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, 2021 

 

 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 13, 2021 was 1,555,175.

 

 


 

 

INDEX TO FORM 10-Q FILING

FOR THE SIX MONTHS ENDED MARCH 31, 2021

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

PART I

 

 

 

 

 

 

 

 

 

FINANCIAL INFORMATION

 

3

 

 

 

 

 

Item 1.

 

Financial Statements

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2021 (Unaudited) and September 30, 2020

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Income (Unaudited) for the Three and Six Months Ended March 31, 2021 and 2020

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended March 31, 2021 and 2020

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Six Months Ended March 31, 2021 and 2020

 

6

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Statements (Unaudited)

 

8

 

 

 

 

 

Item 2.

 

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

 

23

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

 

33

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

33

 

 

 

 

 

 

 

PART II

 

 

 

 

 

 

 

 

 

OTHER INFORMATION

 

34

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

34

 

 

 

 

 

Item 1A.

 

Risk Factors

 

34

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

34

 

 

 

 

 

Item 3.

 

Defaults upon Senior Securities

 

34

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

34

 

 

 

 

 

Item 5.

 

Other Information

 

34

 

 

 

 

 

Item 6.

 

Exhibits

 

35

 

 

 

 

 

SIGNATURES

 

36

 

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,  2021

 

 

September 30, 2020

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Cash

 

$

11,928

 

 

$

8,984

 

Trade receivables, net

 

 

21,962

 

 

 

20,121

 

Inventories, net

 

 

61,826

 

 

 

64,525

 

Prepaid expenses and other current assets

 

 

1,254

 

 

 

1,778

 

Debtor in possession assets

 

 

200

 

 

 

520

 

Total current assets

 

 

97,170

 

 

 

95,928

 

Property and equipment, net

 

 

31,660

 

 

 

30,376

 

Right of use asset - operating leases

 

 

28,378

 

 

 

30,894

 

Deposits and other assets

 

 

459

 

 

 

223

 

Deferred taxes

 

 

 

 

 

1,021

 

Intangible assets, net

 

 

850

 

 

 

1,063

 

Goodwill

 

 

37,754

 

 

 

37,754

 

Total assets

 

$

196,271

 

 

$

197,259

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

10,661

 

 

$

9,117

 

Accrued liabilities

 

 

12,260

 

 

 

14,822

 

Income taxes payable

 

 

3,498

 

 

 

736

 

Current portion of lease obligations - operating leases

 

 

7,104

 

 

 

7,176

 

Current portion of long-term debt

 

 

9,878

 

 

 

11,986

 

Current portion of notes payable related parties

 

 

 

 

 

1,297

 

Debtor-in-possession liabilities

 

 

11,842

 

 

 

12,228

 

Total current liabilities

 

 

55,243

 

 

 

57,362

 

Long-term debt, net of current portion

 

 

52,979

 

 

 

63,390

 

Lease obligation long term - operating leases

 

 

25,782

 

 

 

28,101

 

Notes payable related parties, net of current portion

 

 

4,000

 

 

 

4,000

 

Deferred taxes

 

 

312

 

 

 

 

Other non-current obligations

 

 

405

 

 

 

734

 

Total liabilities

 

 

138,721

 

 

 

153,587

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized,

   315,790 and 214,244 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively

 

 

 

 

 

 

Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840

  shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively, with a

  liquidation preference of $0.30 per share outstanding

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized, 1,555,175 and 1,589,101 shares issued

   and outstanding at March 31, 2021 and September 30, 2020, respectively

 

 

2

 

 

 

2

 

Paid in capital

 

 

64,759

 

 

 

64,472

 

Treasury stock common 533,011 shares as of March 31, 2021 and 499,805 shares as of

   September 30, 2020

 

 

(4,481

)

 

 

(4,098

)

Treasury stock Series E preferred 50,000 shares as of March 31, 2021 and

   of September 30, 2020

 

 

(7

)

 

 

(7

)

Accumulated deficit

 

 

(2,282

)

 

 

(16,429

)

Equity attributable to Live stockholders

 

 

57,991

 

 

 

43,940

 

Non-controlling interest

 

 

(441

)

 

 

(268

)

Total stockholders' equity

 

 

57,550

 

 

 

43,672

 

Total liabilities and stockholders' equity

 

$

196,271

 

 

$

197,259

 

 

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 March 31,

 

 

For the Six Months Ended March 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues

 

$

70,890

 

 

$

46,431

 

 

$

133,344

 

 

$

88,432

 

Cost of revenues

 

 

44,400

 

 

 

28,655

 

 

 

84,585

 

 

 

54,030

 

Gross profit

 

 

26,490

 

 

 

17,776

 

 

 

48,759

 

 

 

34,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

12,565

 

 

 

11,701

 

 

 

24,844

 

 

 

22,510

 

Sales and marketing expenses

 

 

2,800

 

 

 

3,007

 

 

 

5,499

 

 

 

5,337

 

Total operating expenses

 

 

15,365

 

 

 

14,708

 

 

 

30,343

 

 

 

27,847

 

Operating income

 

 

11,125

 

 

 

3,068

 

 

 

18,416

 

 

 

6,555

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(1,649

)

 

 

(1,270

)

 

 

(3,119

)

 

 

(2,627

)

Gain on lease settlement, net

 

 

 

 

 

837

 

 

 

 

 

 

223

 

Gain on Payroll Protection Program loan forgiveness

 

 

1,382

 

 

 

 

 

 

1,382

 

 

 

 

Gain on disposal of fixed assets

 

 

(129

)

 

 

 

 

 

 

 

 

 

Gain on bankruptcy settlement

 

 

1,115

 

 

 

 

 

 

1,115

 

 

 

 

Other income (expense)

 

 

79

 

 

 

(125

)

 

 

858

 

 

 

(306

)

Total other (expense) income, net

 

 

798

 

 

 

(558

)

 

 

236

 

 

 

(2,710

)

Income before provision for income taxes

 

 

11,923

 

 

 

2,510

 

 

 

18,652

 

 

 

3,845

 

Provision for income taxes

 

 

3,228

 

 

 

629

 

 

 

4,678

 

 

 

979

 

Net income

 

 

8,695

 

 

 

1,881

 

 

 

13,974

 

 

 

2,866

 

Net loss attributable to non-controlling interest

 

 

39

 

 

 

 

 

 

173

 

 

 

 

Net income attributable to Live stockholders

 

$

8,734

 

 

$

1,881

 

 

$

14,147

 

 

$

2,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

5.62

 

 

$

1.07

 

 

$

9.22

 

 

$

1.61

 

Diluted

 

$

2.66

 

 

$

0.54

 

 

$

4.34

 

 

$

0.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

1,555,175

 

 

 

1,752,908

 

 

 

1,534,287

 

 

 

1,779,706

 

Diluted

 

 

3,284,133

 

 

 

3,462,115

 

 

 

3,263,245

 

 

 

3,488,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Six Months Ended March 31,

 

 

 

2021

 

 

2020

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

13,974

 

 

$

2,866

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,420

 

 

 

2,477

 

Gain on lease settlement, net

 

 

 

 

 

(223

)

Gain or loss on disposal of property and equipment

 

 

(23

)

 

 

106

 

Gain on Payroll Protection Program loan forgiveness

 

 

(1,382

)

 

 

 

Gain on bankruptcy settlement

 

 

(1,115

)

 

 

 

Amortization of debt issuance cost

 

 

612

 

 

 

212

 

Stock based compensation expense

 

 

287

 

 

 

48

 

Warrant extension fair value adjustment

 

 

 

 

 

368

 

Amortization of right-to-use assets

 

 

125

 

 

 

463

 

Change in reserve for uncollectible accounts

 

 

658

 

 

 

421

 

Change in reserve for obsolete inventory

 

 

964

 

 

 

(139

)

Change in deferred income taxes

 

 

1,334

 

 

 

839

 

Change in other

 

 

(148

)

 

 

(218

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Trade receivables

 

 

(2,499

)

 

 

117

 

Inventories

 

 

1,935

 

 

 

4,691

 

Income taxes

 

 

2,763

 

 

 

88

 

Prepaid expenses and other current assets

 

 

529

 

 

 

1,228

 

Deposits and other assets

 

 

(235

)

 

 

128

 

Accounts payable

 

 

2,594

 

 

 

(5,918

)

Accrued liabilities

 

 

(2,882

)

 

 

(983

)

Net cash provided by operating activities

 

 

20,911

 

 

 

6,571

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchase of intangible assets

 

 

 

 

 

(4

)

Lonesome Oak acquisition

 

 

 

 

 

(550

)

Purchase of property and equipment

 

 

(5,469

)

 

 

(1,858

)

Net cash provided by (used in) investing activities

 

 

(5,469

)

 

 

(2,412

)

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Net borrowings (payments) under revolver loans

 

 

(4,554

)

 

 

2,640

 

Purchase of series E preferred treasury stock

 

 

 

 

 

(3

)

Proceeds from issuance of notes payable

 

 

2,258

 

 

 

5,000

 

Purchase of common treasury stock

 

 

(383

)

 

 

(759

)

Payments on related party notes payable

 

 

(2,000

)

 

 

 

Debtor-in-possession cash

 

 

112

 

 

 

(187

)

Payments on notes payable

 

 

(7,931

)

 

 

(12,035

)

Net cash used in financing activities

 

 

(12,498

)

 

 

(5,344

)

 

 

 

 

 

 

 

 

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

 

2,944

 

 

 

(1,185

)

CASH AND CASH EQUIVALENTS, beginning of period

 

 

8,984

 

 

 

2,681

 

CASH AND CASH EQUIVALENTS, end of period

 

$

11,928

 

 

$

1,496

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow disclosures:

 

 

 

 

 

 

 

 

Interest paid

 

$

2,516

 

 

$

1,187

 

Income taxes paid

 

$

369

 

 

$

 

 

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

 

 

Accumulated

Deficit

 

 

Non-controlling Interest

 

 

Total

Equity

 

Balance, December 31, 2020

 

 

214,244

 

 

$

 

 

 

47,840

 

 

$

 

 

 

1,555,175

 

 

$

2

 

 

$

64,489

 

 

$

(7

)

 

$

(4,481

)

 

$

(11,016

)

 

$

(402

)

 

$

48,585

 

Stock based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

270

 

Warrant exercise

 

 

101,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,734

 

 

 

(39

)

 

 

8,695

 

Balance, March 31, 2021

 

 

315,790

 

 

$

 

 

 

47,840

 

 

$

 

 

 

1,555,175

 

 

$

2

 

 

$

64,759

 

 

$

(7

)

 

$

(4,481

)

 

$

(2,282

)

 

$

(441

)

 

$

57,550

 

 

 

 

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

 

 

Total

Equity

 

Balance, December 31, 2019

 

 

214,244

 

 

$

 

 

 

47,840

 

 

$

 

 

 

1,784,310

 

 

$

2

 

 

$

64,219

 

 

$

(7

)

 

$

(2,781

)

 

$

(26,370

)

 

$

35,063

 

Stock based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

19

 

Warrant extension fair value adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

102

 

 

 

 

 

 

 

 

 

 

 

 

102

 

Purchase of common treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(64,868

)

 

 

 

 

 

 

 

 

 

 

 

(416

)

 

 

 

 

 

(416

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,881

 

 

 

1,881

 

Balance, March 31, 2020

 

 

214,244

 

 

$

 

 

 

47,840

 

 

$

 

 

 

1,719,442

 

 

$

2

 

 

$

64,340

 

 

$

(7

)

 

$

(3,197

)

 

$

(24,489

)

 

$

36,649

 

 

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


6


 

 

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

 

 

Accumulated

Deficit

 

 

Non-controlling Interest

 

 

Total

Equity

 

Balance, September 30, 2020

 

 

214,244

 

 

$

 

 

 

47,840

 

 

$

 

 

 

1,589,101

 

 

$

2

 

 

$

64,472

 

 

$

(7

)

 

$

(4,098

)

 

$

(16,429

)

 

$

(268

)

 

$

43,672

 

Stock based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

287

 

Warrant exercise

 

 

101,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of common treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(33,926

)

 

 

 

 

 

 

 

 

 

 

 

(383

)

 

 

 

 

 

 

 

 

(383

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,147