10-Q

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

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.

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.

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.

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	)