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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 March 31, 2023

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 May 8, 2023 was 3,165,890.


 

INDEX TO FORM 10-Q FILING

FOR THE SIX MONTHS ENDED March 31, 2023

TABLE OF CONTENTS

 

 

Page

PART I

 

 

FINANCIAL INFORMATION

 

3

 

Item 1.

Financial Statements

 

3

 

 

Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and September 30, 2022

 

3

 

 

Condensed Consolidated Statements of Income (Unaudited) for the Three and Six Months Ended March 31, 2023 and 2022

 

4

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended March 31, 2023 and 2022

 

5

 

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Six Months Ended March 31, 2023 and 2022

 

6

 

 

Notes to the Condensed Consolidated Financial Statements (Unaudited)

 

7

 

 

Item 2.

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

 

27

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

 

37

 

 

Item 4.

Controls and Procedures

 

37

 

 

PART II

 

 

 

 

OTHER INFORMATION

 

38

 

 

Item 1.

Legal Proceedings

 

38

 

 

Item 1A.

Risk Factors

 

39

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

39

 

 

Item 3.

Defaults upon Senior Securities

 

40

 

 

Item 4.

Mine Safety Disclosures

 

40

 

 

Item 5.

Other Information

 

40

 

 

Item 6.

Exhibits

 

41

 

 

SIGNATURES

 

44

2


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

LIVE VENTURES INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per-share amounts)

 

 

 

March 31, 2023

 

 

September 30, 2022

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Cash

 

$

4,168

 

 

$

4,600

 

Trade receivables, net of allowance for doubtful accounts of $482,000 at March 31, 2023 and $132,000 at September 30, 2022

 

 

29,703

 

 

 

25,665

 

Inventories, net of reserves of $2.6 million at March 31, 2023 and $2.4 million at September 30, 2022

 

 

115,050

 

 

 

97,659

 

Income taxes receivable

 

 

4,237

 

 

 

4,403

 

Prepaid expenses and other current assets

 

 

2,748

 

 

 

2,477

 

Total current assets

 

 

155,906

 

 

 

134,804

 

Property and equipment, net of accumulated depreciation of $31.7 million at March 31, 2023, and $26.7 million at September 30, 2022

 

 

67,098

 

 

 

64,590

 

Right of use asset - operating leases

 

 

45,504

 

 

 

33,659

 

Right of use asset - finance leases

 

 

387

 

 

 

 

Deposits and other assets

 

 

1,741

 

 

 

647

 

Intangible assets, net of accumulated amortization of $3.4 million at March 31, 2023 and $2.1 million at September 30, 2022

 

 

25,249

 

 

 

3,844

 

Goodwill

 

 

69,506

 

 

 

41,093

 

Total assets

 

$

365,391

 

 

$

278,637

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

12,420

 

 

$

10,899

 

Accrued liabilities

 

 

21,465

 

 

 

16,486

 

Current portion of lease obligations - operating leases

 

 

10,688

 

 

 

7,851

 

Current portion of lease obligations - finance leases

 

 

341

 

 

 

217

 

Current portion of long-term debt

 

 

30,288

 

 

 

18,935

 

Current portion of notes payable related parties

 

 

 

 

 

2,000

 

Total current liabilities

 

 

75,202

 

 

 

56,388

 

Long-term debt, net of current portion

 

 

67,530

 

 

 

59,704

 

Lease obligation long term - operating leases

 

 

39,611

 

 

 

30,382

 

Lease obligation long term - finance leases

 

 

19,930

 

 

 

19,568

 

Notes payable related parties, net of current portion

 

 

45,675

 

 

 

5,000

 

Deferred taxes

 

 

12,986

 

 

 

8,818

 

Other non-current obligations

 

 

1,222

 

 

 

1,615

 

Total liabilities

 

 

262,156

 

 

 

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 March 31, 2023 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, 3,165,890 and 3,074,833 shares issued
   and outstanding at March 31, 2023 and September 30, 2022, respectively

 

 

2

 

 

 

2

 

Paid in capital

 

 

68,630

 

 

 

65,321

 

Treasury stock common 646,355 and 620,971 shares as of March 31, 2023 and September 30, 2022, respectively

 

 

(7,853

)

 

 

(7,215

)

Treasury stock Series E preferred 80,000 shares as of March 31, 2023 and
   of September 30, 2022, respectively

 

 

(7

)

 

 

(7

)

Retained earnings

 

 

42,911

 

 

 

39,509

 

Equity attributable to Live stockholders

 

 

103,683

 

 

 

97,610

 

Non-controlling interest

 

 

(448

)

 

 

(448

)

Total stockholders' equity

 

 

103,235

 

 

 

97,162

 

Total liabilities and stockholders' equity

 

$

365,391

 

 

$

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 amounts)

 

 

 

For the Three Months Ended March 31,

 

 

For the Six Months Ended March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

$

91,122

 

 

$

69,706

 

 

$

160,108

 

 

$

144,864

 

Cost of revenues

 

 

59,514

 

 

 

44,753

 

 

 

106,556

 

 

 

92,295

 

Gross profit

 

 

31,608

 

 

 

24,953

 

 

 

53,552

 

 

 

52,569

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

22,617

 

 

 

13,154

 

 

 

37,217

 

 

 

27,311

 

Sales and marketing expenses

 

 

4,039

 

 

 

3,350

 

 

 

6,816

 

 

 

6,402

 

Total operating expenses

 

 

26,656

 

 

 

16,504

 

 

 

44,033

 

 

 

33,713

 

Operating income

 

 

4,952

 

 

 

8,449

 

 

 

9,519

 

 

 

18,856

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(3,235

)

 

 

(858

)

 

 

(5,282

)

 

 

(1,875

)

Loss on debt extinguishment

 

 

 

 

 

(363

)

 

 

 

 

 

(363

)

Gain on disposal of fixed assets

 

 

7

 

 

 

(1

)

 

 

7

 

 

 

(1

)

Gain on bankruptcy settlement

 

 

 

 

 

11,362

 

 

 

 

 

 

11,352

 

Other income (expense)

 

 

384

 

 

 

292

 

 

 

323

 

 

 

418

 

Total other expense, net

 

 

(2,844

)

 

 

10,432

 

 

 

(4,952

)

 

 

9,531

 

Income before provision for income taxes

 

 

2,108

 

 

 

18,881

 

 

 

4,567

 

 

 

28,387

 

Provision for income taxes

 

 

550

 

 

 

3,523

 

 

 

1,165

 

 

 

6,483

 

Net income

 

 

1,558

 

 

 

15,358

 

 

 

3,402

 

 

 

21,904

 

Net income attributable to Live stockholders

 

$

1,558

 

 

$

15,358

 

 

$

3,402

 

 

$

21,904

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.50

 

 

$

4.90

 

 

$

1.10

 

 

$

6.96

 

Diluted

 

$

0.49

 

 

$

4.84

 

 

$

1.08

 

 

$

6.87

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,143,911

 

 

 

3,134,540

 

 

 

3,101,007

 

 

 

3,148,059

 

Diluted

 

 

3,184,982

 

 

 

3,172,881

 

 

 

3,137,625

 

 

 

3,187,123

 

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 Six Months Ended March 31,

 

 

 

2023

 

 

2022

 

Operating Activities:

 

 

 

 

 

 

Net income

 

$

3,402

 

 

$

21,904

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

6,297

 

 

 

3,045

 

(Gain)/loss on disposal of property and equipment

 

 

(7

)

 

 

1

 

Gain on bankruptcy settlement

 

 

 

 

 

(11,501

)

Amortization of debt issuance cost

 

 

105

 

 

 

(112

)

Stock based compensation expense

 

 

109

 

 

 

37

 

Amortization of right-of-use assets

 

 

1,397

 

 

 

55

 

Change in reserve for uncollectible accounts

 

 

350

 

 

 

27

 

Change in reserve for obsolete inventory

 

 

169

 

 

 

146

 

Change in deferred income taxes

 

 

4,168

 

 

 

2,257

 

Changes in assets and liabilities:

 

 

 

 

 

 

Trade receivables

 

 

436

 

 

 

(698

)

Inventories

 

 

2,384

 

 

 

(8,658

)

Income taxes payable/receivable

 

 

166

 

 

 

(148

)

Prepaid expenses and other current assets

 

 

3,453

 

 

 

(422

)

Deposits and other assets

 

 

(1,095

)

 

 

(116

)

Accounts payable

 

 

(3,668

)

 

 

3,911

 

Accrued liabilities

 

 

(3,547

)

 

 

(4,500

)

Other Liabilities

 

 

59

 

 

 

23

 

Net cash provided by operating activities

 

 

14,178

 

 

 

5,251

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Acquisition of Flooring Liquidators, net of cash acquired

 

 

(33,929

)

 

 

 

Purchase of property and equipment

 

 

(2,900

)

 

 

(7,503

)

Net cash used in investing activities

 

 

(36,829

)

 

 

(7,503

)

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Net borrowings (payments) under revolver loans

 

 

12,312

 

 

 

4,887

 

Proceeds from issuance of notes payable

 

 

8,449

 

 

 

9,000

 

Payments on notes payable

 

 

(3,679

)

 

 

(8,020

)

Proceeds from issuing related party notes payable

 

 

7,000

 

 

 

 

Payments for debt acquisition costs

 

 

(96

)

 

 

 

Purchase of common treasury stock

 

 

(639

)

 

 

(2,084

)

Payments on financing leases

 

 

(1,077

)

 

 

(80

)

Payments on seller financing arrangements

 

 

(51

)

 

 

 

Debtor-in-possession cash

 

 

 

 

 

75

 

Net cash provided by financing activities

 

 

22,219

 

 

 

3,778

 

 

 

 

 

 

 

Increase in cash

 

 

(432

)

 

 

1,526

 

Cash, beginning of period

 

 

4,600

 

 

 

4,664

 

Cash, end of period

 

$

4,168

 

 

$

6,190

 

 

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

 

 

Interest paid

 

$

4,602

 

 

$

1,823

 

Income taxes paid

 

$

43

 

 

$

4,458

 

Noncash financing and investing activities:

 

 

 

 

 

 

Noncash items related to Flooring Liquidators acquisition

 

$

36,900

 

 

$

 

 

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