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 June 30, 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 August 9, 2021 was 1,570,834.

INDEX TO FORM 10-Q FILING

FOR THE NINEMONTHS ENDED JUNE 30, 2021

TABLE OF CONTENTS


		Page
	PART I

	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and September 30, 2020	3

	Condensed Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended June 30, 2021 and 2020	4

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended June 30, 2021 and 2020	5

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended June 30, 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	24

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35

Item 4.	Controls and Procedures	35

	PART II

	OTHER INFORMATION	37

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults upon Senior Securities	38

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

SIGNATURES		40

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

LIVE VENTURES INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts)


	June 30, 2021			September 30, 2020
	(Unaudited)
Assets
Cash	$	10,565		$	8,984
Trade receivables, net		19,376			20,121
Inventories, net		61,426			64,525
Prepaid expenses and other current assets		1,353			1,778
Debtor in possession assets		162			520
Total current assets		92,882			95,928
Property and equipment, net		32,942			30,376
Right of use asset - operating leases		27,803			30,894
Equity method investment		6,000			—
Deposits and other assets		583			223
Deferred taxes		—			1,021
Intangible assets, net		744			1,063
Goodwill		37,754			37,754
Total assets	$	198,708		$	197,259
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable	$	10,889		$	9,117
Accrued liabilities		13,344			14,822
Income taxes payable		5,948			736
Current portion of lease obligations - operating leases		6,857			7,176
Current portion of long-term debt		8,100			11,986
Current portion of notes payable related parties		—			1,297
Debtor-in-possession liabilities		11,208			12,228
Total current liabilities		56,346			57,362
Long-term debt, net of current portion		44,844			63,390
Lease obligation long term - operating leases		25,212			28,101
Notes payable related parties, net of current portion		4,000			4,000
Deferred taxes		320			—
Other non-current obligations		405			734
Total liabilities		131,127			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 June 30, 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 June 30, 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, 1,570,834 and 1,589,101 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively		2			2
Paid in capital		64,883			64,472
Treasury stock common 533,011 shares as of June 30, 2021 and 499,805 shares as of September 30, 2020		(4,507	)		(4,098	)
Treasury stock Series E preferred 50,000 shares as of June 30, 2021 and of September 30, 2020		(7	)		(7	)
Retained earnings (deficit)		7,656			(16,429	)
Equity attributable to Live stockholders		68,027			43,940
Non-controlling interest		(446	)		(268	)
Total stockholders' equity		67,581			43,672
Total liabilities and stockholders' equity	$	198,708		$	197,259

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 June 30,						For the Nine Months Ended June 30,
	2021			2020			2021			2020
Revenues	$	69,095		$	42,472		$	202,439		$	130,904
Cost of revenues		44,029			25,759			128,614			79,789
Gross profit		25,066			16,713			73,825			51,115

Operating expenses:
General and administrative expenses		13,794			8,221			38,638			30,731
Sales and marketing expenses		3,040			2,502			8,539			7,839
Total operating expenses		16,834			10,723			47,177			38,570
Operating income		8,232			5,990			26,648			12,545
Other (expense) income:
Interest expense, net		(938	)		(1,155	)		(4,057	)		(3,782	)
Gain on lease settlement, net		—			—			—			223
Gain on Payroll Protection Program loan forgiveness		4,768			—			6,150			—
Gain on disposal of fixed assets		—			—			—			—
Gain on bankruptcy settlement		650			—			1,765			—
Other income (expense)		(76	)		173			782			(133	)
Total other (expense) income, net		4,404			(982	)		4,640			(3,692	)
Income before provision for income taxes		12,636			5,008			31,288			8,853
Provision for income taxes		2,703			1,423			7,381			2,402
Net income		9,933			3,585			23,907			6,451
Net loss attributable to non-controlling interest		5			—			178			—
Net income attributable to Live stockholders	$	9,938		$	3,585		$	24,085		$	6,451

Income per share:
Basic	$	6.35		$	2.18		$	15.41		$	3.72
Diluted	$	3.01		$	1.07		$	7.31		$	1.87

Weighted average common shares outstanding:
Basic		1,566,064			1,646,836			1,563,025			1,735,416
Diluted		3,297,854			3,356,043			3,294,815			3,444,623

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 Nine Months Ended June 30,
	2021			2020
OPERATING ACTIVITIES:
Net income	$	23,907		$	6,451
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition:
Depreciation and amortization		5,089			3,954
Gain on lease settlement, net		—			(223	)
Gain or loss on disposal of property and equipment		132			263
Gain on Payroll Protection Program loan forgiveness		(6,150	)		—
Gain on bankruptcy settlement		(1,765	)		—
Amortization of debt issuance cost		635			274
Stock based compensation expense		230			67
Warrant extension fair value adjustment		—			368
Amortization of right-to-use assets		125			985
Change in reserve for uncollectible accounts		451			424
Change in reserve for obsolete inventory		1,137			(84	)
Change in deferred income taxes		1,340			2,190
Change in other		(484	)		(316	)
Changes in assets and liabilities:
Trade receivables		295			2,702
Inventories		934			9,398
Income taxes		5,214			152
Prepaid expenses and other current assets		430			24
Deposits and other assets		(359	)		173
Accounts payable		3,010			(6,266	)
Accrued liabilities		(1,972	)		(2,461	)
Net cash provided by operating activities		32,199			18,075

INVESTING ACTIVITIES:
Purchase of intangible assets		—			(30	)
Lonesome Oak acquisition		—			(550	)
Investment		(6,000	)		—
Note receivable		—			(55	)
Purchase of property and equipment		(8,470	)		(2,357	)
Net cash used in investing activities		(14,470	)		(2,992	)

FINANCING ACTIVITIES:
Net borrowings (payments) under revolver loans		(3,247	)		(5,169	)
Purchase of series E preferred treasury stock		—			(3	)
Stock option exercise		181			—
Proceeds from issuance of notes payable		2,258			9,768
Purchase of common treasury stock		(409	)		(1,433	)
Payments on related party notes payable		(5,500	)		—
Debtor-in-possession cash		128			(86	)
Payments on notes payable		(9,559	)		(15,152	)
Net cash used in financing activities		(16,148	)		(12,075	)

INCREASE IN CASH AND CASH EQUIVALENTS		1,581			3,008
CASH AND CASH EQUIVALENTS, beginning of period		8,984			2,681
CASH AND CASH EQUIVALENTS, end of period	$	10,565		$	5,689

Supplemental cash flow disclosures:
Interest paid	$	3,481		$	3,415
Income taxes paid	$	736		$	—

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			Retained
	Shares		Amount		Shares		Amount		Shares			Amount		Paid-In Capital			Treasury Stock			Treasury Stock			Earnings (Deficit)			Non-controlling Interest			Total Equity
Balance, March 31, 2021		315,790	$	—		47,840	$	—		1,555,175		$	2	$	64,759		$	(7	)	$	(4,481	)	$	(2,282	)	$	(441	)	$	57,550
Stock based compensation		—		—		—		—		—			—		(57	)		—			—			—			—			(57	)
Stock option exercise		—		—		—		—		16,668			—		181			—			—			—			—			181
Purchase of common treasury stock		—		—		—		—		(1,009	)		—		—			—			(26	)		—			—			(26	)
Net income		—		—		—		—		—			—		—			—			—			9,938			(5	)		9,933
Balance, June 30, 2021		315,790	$	—		47,840	$	—		1,570,834		$	2	$	64,883		$	(7	)	$	(4,507	)	$	7,656		$	(446	)	$	67,581


	Series B Preferred Stock				Series E Preferred Stock				Common Stock						Series E Preferred Stock			Common Stock			Retained
	Shares		Amount		Shares		Amount		Shares		Amount		Paid-In Capital		Treasury Stock			Treasury Stock			Earnings (Deficit)			Total Equity
Balance, March 31, 2020		214,244	$	—		47,840	$	—		1,719,442	$	2	$	64,340	$	(7	)	$	(3,197	)	$	(24,489	)	$	36,649
Stock based compensation		—		—		—		—		—		—		19		—			—			—