282

)

 

 

(3,070

)

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Net borrowings (payments) under revolver loans

 

 

(51

)

 

 

2,040

 

Proceeds from issuance of notes payable

 

 

5,709

 

 

 

5,500

 

Payments on notes payable

 

 

(1,362

)

 

 

(3,333

)

Purchase of common treasury stock

 

 

(622

)

 

 

 

Payments on financing leases

 

 

(481

)

 

 

(33

)

Debtor-in-possession cash

 

 

 

 

 

19

 

Net cash provided by financing activities

 

 

3,193

 

 

 

4,193

 

 

 

 

 

 

 

 

Increase in cash

 

 

8,165

 

 

 

5,367

 

Cash, beginning of period

 

 

4,600

 

 

 

4,664

 

Cash, end of period

 

$

12,765

 

 

$

10,031

 

 

 

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

 

 

Interest paid

 

$

1,927

 

 

$

890

 

Income taxes paid

 

$

 

 

$

1,538

 

Noncash financing and investing activities:

 

 

 

 

 

 

Kinetic goodwill adjustment

 

$

312

 

 

$

 

 

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, 2022

 

 

 

 

$

 

 

 

47,840

 

 

$

 

 

 

3,074,833

 

 

$

2

 

 

$

65,321

 

 

$

(7

)

 

$

(7,215

)

 

$

39,509

 

 

$

(448

)

 

$

97,162

 

Purchase of common treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,710

)

 

 

 

 

 

 

 

 

 

 

 

(621

)

 

 

 

 

 

 

 

 

(621

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,844

 

 

 

 

 

 

1,844

 

Balance, December 31, 2022

 

 

 

 

$

 

 

 

47,840

 

 

$

 

 

 

3,050,123

 

 

$

2

 

 

$

65,321

 

 

$

(7

)

 

$

(7,836

)

 

$

41,353

 

 

$

(448

)

 

$

98,385

 

 

 

 

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

 

 

Accumulated
Deficit

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,546

 

 

 

 

 

 

6,546

 

Balance, December 31, 2021

 

 

315,790

 

 

$

 

 

 

47,840

 

 

$

 

 

 

1,582,334

 

 

$

2

 

 

$

65,302

 

 

$

(7

)