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 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

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.

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.

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.

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		—