☒ QUARTERLY Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

☐ TRANSITION Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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.

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 8,~~May 6, 2022 was ~~1,582,334~~3,095,616.


	December 31, 2021			September 30, 2021			March 31, 2022			September 30, 2021
	(Unaudited)						(Unaudited)
Assets
Cash	$	10,031		$	4,664		$	6,190		$	4,664
Trade receivables, net of allowance for doubtful accounts of $61 at December 31, 2021 and September 30, 2021		19,117			21,559
Inventories, net of reserves of approximately $1.9 million at December 31, 2021, and approximately $1.8 million at September 30, 2021		73,898			70,747
Trade receivables, net of allowance for doubtful accounts of approximately $34,000 at March 31, 2022 and $61,000 at September 30, 2021								22,204			21,559
Inventories, net of reserves of approximately $1.7 million at March 31, 2022, and approximately $1.8 million at September 30, 2021								79,364			70,747
Prepaid expenses and other current assets		2,042			1,640			2,064			1,640
Debtor in possession assets		143			180			—			180
Total current assets		105,231			98,790			109,822			98,790
Property and equipment, net of accumulated depreciation of approximately $21.8 million at December 31, 2021, and approximately $20.6 million at September 30, 2021		37,440			35,632
Property and equipment, net of accumulated depreciation of approximately $23.1 million at March 31, 2022, and approximately $20.6 million at September 30, 2021								40,585			35,632
Right of use asset - operating leases		29,090			30,466			28,415			30,466
Deposits and other assets		1,345			682			798			682
Intangible assets, net of accumulated amortization of approximately $2.5 million at December 31, 2021 and approximately $2.2 million at September 30, 2021		4,410			4,697
Intangible assets, net of accumulated amortization of approximately $2.7 million at March 31, 2022, and approximately $2.2 million at September 30, 2021								4,201			4,697
Goodwill		41,471			41,471			41,471			41,471
Total assets	$	218,987		$	211,738		$	225,292		$	211,738
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable	$	9,713		$	10,644		$	14,597		$	10,644
Accrued liabilities		14,304			17,048			12,117			17,048
Income taxes payable		734			876			728			876
Current portion of lease obligations - operating leases		7,196			7,202			7,311			7,202
Current portion of long-term debt		17,553			16,055			20,032			16,055
Current portion of notes payable related parties		2,000			2,000			2,000			2,000
Debtor-in-possession liabilities		11,184			11,135			—			11,135
Total current liabilities		62,684			64,960			56,785			64,960
Long-term debt, net of current portion		40,305			37,559			39,359			37,559
Lease obligation long term - operating leases		28,008			29,343			27,158			29,343
Notes payable related parties, net of current portion		2,000			2,000			2,000			2,000
Deferred taxes		4,346			2,796			5,053			2,796
Total liabilities		137,343			136,658			130,355			136,658
Commitments and contingencies
Stockholders' equity:
Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized, 315,790 shares issued and outstanding at December 31, 2021 and September 30, 2021, respectively		0			0
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at December 31, 2021 and September 30, 2021, respectively, with a liquidation preference of $0.30 per share outstanding		0			0
Common stock, $0.001 par value, 10,000,000 shares authorized, 1,582,334 and 1,582,334 shares issued and outstanding at December 31, 2021 and September 30, 2021, respectively		2			2
Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized, 0 and 315,790 shares issued and outstanding at March 31, 2022 and September 30, 2021, respectively								0			0
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at March 31, 2022 and September 30, 2021, respectively, with a liquidation preference of $0.30 per share outstanding								0			0
Common stock, $0.001 par value, 10,000,000 shares authorized, 3,095,616 and 1,582,334 shares issued and outstanding at March 31, 2022 and September 30, 2021, respectively								2			2
Paid in capital		65,302			65,284			65,321			65,284
Treasury stock common 534,520 shares as of December 31, 2021 and September 30, 2021, respectively		(4,519	)		(4,519	)
Treasury stock Series E preferred 50,000 shares as of December 31, 2021 and of September 30, 2021, respectively		(7	)		(7	)
Treasury stock common 600,188 shares as of March 31, 2022 and 534,520 shares as of September 30, 2021, respectively								(6,603	)		(4,519	)
Treasury stock Series E preferred 50,000 shares as of March 31, 2022 and of September 30, 2021, respectively								(7	)		(7	)
Retained earnings		21,314			14,768			36,672			14,768
Equity attributable to Live stockholders		82,092			75,528			95,385			75,528
Non-controlling interest		(448	)		(448	)		(448	)		(448	)
Total stockholders' equity		81,644			75,080			94,937			75,080
Total liabilities and stockholders' equity	$	218,987		$	211,738		$	225,292		$	211,738

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


	For the Three Months Ended December 31,						For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2021			2020			2022			2021			2022			2021
Revenues	$	75,158		$	62,454
Cost of revenues		47,542			40,185
Revenue							$	69,706		$	70,890		$	144,864		$	133,344
Cost of revenue								44,753			44,400			92,295			84,585
Gross profit		27,616			22,269			24,953			26,490			52,569			48,759

Operating expenses:
General and administrative expenses		14,157			12,279			13,154			12,565			27,311			24,844
Sales and marketing expenses		3,052			2,699			3,350			2,800			6,402			5,499
Total operating expenses		17,209			14,978			16,504			15,365			33,713			30,343
Operating income		10,407			7,291			8,449			11,125			18,856			18,416
Other (expense) income:
Other income (expense):
Interest expense, net		(1,017	)		(1,470	)		(858	)		(1,649	)		(1,875	)		(3,119	)
Gain on disposal of fixed assets		0			129
Loss on bankruptcy settlement		(10	)		0
Other income		126			779
Total other expense, net		(901	)		(562	)
Gain on Payroll Protection Program loan forgiveness								0			1,382			0			1,382
Loss on debt extinguishment								(363	)		0			(363	)		0
Loss on disposal of fixed assets								(1	)		0			(1	)		0
Gain on bankruptcy settlement								11,362			1,115			11,352			1,115
Other income (expense)								292			(50	)		418			858
Total other income, net								10,432			798			9,531			236
Income before provision for income taxes		9,506			6,729			18,881			11,923			28,387			18,652
Provision for income taxes		2,960			1,450			3,523			3,228			6,483			4,678
Net income		6,546			5,279			15,358			8,695			21,904			13,974
Net income attributable to non-controlling interest		—			134			—			39			—			173
Net income attributable to Live stockholders	$	6,546		$	5,413		$	15,358		$	8,734		$	21,904		$	14,147

Income per share:
Basic	$	4.14		$	3.45		$	4.90		$	5.62		$	6.96		$	9.22
Diluted	$	2.04		$	1.63		$	4.84		$	2.66		$	6.87		$	4.34

Weighted average common shares outstanding:
Basic		1,582,334			1,568,213			3,134,540			1,555,175			3,148,059			1,534,287
Diluted		3,202,057			3,319,088			3,172,881			3,284,133			3,187,124			3,263,245

Dividends declared - series B convertible preferred stock	$	0		$	0
Dividends declared - series E convertible preferred stock	$	0		$	0
Dividends declared - common stock	$	0		$	0

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


	For the Three Months Ended December 31,						For the Six Months Ended March 31,
	2021			2020			2022			2021
Operating Activities:
Net income	$	6,546		$	5,279		$	21,904		$	13,974
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,549			1,714			3,045			3,420
Gain or loss on disposal of property and equipment		0			(129	)		1			(23	)
Loss on bankruptcy settlement		10			0
Gain on Payroll Protection Program loan forgiveness								0			(1,382	)
Gain on bankruptcy settlement								(11,501	)		(1,115	)
Amortization of debt issuance cost		24			266			(112	)		612
Stock based compensation expense		18			17			37			287
Amortization of right-of-use assets		68			106			55			125
Change in reserve for uncollectible accounts		0			658			27			658
Change in reserve for obsolete inventory		(59	)		590			146			964
Changes in assets and liabilities:
Trade receivables		2,413			1,909			(698	)		(2,499	)
Inventories		(3,016	)		(716	)		(8,658	)		1,935
Income taxes payable/receivable		(142	)		70			(148	)		2,763
Prepaid expenses and other current assets		(431	)		478			(422	)		529
Change in deferred income taxes		1,550			1,290			2,257			1,334
Deposits and other assets		(663	)		(366	)		(116	)		(235	)
Accounts payable		(981	)		(898	)		3,911			2,594
Accrued liabilities		(2,655	)		(2,256	)		(4,500	)		(2,882	)
Change in other		13			(344	)		23			(148	)
Net cash provided by operating activities		4,244			7,668			5,251			20,911

Investing Activities:
Purchase of property and equipment		(3,070	)		(3,258	)		(7,503	)		(5,469	)
Net cash used in investing activities		(3,070	)		(3,258	)		(7,503	)		(5,469	)

Financing Activities:
Net borrowings (payments) under revolver loans		2,040			(3,289	)		4,887			(4,554	)
Proceeds from issuance of notes payable		5,500			2,130			9,000			2,258
Purchase of common treasury stock		0			(383	)		(2,084	)		(383	)
Payments on related party notes payable								—			(2,000	)
Debtor-in-possession cash		19			92			75			112
Payments on financing leases		(33	)		0			(80	)		—
Payments on notes payable		(3,333	)		(4,712	)		(8,020	)		(7,931	)
Net cash provided by (used in) financing activities		4,193			(6,162	)		3,778			(12,498	)

Increase (decrease) in cash		5,367			(1,752	)
Increase in cash								1,526			2,944
Cash, beginning of period		4,664			8,984			4,664			8,984
Cash, end of period	$	10,031		$	7,232		$	6,190		$	11,928

Supplemental cash flow disclosures:
Interest paid	$	890		$	1,223		$	1,823		$	2,516
Income taxes paid	$	1,538		$	0		$	4,458		$	369
Noncash financing and investing activities:
Settlement of debt in exchange for property and equipment	$	0		$	1,000

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


	Series B Preferred Stock				Series E Preferred Stock				Common Stock						Series E Preferred Stock			Common Stock										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		Shares			Amount		Shares		Amount		Shares			Amount		Paid-In Capital		Treasury Stock			Treasury Stock			Retained Earnings		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		315,790		$	—		47,840	$	—		1,582,334		$	2	$	65,284	$	(7	)	$	(4,519	)	$	14,768	$	(448	)	$	75,080
Stock based compensation		—		—		—		—		—		—		18		—			—			—		—			18		—			—		—		—		—			—		18		—			—			—		—			18
Net income		—		—		—		—		—		—		—		—			—			6,546		—			6,546		—			—		—		—		—			—		—		—			—			6,546		—			6,546
Balance, December 31, 2021		315,790	$	—		47,840	$	—		1,582,334	$	2	$	65,302	$	(7	)	$	(4,519	)	$	21,314	$	(448	)	$	81,644		315,790			—		47,840		—		1,582,334			2		65,302		(7	)		(4,519	)		21,314		(448	)		81,644
Stock based compensation																													—			—		—		—		—			—		19		—			—			—		—			19
Purchase of common treasury stock																													—			—		—		—		(65,668	)		—		—		—			(2,084	)		—		—			(2,084	)
Conversion of Series B preferred stock																													(315,790	)		—		—		—		1,578,950			—		—		—			—			—					—
Net income																													—			—		—		—		—			—		—		—			—			15,358		—			15,358
Balance, March 31, 2022																													—		$	—		47,840	$	—		3,095,616		$	2	$	65,321	$	(7	)	$	(6,603	)	$	36,672	$	(448	)	$	94,937


	Series B Preferred Stock				Series E Preferred Stock				Common Stock							Series E Preferred Stock			Common Stock												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			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			214,244	$	—		47,840	$	—		1,589,101		$	2	$	64,472	$	(7	)	$	(4,098	)	$	(16,429	)	$	(268	)	$	43,672
Stock based compensation		—		—		—		—		—			—		17		—			—			—						17			—		—		—		—		—			—		17		—			—			—						17
Warrant exercise																																101,546		—		—		—		—			—		—		—			—			—						—
Purchase of common treasury stock		—		—		—		—		(33,926	)		—		—		—			(383	)		—						(383	)		—		—		—		—		(33,926	)		—		—		—			(383	)		—						(383	)
Net income		—		—		—		—		—			—		—		—			—			5,413			(134	)		5,279			—		—		—		—		—			—		—		—			—			5,413			(134	)		5,279
Balance, December 31, 2020		214,244	$	—		47,840	$	—		1,555,175		$	2	$	64,489	$	(7	)	$	(4,481	)	$	(11,016	)	$	(402	)	$	48,585			315,790		—		47,840		—		1,555,175			2		64,489		(7	)		(4,481	)		(11,016	)		(402	)		48,585
Stock based compensation																																—		—		—		—		—			—		270		—			—			—						270
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

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

FOR THE ~~THREE~~SIX MONTHS ENDED ~~DECEMBER~~MARCH 31, ~~2021~~2022 AND ~~2020~~2021

Note 2: Summary of Significant Accounting Policies

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company, its majority owned subsidiaries over which the Company exercises control, and a variable interest ~~entity.~~entity (“VIE”). The Company records a non-controlling interest within stockholders’ equity for the portion of the entity’s equity attributed to the consolidated entities that are not wholly owned. All intercompany accounts and transactions have been eliminated in consolidation. These reclassifications have no material effect on the reported financial results.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at

the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates made in connection with the accompanying unaudited condensed consolidated financial statements include the estimated reserve for doubtful accounts, the estimated reserve for excess and obsolete inventory, estimated warranty reserve, estimated fair value for stock-based compensation, fair values in connection with the analysis of goodwill, other intangibles and long-lived assets for impairment, valuation allowance against deferred tax assets, and estimated useful lives for intangible assets and property and equipment.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which introduces a new approach to estimate credit losses on certain types of financial instruments based on expected losses instead of incurred losses. It also modified the impairment model for available-for-sale debt securities and provided a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU No. 2016-13 is effective for smaller reporting companies for fiscal years beginning after December 15, 2022 and the interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of adopting this new accounting standard on its consolidated financial statements and related ~~disclosures.~~disclosures; however, adoption of this ASU is anticipated to have no material impact on the Company's financial statements.

In December 2019, the FASB issued ASU No. 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 is part of the FASB’s overall simplification initiative and seeks to simplify the accounting for income taxes by updating certain guidance and removing certain exceptions. The updated guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted. The Company ~~has~~ implemented this update ~~in the current quarter.~~as of December 31, 2021. The adoption of this ASU had no material impact on the Company’s consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04 - Reference Rate Reform (Topic 848), codified as ASC 848 (“ASC 848”). The purpose of ASC 848 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates to alternative reference rates. ASC 848 applies only to contracts, hedging relationships, and other transactions that reference a reference rate expected to be discontinued because of reference rate reform. Effective December 31, 2021, the Secured Overnight Financing Rate (“SOFR”) replaced the USD London Interbank-Offered Rate (“LIBOR”) for most financial benchmarking. The guidance may be applied upon issuance of ASC 848 through December 31, 2022. The Company is currently assessing the impact of adopting this new accounting standard on its consolidated financial statements and related ~~disclosures.~~disclosures, however, adoption of this ASU is anticipated to have no material impact on the Company's financial statements.

In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This update provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. This update is effective for the Company’s fiscal years beginning after December 15, 2021. The Company is currently assessing the impact of adopting this new accounting standard on its ~~Consolidated Financial Statements~~consolidated financial statements and related ~~disclosures.~~disclosures, however, adoption of this ASU is anticipated to have no material impact on the Company's financial statements.

Note 3: Leases

The Company leases retail stores, warehouse facilities, and office space. These assets and properties are generally leased under noncancelable agreements that expire at various dates through 2040 with various renewal options for additional periods. The agreements, which have been classified as operating leases, generally provide for ~~minimum~~ minimum—and in some cases ~~percentage~~ percentage—rent, and require us to pay all insurance, taxes, and other maintenance costs. As a result, the Company recognizes assets and liabilities for all leases with lease terms greater than 12 months. The amounts that are recognized reflect the present value of remaining lease payments for all leases. The discount rate used is an estimate of the Company’s blended incremental borrowing rate, based on information available associated with each subsidiary’s debt outstanding at lease commencement. In considering the lease asset value, the Company considers fixed and variable payment terms, prepayments, and options to extend, terminate, or purchase. Renewal, termination, or purchase options only affect the lease term used for determining lease asset value ~~only~~ if the option is reasonably certain to be exercised.

As of ~~December~~March 31, ~~2021,~~2022, the weighted average remaining lease term is ~~8.37~~8.09 years and our weighted average discount rate is ~~6.44~~6.45%. Total cash payments for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 were approximately $~~2.5~~4.9 million and $~~2.2~~1.7 million, respectively. Additionally, we obtained right-of-use assets in exchange for lease liabilities of approximately $~~1.0~~2.8 million upon commencement of operating leases during the ~~three~~six months ended ~~December~~March 31, ~~2021.~~2022.

The following table details our right of use assets and lease liabilities as of ~~December~~March 31, ~~2021~~2022 and September 30, 2021 ~~(000's)~~(in $000's):


	December 31, 2021		September 30, 2021		March 31, 2022		September 30, 2021
Right of use asset - operating leases	$	29,090	$	30,466	$	28,415	$	30,466
Operating lease liabilities:
Current		7,196		7,202		7,311		7,202
Long term		28,008		29,343		27,158		29,343

Total present value of future lease payments as of ~~December~~March 31, ~~2021:~~2022 (in $000's):


Twelve months ended June 30,
2022	$	9,194
Twelve months ended March 31,
2023		7,466		$	9,353
2024		5,773			7,613
2025		4,263			5,738
2026		2,885			4,046
2027					2,881
Thereafter		12,511			14,571
Total		42,092			44,202
Less implied interest		(6,888	)		(9,733	)
Present value of payments	$	35,204		$	34,469

During the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, the Company recorded 0 gain or loss settlements, 0r did it record impairment charges relating to any of its leases.

Note 8: ~~Long Term~~Long-Term Debt

Long-term debt as of ~~December~~March 31, ~~2021~~2022 and September 30, 2021 consisted of the following (in ~~000's)~~$000's):


	December 31, 2021			September 30, 2021			March 31, 2022			September 30, 2021
Bank of America Revolver Loan	$	1,490		$	—		$	3,729		$	—
Encina Business Credit Revolver Loan		13,938			12,735			—			12,735
Texas Capital Bank Revolver Loan		8,142			8,794			8,594			8,794
Fifth-Third Bank Revolver								14,094			—
Fifth-Third Bank Term Loan								3,417			—
Encina Business Credit Term Loan		1,233			1,319			—			1,319
Note Payable to the Sellers of Vintage Stock		2,000			4,200			—			4,200
Note #3 Payable to Banc of America Leasing & Capital LLC		1,180			1,320			1,039			1,320
Note #4 Payable to Banc of America Leasing & Capital LLC		363			406			319			406
Note #5 Payable to Banc of America Leasing & Capital LLC		1,843			1,985			1,699			1,985
Note #6 Payable to Banc of America Leasing & Capital LLC		582			618			545			618
Note #7 Payable to Banc of America Leasing & Capital LLC		3,978			4,121			3,834			4,121
Note #8 Payable to Banc of America Leasing & Capital LLC		2,834			2,943			2,724			2,943
Note #9 Payable to Banc of America Leasing & Capital LLC		5,500			—			5,274			—
Note Payable to Extruded Fibers		400			700			—			700
Note Payable to the Sellers of Precision Marshall		2,500			2,500			2,500			2,500
Note Payable to Store Capital Acquisitions, LLC		9,200			9,209			9,202			9,209
Note payable to individuals, interest at 10-11% per annum, payable on a 90 day written notice, unsecured		207			207			207			207
Note payable to individual, interest at 10% per annum, payable on a 90 day written notice, unsecured		500			500			500			500
Note payable to individual, noninterest bearing, monthly payments of $19 through March 2023		391			472			306			472
Note payable to individuals, interest at 7% per annum, unsecured		198			198			198			198
Note payable RSSI/(VSSS)		130			130			130			130
Note Payable to JCM Holdings		1,790			1,833			1,746			1,833
Total notes payable		58,399			54,190			60,057			54,190
Less unamortized debt issuance costs		(541	)		(576	)		(666	)		(576	)
Net amount		57,858			53,614			59,391			53,614
Less current portion		(17,553	)		(16,055	)		(20,032	)		(16,055	)
Total long-term debt	$	40,305		$	37,559		$	39,359		$	37,559

Future maturities of long-term debt at ~~December~~March 31, ~~2021,~~2022, are as follows which does not include related party debt separately ~~stated:~~stated (in $000's):


Twelve months ending December 31,
2022	$	17,553
Twelve months ending March 31,
2023		20,827	$	20,162
2024		3,264		4,161
2025		2,483		3,642
2026		3,087		2,969
2027				19,048
Thereafter		11,185		10,075
Total future maturities of long-term debt	$	58,399	$	60,057

Bank of America Revolver Loan

On January 31, 2020, Marquis entered into an amended $25.0 million revolving credit agreement (“BofA Revolver”) with Bank of America Corporation (“BofA”). The BofA Revolver is a five-year, asset-based facility that is secured by substantially all of Marquis’ assets. Availability under the BofA Revolver is subject to a monthly borrowing base calculation. Marquis’ ability to borrow under the BofA Revolver is subject to the satisfaction of certain conditions, including meeting all loan covenants under the credit agreement with BofA. As of ~~December~~March 31, ~~2021,~~2022, the outstanding balance was approximately $~~1.5~~3.7 million.

Loans with Encina Business Credit, LLC

On July 14, 2020, Precision Marshall entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC, as Agent (the “Agent”). The Loan Agreement provides for secured revolving loans (the “Encina Revolver Loans”) in a principal amount not to exceed the lesser of (i) $23.5 million and (ii) a borrowing base equal to the sum of (a) 85% of Precision's eligible accounts receivable, plus (b) 85% of Precision's eligible inventory, subject to an eligible inventory sublimit that begins at $14.0 million and declines to $12.0 million during the term of the Loan Agreement, minus (c) customary reserves. The Encina Revolver Loans mature on July 14, 2023. ~~As of December 31, 2021 , the balance outstanding was approximately $13.9~~ ~~million.~~ On January 20, 2022, the ~~Company~~Precision Marshall refinanced these loans ~~and the balance outstanding was repaid.~~with Fifth-Third Bank (see below). The refinanced credit facility, totaling $29 million, is comprised of $23.0 million in revolving credit, $3.5 million in machinery and equipment (“M&E”) lending, and $2.5 million for capital expenditure (“Capex”) lending.

Loan with Fifth Third Bank

On January 20, 2022, Precision Marshall refinanced its Encina Business Credit loans with Fifth Third Bank (see above), and the balance outstanding was repaid. The refinanced credit facility, totaling $29 million, is comprised of $23.0 million in revolving credit, $3.5 million in M&E lending, and $2.5 million for capital Capex lending. Advances under the new credit facility will bear interest at the 30-day SOFR plus 200 basis points for lending under the revolving facility, and 30-day SOFR plus 225 basis points for M&E and Capex lending (Effective December 31, 2021, SOFR replaced the USD LIBOR for most financial benchmarking). The refinancing of the Borrower’s existing credit facility reduces interest costs and improves the availability and liquidity of funds by approximately $3.0 million at the close. The facility terminates on January 20, 2027, unless terminated earlier in accordance with its terms. As of March 31, 2022, the outstanding balance on the revolving loan was approximately $14.1 million, and the outstanding balance on the term note was approximately $3.4 million.

Texas Capital Bank Revolver Loan

On November 3, 2016, Vintage Stock entered into an amended $12.0 million credit agreement with Texas Capital Bank (“TCB Revolver”). The TCB Revolver is a five-year, asset-based facility that is secured by substantially all of Vintage Stock’s assets. Availability under the TCB Revolver is subject to a monthly borrowing base calculation. The TCB Revolver matures, as amended September 30, 2020, on November 3, 2023. As of ~~December~~March 31, ~~2021,~~2022, the balance outstanding was approximately $~~8.1~~8.6 million.

Note payable to JCM Holdings

During October 2020, Marquis purchased a manufacturing facility for $2.5 million. Marquis had previously been leasing this facility. Additionally, Marquis entered into a $2.0 million note in favor of the seller of the facility for the balance of the purchase price, which note is secured by the facility. The note bears interest at 6%, and ~~principal~~matures in January 2030. Principal and interest payments are due ~~monthly. The~~monthly, and the note is fully amortized ~~and matures~~ ~~January 2030~~.at maturity. As of ~~December~~March 31, ~~2021,~~2022, the remaining principal balance was approximately $~~1.8~~1.7 million.

Equipment Loans

On June 20, 2016 and August 5, 2016, Marquis entered into a transaction that provided for a master agreement and separate loan schedules (the “Equipment Loans”) with Banc of America Leasing & Capital, LLC that provided for the following during the ~~three~~six months ended ~~December~~March 31, ~~2021:~~2022:

~~Note #9 is for approximately~~In December 2021, Marquis funded the acquisition of $5.5 million of new equipment under note #9 of its master agreement. The note, which is secured by the equipment, ~~is due~~matures December 2026, and is payable in 60 monthly ~~payments~~installments of $92,000 beginning January 2022, bearing interest at 3.75%.

Loan Covenant Compliance

As of ~~December~~March 31, ~~2021,~~2022, the Company was in compliance with all covenants under its existing revolving and other loan agreements.

Note 10: Stockholders’ Equity

Series B Convertible Preferred Stock

In March 2022, the existing 315,790 shares of Series B Convertible Preferred Stock were converted into 1,578,950 common shares, in accordance with Series B Convertible Preferred Stock agreements. Of the 315,790 existing shares of Series B Convertible Preferred Stock converted, Isaac Capital Group LLC (“ICG”) held 259,902 of these shares, and converted them into 1,299,510 common shares. Jon Isaac, the Company's President and Chief Executive Officer, is the President and sole member of ICG, and, accordingly, has sole voting and dispositive power with respect to these shares. As of ~~December~~March 31, ~~2021~~2022 and September 30, 2021, there were ~~315,790~~0 and 315,790 shares of Series B Convertible Preferred Stock issued and outstanding, respectively.

Series E Convertible Preferred Stock

As of ~~December~~March 31, ~~2021,~~2022, and September 30, 2021, ~~respectively,~~ there ~~were~~ ~~47,840~~ ~~and~~was 47,840 shares of Series E Convertible Preferred Stock, issued and ~~outstanding.~~outstanding, respectively.

Treasury Stock

As of ~~December~~March 31, ~~2021~~2022 and September 30, 2021, the Company had ~~534,520~~600,188 and 534,520 shares of Treasury Stock, respectively. During the ~~three~~six months ended ~~December~~March 31, ~~2020,~~2022 and 2021, respectively, the Company purchased65,668 and 33,926 shares of its common stock on the open market for approximately $~~383,000~~2.1 million and approximately $400,000, respectively.~~NaN~~ ~~shares were acquired for the three months ended December 31, 2021.~~

Note 11: Stock-Based Compensation

Our 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) authorizes the issuance of distribution equivalent rights, incentive stock options, non-qualified stock options, performance stock, performance units, restricted ordinary shares, restricted stock units, stock appreciation rights, tandem stock appreciation rights and unrestricted ordinary shares to our directors, officer, employees, consultants and advisors. The Company has reserved up to 300,000 shares of common stock for issuance under the 2014 Plan.

From time to time, the Company grants stock options to directors, officers, and employees. These awards are valued at the grant date by determining the fair value of the instruments. The value of each award is amortized on a straight-line basis over the requisite service period.

The following table summarizes stock option activity for the fiscal year ended September 30, 2021 and the ~~three~~six months ended ~~December~~March 31, ~~2021:~~2022:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Intrinsic Value		Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Intrinsic Value
Outstanding at September 30, 2020		119,168		$	15.76		2.71	$	0		119,168		$	15.76		2.71	$	0
Granted		7,500			40.92						7,500			40.92
Exercised		(28,668	)	11.25							(28,668	)	11.25
Forfeited		(10,500	)	20.56							(10,500	)	20.56
Outstanding at September 30, 2021		87,500		$	18.81		1.78	$	1,626		87,500		$	18.81		1.78	$	1,626
Exercisable at September 30, 2021		78,500		$	16.29		1.72	$	1,626		78,500		$	16.29		1.72	$	1,626

Outstanding at September 30, 2021		87,500		$	18.81		1.78	$	1,626		87,500		$	18.81		1.78	$	1,626
Granted		0		$	0						0		$	0
Exercised		0		$	0						0		$	0
Outstanding at December 31, 2021		87,500		$	18.81		1.52	$	1,223
Exercisable at December 31, 2021		82,500		$	17.53		1.48	$	1,223
Outstanding at March 31, 2022											87,500		$	18.81		1.28	$	2,193
Exercisable at March 31, 2022											82,500		$	17.53		1.23	$	2,144

The Company recognized compensation expense of approximately $~~18,791~~19,000 and $~~17,000~~270,000 during the three months ended ~~December~~March 31, 2022 and 2021, respectively, and ~~2020,~~approximately $37,000 and $287,000 during the six months ended March 31, 2022 and 2021, respectively, related to stock option awards granted to certain employees and officers based on the grant date fair value of the awards, and the revaluation for existing options whereby the expiration date was extended.

~~At December~~As of March 31, ~~2021,~~2022, the Company had $~~18,792~~0 of unrecognized compensation expense associated with stock option ~~awards which the Company expects to recognize as compensation expense through March 2022.~~awards.

The following table summarizes information about the Company’s non-vested shares outstanding as of ~~December~~March 31, ~~2021:~~2022:


Non-vested Shares	Number of Shares			Average Grant-Date Fair Value		Number of Shares			Average Grant-Date Fair Value
Non-vested at September 30, 2021		9,000		$	17.57		9,000		$	17.57
Granted		0		$	0		0		$	0
Vested		(4,000	)	$	20.74		(4,000	)	$	20.74
Non-vested at December 31, 2021		5,000		$	15.04
Non-vested at March 31, 2022							5,000		$	15.04

Note 12: Earnings Per Share

Net income ~~(loss)~~ per share is calculated using the weighted average number of shares of common stock outstanding during the applicable period. Basic weighted average common shares outstanding do not include shares of restricted stock that have not yet vested, although such shares are included as outstanding shares in the Company’s Consolidated Balance Sheet. Diluted net income ~~(loss)~~ per share is computed using the weighted average number of common shares outstanding and if dilutive, potential common shares outstanding during the

period. Potential common shares consist of the additional common shares issuable in respect of restricted share awards, stock options and convertible preferred stock. Preferred stock dividends are subtracted from net earnings to determine the amount available to common stockholders.

The following table presents the computation of basic and diluted net earnings per share (in ~~000's)~~$000's):


	Three Months Ended December 31,				Three Months Ended March 31,				For the Six Months Ended March 31,
	2021		2020		2022		2021		2022		2021
Basic
Net income	$	6,546	$	5,413	$	15,358	$	8,734	$	21,904	$	14,147
Less: preferred stock dividends		—		—		0		0		0		0
Net income applicable to common stock	$	6,546	$	5,413	$	15,358	$	8,734	$	21,904	$	14,147

Weighted average common shares outstanding		1,582,334		1,568,213		3,134,540		1,555,175		3,148,059		1,534,287
Basic earnings per share	$	4.14	$	3.45	$	4.90	$	5.62	$	6.96	$	9.22

Diluted
Net income applicable to common stock	$	6,546	$	5,413	$	15,358	$	8,734	$	21,904	$	14,147
Add: preferred stock dividends		0		0		0		0		0		0
Net income applicable for diluted earnings per share	$	6,546	$	5,413	$	15,358	$	8,734	$	21,904	$	14,147

Weighted average common shares outstanding		1,582,334		1,568,213		3,134,540		1,555,175		3,148,059		1,534,287
Add: Options		40,534		41,668		38,102		87,168		38,825		87,168
Add: Series B Preferred Stock		1,578,950		1,071,220		—		1,593,950		—		1,593,950
Add: Series B Preferred Stock Warrants		0		590,147
Add: Series E Preferred Stock		239		47,840		239		47,840		239		47,840
Assumed weighted average common shares outstanding		3,202,057		3,319,088		3,172,881		3,284,133		3,187,124		3,263,245
Diluted earnings per share	$	2.04	$	1.63	$	4.84	$	2.66	$	6.87	$	4.34

There are ~~4,000~~0 and ~~77,500~~33,250 options to purchase shares of common stock that are anti-dilutive, and are not included in the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, diluted earnings per share computations, respectively.

Note 13: Related Party Transactions

Transactions with Isaac Capital Fund and Capital Group LLC

As of ~~December~~March 31, ~~2021, Isaac Capital Group LLC (“ICG”) owned~~2022, ICG beneficially owns ~~259,902~~48.5 ~~shares~~% of ~~Series B Preferred Stock that are convertible into~~ ~~1,299,510~~ ~~shares of common~~the Company’s issued and outstanding capital stock. Jon Isaac, the Company's President and Chief Executive Officer, is the President and sole member of ICG, and, accordingly, has sole voting and dispositive power with respect to these shares. ~~ICG beneficially owns~~ ~~47.5% of the Company’s outstanding capital stock.~~ Mr. Isaac also personally owns 217,177 shares of common stock and holds options to purchase up to 25,000 shares of common stock at an exercise price of $10.00 per share, all of which are currently exercisable.

ICG Term Loan

During 2015, Marquis entered into a mezzanine loan in the amount of up to $~~7.0~~$7.0 million (the “ICF Loan”) with Isaac Capital Fund I, LLC (“ICF”), a private lender whose managing member is Jon Isaac, the Company’s President and Chief Executive Officer. On July 10, 2020, (i) ICF released and discharged Marquis from all obligations under the loan, (ii) ICF assigned all of its rights and obligations under the instruments, documents, and agreements with respect to the ~~ICG~~ICF Loan to ICG, of which Jon Isaac, the Company’s President and Chief Executive Officer, is the sole member, and (iii) Live Ventures borrowed $~~2.0~~$2.0 million (the “ICG Loan”) from ICG using essentially ~~using~~ the same documentation from the ICF Loan. There was no balance outstanding on the note as of the date of assignment. The ICG Loan matures on May 1, 2025 and bears interest at a rate of ~~12.5~~%12.5%. Interest is payable in arrears on the last day of each month, commencing July 31, 2020. As of ~~December~~March 31, ~~2021,~~2022, and September 30, 2021, there was $2.0 million outstanding on this loan.

ICG Revolving Promissory Note

On April 9, 2020, the Company entered into an unsecured revolving line of credit promissory note whereby ICG agreed to provide the Company with a $1.0 million revolving credit facility (the “ICG Revolver”). The ICG Revolver bears interest at 10.0% per annum and provides for the payment of interest monthly in arrears and matures April 2023. As of ~~December~~March 31, ~~2021,~~2022, the Company has 0tnot drawn on the ~~revolving promissory note.~~ICG Revolver.

Transactions with JanOne Inc.

Lease agreement

Customer Connexx LLC, a wholly-owned subsidiary of JanOne Inc. (“JanOne”), rents approximately 9,900 square feet of office space from the Company at its Las Vegas office, which totals 16,500 square feet. JanOne paid the Company $~~55,000~~75,000 and $~~35,000~~50,000 in rent and other reimbursed expenses for three months ended March 31, 2022 and 2021 and $144,000 and $88,000 in rent and other reimbursed expenses for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. Tony Isaac is the Chief Executive Officer, President, Secretary, and a member of the Board of Directors ~~member,~~ of JanOne.

~~Note payable~~

On December 30, 2017, Appliance Smart Holdings ("ASH") entered into the Agreement with the Seller and ApplianceSmart, a subsidiary of the Seller. Pursuant to the Agreement, ASH purchased from the Seller all of the issued and outstanding shares of capital stock of ApplianceSmart in exchange for the Purchase Price. ASH was required to deliver the Purchase Price, and a portion of the Purchase Price was delivered, to the Seller prior to March 31, 2018. Between March 31, 2018 and April 24, 2018, ASH and the Seller negotiated in good faith the method of payment of the remaining outstanding balance of the Purchase Price.

On April 25, 2018, ASH delivered to the Seller the ApplianceSmart Note in the Original Principal Amount, as such amount may be adjusted per the terms of the ApplianceSmart Note. The ApplianceSmart Note is effective as of April 1, 2018 and matures on the Maturity Date. The ApplianceSmart Note bears interest at 5~~% per annum with interest payable monthly in arrears.~~ ~~NaN~~ percent of the outstanding principal amount will be repaid annually on a quarterly basis, with the accrued and unpaid principal due on the Maturity Date. ApplianceSmart has agreed to guaranty repayment of the ApplianceSmart Note. The remaining approximately $~~2.6~~ million of the Purchase Price was paid in cash by ASH to the Seller. ASH may reborrow funds, and pay interest on such re-borrowings, from the Seller up to the Original Principal Amount. As of December 31, 2021, there was approximately $~~2.8~~ ~~million outstanding on the ApplianceSmart Note, which is included within the debtor-in-possession liabilities in the accompanying condensed consolidated balance sheets.~~

On December 26, 2018, ASH and the Seller amended and restated the ApplianceSmart Note to, among other things, grant the Seller a security interest in the assets of ASH and ApplianceSmart in accordance with the terms of separate security agreements entered into between ASH and ApplianceSmart, respectively, and the Seller.

As stated in Note 14 below, on December 9, 2019, ApplianceSmart filed a voluntary petition in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of Title 11 of the United States Code. See Note 11 for a complete discussion. As part of ApplianceSmart’s reorganization plan, ApplianceSmart agreed to deliver to JanOne a payment of ~~NaN~~ ~~thousand dollars as settlement of its debt. That payment was made to JanOne in January of 2022.~~

Transactions with Vintage Stock CEO

Note Payable to the Sellers of Vintage Stock

In connection with the purchase of Vintage Stock, on November 3, 2016, Vintage Stock Affiliated Holdings, LLC ~~("VSAH"~~(“VSAH”) and Vintage Stock entered into a seller financed mezzanine loan in the amount of $10.0 million with the previous owners of Vintage Stock. The Company executed a promissory note (the “Sellers Subordinated Acquisition Note”), which bears interest at 8% per annum, with interest payable monthly in arrears. The Sellers Subordinated Acquisition Note, as amended, has a maturity date of September 23, 2023. As of ~~December~~March 31, ~~2021,~~2022, the amount ~~owed~~ was $~~2.0~~ ~~million.~~fully repaid.

Spriggs Promissory Note

On July 10, 2020, the Company executed a promissory note (the “Spriggs Promissory Note”) in favor of Spriggs Investments, LLC (“Spriggs Investments”), a limited liability company whose sole member is Rodney Spriggs, the President and Chief Executive Officer of Vintage Stock, Inc., a wholly-owned subsidiary of the Company, that memorializes a loan by Spriggs Investments to the Company in the initial principal amount of $2.0 million (the “Spriggs Loan”). The Spriggs Loan matures on July 10, 2022 and bears simple interest at a rate of 10.0% per annum. As of ~~December~~March 31, ~~2021,~~2022, the amount owed was $2.0 million.

Note 14: Commitments and Contingencies

Litigation

SEC Investigation

On February 21, 2018, the Company received a subpoena from the SEC and a letter from the SEC stating that it is conducting an investigation. The subpoena requested documents and information concerning, among other things, the restatement of the Company’s financial statements for the quarterly periods ended December 31, 2016, March 31, 2017, and June 30, 2017, the acquisition of Marquis Industries, Inc., Vintage Stock, Inc., and ApplianceSmart, Inc., and the change in auditors. On August 12, 2020, three of the Company’s corporate executive officers (together, the “Executives”) each received a “Wells Notice” from the staff of the SEC relating to the Company’s SEC investigation. On October 7, 2020, the Company received a “Wells Notice” from the staff of the SEC relating to the Company’s previously-disclosed SEC investigation. The Wells Notices relate to, among other things, the Company’s reporting of its financial performance for its fiscal year ended September 30, 2016, certain disclosures related to executive compensation, and its previous acquisition of ApplianceSmart. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. The Wells Notices informed the Company and the Executives that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against the Company and each of the Executives to allege certain violations of the federal securities laws. The Company and the Executives maintain that their actions were appropriate, and are vigorously defending against any and all allegations brought forth.

On October 1, 2018, the Company received a letter from the SEC requesting information regarding a potential violation of Section 13(a) of the Securities Exchange Act of 1934, based upon the timing of the Company’s Form 8-K filed on February 14, 2018. The Company cooperated fully with the SEC inquiry and provided a response to the SEC on October 26, 2018.

On August 2, 2021, the SEC filed a civil complaint (the “SEC Complaint”) in the United States District Court for the District of Nevada naming the Company.

The SEC Complaint alleges financial, disclosure and reporting violations against the Company under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5. The SEC Complaint also alleges various claims against certain executive officers under Sections 13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, 13a-14, 13b2-1, and 13b2-2. The SEC seeks permanent injunctions and civil penalties against the Company. The foregoing is only a general summary of the SEC Complaint, which may be accessed on the SEC’s website at https://www.sec.gov/litigation/litreleases/2021/lr25155.htm.

The Company continues to assert that the SEC’s pursuit of this matter will not result in any benefit to investors and instead will only serve as a distraction from core business. On October 1, 2021, the Company, filed a motion with the court to dismiss the complaint. The SEC filed its response opposing the motions on November 1, 2021. The defendants filed their reply ~~responses~~ to the SEC’s opposition on November 15, 2021. The motions to dismiss are now under submission and the court has not yet scheduled a hearing date. Pursuant to the automatic stay of proceedings under the Private Securities Litigation Reform Act, all discovery has been stayed pending the motions to dismiss.

ApplianceSmart Bankruptcy and Other ApplianceSmart Related Litigation Matters

On ~~December 9, 2019, ApplianceSmart filed a voluntary petition in~~Feb 28, 2022, the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of the Bankruptcy Code. The bankruptcy affects the Company's indirect subsidiary, ApplianceSmart, only, and does not affect any other subsidiary of Live Ventures, including, but not limited to ASH, or the Company itself.

ApplianceSmart expects to continue to operate its business in the ordinary course of business as debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. In addition, the Company reserves its right to file a motion seeking authority to use cash collateral of the lenders under ApplianceSmart’s reserve-based revolving credit facility. The case is being administrated under the caption ~~In re: ApplianceSmart, Inc~~. (case number 19-13887). Court filings and other information related to the Chapter 11 Case are available at the PACER Case Locator website for those registered to do so or at the Courthouse located at One Bowling Green, Manhattan, New York 10004.

On October 13, 2021, a hearing was held to consider approval of the Disclosure Statement filed by ApplianceSmart in conjunction with its bankruptcy proceedings. On December 14, 2021, a hearing was held to confirmcourt approved ApplianceSmart’s plan for reorganization (the “Plan”)~~. A final decree is expected upon the full satisfaction~~, discharging ApplianceSmart of certain debts according to the Plan atresulting in the Company recording a gain of approximately $11.4 million, which ~~time ApplianceSmart will emerge from Chapter 11.~~includes a write-off or adjustment of approximately $

1711.5

~~ApplianceSmart’s balance sheets are shown below (in 000's). The debtor in possession assets~~million on the settlement of debts and other liabilities, ~~are primarily related to assets and liabilities incurred pre-petition and are~~offset by payments subject to ~~compromise.~~the bankruptcy that were not included as debtor-in-possession liabilities of approximately $149,000

December 31, 2021

September 30, 2021

(Unaudited)

Assets

Cash

$
55

$
74

Trade receivables, net

29

0

Inventories, net

29

106

Prepaid expenses and other current assets

30

0

Total debtor in possession assets

143

180

Right of use asset - operating leases

582

612

Other

0

7

Total assets

$
725

$
799

Liabilities and Stockholders' Deficit

Liabilities:

Accounts payable

$
5,396

$
5,435

Accrued liabilities

2,962

2,874

        Notes payable related parties, including current portion

2,826

2,826

Total debtor in possession liabilities

11,184

11,135

Accounts payable

45

140

Accrued liabilities

476

619

        Lease obligation - operating leases

612

640

      Taxes payable

878

870

Total liabilities

13,195

13,404

Stockholders' equity:

Intercompany

2,870

2,496

Accumulated deficit

(15,340
)

(15,101
)
Total stockholders' deficit

(12,470
)

(12,605
)
Total liabilities and stockholders' deficit

$
725

$
799

~~ApplianceSmart’s statements of operations for the three months ended December 31, 2021 and 2020 are shown below (in 000's):~~

Three months ended December 31, 2021 (unaudited)

Three months ended December 31, 2020 (unaudited)

Revenues

$
96

$
296

Cost of revenues

106

165

Gross profit

(10
)

131

Operating expenses:

General and administrative expenses

219

208

Total operating expenses

219

208

Operating income

(229
)

(77
)
Other (expense) income:

Interest expense, net

0

(46
)
Accounts payable settlement

(10
)

44

Other income (expense)

—

279

Total other (expense) income, net

(10
)

277

Income before provision for income taxes

$
(239
)
$
200

Generally

The Company is involved in various claims and lawsuits arising in the normal course of business. The ultimate results of claims and litigation cannot be predicted with certainty. The Company currently believes that the ultimate outcome of such lawsuits and proceedings will not, individually, or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows. ~~Additionally, a number of claims have been filed against ApplianceSmart in connection with its bankruptcy, which have been stayed as a result of the Chapter 11 Case.~~ As applicable, liabilities pertaining to these matters, that are probable and estimable, have been accrued.

Warranties

During 2019, the Company became the principal for certain extended ~~warranties,~~warranties; as a result, warranty reserves are included in accrued liabilities in our consolidated balance sheet. The following table summarizes the warranty reserve activity for the ~~three~~six months ended ~~December~~March 31, ~~2021:~~2022:


Beginning balance, September 30, 2021	$	105		$	105
Warranties issued/accrued		0			0
Warranty settlements		(25	)		0
Ending balance, December 31, 2021	$	80
Ending balance, March 31, 2022				$	105

Note 15: Segment Reporting

The Company operates in ~~three~~four operating segments which are characterized as: (1) Retail, (2) Flooring Manufacturing, ~~and~~ (3) Steel ~~Manufacturing.~~Manufacturing, and (4) Corporate and Other. The Retail segment consists of Vintage Stock and ~~ApplianceSmart,~~ApplianceSmart; the Flooring Manufacturing Segment consists of ~~Marquis,~~Marquis; and the Steel Manufacturing Segment consists of Precision Marshall.

1917

The following tables summarize segment information (in ~~000's)~~$000's):


	For the Three Months Ended December 31,						For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2021			2020			2022			2021			2022			2021
Revenues
Retail	$	26,211		$	22,370		$	20,741		$	24,003		$	46,952		$	46,373
Flooring Manufacturing		32,872			30,222			32,772			32,972			65,644			63,194
Steel Manufacturing		12,366			9,735			14,027			13,793			26,393			23,528
Corporate & Other		3,709			127
Corporate and Other								2,166			122			5,875			249
Total revenues	$	75,158		$	62,454		$	69,706		$	70,890		$	144,864		$	133,344

Gross profit
Retail	$	13,390		$	12,047		$	11,110		$	12,970		$	24,500		$	25,017
Flooring Manufacturing		9,029			8,325			8,580			10,022			17,609			18,347
Steel Manufacturing		3,615			1,776			4,252			3,380			7,867			5,156
Corporate & Other		1,582			121
Corporate and Other								1,011			118			2,593			239
Total gross profit	$	27,616		$	22,269		$	24,953		$	26,490		$	52,569		$	48,759

Operating income (loss)
Retail	$	4,810		$	4,493		$	3,132		$	5,071		$	7,942		$	9,564
Flooring Manufacturing		4,608			4,150			3,875			6,011			8,483			10,161
Steel Manufacturing		1,654			144			2,719			1,742			4,373			1,886
Corporate & Other		(665	)		(1,496	)
Total opertaing income	$	10,407		$	7,291
Corporate and Other								(1,277	)		(1,699	)		(1,942	)		(3,195	)
Total operating income							$	8,449		$	11,125		$	18,856		$	18,416

Depreciation and amortization
Retail	$	340		$	347		$	296		$	391		$	636		$	738
Flooring Manufacturing		779			965			780			907			1,559			1,872
Steel Manufacturing		234			393			281			396			515			789
Corporate & Other		196			9
Corporate and Other								139			11			335			21
Total depreciation and amortization	$	1,549		$	1,714		$	1,496		$	1,705		$	3,045		$	3,420

Interest expenses
Retail	$	152		$	660		$	84		$	582		$	236		$	1,242
Flooring Manufacturing		431			410			462			648			893			1,058
Steel Manufacturing		298			268			182			288			479			556
Corporate & Other		136			132
Corporate and Other								130			131			267			263
Total interest expenses	$	1,017		$	1,470		$	858		$	1,649		$	1,875		$	3,119

Net income (loss) before provision for income taxes
Retail	$	4,700		$	4,173		$	14,593		$	4,485		$	19,293		$	8,658
Flooring Manufacturing		4,045			3,722			3,337			5,171			7,382			8,893
Steel Manufacturing		1,313			(164	)		2,002			2,460			3,315			2,296
Corporate & Other		(552	)		(1,002	)
Corporate and Other								(1,051	)		(193	)		(1,602	)		(1,195	)
Total net income before provision for income taxes	$	9,506		$	6,729		$	18,881		$	11,923		$	28,388		$	18,652

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For a description of our significant accounting policies and an understanding of the significant factors that influenced our performance during the three and six months ended ~~December~~March 31, ~~2021,~~2022, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (hereafter referred to as “MD&A”) should be read in conjunction with the condensed consolidated financial statements, including the related notes, appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 (the “2021 Form 10-K”).

This Quarterly Report on Form 10-Q includes statements that constitute “forward-looking statements.” These forward-looking statements are often characterized by the terms “may,” “believes,” “projects,” “intends,” “plans,” “expects,” or “anticipates,” and do not reflect historical facts.

Specific forward-looking statements contained in this portion of the Annual Report include, but are not limited to: (i) statements that are based on current projections and expectations about the markets in which we operate, (ii) statements about current projections and expectations of general economic conditions, (iii) statements about specific industry projections and expectations of economic activity, (iv) statements relating to our future operations, prospects, results, and performance, (v) statements about the Chapter 11 Case, (vi) statements that the cash on hand and additional cash generated from operations together with potential sources of cash through issuance of debt or equity will provide the Company with sufficient liquidity for the next 12 months, and (vii) statements that the outcome of pending legal proceedings will not have a material adverse effect on business, financial position and results of operations, cash flow or liquidity.

Forward-looking statements involve risks, uncertainties, and other factors, which may cause our actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results, future performance and capital requirements and cause them to materially differ from those contained in the forward-looking statements include those identified in our 2021 Form 10-K under Item 1A “Risk Factors” and Part II, Item 1A. "Risk Factors" below, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.

In addition, the foregoing factors may generally affect our business, results of operations and financial position. Forward-looking statements speak only as of the date the statements were made. We do not undertake and specifically decline any obligation to update any forward-looking statements. Any information contained on our website www.liveventures.com or any other websites referenced in this Quarterly Report are not part of this Quarterly Report.

Live Ventures Incorporated is a holding company of diversified businesses, which, together with our subsidiaries, we refer to as the “Company”, “Live Ventures”, “we”, “us” or “our”. We acquire and operate companies in various industries that have historically demonstrated a strong history of earnings power. We currently have ~~three~~four segments to our business: Retail, Flooring Manufacturing, Steel Manufacturing, and Corporate &and Other.

Under the Live Ventures brand, we seek opportunities to acquire profitable and well-managed companies. We work closely with consultants who help us identify target companies that fit within the criteria we have established for opportunities that will provide synergies with our businesses.

Our principal offices are located at 325 E. Warm Springs Road, Suite 102, Las Vegas, Nevada 89119, our telephone number is (702) 939-0231, and our corporate website (which does not form part of this Quarterly Report Form 10-Q) is located at www.liveventures.com. Our common stock trades on the Nasdaq Capital Market under the symbol “LIVE”.

Our Retail Segment is composed of Vintage Stock, Inc. ("(“Vintage ~~Stock"~~Stock”) and ApplianceSmart, Inc. ~~("ApplianceSmart"~~(“ApplianceSmart”).

Vintage Stock Holdings LLC, Vintage Stock, V-Stock, Movie Trading Company and EntertainMart (collectively, “Vintage Stock”) is an award-winning specialty entertainment retailer that offers a large selection of entertainment products, including new and pre-owned movies, video games and music products, as well as ancillary products, such as books, comics, toys and collectibles, in a single location. With its integrated buy-sell-trade business model, Vintage Stock buys, sells and trades new and pre-owned movies, music, video games,

electronics and collectibles through 66 retail locations strategically positioned across Arkansas, Colorado, Idaho, Illinois, Kansas, Missouri, Nebraska, New Mexico, Oklahoma, Texas, and Utah.

~~ApplianceSmart operates one store in Reynoldsburg, Ohio.~~ ApplianceSmart is a household appliance retailer with two product categories: one consisting of typical and commonly available, innovative appliances, and the other consisting of affordable value-priced, offerings such as close-outs, factory overruns, discontinued models, and special-buy appliances, including open box merchandise and others.

On December 9, 2019, ApplianceSmart filed a voluntary petition (the “Chapter 11 Case”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The bankruptcy ~~affects~~affected Live Ventures’ indirect subsidiary ApplianceSmart only and ~~does~~did not affect any other subsidiary of Live Ventures, or Live Ventures itself. ApplianceSmart ~~expects~~expected to continue to operate its business in the ordinary course of business as debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. In addition, the Company ~~reserves~~reserved its right to file a motion seeking authority to use cash collateral of the lenders under the reserve-based revolving credit facility. The case iswas being administrated under the caption In re: ApplianceSmart, Inc. (case number 19-13887). Court filings and other information related to the Chapter 11 Case are available at the PACER Case Locator website for those registered to do so or at the Courthouse located at One Bowling Green, Manhattan, New York 10004.

At December 31, 2021, ApplianceSmart operated one store in Ohio. ApplianceSmart is a household appliance retailer with two product categories: one consisting of typical and commonly available, innovative appliances, and the other consisting of affordable value-priced, niche offerings such as close-outs, factory overruns, discontinued models, and special-buy appliances, including open box merchandise and others.

On October 13, 2021, a hearing was held to consider approval of the Disclosure Statement filed by ApplianceSmart in conjunction with its bankruptcy proceedings. On December 14, 2021, a hearing was held to confirm ApplianceSmart’s plan for reorganization (the “Plan”). ~~A final decree is expected upon~~On February 28, 2022, the ~~full satisfaction~~court approved ApplianceSmart’s plan for reorganization (the “Plan”), discharging ApplianceSmart of certain debts according to the Plan atresulting in the Company recording a gain of approximately $11.4 million, which ~~time~~includes a write-off or adjustment of approximately $11.5 million on the settlement of debts and other liabilities, offset by payments subject to the bankruptcy that were not included as debtor-in-possession liabilities of approximately $149,000.

As of March 31, 2022 ApplianceSmart ~~will emerge from Chapter 11.~~operates one store in Reynoldsburg, Ohio.

Our Flooring Manufacturing segment is comprised of Marquis Industries, Inc. ~~("Marquis"~~(“Marquis”).

~~Marquis Affiliated Holdings LLC and wholly-owned subsidiaries (“Marquis”).~~ Marquis is a leading carpet manufacturer and distributor of carpet and hard-surface flooring products. Over the last decade, Marquis has been an innovator and leader in the value-oriented polyester carpet sector, which is currently the market’s fastest-growing fiber category. Marquis focuses on the residential, niche commercial, and hospitality end-markets and serves thousands of customers.

Since commencing operations in 1995, Marquis has built a strong reputation for outstanding value, styling, and customer service. Its innovation has yielded products and technologies that differentiate its brands in the flooring marketplace. Marquis’s state-of-the-art operations enable high quality products, unique customization, and exceptionally short lead-times. Furthermore, the Company has recently invested in additional capacity to grow several attractive lines of business, including printed carpet and yarn extrusion.

Our Steel Manufacturing segment is comprised of Precision Industries, Inc. (“Precision Marshall”).

Precision Marshall is the North American leader in providing and manufacturing, pre-finished de-carb free tool and die steel. For nearly 75 years, Precision Marshall has served steel distributors through quick and accurate service. Precision Marshall has led the industry with exemplary availability and value-added processing that saves distributors time and processing costs.

Founded in 1948, Precision Marshall “The Deluxe Company” has built a reputation of high integrity, speed of service and doing things the “Deluxe Way”. The term Deluxe refers to all aspects of the product and customer service to be head and shoulders above the rest. From order entry to packaging and delivery, Precision Marshall makes it easy to do business and backs all products and service with a guarantee.

Precision Marshall provides four key products to over 500 steel distributors in four product categories: Deluxe Alloy Plate, Deluxe Tool Steel Plate, Precision Ground Flat Stock, and Drill Rod. With over 5,000 distinct size grade combinations in stock every day, Precision Marshall arms tool steel distributors with deep inventory availability and same day shipment to their place of business or often ships direct to their customer saving time and handling.

Our consolidated financial statements have been prepared in accordance with GAAP. Preparation of these statements requires us to make judgments and estimates. Some accounting policies have a significant and material impact on amounts reported in these financial statements. Estimates and assumptions are based on management's experience and other information available prior to the issuance of our financial statements. Our actual realized results may differ materially from management’s initial estimates as reported. Our significant accounting policies include ~~Trade and Other Receivables,~~ Inventories, Goodwill, Revenue Recognition, Fair Value Measurements, Stock Based Compensation, Income Taxes, Segment Reporting and Concentrations of Credit Risk. For a summary of our significant accounting policies and the means by which we develop estimates thereon, see Part II, Item 8 – Financial Statements - Notes to unaudited condensed consolidated financial statements Note 2 – summary of significant accounting policies in our ~~10-K report as filed on December 28, 2021.~~2021 10-K.

We evaluate the performance of our operations based on financial measures such as revenue and “Adjusted EBITDA.” Adjusted EBITDA is defined as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization, stock-based compensation, and other non-cash or nonrecurring charges. We believe that Adjusted EBITDA is an important indicator of the operational strength and performance of the business, including the business’ ability to fund acquisitions and other capital expenditures, and to service its debt. Additionally, this measure is used by management to evaluate operating results and perform analytical comparisons and identify strategies to improve performance. Adjusted EBITDA is also a measure that is customarily used by financial analysts to evaluate a company's financial performance, subject to certain adjustments. Adjusted EBITDA does not represent cash flows from operations, as defined by GAAP, and should not be construed as an alternative to net income or loss and is indicative neither of our results of operations, nor of cash flows available to fund all of our cash needs. It is, however, a measurement that the Company believes is useful to investors in analyzing its operating performance. Accordingly, Adjusted EBITDA should be considered in addition to, but not as a substitute for, net income, cash flow provided by operating activities, and other measures of financial performance prepared in accordance with GAAP. Adjusted EBITDA is a non-GAAP financial measure. As companies often define non-GAAP financial measures differently, Adjusted EBITDA, as calculated by Live Ventures Incorporated, should not be compared to any similarly titled measures reported by other companies.

Results of Operations Three Months Ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021

The following table sets forth certain statement of income items and as a percentage of revenue, for the three months ended ~~December~~March 31, 2022 and 2021 ~~and 2020~~ (in ~~000's)~~$000’s):


	For the Three Months Ended December 31, 2021						For the Three Months Ended December 31, 2020						For the Three Months Ended March 31, 2022			For the Three Months Ended March 31, 2021
				% of Total Revenue						% of Total Revenue
Statement of Income Data:
Revenues	$	75,158			100.0	%	$	62,454			100.0	%
Cost of revenues		47,542			63.3	%		40,185			64.3	%
Gross profit		27,616			36.7	%		22,269			35.7	%
Selected Data:
Revenue													$	69,706		$	70,890
Cost of revenue														44,753			44,400
General and administrative expenses		14,157			18.8	%		12,279			19.7	%		13,154			12,565
Sales and marketing expenses		3,052			4.1	%		2,699			4.3	%		3,350			2,800
Operating income		10,407			13.8	%		7,291			11.7	%
Interest expense, net		(1,017	)		(1.4	)%		(1,470	)		(2.4	)%		(858	)		(1,649	)
Gain on disposal of fixed assets		—			0.0	%		129			0.2	%
Other income		116			0.2	%		779			1.2	%
Income before provision for income taxes		9,506			12.6	%		6,729			10.8	%
Provision for income taxes		2,960			3.9	%		1,450			2.3	%		3,523			3,228
Net income	$	6,546			8.7	%	$	5,279			8.5	%	$	15,358		$	8,695

Adjusted EBITDA (a)
Retail business	$	5,202					$	5,182					$	3,610		$	5,456
Flooring Manufacturing business		5,255						5,098						4,579			6,726
Steel Manufacturing business		1,844						497						2,828			2,034
Corporate & Other		(199	)					(847	)
Corporate and Other														(762	)		(894	)
Total Adjusted EBITDA	$	12,102					$	9,930					$	10,255		$	13,322

Adjusted EBITDA as a percentage of revenue
Retail business		19.8	%					23.2	%					17.4	%		22.7	%
Flooring Manufacturing business		16.0	%					16.9	%					14.0	%		20.4	%
Steel Manufacturing business		14.9	%					5.1	%					20.2	%		14.7	%
Corporate & Other		-5.4	%					-664.0	%
Corporate and Other														-35.2	%		-732.8	%
Consolidated adjusted EBITDA as a percentage of revenue		16.1	%					15.9	%					14.7	%		18.8	%


	For the Three Months Ended December 31, 2021					For the Three Months Ended December 31, 2020					For the Three Months Ended March 31, 2022					For the Three Months Ended March 31, 2021
	Net Revenue		% of Total Revenue			Net Revenue		% of Total Revenue			Net Revenue		% of Total Revenue			Net Revenue		% of Total Revenue
Revenue
Retail
Movies, Music, Games and Other	$	26,115		34.7	%	$	22,074		35.3	%	$	20,616		29.6	%	$	23,651		33.4	%
Appliances		96		0.1	%		296		0.5	%		125		0.2	%		352		0.5	%
Flooring Manufacturing		32,872		43.7	%		30,222		48.4	%		32,772		47.0	%		32,972		46.5	%
Steel Manufacturing		12,366		16.5	%		9,735		15.6	%		14,027		20.1	%		13,793		19.5	%
Corporate & Other		3,709		4.9	%		127		0.2	%
Corporate and Other												2,166		3.1	%		122		0.2	%
Total Revenue	$	75,158		100.0	%	$	62,454		100.0	%	$	69,706		100.0	%	$	70,890		100.0	%

The following table sets forth gross profit earned by segment and gross profit as a percentage of total revenue for each segment (in ~~000's)~~$000's):


	For the Three Months Ended December 31, 2021						For the Three Months Ended December 31, 2020					For the Three Months Ended March 31, 2022					For the Three Months Ended March 31, 2021
	Gross Profit			Gross Profit % of Total Revenue			Gross Profit		Gross Profit % of Total Revenue			Gross Profit		Gross Profit % of Total Revenue			Gross Profit		Gross Profit % of Total Revenue
Gross Profit
Retail
Movies, Music, Games and Other	$	13,400			17.8	%	$	11,916		19.1	%	$	11,003		15.8	%	$	12,813		18.1	%
Appliances		(10	)		0.0	%		131		0.2	%		107		0.2	%		157		0.2	%
Flooring Manufacturing		9,029			12.0	%		8,325		13.3	%		8,580		12.3	%		10,022		14.1	%
Steel Manufacturing		3,615			4.8	%		1,776		2.8	%		4,252		6.1	%		3,380		4.8	%
Corporate & Other		1,582			2.1	%		121		0.2	%
Corporate and Other													1,011		1.5	%		118		0.2	%
Total Gross Profit	$	27,616			36.7	%	$	22,269		35.7	%	$	24,953		35.8	%	$	26,490		37.4	%

Revenue decreased approximately $1.2 million, or 1.7%, to approximately $70.0 million for the three months ended March 31, 2022, as compared to the corresponding prior year period. The decrease is primarily attributable to decreased revenue in the Retail segment of approximately $3.3 million, offset by increased revenue in Corporate and Other of approximately $2.0 million. The decrease in revenue in the Retail segment was primarily due to additional stimulus payments and timely tax refunds received by our Retail segment customer base during Q2 2021 that allowed for more discretionary consumer spending. The increase in revenue in the Corporate and Other segment as compared to the prior year period was due to the consolidation of SW Financial in June 2021.

Cost of revenue increased by 0.8% to approximately $44.8 million for the three months ended March 31, 2022, as compared to approximately $44.4 million for the three months ended March 31, 2021. Cost of revenue remained relatively unchanged from the prior year period. The increase is due to inflationary pressures, and the consolidation of SW Financial in June 2021.

General and Administrative expenses increased by 4.7% to approximately $13.2 million for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to increases in employee compensation and related costs as a result of our Retail segment opening new locations.

Selling and marketing expense increased by 19.6% to approximately $3.4 million for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to increased convention and trade show activity, which was largely canceled during COVID, as well as compensation associated with the Marquis sales force.

Interest expense, net, decreased by 48% to approximately $858,000 for the three months ended March 31, 2022, as compared to the three months ended March 31, 2021. The decrease is primarily due to the payoff of debt and related debt discount, favorable interest rates obtained from Precision's credit facility refinancing (see Note 8 of the unaudited consolidated financial statements), and the forgiveness of loans received under the Paycheck Protection Program (“PPP loan”).

The following table sets forth certain statement of income items and as a percentage of revenue, for the six months ended March 31, 2022 and 2021 (in $000's):

The following table sets forth gross profit earned by segment and gross profit as a percentage of total revenue for each segment (in $000's):

Revenue increased approximately ~~$12.7~~$11.5 million, or ~~20%~~8.6%, to ~~$75.2~~$144.9 million for the ~~three~~six months ended ~~December~~March 31, ~~2021,~~2022, as compared to the corresponding prior year period. The increase is primarily attributable to the increased revenue in Corporate and Other of approximately $5.6 million, the ~~Retail~~Steel Manufacturing Segment of ~~$3.8~~approximately $2.9 million, and the Flooring Manufacturing segment of approximately $2.5 million. The increase in revenue for Corporate and Other is primarily due to the consolidation of SW Financial in ~~2021 resulting in an increase of $3.6 million as compared to the prior year period.~~fiscal 2021. The increase in revenue in the ~~retail segment~~Steel Manufacturing and Flooring Manufacturing segments was primarily due to increased ~~retail pricing and~~customer demand, as well as the ~~opening~~passing on of ~~three new stores during the three months ended December 31, 2021. Also contributing~~product cost increases to the increase in revenue, were increases in the Flooring Manufacturing segment of $2.7 million and Steel Manufacturing Segment of $2.6 million. These increases were primarily attributable to increased sales pricing and increased demand.

Cost of revenue increased by ~~18%~~9.1% to approximately ~~$47.5~~$92.3 million for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022, as compared to approximately ~~$40.2~~$84.6 million for the ~~three~~six months ended ~~December~~March 31, ~~2020.~~2021. The increase is primarily attributable to the increases in revenues.

General and Administrative expenses increased by ~~15%~~9.9% to approximately ~~$14.2~~$27.3 million for the ~~three~~six months ended ~~December~~March 31, ~~2021,~~2022, as compared to the ~~three~~six months ended ~~December~~March 31, ~~2020~~2021, primarily due to increases in employee compensation and related ~~costs.~~costs as a result of our Retail segment opening new locations.

Selling and marketing expense increased by ~~13%~~16.4% to approximately ~~$3.1~~$6.4 million for the ~~three~~six months ended ~~December~~March 31, ~~2021,~~2022, as compared to the ~~three~~six months ended ~~December~~March 31, ~~2020,~~2021, primarily due to increased convention and trade show activity, which was largely canceled during COVID, as well as compensation associated with the Marquis sales force.

Interest expense, net, decreased by ~~31%~~39.9% to approximately $1.9 million for the ~~three~~six months ended ~~December~~March 31, ~~2021,~~2022, as compared to the ~~three~~six months ended ~~December~~March 31, ~~2020,~~2021. The decrease is primarily due to ~~a decrease in certain~~the payoff of debt and related debt discount, favorable interest rates obtained from Precision's credit facility refinancing (see Note 8 of the unaudited consolidated financial statements), and the ~~continued efforts to repay certain debt obligations.~~

forgiveness of loans received under the Paycheck Protection Program (“PPP loan”).


	For the Three Months Ended December 31, 2021											For the Three Months Ended December 31, 2020											For the Three Months Ended March 31, 2022											For the Three Months Ended March 31, 2021
	Retail		Flooring Manufacturing		Steel Manufacturing		Corporate & Other			Total		Retail		Flooring Manufacturing		Steel Manufacturing		Corporate & Other			Total		Retail		Flooring Manufacturing		Steel Manufacturing		Corporate and Other			Total		Retail		Flooring Manufacturing		Steel Manufacturing		Corporate and Other			Total
Revenue	$	26,211	$	32,872	$	12,366	$	3,709		$	75,158	$	22,370	$	30,222	$	9,735	$	127		$	62,454	$	20,741	$	32,772	$	14,027	$	2,166		$	69,706	$	24,003	$	32,972	$	13,793	$	122		$	70,890
Cost of Revenue		12,821		23,843		8,751		2,127			47,542		10,323		21,897		7,959		6			40,185		9,631		24,192		9,775		1,155			44,753		11,033		22,950		10,413		4			44,400
Gross Profit		13,390		9,029		3,615		1,582			27,616		12,047		8,325		1,776		121			22,269		11,110		8,580		4,252		1,011			24,953		12,970		10,022		3,380		118			26,490
General and Administrative Expense		8,454		1,639		1,821		2,243			14,157		7,420		1,941		1,527		1,391			12,279		7,888		1,586		1,395		2,285			13,154		7,700		1,609		1,441		1,815			12,565
Selling and Marketing Expense		126		2,782		140		4			3,052		134		2,234		105		226			2,699		90		3,119		138		3			3,350		199		2,402		197		2			2,800
Operating Income (Loss)	$	4,810	$	4,608	$	1,654	$	(665	)	$	10,407	$	4,493	$	4,150	$	144	$	(1,496	)	$	7,291	$	3,132	$	3,875	$	2,719	$	(1,277	)	$	8,449	$	5,071	$	6,011	$	1,742	$	(1,699	)	$	11,125

Segment results for Retail include Vintage Stock and ApplianceSmart. Revenue for the three months ended ~~December~~March 31, 2022 decreased by approximately $3.3 million, or 14%, as compared to the prior year, primarily due to additional stimulus payments and timely tax refunds received by our Retail segment customer base during the second quarter of 2021, that allowed for more discretionary consumer spending at our Vintage Stock locations. Additionally, sales by ApplianceSmart continued to decrease, primarily due to increased competition. Cost of revenue decreased proportionately with the decrease in revenue. Operating income for the three months ended March 31, 2022 was approximately $3.1 million, as compared to operating income of approximately $5.1 million for the prior year period.

Segment results for Flooring Manufacturing includes Marquis. Revenue for the three months ended March 31, 2022 decreased by approximately $200,000, or 1%, as compared to the prior year period, primarily due to reduced customer demand. Cost of revenue for the three months ended March 31, 2022 increased, as compared to the prior year period, primarily due to increases in raw material costs. Sales and marketing expenses increased by approximately ~~$4.0~~$717,000 for the three months ended March 31, 2022 primarily due to increased convention and trade show activity, as well as increased compensation associated with the Marquis sales force. Operating income for the three months ended March 31, 2022 was approximately $3.9 million, as compared to operating income of approximately $6.0 million for the prior year period.

Segment results for Steel Manufacturing includes Precision Marshall. Revenue for the three months ended March 31, 2022 increased by approximately $234,000, or ~~17%~~2%, as compared to the prior year period, primarily due to increased sales prices resulting from rising costs. Cost of revenue for the three months ended March 31, 2022 decreased, as compared to the prior year period, as a percentage of sales due to improved manufacturing efficiencies and increased revenue due to price increases. Operating income for the three months ended March 31, 2022 was approximately $2.7 million, as compared to operating income of approximately $1.7 in the prior period. The increase in operating income is primarily due to an increase in gross profit.

Segment results for Corporate and Other includes our directory services business and our investment in SW Financial. Revenues for the three months ended March 31, 2022 increased by $2.0 million primarily due to the addition of SW Financial as a VIE during fiscal 2021. Cost of revenue for the three months ended March 31, 2022 increased proportionately with revenue for the reason stated. Operating loss for the three months ended March 31, 2022 was approximately $1.3 million, as compared to a loss of approximately $1.7 million in the prior period. Revenues and operating income for our directory services business continue to decline due to decreasing renewals. We expect revenue and operating income from this segment to continue to decrease in the future. We are no longer accepting new customers in our directory services business. We anticipate revenues from our investment in SW Financial to trend upward in the future

Segment results for Retail include Vintage Stock and ApplianceSmart. Revenue for the six months ended March 31, 2022 increased by approximately $579,000, or 1%, as compared to the prior year, primarily due to increased retail pricing and additional locations added at Vintage Stock, offset by decreasing sales by ApplianceSmart, primarily due to decreases in sales resulting from increased competition. Retail price increases were primarily due to higher product costs relating to inflationary pressures that were passed on to customers. Retail sales at our Vintage Stock locations during the six months ended March 31, 2022 were impacted by the lack of stimulus payments and timely tax refunds customers received during the six months ended March 31, 2021. Cost of revenue increased ~~proportionately with the increase~~due to changes in ~~revenue.~~product mix, as well as other inflationary pressures. Operating income for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 was approximately ~~$4.8~~$7.9 million, as compared to operating income of approximately ~~$4.5~~$9.6 million for the prior year period.

Segment results for Flooring Manufacturing includes Marquis. Revenue for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 increased by approximately ~~$2.7~~$2.5 million, or 9%4%, as compared to the prior year period, primarily due to greater demand for various grades of flooring, as well increases in sales prices. The shift in demand in flooring grades was generally toward higher priced product. Sales price increases were primarily due to higher product costs relating to inflationary pressures that were passed on to customers. Cost of revenue for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 increased ~~proportionately with revenue,~~primarily due to increases in raw material costs, as compared to the prior year period. Sales and marketing expenses increased by approximately $1.3 million for the six months ended March 31, 2022 primarily due to increased convention and trade show activity, as well as increased compensation associated with the Marquis sales force. Operating income for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 was approximately ~~$4.6~~$8.5 million, as compared to operating income of approximately ~~$4.2~~$10.2 million for the prior year period.

Segment results for Steel Manufacturing includes Precision Marshall. Revenue for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 increased by ~~$2.6~~$2.9 million, or ~~27%~~12%, as compared to the prior year period, primarily due to increased sales prices resulting from rising costs. Cost of revenue for the ~~three~~six months ended ~~December~~March 31, ~~2021 decreased,~~2022 increased moderately, as compared to the prior year period, as a percentage of sales due to improved manufacturing efficiencies and increased revenue due to price increases. Operating income for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 was approximately ~~$1.7~~$4.4 million, as compared to operating income of approximately ~~$144,000~~$1.9 in the prior period. The increase in operating income is primarily due to an increase in gross profit.

~~Segment results~~Results for Corporate and Other includes our directory services business and our investment in SW Financial. Revenues for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 increased by ~~$3.6~~$5.6 million primarily due to the addition of SW Financial as a VIE during fiscal 2021. Cost of revenue for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 increased proportionately with revenue ~~for~~due to inflationary pressures and the ~~reason stated.~~consolidation of SW Financial in June 2021. Operating loss for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 was approximately ~~($665,000),~~$1.9 million, as compared to a loss of approximately ~~($1.5 million)~~$3.2 million in the prior period. Revenues and operating income for our directory services business continue to decline due to decreasing renewals. We expect revenue and operating income from this segment to continue to decrease in the future. We are no longer accepting new customers in our directory services business. We anticipate revenues from our investment in SW Financial to trend upward in the future.

The following ~~table presents~~tables present a reconciliation of Adjusted EBITDA from net income for the three and six months ended March 31, 2022 (in 000's):

Adjusted EBITDA decreased by approximately $3.1 million, or 23%, for the three months ended March 31, 2022, as compared to the prior year period. The decrease is primarily due to decreases in revenue and increases in SG&A expenses, as discussed above.

Adjusted EBITDA decreased by approximately $900,000, or 4%, for the six months ended March 31, 2022, as compared to the prior year period. The decrease is primarily due to increases in cost of revenue and increases in SG&A expenses, as discussed above.

As of ~~December~~March 31, ~~2021,~~2022, we had total cash on hand of approximately ~~$10.0~~$6.2 million and approximately ~~$28.8~~$31.8 million of available borrowing under our revolving credit facilities. As we continue to pursue acquisitions and other strategic transactions to expand and grow our business, we regularly monitor capital market conditions and may raise additional funds through borrowings or public or private sales of debt or equity securities. The amount, nature, and timing of any borrowings or sales of debt or equity securities will depend on our operating performance and other circumstances; our then-current commitments and obligations; the amount, nature and timing of our capital requirements; any limitations imposed by our current credit arrangements; and, overall market conditions.

Based on our current operating plans, we believe that available cash balances, cash generated from our operating activities and funds available under our asset-based revolver lines of credit will provide sufficient liquidity to do the following: fund our ~~operations,~~operations; pay our scheduled loan ~~payments,~~payments; ability to repurchase shares under our share buyback ~~program,~~program; and, pay dividends on our shares of Series E Preferred Stock as declared by the Board of Directors, for at least the next 12 months.

We had working capital of approximately ~~$42.5~~$53.0 million as of ~~December~~March 31, ~~2021,~~2022, as compared to working capital of approximately $33.8 million as of September 30, ~~2021.~~2021; an increase of approximately $19.2 million. The increase is primarily due to increases in cash and inventories of approximately $10.1 million, and decreases in debtor-in-possession liabilities and accrued liabilities of approximately $16.1 million, partially offset by increases in accounts payable and the current portion of long-term debt of approximately $7.9 million.

The Company’s cash, as of ~~December~~March 31, ~~2021,~~2022, was approximately ~~$10~~$6.2 million compared to approximately $4.7 million as of September 30, 2021, an increase of approximately ~~$5.3~~$1.5 million. Net cash provided by operations was approximately ~~$4.2~~$5.3 million for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022, as compared to net cash provided by operations of approximately ~~$7.7~~$20.9 million for the ~~three~~six months ended ~~December~~March 31, ~~2020.~~2021. The decrease was primarily due to purchases of inventory, as well as payments on accrued liabilities.

Our primary sources of cash inflows are from customer receipts from sales on account, factored accounts receivable proceeds, receipts for securities sales commissions, and net remittances from directory services customers processed in the form of ACH billings. Our most significant cash outflows include payments for raw materials and general operating expenses, including payroll costs and general and administrative expenses that typically occur within close proximity of expense recognition.

Our cash flows used in investing activities of approximately ~~$3.1~~$7.5 million for the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 consisted of purchases of property and equipment. Our cash flows used in investing activities of approximately ~~$3.3~~$5.5 million for the ~~three~~six months ended ~~December~~March 31, ~~2020~~2021 consisted ~~primarily~~ of purchases of property and equipment.

Our cash flows provided by financing activities of approximately ~~$4.2~~$3.8 million during the ~~three~~six months ended ~~December~~March 31, ~~2021~~2022 consisted of ~~net~~ proceeds from notes payable of approximately ~~$5.5~~$9.0 million, and approximately ~~$2.0~~$4.9 million in net ~~payments~~proceeds under revolver loans, partially offset by payments of notes payable and financing leases of approximately ~~$3.4~~$8.1 million, and purchases of treasury stock in the amount of approximately $2.1 million.

Our cash flows used in financing activities of approximately ~~$6.2~~$12.5 million during the ~~three~~six months ended ~~December~~March 31, ~~2020~~2021 consisted of payments on notes payable and related notes payable of approximately ~~$4.7 million, and approximately $3.3~~$9.9 million, net ~~payments~~borrowings under revolver loans of approximately $4.6 million, and purchases of treasury stock in the amount of approximately $383,000, partially offset by the issuance of notes payable of approximately ~~$2.1~~$2.3 million associated with the acquisition of a facility by ~~Marquis, and purchases of treasury stock in the amount of $383,000.~~Marquis.

Currently, we are not issuing common shares for liquidity purposes. We prefer to use asset-based lending arrangements and mezzanine financing together with Company provided capital to finance acquisitions and have done so historically. Occasionally, as our Company history has demonstrated, we will issue stock and derivative instruments linked to stock for services ~~and/~~or debt settlement.

We may require additional debt financing or capital to finance new acquisitions, refinance existing indebtedness or other strategic investments in our business. Other sources of financing may include stock issuances and additional loans; or other forms of financing. Any financing obtained by us may further dilute or otherwise impair the ownership interest of our existing stockholders.

As of ~~December~~March 31, ~~2021,~~2022, we did not participate in any market risk-sensitive commodity instruments for which fair value disclosure would be required. We believe we are not subject in any material way to other forms of market risk, such as foreign currency exchange risk or foreign customer purchases or commodity price risk. We believe we are not subject in any material way to other forms of market risk, such as foreign currency exchange risk or foreign customer purchases or commodity price risk.

Evaluation of Disclosure control and Procedures. We carried out an evaluation, under the supervision, and with the participation of our management, including our principal executive officer (our CEO) and principal financial officer (our CFO), of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of ~~December~~March 31, ~~2021,~~2022, the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure due to material weaknesses in internal control over financial reporting further described below.

Despite the identified material weaknesses, management concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, the financial position, results of operations and cash flows for the periods disclosed in conformity with GAAP. Frazier & Deeter, LLC, the Company’s independent registered public accounting firm, has issued an unqualified opinion on our consolidated financial statements as of and for the year ended September 30, 2021. They were not engaged to perform, and did not perform, an audit of internal control over financial reporting. These material weaknesses ~~have~~had no impact on our consolidated financial statements in prior years.

Management’s Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management, including the Company’s CEO and ~~CAO,~~CFO, do not expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial reporting will prevent or detect all errors and all fraud. A control system, regardless of how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be met. These inherent limitations include the following: judgements in decision-making can be faulty, and control and process breakdowns can occur because of simple errors or mistakes, controls can be circumvented by individuals, acting alone or in collusion with each other, or by management override. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Our management assessed the effectiveness of our internal control over financial reporting as of ~~December~~March 31, ~~2021.~~2022. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) of 2013 regarding Internal Control – Integrated Framework. Based on our assessment using those criteria, our management concluded that our internal controls over financial reporting ~~were~~was ineffective as of ~~December~~March 31, ~~2021.~~2022. Management noted the following deficiencies that management believes to be material weaknesses:

In response to the above identified weaknesses in our internal control over financial reporting, we plan to improve the documentation of our internal control policies and procedures and develop an internal testing plan to document our evaluation of effectiveness of ~~the~~our internal controls. We expect to conclude these remediation initiatives during the fiscal year ended September 30, 2022. We continue to

evaluate testing of our internal control policies and procedures, including assessing internal and external resources that may be available to complete these tasks, but do not know when these tasks will be completed.

A material weakness (within the meaning of PCAOB Auditing Standard No. 2201) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A ""significant deficiency" is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company’s financial reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~December~~March 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Please refer to ~~"Item~~“Item 3. Legal ~~Proceedings"~~Proceedings” in our 2021 Annual Report on Form 10-K ~~for the year ended September 30, 2021~~ for information regarding material pending legal proceedings. Except as set forth therein and below, there have been no new material legal proceedings and no material developments in the legal proceedings previously disclosed.

On February 21, 2018, the Company received a subpoena from the Securities and Exchange Commission (“SEC”) and a letter from the SEC stating that it is conducting an investigation. The subpoena requested documents and information concerning, among other things, the restatement of the Company’s financial statements for the quarterly periods ended December 31, 2016, March 31, 2017, and June 30, 2017, the acquisition of Marquis Industries, Inc., Vintage Stock, Inc., and ApplianceSmart, Inc., and the change in auditors. On August 12, 2020, three of the Company’s corporate executive officers (together, the “Executives”) each received a “Wells Notice” from the Staff of the SEC relating to the Company’s SEC investigation. On October 7, 2020, the Company received a “Wells Notice” from the Staff of the SEC relating to the Company’s previously-disclosed SEC investigation. The Wells Notices related to, among other things, the Company’s reporting of its financial performance for its fiscal year ended September 30, 2016, certain disclosures related to executive compensation, and its previous acquisition of ApplianceSmart.

On August 2, 2021, the SEC filed a civil complaint (the “SEC Complaint”) in the United States District Court for the District of Nevada naming the Company and two of its executive officers as defendants (collectively, the "Defendants"). The SEC Complaint alleges various financial, disclosure, and reporting violations related to income and earnings per share, purported undisclosed stock promotion and trading, and undisclosed executive compensation from 2016 through 2018. The violations are brought under Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5; Sections 13(a), 13(b)(2)(B) and 13(b)(5) of the Exchange Act and Rules 12b-20, 13a-1, 13a-14, 13a-13, 13b2-1, 13b2-2; Section 14(a) of the Exchange Act and Rule 14a-3; and Section 17(a) of the Securities Act of 1933. The SEC seeks permanent injunctions against the Defendants, officer-and-director bars, disgorgement of profits, and civil penalties. The foregoing is only a general summary of the SEC Complaint, which may be accessed on the SEC’s website at https://www.sec.gov/litigation/litreleases/2021/lr25155.htm.

The Company continues to assert that the SEC’s pursuit of this matter will not result in any benefit to investors and instead will only serve as a distraction from its core business activities. On October 1, 2021, the Company, filed a motion with the court to dismiss the complaint. The SEC filed its response opposing the motion on November 1, 2021. The defendants filed their reply ~~responses~~ to the SEC’s opposition on November 15, 2021. The motions to dismiss are now under submission and the court has not yet scheduled a hearing date. Pursuant to the automatic stay of proceedings under the Private Securities Litigation Reform Act, all discovery has been stayed pending the motions to dismiss.

The Defendants strongly dispute and deny the allegations and intend to continue to defend themselves vigorously against the claims.

As stated in ~~Item 2~~ ~~and~~ ~~Note 14~~above, on ~~December 9, 2019, ApplianceSmart filed~~October 13, 2021, a ~~voluntary petition in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11~~hearing was held to consider approval of the ~~Bankruptcy Code.~~Disclosure Statement filed by ApplianceSmart in conjunction with its bankruptcy proceedings. On December 14, 2021, a hearing was held to confirm ApplianceSmart’s plan for reorganization (the “Plan”). ~~A final decree is expected upon~~On Feb 28, 2022, the ~~full satisfaction~~court approved ApplianceSmart’s plan for reorganization (the “Plan”), discharging ApplianceSmart of certain debts according to the Plan atresulting in the Company recording a gain of approximately $11.4 million, which ~~time ApplianceSmart will emerge from Chapter 11.~~includes a write-off or adjustment of approximately $11.5 million on the settlement of debts and other liabilities, offset by payments subject to the bankruptcy that were not included as debtor-in-possession liabilities of approximately $149,000.

On February 20, 2018, the Company announced a $10 million common stock repurchase program. ~~The~~During the six months ended March 31, 2022, the Company ~~did not repurchase any~~repurchased 65,668 shares of common stock under this program ~~during the quarter ended December 31, 2021.~~at a cost of approximately $2.1 million. As of ~~December~~March 31, ~~2021,~~2022, the Company has approximately ~~$6.8~~$4.6 million available for repurchases under this program.

The following exhibits are filed with or incorporated by reference into this Quarterly Report.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


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)


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)


		Page
	PART I

	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets as of ~~December~~March 31, ~~2021~~2022 (Unaudited) and September 30, 2021	3

	Condensed Consolidated Statements of Income (Unaudited) for the Three and Six Months Ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021	4

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~Three~~Six Months Ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021	5

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Six Months Ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~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	2119

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2930

Item 4.	Controls and Procedures	2930

	PART II

	OTHER INFORMATION	3132

Item 1.	Legal Proceedings	3132

Item 1A.	Risk Factors	3132

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3132

Item 3.	Defaults upon Senior Securities	3132

Item 4.	Mine Safety Disclosures	3233

Item 5.	Other Information	3233

Item 6.	Exhibits	3334

SIGNATURES		3435


	December 31, 2021			September 30, 2021			March 31, 2022			September 30, 2021
Inventory, net
Raw materials	$	26,511		$	18,604		$	27,610		$	18,604
Work in progress		4,598			12,404			6,500			12,404
Finished goods		24,852			22,584			26,513			22,584
Merchandise		19,789			18,948			20,435			18,948
		75,750			72,540			81,058			72,540
Less: Inventory reserves		(1,852	)		(1,793	)		(1,694	)		(1,793	)
Total inventory, net	$	73,898		$	70,747		$	79,364		$	70,747


	December 31, 2021			September 30, 2021			March 31, 2022			September 30, 2021
Property and equipment, net:
Land	$	2,029		$	2,029		$	2,029		$	2,029
Building and improvements		11,968			11,737			11,900			11,737
Transportation equipment		450			450			450			450
Machinery and equipment		37,879			35,284			42,235			35,284
Furnishings and fixtures		4,072			3,907			4,074			3,907
Office, computer equipment and other		2,872			2,792			3,007			2,792
		59,270			56,199			63,695			56,199
Less: Accumulated depreciation		(21,830	)		(20,567	)		(23,110	)		(20,567	)
Total property and equipment, net	$	37,440		$	35,632		$	40,585		$	35,632


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐


	Three months ended December 31, 2021 (unaudited)			Three months ended December 31, 2020 (unaudited)
Revenues	$	96		$	296
Cost of revenues		106			165
Gross profit		(10	)		131

Operating expenses:
General and administrative expenses		219			208
Total operating expenses		219			208
Operating income		(229	)		(77	)
Other (expense) income:
Interest expense, net		0			(46	)
Accounts payable settlement		(10	)		44
Other income (expense)		—			279
Total other (expense) income, net		(10	)		277
Income before provision for income taxes	$	(239	)	$	200


	For the Six Months Ended March 31, 2022			For the Six Months Ended March 31, 2021

Select Data:
Revenue	$	144,864		$	133,344
Cost of revenue		92,295			84,585
General and administrative expenses		27,311			24,844
Sales and marketing expenses		6,402			5,499
Operating income		18,856			18,416
Interest expense, net		(1,875	)		(3,119	)
Provision for income taxes		6,483			4,678
Net income	$	21,904		$	13,974

Adjusted EBITDA (a)
Retail business	$	8,813		$	10,594
Flooring Manufacturing business		9,834			11,824
Steel Manufacturing business		4,672			2,531
Corporate and Other		(964	)		(1,697	)
Total Adjusted EBITDA	$	22,355		$	23,252

Adjusted EBITDA as a percentage of revenue
Retail business		18.8	%		22.8	%
Flooring Manufacturing business		15.0	%		18.7	%
Steel Manufacturing business		17.7	%		10.8	%
Corporate and Other		-16.4	%		-681.5	%
Consolidated adjusted EBITDA as a percentage of revenue		15.4	%		17.4	%


	For the Three Months Ended				For the Three Months Ended						For the Six Months Ended
	December 31, 2021		December 31, 2020		March 31, 2022			March 31, 2021			March 31, 2022			March 31, 2021
Net income	$	6,546	$	5,279	$	15,358		$	8,695		$	21,904		$	13,974
Depreciation and amortization		1,549		1,714		1,496			1,706			3,045			3,420
Stock-based compensation		18		17		19			270			37			287
Interest expense, net		1,017		1,470		858			1,649			1,875			3,119
Income tax expense		2,960		1,450		3,523			3,228			6,483			4,678
Other		12		—
Gain on bankruptcy settlement						(11,362	)		(1,115	)		(11,352	)		(1,115	)
Gain/loss on extinguishment of debt						363			(1,382	)		363			(1,382	)
Non-recurring loan costs						—			271			—			271
Adjusted EBITDA	$	12,102	$	9,930	$	10,255		$	13,322		$	22,355		$	23,252


	Live Ventures Incorporated

Dated: ~~February 10,~~May 11, 2022	/s/ Jon Isaac
	President and Chief Executive Officer
	(Principal Executive Officer)

Dated: ~~February 10,~~May 11, 2022	/s/ David Verret
	Chief ~~Accounting~~Financial Officer
	(Principal Financial Officer)


*	Filed herewith