☒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,~~August 9, 2021 was ~~1,555,175.~~1,570,834.


	December 31, 2020			September 30, 2020			June 30, 2021			September 30, 2020
	(Unaudited)						(Unaudited)
Assets
Cash	$	7,232		$	8,984		$	10,565		$	8,984
Trade receivables, net		17,564			20,121			19,376			20,121
Inventories, net		64,739			64,525			61,426			64,525
Prepaid expenses and other current assets		1,305			1,778			1,353			1,778
Debtor in possession assets		326			520			162			520
Total current assets		91,166			95,928			92,882			95,928
Property and equipment, net		31,127			30,376			32,942			30,376
Right of use asset - operating leases		28,971			30,894			27,803			30,894
Equity method investment								6,000			—
Deposits and other assets		590			223			583			223
Deferred taxes		—			1,021			—			1,021
Intangible assets, net		956			1,063			744			1,063
Goodwill		37,754			37,754			37,754			37,754
Total assets	$	190,564		$	197,259		$	198,708		$	197,259
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable	$	8,227		$	9,117		$	10,889		$	9,117
Accrued liabilities		12,896			14,822			13,344			14,822
Income taxes payable		806			736			5,948			736
Lease obligation short term - operating leases		6,958			7,176
Current portion of lease obligations - operating leases								6,857			7,176
Current portion of long-term debt		12,066			11,986			8,100			11,986
Current portion of long-term debt related parties		—			1,297
Debtor in possession liabilities		11,889			12,228
Current portion of notes payable related parties								—			1,297
Debtor-in-possession liabilities								11,208			12,228
Total current liabilities		52,842			57,362			56,346			57,362
Long-term debt, net of current portion		57,961			63,390			44,844			63,390
Lease obligation long term - operating leases		26,503			28,101			25,212			28,101
Long-term debt related parties, net of current portion		4,000			4,000
Deferred tax liability		269			—
Notes payable related parties, net of current portion								4,000			4,000
Deferred taxes								320			—
Other non-current obligations		404			734			405			734
Total liabilities		141,979			153,587			131,127			153,587
Commitments and contingencies
Stockholders' equity:
Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized, 214,244 shares issued and outstanding at December 31, 2020 and September 30, 2020		—			—
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at December 31, 2020 and September 30, 2020, with a liquidation preference of $0.30 per share outstanding		—			—
Common stock, $0.001 par value, 10,000,000 shares authorized, 1,555,175 and 1,589,101 shares issued and outstanding at December 31, 2020 and September 30, 2020, respectively		2			2
Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized, 315,790 and 214,244 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively								—			—
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively, with a liquidation preference of $0.30 per share outstanding								—			—
Common stock, $0.001 par value, 200,000,000 shares authorized, 1,570,834 and 1,589,101 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively								2			2
Paid in capital		64,489			64,472			64,883			64,472
Treasury stock common 533,011 shares as of December 31, 2020 and 499,085 shares as of September 30, 2020		(4,481	)		(4,098	)
Treasury stock Series E preferred 50,000 shares as of December 31, 2020 and September 30, 2020		(7	)		(7	)
Accumulated deficit		(11,016	)		(16,429	)
Treasury stock common 533,011 shares as of June 30, 2021 and 499,805 shares as of September 30, 2020								(4,507	)		(4,098	)
Treasury stock Series E preferred 50,000 shares as of June 30, 2021 and of September 30, 2020								(7	)		(7	)
Retained earnings (deficit)								7,656			(16,429	)
Equity attributable to Live stockholders		48,987			43,940			68,027			43,940
Noncontrolling interest		(402	)		(268	)
Non-controlling interest								(446	)		(268	)
Total stockholders' equity		48,585			43,672			67,581			43,672
Total liabilities and stockholders' equity	$	190,564		$	197,259		$	198,708		$	197,259

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


	Three Months Ended December 31,						For the Three Months Ended June 30,						For the Nine Months Ended June 30,
	2020			2019			2021			2020			2021			2020
Revenues	$	62,454		$	42,001		$	69,095		$	42,472		$	202,439		$	130,904
Cost of revenues		40,185			25,375			44,029			25,759			128,614			79,789
Gross profit		22,269			16,626			25,066			16,713			73,825			51,115

Operating expenses:
General and administrative expenses		12,279			10,809			13,794			8,221			38,638			30,731
Sales and marketing expenses		2,699			2,330			3,040			2,502			8,539			7,839
Total operating expenses		14,978			13,139			16,834			10,723			47,177			38,570
Operating income		7,291			3,487			8,232			5,990			26,648			12,545
Other (expense) income:
Interest expense, net		(1,470	)		(1,357	)		(938	)		(1,155	)		(4,057	)		(3,782	)
Impairment charges		—			(1,207	)
Gain on lease settlement, net								0			0			0			223
Gain on Payroll Protection Program loan forgiveness								4,768			0			6,150			0
Gain on disposal of fixed assets		129			—			0			0			0			0
Gain on bankruptcy settlement								650			0			1,765			0
Other income (expense)		779			(181	)		(76	)		173			782			(133	)
Total other (expense) income, net		(562	)		(2,745	)		4,404			(982	)		4,640			(3,692	)
Income before provision for income taxes		6,729			742			12,636			5,008			31,288			8,853
Provision for income taxes		1,450			195			2,703			1,423			7,381			2,402
Net income		5,279			547			9,933			3,585			23,907			6,451
Net loss attributable to non-controlling interest		134			—			5			0			178			0
Net income attributable to Live stockholders	$	5,413		$	547		$	9,938		$	3,585		$	24,085		$	6,451

Income per share:
Basic	$	3.45		$	0.30		$	6.35		$	2.18		$	15.41		$	3.72
Diluted	$	1.63		$	0.15		$	3.01		$	1.07		$	7.31		$	1.87

Weighted average common shares outstanding:
Basic		1,568,213			1,806,746			1,566,064			1,646,836			1,563,025			1,735,416
Diluted		3,318,728			3,540,953			3,297,854			3,356,043			3,294,815			3,444,623

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

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


	Three Months Ended December 31,						For the Nine Months Ended June 30,
	2020			2019			2021			2020
OPERATING ACTIVITIES:
Net income	$	5,279		$	547		$	23,907		$	6,451
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition:
Depreciation and amortization		1,714			1,085			5,089			3,954
Impairment charges		—			1,207
Gain on disposal of property and equipment		(129	)		47
Gain on lease settlement, net								—			(223	)
Gain or loss on disposal of property and equipment								132			263
Gain on Payroll Protection Program loan forgiveness								(6,150	)		—
Gain on bankruptcy settlement								(1,765	)		—
Amortization of debt issuance cost		266			108			635			274
Stock based compensation expense		17			29			230			67
Warrant extension fair value adjustment		—			266			—			368
Change in deferred rent		—			370
Amortization of right-to-use assets								125			985
Change in reserve for uncollectible accounts		658			415			451			424
Change in reserve for obsolete inventory		590			(170	)		1,137			(84	)
Change in deferred income taxes		1,290			126			1,340			2,190
Change in other		(344	)		103			(484	)		(316	)
Changes in assets and liabilities:
Trade receivables		1,909			1,929			295			2,702
Inventories		(716	)		439			934			9,398
Income taxes receivable		70			74
Income taxes								5,214			152
Prepaid expenses and other current assets		478			290			430			24
Deposits and other assets		(366	)		9			(359	)		173
Right-of-use assets		1,923			1,628
Accounts payable		(898	)		(2,182	)		3,010			(6,266	)
Accrued liabilities		(2,256	)		(2,020	)		(1,972	)		(2,461	)
Lease liabilities		(1,817	)		(1,301	)
Net cash provided by operating activities		7,668			2,999			32,199			18,075

INVESTING ACTIVITIES:
Purchase of intangible assets		—			(4	)		—			(30	)
Lonesome Oak acquisition								—			(550	)
Investment								(6,000	)		—
Note receivable								—			(55	)
Purchase of property and equipment		(3,258	)		(641	)		(8,470	)		(2,357	)
Net cash provided by (used in) investing activities		(3,258	)		(645	)
Net cash used in investing activities								(14,470	)		(2,992	)

FINANCING ACTIVITIES:
Net borrowings (payments) under revolver loans		(3,289	)		(972	)		(3,247	)		(5,169	)
Purchase of series E preferred treasury stock								—			(3	)
Stock option exercise								181			—
Proceeds from issuance of notes payable		2,130			—			2,258			9,768
Purchase of common treasury stock		(383	)		(343	)		(409	)		(1,433	)
Debtor in possession - cash		92			(173	)
Payments on long-term debt		(4,712	)		(2,042	)
Payments on related party notes payable								(5,500	)		—
Debtor-in-possession cash								128			(86	)
Payments on notes payable								(9,559	)		(15,152	)
Net cash used in financing activities		(6,162	)		(3,533	)		(16,148	)		(12,075	)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(1,752	)		(1,179	)
INCREASE IN CASH AND CASH EQUIVALENTS								1,581			3,008
CASH AND CASH EQUIVALENTS, beginning of period		8,984			2,681			8,984			2,681
CASH AND CASH EQUIVALENTS, end of period	$	7,232		$	1,502		$	10,565		$	5,689

Supplemental cash flow disclosures:
Interest paid	$	1,223		$	1,187		$	3,481		$	3,415
Income taxes paid	$	—		$	—		$	736		$	—
Noncash financing and investing activities:
Settlement of debt in exchange for property and equipment	$	1,000		$	—

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

Series B
Preferred Stock

Series E
Preferred Stock

Common Stock

Series E
Preferred
Stock

Common
Stock

Shares

Amount

Shares

Amount

Shares

Amount

Paid-In
Capital

Treasury
Stock

Treasury
Stock

Accumulated
Deficit

Non-controlling interest

Total
Equity

Balance, September 30, 2020

214,244

$
—

47,480

$
—

1,589,101

$
2

$
64,472

$
(7
)

$
(4,098
)

$
(16,429
)

$
(268
)

$
43,672

Stock based compensation

—

—

—

—

—

—

17

—

—

—

—

17

Purchase of common treasury stock

—

—

—

—

(33,926
)

—

—

—

(383
)

—

—

(383
)
Net income (loss)

—

—

—

—

—

—

—

—

—

5,413

(134
)

5,279

Balance, December 31, 2020

214,244

$
—

47,480

$
—

1,555,175

$
2

$
64,489

$
(7
)

$
(4,481
)

$
(11,016
)

$
(402
)

$
48,585

Series B
Preferred Stock

Series E
Preferred Stock

Common Stock

Series E
Preferred
Stock

Common
Stock

Shares

Amount

Shares

Amount

Shares

Amount

Paid-In
Capital

Treasury
Stock

Treasury
Stock

Accumulated
Deficit

Total Equity

Balance, September 30, 2019

214,244

$
—

77,840

$
—

1,826,009

$
2

$
63,924

$
(4
)

$
(2,438
)

$
(27,355
)

$
34,129

Stock based compensation

—

—

—

—

—

—

29

—

—

—

29

Warrant extension fair value adjustment

—

—

—

—

—

—

266

—

—

—

266

Purchase of common treasury stock

—

—

—

—

(41,699
)

—

—

—

(343
)

—

(343
)
Purchase of Series E preferred stock

—

—

(30,000
)

—

—

—

—

(3
)

(3
)
Net income

—

—

—

—

—

—

—

—

—

547

547

Balance, December 31, 2019

214,244

$
—

47,840

$
—

1,784,310

$
2

$
64,219

$
(7
)

$
(2,781
)

$
(26,808
)

$
34,625

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

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

FOR THE THREE AND NINE MONTHS ENDED ~~DECEMBER 31,~~JUNE 30, 2021 AND 2020 ~~AND 2019~~

The accompanying unaudited condensed consolidated financial statements include the accounts of Live Ventures Incorporated, a Nevada corporation, and its subsidiaries (collectively, the “Company”). Commencing in fiscal year 2015, the Company began a strategic shift in its business plan away from providing online marketing solutions for small and medium sized ~~business~~businesses to acquiring profitable companies in various industries that have demonstrated a strong history of earnings power. The Company continues to actively develop, revise, and evaluate its products, services and its marketing strategies in its businesses. The Company has ~~three~~ 3operating segments: Retail, Flooring Manufacturing, and Steel Manufacturing. Included in the Retail segment: (i) Vintage Stock, Inc. (“Vintage Stock”), through which the Company is engaged in the retail sale of new and used movies, music, collectibles, comics, books, games, game systems and components and (ii) ApplianceSmart, Inc. (“ApplianceSmart”), through which the Company is engaged in the sale of new major appliances through a retail store. Included in the Flooring Manufacturing segment is Marquis Industries, Inc. (“Marquis”), which is engaged in the manufacture and sale of carpet and the sale of vinyl and wood floorcoverings. Included in the Steel Manufacturing Segment is Precision Industries, Inc. (“Precision Marshall”), which is engaged in the manufacture and sale of alloy and steel plates, ground flat stock, and drill ~~rods~~.rods.

The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of the Company’s management, this interim information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results of operations for three and nine months ended ~~December 31, 2020~~June 30, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, 2021. This financial information should be read in conjunction with the consolidated financial statements and related notes thereto as of September 30, 2020 and for the fiscal year then ended included in the Company’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on January 13, 2021 (the “2020 10-K”).

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 fund our operations, pay our scheduled loan payments, continue to repurchase shares to the extent that we do so, 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.

In March 2020, there was a global outbreak of COVID-19 (Coronavirus) which continues to create challenges and unprecedented conditions. Although there are effective vaccines for COVID-19 that have been approved for use, distribution of the vaccines did not begin until late 2020, and a majority of the public will likely not have access to a vaccination until sometime in 2021. Accordingly, there remains significant uncertainty about the duration and the extent of the impact of the COVID-19 pandemic. These uncertainties include, but are not limited to, the potential adverse effect of the pandemic on the Company’s supply chain partners, its employees and customers, customer sentiment in general, and traffic within shopping centers, and, where applicable, malls, containing its stores. Recommendations and/or mandates from federal, state, and local authorities to avoid large gatherings of people or self-quarantine have previously affected, and may continue to affect, traffic to the stores. As of March 31, 2020, Vintage Stock had closed all of its retail locations in response to the crisis. Beginning May 1, 2020, Vintage Stock began to reopen certain locations in compliance with government regulations and, at June 30, 2020, all Vintage Stock retail locations were reopened while maintaining compliance with government mandates. The Company is unable to predict if additional periods of store closures will be needed or mandated. During March and April 2020, Marquis conducted rolling layoffs for certain employees, however, during May 2020, most employees have returned to their respective locations. Continued impacts of the pandemic could materially adversely affect the near-term and long-term revenues, earnings, liquidity, and cash flows, and may require significant actions in response, including but not limited to, employee furloughs, reduced store hours, store closings, expense reductions or discounting of pricing of products, all in an effort to mitigate such impacts. The extent of the impact of the pandemic on the business and financial results will depend largely on future developments, including the duration of the spread of the outbreak within the U.S. and the effect of the vaccines, the impact on capital and financial markets and the related impact on consumer confidence and spending, all of which are highly uncertain and cannot be predicted. This situation is changing rapidly, and additional impacts may arise that the Company is not aware of currently.

Certain amounts in the prior ~~year~~period have been ~~reclassifies~~reclassified to ~~confirm~~conform to the current ~~year~~period presentation.

Note 3: Leases

~~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 and, in some cases percentage rent, and require us to pay all insurance, taxes, and other maintenance costs. As a result, ~~they recognize~~the Company recognizes assets and liabilities for all leases with lease terms greater than 12 months. The amounts 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 affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

~~The~~As of June 30, 2021, the weighted average remaining lease term is ~~9.2 years. Our~~8.7 years and our weighted average discount rate is ~~6.9%~~6.8%. Total cash payments for the ~~three~~nine months ended ~~December 31,~~June 30, 2021 and 2020 ~~was~~were $~~2,178. We did not enter into any new~~2,132 and $5,961, respectively. Additionally, we obtained right-of-use assets in exchange for lease liabilities of approximately $7,600 upon commencement of operating leases during the ~~three~~nine months ended ~~December 31, 2020~~.June 30, 2021.

The following table details our right of use assets and lease liabilities as of ~~December 31, 2020 and September~~June 30, ~~2020:~~2021:


	June 30, 2021
Right of use asset - operating leases	$	27,803
Operating lease liabilities:
Current		6,857
Long term		25,212

December 31, 2020

September 30, 2020

Right of use asset - operating leases

$
28,971

$
30,894

Operating lease liabilities:

Current

6,958

7,176

Long term

26,503

28,101

Total present value of future lease payments as of ~~December 31, 2020:~~June 30, 2021:

Twelve months ended December 31,
2021	$	8,731

Twelve months ended June 30,
2022		6,871		$	8,827
2023		4,879			6,747
2024		3,953			4,280
2025		2,946			3,772
2026					2,536
Thereafter		13,660			12,447
Total		41,040			38,609
Less implied interest		(7,579	)		(6,540	)
Present value of payments	$	33,461		$	32,069

During the ~~three~~nine months ended ~~December 31, 2019,~~June 30, 2020, the Company ~~incurred $1,207~~recorded a net gain on lease settlement of $223 which consisted of impairment charges of $614 related to the decision to close additional ApplianceSmart retail locations resulting in a decrease to the associated right of use asset related to these ~~leases. These locations physically~~leases, offset by a gain on lease settlement of $837 resulting from the extinguishment of the lease liability associated with the closed ~~during the three months ended March 31, 2020.~~retail locations. There were no0 similar charges for the ~~three~~nine months ended ~~December 31, 2020.~~June 30, 2021.

Note 4: Balance Sheet Detail Information


	June 30, 2021			September 30, 2020
Trade receivables, current, net:
Accounts receivable, current	$	19,644		$	20,197
Less: Reserve for doubtful accounts		(268	)		(76	)
	$	19,376		$	20,121
Trade receivables , long term, net:
Accounts receivable, long term	$	0		$	196
Less: Reserve for doubtful accounts		0			(196	)
	$	0		$	0
Total trade receivables, net:
Gross trade receivables	$	19,644		$	20,393
Less: Reserve for doubtful accounts		(268	)		(272	)
	$	19,376		$	20,121
Inventory, net
Raw materials	$	15,156		$	13,175
Work in progress		12,483			11,747
Finished goods		19,048			25,009
Merchandise		16,637			17,729
		63,324			67,660
Less: Inventory reserves		(1,898	)		(3,135	)
	$	61,426		$	64,525
Property and equipment, net:
Building and improvements	$	11,643		$	9,908
Transportation equipment		121			480
Machinery and equipment		34,078			27,217
Furnishings and fixtures		3,820			2,908
Office, computer equipment and other		2,727			3,445
		52,391			43,958
Less: Accumulated depreciation		(19,447	)		(13,582	)
	$	32,942		$	30,376
Intangible assets, net:
Domain name and marketing related intangibles	$	90		$	90
Customer relationship intangibles		2,689			2,689
Purchased software		120			121
		2,899			2,900
Less: Accumulated amortization		(2,155	)		(1,837	)
	$	744		$	1,063
Accrued liabilities:
Compensation and benefits	$	4,498		$	4,178
Accrued sales and use taxes		1,245			1,251
Accrued property taxes		1,993			270
Accrued gift card and escheatment liability		1,579			1,534
Accrued interest payable		221			280
Accrued accounts payable and bank overdrafts		903			3,818
Accrued professional fees		1,450			2,191
Customer deposits		206			169
Accrued expenses - other		1,249			1,131
	$	13,344		$	14,822

December 31, 2020

September 30, 2020

Trade receivables, current, net:

Accounts receivable, current

$
17,626

$
20,197

Less: Reserve for doubtful accounts

(62
)

(76
)

$
17,564

$
20,121

Trade receivables , long term, net:

Accounts receivable, long term

$
—

$
196

Less: Reserve for doubtful accounts

—

(196
)

$
—

$
—

Total trade receivables, net:

Gross trade receivables

$
17,626

$
20,393

Less: Reserve for doubtful accounts

(62
)

(272
)

$
17,564

$
20,121

Inventory, net

Raw materials

$
12,930

$
13,175

Work in progress

11,031

11,747

Finished goods

26,474

25,009

Merchandise

16,891

17,729

67,326

67,660

Less: Inventory reserves

(2,587
)

(3,135
)

$
64,739

$
64,525

Property and equipment, net:

Building and improvements

$
11,405

$
9,908

Transportation equipment

122

480

Machinery and equipment

29,719

27,217

Furnishings, fixtures, office equipment and other

6,749

6,353

47,994

43,958

Less: Accumulated depreciation

(16,868
)

(13,582
)

$
31,127

$
30,376

Intangible assets, net:

Domain name and marketing related intangibles

$
90

$
90

Customer relationship intangibles

2,689

2,689

Purchased software

121

121

2,900

2,900

Less: Accumulated amortization

(1,944
)

(1,837
)

$
956

$
1,063

Accrued liabilities:

Accrued payroll

$
2,691

$
4,178

Accrued sales and use taxes

1,574

1,251

Accrued property and other tax

208

270

Accrued gift card and escheatment liability

1,683

1,534

Accrued interest payable

393

280

Accrued bank fees and overdrafts

514

2,631

Accrued professional fees

5,102

3,378

Customer deposits

35

169

Accrued expenses - other

695

1,131

$
12,896

$
14,822

Note 5:6: Long Term Debt

Long-term debt as of ~~December 31, 2020~~June 30, 2021 and September 30, 2020 consisted of the following:


	June 30, 2021			September 30, 2020
Bank of America Revolver Loan	$	—		$	—
Encina Business Credit Revolver Loan		11,523			14,886
Texas Capital Bank Revolver Loan		7,497			7,115
Crossroads Financial Revolver Loan		—			883
Encina Business Credit Term Loan		1,405			1,663
Note Payable Comvest Term Loan		—			5,554
Note Payable to the Sellers of Vintage Stock		4,500			10,000
Note #1 Payable to Banc of America Leasing & Capital LLC		587			1,229
Note #3 Payable to Banc of America Leasing & Capital LLC		1,458			1,862
Note #4 Payable to Banc of America Leasing & Capital LLC		448			572
Note #5 Payable to Banc of America Leasing & Capital LLC		2,125			2,538
Note #6 Payable to Banc of America Leasing & Capital LLC		653			758
Note #7 Payable to Banc of America Leasing & Capital LLC		4,263			4,681
Note #8 Payable to Banc of America Leasing & Capital LLC		3,051			3,091
Note Payable to Extruded Fibers		1,000			2,900
Note Payable to JCM Holdings		1,876			—
Note Payable to the Sellers of Precision Marshall		2,500			2,500
Note Payable to Store Capital Acquisitions, LLC		9,218			9,243
Payroll Protection Program		—			6,151
JanOne Inc. (Note 11)		—			—
Isaac Capital Group		2,000			2,000
Spriggs Investments, LLC		2,000			2,000
Sellers of Lonesome Oak		—			1,297
Note payable to individuals, interest at 10-11% per annum, payable on a 90 day written notice, unsecured		707			707
Note payable to individuals, interest at 7% per annum, unsecured		199			—
Note payable to individual, noninterest bearing, monthly payments of $19 through March 2023		553			810
Total notes payable		57,563			82,440
Less unamortized debt issuance costs		(619	)		(1,767	)
Net amount		56,944			80,673
Less current portion		(8,100	)		(13,283	)
Long-term portion	$	48,844		$	67,390

December 31, 2020

September 30, 2020

Bank of America Revolver Loan

$
—

$
—

Encina Business Credit Revolver Loan

13,233

14,886

Texas Capital Bank Revolver Loan

5,534

7,115

Crossroads Financial Revolver Loan

828

883

Encina Business Credit Term Loan

1,576

1,663

Note Payable Comvest Term Loan

1,882

5,554

Note Payable to the Sellers of Vintage Stock

10,000

10,000

Note #1 Payable to Banc of America Leasing & Capital LLC

1,017

1,229

Note #3 Payable to Banc of America Leasing & Capital LLC

1,729

1,862

Note #4 Payable to Banc of America Leasing & Capital LLC

531

572

Note #5 Payable to Banc of America Leasing & Capital LLC

2,402

2,538

Note #6 Payable to Banc of America Leasing & Capital LLC

723

758

Note #7 Payable to Banc of America Leasing & Capital LLC

4,543

4,681

Note #8 Payable to Banc of America Leasing & Capital LLC

3,264

3,091

Note Payable to Extruded Fibers

1,600

2,900

Note Payable to JCM Holdings

1,959

—

Note Payable to the Sellers of Precision Marshall

2,500

2,500

Note Payable to Store Capital Acquisitions, LLC

9,235

9,243

Payroll Protection Program

6,150

6,151

JanOne Inc

—

—

Isaac Capital Fund

2,000

2,000

Spriggs Investments, LLC

2,000

2,000

Seller of Lonesome Oak

1,254

1,297

Note payable to individual, interest at 10-11% per annum, payable on a 90 day written notice,
unsecured

707

707

Note payable to individuals, interest at 17% per annum, unsecured

130

—

Note payable to individual, noninterest bearing, monthly payments of $19 through March 2023, unsecured

726

810

Total debt

75,524

82,440

Less unamortized debt issuance costs

(1,497
)

(1,767
)
Net debt

74,027

80,673

Less current portion

(12,066
)

(13,283
)
Long-term portion

$
61,961

$
67,390

Future maturities of long-term debt at ~~December 31, 2020,~~June 30, 2021, are as follows which does not include related party debt separately stated:

Twelve months ending December 31,
2021	$	12,066

Twelve months ending June 30,
2022		12,523	$	8,100
2023		33,544		17,357
2024		2,256		14,755
2025		3,353		1,905
2026				3,487
Thereafter		11,782		11,959
Total	$	75,524	$	57,563

On July 6, 2015 ~~(amended most recently January 31, 2020, July 6, 2020 and September 28, 2020)~~ (as amended), Marquis entered into a ~~$25,000~~$25,000 revolving credit agreement (“BofA Revolver”) with Bank of America Corporation (“BofA”). The BofA Revolver is ~~a five-year,~~an asset-based facility that matures on January 31, 2025 and 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~~satisfying all loan covenants under the credit agreement with BofA.

The following tables summarize the BofA Revolver for the ~~three~~nine months ended ~~December 31,~~June 30, 2021 and 2020 ~~and 2019~~ and as of ~~December 31, 2020~~June 30, 2021 and September 30, 2020:


	During the three months ended December 31,						During the nine months ended June 30,
	2020			2019			2021			2020
Cumulative borrowing during the period	$	33,126		$	24,344		$	99,137		$	85,563
Cumulative repayment during the period		35,790			23,817			102,854			87,919
Maximum borrowed during the period		11,347			2,083			—			11,347
Weighted average interest for the period		0.00	%		3.66	%		0.00	%		2.87	%


	December 31, 2020			September 30, 2020			June 30, 2021			September 30, 2020
Total availability	$	24,924		$	21,732		$	26,765		$	21,732
Total outstanding		—			—			—			—

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) ~~$23,500~~$23,500 and (ii) a borrowing base equal to the sum of Precision’s (a) ~~85%~~85% of eligible accounts receivable, plus (b) ~~85%~~85% of eligible inventory, subject to an eligible inventory sublimit that begins at ~~$14,000~~$14,000 and declines to ~~$12,000~~$12,000 during the term of the Loan Agreement, minus (c) customary reserves. The Encina Revolver Loans mature on July 14, 2023.

The following tables summarize the Encina Revolver Loans for the for the ~~three~~nine months ended ~~December 31,~~June 30, 2021 and 2020 ~~and 2019~~ and as of ~~December 31, 2020~~June 30, 2021 and September 30, 2020:


	During the three months ended December 31,						During the nine months ended June 30,
	2020			2019			2021			2020
Cumulative borrowing during the period	$	8,431		$	—		$	32,711		$	—
Cumulative repayment during the period		10,084			—			36,338			—
Maximum borrowed during the period		1,000			—			1,250			—
Weighted average interest for the period		6.50	%		0.00	%		6.50	%		0.00	%


	December 31, 2020			September 30, 2020			June 30, 2021			September 30, 2020
Total availability	$	588		$	421		$	5,439		$	421
Total outstanding		13,233			14,886			11,523			14,886

On November 3, 2016, Vintage Stock entered into a ~~$12,000~~$12,000 credit agreement (as ~~amended on January 23, 2017, amended on September 20, 2017, June 7, 2018, September 24, 2019 and September 30, 2020)~~amended) 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 November 3, ~~2023.~~2023.

The following tables summarize the TCB Revolver for the ~~three~~nine months ended ~~December 31,~~June 30, 2021 and 2020 ~~and 2019~~ and as of ~~December 31, 2020~~June 30, 2021 and September 30, 2020:


	During the three months ended December 31,						During the nine months ended June 30,
	2020			2019			2021			2020
Cumulative borrowing during the period	$	20,700		$	18,626		$	68,892		$	46,792
Cumulative repayment during the period		22,281			19,709			68,510			51,063
Maximum borrowed during the period		8,930			11,798			8,930			11,798
Weighted average interest for the period		2.40	%		4.13	%		2.38	%		3.59	%


	December 31, 2020			September 30, 2020			June 30, 2021			September 30, 2020
Total availability	$	6,466		$	5,520		$	4,503		$	5,520
Total outstanding		5,534			7,115			7,497			7,115

On March 15, 2019, ApplianceSmart, Inc. (the “Borrower”), entered into a Loan and Security Agreement (the “Crossroads Revolver”) with Crossroads Financing, LLC (“Crossroads”), providing for a ~~$4,000~~$4,000 revolving credit facility, subject to a borrowing base limitation (the “ABL Facility”). The borrowing base for the ABL Facility at any time equals the lower of (i) up to ~~75%~~75% of inventory cost or (ii) up to ~~85%~~85% of net orderly liquidation value, in each case as further described in the Loan Agreement.~~The Crossroads Revolver matures on March 15, 2021.~~

On March 3, 2020, the Company executed a guaranty agreement to Crossroads to induce Crossroads to continue to extend financial accommodations and consent to use of cash collateral to ~~ApplianceSmart.~~ApplianceSmart (the "Live Guaranty"). The amount of the guaranty is ~~$1,200. The guaranty terminates at such time as ApplianceSmart has paid in full all amounts owed by it to Crossroads. The Company expects the guaranty to continue in effect until August 2021.~~ $1,200. In addition, certain executive officers of the Borrower have agreed to provide validity guarantees.

On May 28, 2021, Crossroads and the Company entered into an Assignment and Assumption of Loan and Security Agreement pursuant to which, among other things, Crossroads assigned the Company all of Crossroads' rights, claims, title, and interest in and to the Crossroads Revolver in exchange for the payment in full of the Crossroads Revolver. In addition, on May 28, 2021, the Live Guaranty was terminated.

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 1112 for a complete discussion.

As of June 30, 2021, the Company terminated the Crossroads Revolver and repaid the loan in full.

During October 2020, Marquis purchased a manufacturing facility for ~~$2,500.~~$2,500. Marquis had previously been leasing this facility. Additionally, Marquis entered into a ~~$2,000~~$2,000 loan agreement with the seller of the facility, which is secured by the facility, in order to complete the purchase of the facility. The loan bears interest at 6%6% due monthly and matures January ~~2030.~~ 2030.

During January 2021, the Company paid the Comvest loan in full and, as a result, the loan agreement and the related instruments, documents, and agreements, were terminated.

During February 2021, Precision received notice that its $1,383 payroll protection program loan has been forgiven and 0 amounts are owed.

During June 2021, Marquis received notice that its $4,768 payroll protection program loan has been forgiven and 0 amounts are owed.

We were in compliance as of ~~December 31, 2020~~June 30, 2021 with all covenants under our existing revolving and other loan agreements, with the exception of covenants related to the Crossroads Revolver.

As of ~~December 31, 2020,~~June 30, 2021, and September 30, 2020, there were 47,840 and 47,840 shares outstanding of Series a Preferred Stock, respectively. During the ~~three~~nine months ended ~~December 31, 2019,~~June 30, 2020, the Company repurchased 30,000 shares of Series E Convertible Preferred Stock for an aggregate purchase price of ~~$3.~~$3. During July 2021, the Company paid all accrued and then outstanding Series E Convertible Preferred Stock dividends.

For the ~~three~~nine months ended ~~December 31,~~June 30, 2021 and 2020, ~~and 2019,~~ the Company purchased ~~33,926~~34,935 and ~~41,699~~212,728 shares ~~respectively,~~ of its common stock on the open market for ~~$383~~$409 and ~~$343, respectively.~~$1,433, respectively.

As of September 30, 2020 the Company had 118,029 warrants ~~listed below expire~~to purchase shares of Series B Convertible Preferred Stock outstanding with a weighted average exercise price of $20.80 expiring at various timeframes over the next two years. ~~However,~~The Company and ICG previously entered into ~~an agreement~~agreements whereby if the warrants ~~are~~were not exercised on or before the applicable expiration date, the applicable expiration date iswas deemed automatically extended for successive ~~two year~~two-year periods, immediately prior to such expiration. During the ~~three~~nine months ended ~~December 31, 2019,~~June 30, 2020, the Company recorded a fair value adjustment of ~~$266~~$368 related to the extension of warrants that expired during this period. There was no such adjustment during the ~~three~~nine months ended ~~December 31, 2020.~~

~~The following table summarizes information about the Company’s warrants at December 31, 2020 and September~~June 30, ~~2020, respectively:~~2021.

The warrants may be exchanged for shares of common stock at a ratio of one share of Series B Preferred Stock into five common shares. The following table provides information assuming the warrants are exercised and exchanged for common shares:

~~The exercise price for the Series B Convertible Preferred Stock warrants outstanding and exercisable at December 31, 2020 and September 30, 2020, are as follows:~~

~~All~~In January 2021, all of the warrants were exercised (via cashless exercise) for shares of Series B Convertible Preferred ~~Stock using a cashless exercise method during January 2021.~~Stock.

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, net of estimated forfeitures. 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 twelve months ended September 30, 2020 and the ~~three~~nine months ended ~~December 31, 2020:~~June 30, 2021:


	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, 2019		200,418		$	16.37		2.40	$	27		200,418		$	16.37		2.40	$	27
Forfeited		(81,250	)								(81,250	)
Outstanding at September 30, 2020		119,168		$	19.07		2.71	$	—		119,168		$	19.07		2.71	$	—
Exercisable at September 30, 2020		95,001		$	15.50		1.55	$	—		95,001		$	15.50		1.55	$	—

Outstanding at December 31, 2020		119,168		$	19.07		2.45	$	87
Exercisable at December 31, 2020		103,168		$	15.94		1.60	$	87
Outstanding at September 30, 2020											119,168		$	19.07		2.71	$	—
Granted											2,500		$	42.75
Exercised											(16,668	)	$	10.86
Outstanding at June 30, 2021											105,000		$	20.93		2.95	$	1,290
Exercisable at June 30, 2021											90,500		$	17.78		2.20	$	1,290

The Company recognized compensation expense of ~~$17~~$(57) and ~~$29~~$19 during the three months ended ~~December 31,~~June 30, 2021 and 2020, respectively, and ~~2019,~~$230 and $67 during the nine months ended June 30, 2021 and 2020, respectively, related to stock option awards granted to certain employees and officers based on the grant date fair value of the awards, net of estimated ~~forfeitures.~~forfeitures and the revaluation for existing options whereby the expiration date was extended.

At ~~December 31, 2020,~~June 30, 2021, the Company ~~has $43~~had $69 of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the ~~company~~Company expects to recognize as compensation expense through ~~October of 2022.~~December 2021.

The exercise price for stock options outstanding and exercisable outstanding at ~~December 31, 2020~~June 30, 2021 is as follows:


Outstanding				Exercisable
Number of Options		Exercise Price ($)		Number of Options		Exercise Price ($)
	25,000		10.00		25,000		10.00
	6,250		12.50		6,250		12.50
	6,250		15.00		6,250		15.00
	25,000		15.18		25,000		15.18
	8,000		23.41		8,000		23.41
	1,250		23.89		0		0
	8,000		27.60		8,000		27.60
	8,000		31.74		8,000		31.74
	8,000		36.50		4,000		36.50
	8,000		41.98		0		0
	1,250		61.60		0		0
	105,000				90,500

Outstanding

Exercisable

Number of Options

Exercise Price ($)

Number of Options

Exercise Price ($)

25,000

10.00

25,000

10.00

16,668

10.86

16,668

10.86

6,250

12.50

6,250

12.50

6,250

15.00

6,250

15.00

25,000

15.18

25,000

15.18

8,000

23.41

8,000

23.41

8,000

27.60

8,000

27.60

8,000

31.74

8,000

31.74

8,000

36.50

—

—

8,000

41.98

—

—

119,168

103,168

The following table summarizes information about the Company’s non-vested shares outstanding as of ~~December 31, 2020 and September~~June 30, ~~2020:~~2021:

Net earnings per share is calculated using the weighted average number of shares of common stock outstanding during the applicable period. Diluted net earnings per share is computed using the weighted average number of shares of common ~~shares~~stock outstanding and if dilutive, potential shares of common ~~shares~~stock outstanding during the period. Potential shares of common stock consist of the additional shares of common stock 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:


	Three Months Ended December 31,				Three Months Ended June 30,				Nine Months Ended June 30,
	2020		2019		2021		2020		2021		2020
Basic
Net income	$	5,413	$	547	$	9,938	$	3,585	$	24,085	$	6,451
		—		—
Less: preferred stock dividends						0		0		0		0
Net income applicable to common stock	$	5,413	$	547	$	9,938	$	3,585	$	24,085	$	6,451

Weighted average common shares outstanding		1,568,213		1,806,746		1,566,064		1,646,836		1,563,025		1,735,416
Basic income per share	$	3.45	$	0.30
Basic earnings per share					$	6.35	$	2.18	$	15.41	$	3.72

Diluted
Net income applicable to common stock	$	5,413	$	547	$	9,938	$	3,585	$	24,085	$	6,451
Add: preferred stock dividends		—		—		0		0		0		0
Net income applicable for diluted earnings per share	$	5,413	$	547	$	9,938	$	3,585	$	24,085	$	6,451

Weighted average common shares outstanding		1,568,213		1,806,746		1,566,064		1,646,836		1,563,025		1,735,416
Add: Options		41,668		25,000		105,000		0		105,000		0
Add: Series B Preferred Stock		1,071,220		1,071,220		1,578,950		1,071,220		1,578,950		1,071,220
Add: Series B Preferred Stock Warrants		590,147		590,147		0		590,147		0		590,147
Add: Series E Preferred Stock		47,480		47,840		47,840		47,840		47,840		47,840
Assumed weighted average common shares outstanding		3,318,728		3,540,953		3,297,854		3,356,043		3,294,815		3,444,623
Diluted income per share	$	1.63	$	0.15
Diluted earnings per share					$	3.01	$	1.07	$	7.31	$	1.87

There are ~~77,500~~NaN and ~~175,418~~119,168 options to purchase shares of common stock ~~options~~ that are anti-dilutive that are not included in the ~~three~~nine months ended ~~December 31,~~June 30, 2021 and 2020, ~~and 2019,~~ diluted earnings per share computations, respectively.

As of ~~December 31, 2020,~~June 30, 2021, Isaac Capital Group LLC (“ICG”) owned 259,902 shares of Series B Preferred Stock that are convertible into 1,299,510 shares of common stock. Jon Isaac is ~~a record~~the President and ~~beneficial owner~~sole member of ~~approximately 46.2%~~ICG and accordingly has sole voting and dispositive power with respect to such shares. ICG beneficially owns 45.7% of the Company’s outstanding capital ~~stock~~stock. The holders of shares of the ~~Company, and~~Series B Stock have agreed not to sell transfer, assign, hypothecate, pledge, margin, hedge, trade, or otherwise obtain or attempt to obtain any economic value from any of such shares or any shares into which they may be converted (e.g., common stock) or for which they may be exchanged. This “lockup” agreement expires on December 31, 2021. Jon Isaac, the Company’s President and Chief Executive Officer, and manager and sole member of ICG, ~~is a record~~owns 213,677 shares of common stock and ~~beneficial owner~~holds options to purchase up to 25,000 shares of ~~approximately 54.0%~~common stock at an exercise price of ~~the outstanding capital stock~~$10.00 per share, all of ~~the Company.~~which are currently exercisable.

During 2015, Marquis entered into a mezzanine loan in the amount of up to ~~$7,000~~$7,000 (the “ICF Loan”) with Isaac Capital Fund I, LLC (“ICF”), a private lender whose managing member is Jon Isaac, our 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 Loan to ~~Isaac Capital Group, LLC,~~ICG, of which Jon Isaac, our 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 substantially the documentation from the ICF Loan. 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 31, 2020,~~June 30, 2021, and September 30, 2020, there was ~~$2,000~~$2,000 outstanding on this loan.

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 $1,000revolving credit facility (the “ICG Revolver”). The ICG Revolver bears interest at ~~10.0%~~10.0% per annum and provides for the payment of interest monthly in arrears and matures April ~~2023.~~2023. As of ~~December 31, 2020,~~June 30, 2021, the Company has ~~not~~0t drawn on the revolving promissory note.

~~The warrants,~~As discussed in Note 7,8, the warrants were set to expire at various ~~timeframes~~times over the next two ~~years. However, Company and ICG entered into an agreement whereby if~~years, subject to the warrants are not exercised on or before the applicable expiration date, the applicable expiration date is deemed automatically extended for successive two-year periods immediately prior to such expiration.automatic extension discussed in Note 8. All of these warrants were exercised by cashless exercise during January 2021.

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 ~~$35~~$56 and ~~$45~~$97 in rent and other reimbursed expenses for the three months ended ~~December 31,~~June 30, 2021 and 2020, respectively. JanOne paid the Company $106and ~~2019,~~$278 in rent and other reimbursed expenses for the nine months ended June 30, 2021 and 2020, respectively. Tony Isaac and Virland Johnson are President and Chief Executive Officer and Board of Directors member, and the Chief Financial Officer of JanOne, respectively.

On December 30, 2017, ApplianceSmart Holdings Inc. (“ASH”) entered into a Stock Purchase Agreement (the “Agreement”) with Appliance Recycling Centers of America, Inc. (now JanOne Inc.) (the “Seller”) and ApplianceSmart, Inc. (“ApplianceSmart”), a subsidiary of the Seller. Pursuant to the Agreement, ASH purchased (the “Transaction”) from the Seller all of the issued and outstanding shares of capital stock of ApplianceSmart in exchange for $6,500 (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 that certain Promissory Note (the “ApplianceSmart Note”) in the original principal amount of ~~$3,919~~$3,919 (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 April 1, 2021 (the “Maturity Date”). The ApplianceSmart Note bears interest at 5% 5% per annum with interest payable monthly in arrears. ~~Ten~~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~~.Note. The remaining ~~$2,581~~$2,581 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~~March 31, ~~2020,~~2021, and September 30, 2020, there was ~~$2,826~~$2,826 principal outstanding on the ApplianceSmart Note.

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.

In connection with the purchase of Vintage Stock, on November 3, 2016, Vintage Stock entered into a seller financed mezzanine loan in the amount of ~~$10,000~~$10,000 (as amended, the “Sellers Subordinated Acquisition Note”) with the previous owners of Vintage ~~Stock.~~Stock, one of whom was Rodney Spriggs, the President and Chief Executive Officer of Vintage Stock, Inc., a wholly-owned subsidiary of the Company. The Sellers Subordinated Acquisition Note bears interest at 8%8% per annum, with interest payable monthly in arrears. The Sellers Subordinated Acquisition Note, ~~as amended,~~ has a maturity date of September 23, ~~2023. Rodney~~2023. Mr. Spriggs ~~President of Vintage Stock,~~ holds a ~~41%~~41% interest in the ~~$10,000 Seller~~Sellers Subordinated Acquisition ~~Note payable by Vintage Stock.~~Note. As of June 30, 2021, the amount owed was $4,500.

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~~Mr. Spriggs. The Spriggs ~~the President and Chief Executive Officer of Vintage Stock, Inc., a wholly-owned subsidiary of the Company, that~~Promissory Note memorializes a loan by Spriggs Investments to the Company in the initial principal amount of ~~$2,000~~$2,000 (the “Spriggs Loan”). The Spriggs Loan matures on July 10, 2022 and bears simple interest at a rate of ~~10.0%~~10.0% per annum. Interest is payable in arrears on the last day of each month, commencing July 31, ~~2020.~~2020. the Company may prepay the Spriggs Loan in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid, together with accrued interest thereon to the date of prepayment; provided, however, that, if the Company prepays the Spriggs Loan in whole or in part on or prior to December 10, 2020, then the Company would also be obligated to pay a prepayment penalty to Spriggs Investments in an amount equal to $100, less the amount of any interest paid or to be paid by the Company up to the date of prepayment. ~~the~~The Company used the proceeds from the Spriggs Loan to finance, in part, the acquisition of ~~Precision.~~Precision Marshall. The Spriggs Promissory

Note contains events of default and other provisions customary for a loan of this type. The Spriggs Loan was guaranteed by Jon Isaac, Live Ventures’ President and Chief Executive Officer, and by ~~ICG.~~ ICG.

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 ~~relate~~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. ~~A Wells Notice is neither~~

On August 2, 2021, the SEC filed a ~~formal charge~~civil complaint (the “SEC Complaint”) in the United States District Court for the District of ~~wrongdoing nor a final determination that the recipient has violated any law. The Wells Notices informed~~Nevada naming the Company and two of its executive officers as defendants (collectively, the ~~Executives that~~"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, Rule 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 ~~Staff has made a preliminary determination to recommend that~~Complaint, which may be accessed on the ~~SEC file an enforcement action against the Company and each of the Executives that would allege certain violations of the federal securities laws.~~ SEC’s website at https://www.sec.gov/litigation/litreleases/2021/lr25155.htm. The Company disputes and denies the ~~Executives maintain that their actions were appropriate,~~allegations and ~~the Company and the Executives have engaged Orrick Herrington & Sutcliffe LLP, among others, to defend themselves, and intend~~intends to vigorously defend against ~~any and all allegations brought forth.~~the claims.

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 provided a response to the SEC on October 26, 2018. The Company is cooperating with the SEC in its inquiry.

On August 13, 2021, Daniel E. Sieggreen filed a individually and on behalf of all others similarly situated (the "Sieggreen Class Action"), filed a class action complaint for violations of federal securities laws in the United States District Court for the District of Nevada naming the Defendants, seeking to recover damages for alleged violations under Sections 10(b) and 20(a) the Exchange Act. The complaint alleges that the Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. The Defendants dispute and deny the allegations and intend to vigorously defend themselves against the claims.

On August 4, 2020, Valassis Communications, Inc. and Valassis Digital Corp. (collectively, “Valassis”) filed suit against ApplianceSmart Holdings LLC ("ApplianceSmart Holdings") in the State of Michigan, Third Judicial Circuit, Wayne County, alleging, among other things, breach of contract and account stated and seeking damages of approximately ~~$700. This matter has since been removed to United States District Court, Eastern District of Michigan, Southern Division. The Company believes that ApplianceSmart, Inc., not~~$700. On June 21, 2021, ApplianceSmart Holdings ~~LLC is~~and Valassis entered into a Confidential Settlement Agreement and Release pursuant to which, among other things, ApplianceSmart Holdings caused $10 to be paid to Valassis in exchange for dismissal of this litigation with prejudice. In addition, Valassis released ApplianceSmart Holdings, ApplianceSmart, the ~~responsible party. On December 9, 2019, ApplianceSmart filed a~~Company and all of their respective subsidiaries and affiliates from all other claims Valassis may have, including in connection with the Chapter 11 Case in the Bankruptcy Court seeking relief under Chapter 11 of the Bankruptcy Code. The bankruptcy affects Live Ventures’ indirect subsidiary ApplianceSmart only and does not affect any other subsidiary of Live Ventures, including, but not limited to ASH, or Live Ventures itself. (as defined below).

On December 12, 2019, Crossroads Center LLC served a lawsuit against ApplianceSmart in the District Court for the State of Minnesota, County of Olmsted, alleging, among other things, breach of contract and seeking damages in excess of ~~$64.~~$64. This matter has been stayed as a result of the Chapter 11 Case.

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.

ApplianceSmart’s statement of operations for the period of October 1, 2020 through ~~December 31, 2020~~June 30, 2021 is below:


	Three Months Ended December 31, 2020			Nine months ended June 30, 2021 (unaudited)
Revenues	$	296		$	876
Cost of revenues		165			484
Gross profit		131			392

Operating expenses:
General and administrative expenses		208			641
Total operating expenses		208			641
Operating income		(77	)		(249	)
Other (expense) income:
Interest expense, net		(46	)		(97	)
Accounts payable settlement		44			694
Other income (expense)		279			280
Total other (expense) income, net		277			877
Income before provision for income taxes		200		$	628

On November 22, 2019, Haier US Appliance Solutions, Inc. d/b/a GE Appliances filed suit against ApplianceSmart in the District Court for the State of Minnesota, County of Hennepin (the “Hennepin Court”) alleging, among other things, breach of contract and seeking damages in excess of ~~$250.~~$250. This matter has been stayed as a result of the Chapter 11 Case.

On November 1, 2019, OIRE Minnesota, L.L.C. filed suit against ApplianceSmart in the Hennepin Court alleging, among other things, breach of contract and seeking damages in excess of $60. This matter was subsequently settled for an aggregate of $20 on February 18, 2020 in exchange for full mutual releases.

On October 16, 2019, VanMile, LLC filed a lawsuit against ApplianceSmart in the Magistrate Court of Gwinnett County, State of Georgia alleging unpaid invoices and seeking damages therefor. Plaintiff is seeking damages of ~~$15.~~$15. This matter has been stayed as a result of the Chapter 11 Case.

On September 12, 2019, Fisher & Paykel Appliances, Inc. initiated an arbitration against ApplianceSmart in San Diego alleging breach of contract and seeking damages in excess of ~~$100.~~$100. This matter has been stayed as a result of the Chapter 11 Case.

On July 22, 2019, Trustee Main/270, LLC (the “Reynoldsburg Landlord”) filed a lawsuit against ApplianceSmart and JanOne Inc. (formerly known as Appliance Recycling Centers of America, Inc.) (“JanOne”) in the Franklin County Common Pleas Court in Columbus, Ohio, alleging, with respect to ApplianceSmart, default under a lease agreement and, with respect to JanOne, guaranty of lease. The complaint sought damages of ~~$1,530~~$1,530 attorney fees, and other charges. On or about September 27, 2019,, the parties entered into a second lease modification agreement and ratification of agreement (the “Second Lease Modification Agreement”) whereby the Reynoldsburg Landlord restored ApplianceSmart’s access to the property. Pursuant to the terms of the Second Lease Modification Agreement, in exchange for such restored access, ApplianceSmart paid the Reynoldsburg Landlord ~~$141~~$141 in partial satisfaction of past due rent and costs and the Reynoldsburg Landlord agreed to dismiss the lawsuit with prejudice. In addition, the Reynoldsburg Landlord agreed to reduced minimum annual rent for the remainder of the term and waived the rent due for October 2019, December 2019, and January 2020. In addition, JanOne ratified its guaranty under the lease.

On August 29, 2019, Martin Drive, LLC filed suit against ApplianceSmart in the Hennepin Court, alleging, among other things, breach of contract and failure to pay rent under the terms of a lease agreement. The plaintiff was awarded a default judgment in the aggregate amount of ~~$265.~~$265. This matter has been stayed as a result of the Chapter 11 Case.

On August 27, 2019, CH Robinson Worldwide, Inc. served a lawsuit against ApplianceSmart in the District Court for the State of Minnesota, County of Carver, alleging, among other things, breach of contract and seeking damages in excess of ~~$140.~~$140. This matter has been stayed as a result of the Chapter 11 Case.

On August 15, 2019, 280 Business Center, LLC filed suit against ApplianceSmart in the District Court for the State of Minnesota, County of Ramsey for eviction from the premises. This matter was settled in September 2019 for $130.

On June 19, 2019, Graceland Retail 2017 LLC filed suit against ApplianceSmart in the Court of Common Pleas in Franklin County, Ohio, alleging, among other things, breach of contract and failure to pay rent under the terms of a lease agreement. The plaintiff was seeking damages of approximately ~~$940.~~$940. This matter has been stayed as a result of the Chapter 11 Case.

We are 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. We currently believe 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.

The Company leases its office, retail, and warehouse space under various long-term operating leases expiring at various times through fiscal year 2040.

During fiscal 2019, as a result of our decision to close certain ApplianceSmart retail locations, we recorded a liability for the estimated remaining lease payments and early termination charges, as applicable, of ~~$724.~~$724. As of ~~December 31,2020,~~June 30, 2021, this amount has been reduced to ~~$405.~~$405.

~~During 2020, Marquis entered into a $1,100 agreement to install heating, ventilation and air conditioning in one of its manufacturing facilities.~~

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

The following tables summarize segment information for the three and nine months ended ~~December 31, 2020~~June 30, 2021 and ~~2019:~~2020:


	For the Three Months Ended June 30,						For the Nine Months Ended June 30,
	2021			2020			2021			2020
Revenues
Retail	$	21,719		$	14,259		$	68,092		$	54,733
Flooring Manufacturing		34,234			28,079			97,428			75,747
Steel Manufacturing		13,018			—			36,546			—
Corporate & other		124			134			373			424
	$	69,095		$	42,472		$	202,439		$	130,904

Gross profit
Retail	$	11,684		$	8,009		$	36,701		$	29,464
Flooring Manufacturing		9,857			8,579			28,204			21,255
Steel Manufacturing		3,409			—			8,565			—
Corporate & other		116			125			355			396
	$	25,066		$	16,713		$	73,825		$	51,115

Operating income (loss)
Retail	$	3,860		$	2,285		$	13,424		$	5,481
Flooring Manufacturing		3,997			4,280			14,158			9,381
Steel Manufacturing		1,928			—			3,814			—
Corporate & other		(1,553	)		(575	)		(4,748	)		(2,317	)
	$	8,232		$	5,990		$	26,648		$	12,545

Depreciation and amortization
Retail	$	372		$	455		$	1,110		$	1,404
Flooring Manufacturing		882			1,001			2,754			2,493
Steel Manufacturing		405			—			1,194			—
Corporate & other		11			20			31			57
	$	1,670		$	1,476		$	5,089		$	3,954

Interest expenses
Retail	$	192		$	692		$	1,434		$	2,456
Flooring Manufacturing		378			440			1,436			1,270
Steel Manufacturing		233			—			789			—
Corporate & other		135			23			398			56
	$	938		$	1,155		$	4,057		$	3,782

Net income (loss) before provision for income taxes
Retail	$	4,322		$	1,871		$	12,980		$	3,321
Flooring Manufacturing		8,271			3,690			17,164			7,681
Steel Manufacturing		1,431			—			3,727			—
Corporate & other		(1,388	)		(553	)		(2,583	)		(2,149	)
	$	12,636		$	5,008		$	31,288		$	8,853

Three Months Ended December 31,

2020

2019

Revenues

Retail

$
22,370

$
21,488

Flooring Manufacturing

30,222

20,367

Steel Manufacturing

9,735

—

Corporate & other

127

146

$
62,454

$
42,001

Gross profit

Retail

$
12,047

$
11,120

Flooring Manufacturing

8,325

5,368

Steel Manufacturing

1,776

—

Corporate & other

121

138

$
22,269

$
16,626

Operating income (loss)

Retail

$
4,493

$
1,859

Flooring Manufacturing

4,150

2,403

Steel Manufacturing

144

—

Corporate & other

(1,496
)

(775
)

$
7,291

$
3,487

Depreciation and amortization

Retail

$
347

$
470

Flooring Manufacturing

965

605

Steel Manufacturing

393

—

Corporate & other

9

10

$
1,714

$
1,085

Interest expenses

Retail

$
660

$
949

Flooring Manufacturing

410

390

Steel Manufacturing

268

—

Corporate & other

132

18

$
1,470

$
1,357

Net income (loss) before provision for income taxes

Retail

$
4,173

$
236

Flooring Manufacturing

3,722

1,880

Steel Manufacturing

(164
)

—

Corporate & other

(1,002
)

(1,374
)

$
6,729

$
742

The Company evaluated subsequent events through the date of this Quarterly Report noting ~~only~~no reportable events other than the ~~following:~~SEC complaint discussed in Note 12.

~~During January 2021, the Company paid the Comvest loan in full and terminated the loan agreement.~~

~~During February 2021, Precision received notice that its $1,382 payroll protection program loan has been forgiven and no amounts are owed.~~

~~All of the Series B Preferred Warrants were exercised by cashless exercise during January 2021.~~

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 nine months ended ~~December 31, 2020,~~June 30, 2021, 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, 2020 (the “2020 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 Quarterly 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 2020 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 segments to our business: Retail, Flooring Manufacturing, and Steel Manufacturing.

Under the Live Ventures brand, we seek opportunities to acquire profitable and well-managed companies. We ~~will~~ work closely with ~~consultants~~third party advisors who will 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 ~~report~~Quarterly Report Form ~~10-K)~~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") and ~~ApplianceSmart.~~ApplianceSmart, Inc. ("ApplianceSmart").

Vintage Stock is an award-winning specialty entertainment retailer offering 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 all available 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 62more than 60 retail locations strategically positioned across Arkansas, Colorado, Idaho, Illinois, Kansas, Missouri, New Mexico, Oklahoma, Texas, and Utah.

ApplianceSmart ~~Inc. (collectively “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, ~~niche~~ 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 Live Ventures’ indirect subsidiary ApplianceSmart only and does not affect any other subsidiary of Live Ventures, or Live Ventures 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 the 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.

Our Flooring Manufacturing segment is comprised of ~~Marquis.~~Marquis Industries, Inc. ("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. ~~We focus~~Marquis focuses on the residential, niche commercial, and hospitality end-markets and ~~serve~~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,~~In addition, 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~~a North American leader in providing and manufacturing pre-finished de-carb free tool and die steel. For over 70 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,~~deluxe alloy plate, deluxe tool steel plate, precision ground flat stock, and ~~Drill Rod.~~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 unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“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 critical and 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 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 the Company’s 10-K report as filed on January 13, 2021.

Results of Operations Three Months Ended ~~December 31,~~June 30, 2021 and 2020 ~~and 2019~~

The following table sets forth certain statement of income items and as a percentage of revenue, for the periods indicated:

Three Months Ended December 31, 2020

Three Months Ended December 31, 2019

% of Total
Revenue

% of Total
Revenue

Statement of Income Data:

Revenue

$
62,454

100.0
%

$
42,001

100.0
%
Cost of Revenue

40,185

64.3
%

25,375

60.4
%
Gross Profit

22,269

35.7
%

16,626

39.6
%
General and Administrative Expense

12,279

19.7
%

10,809

25.7
%
Selling and Marketing Expense

2,699

4.3
%

2,330

5.5
%
Operating Income

7,291

11.7
%

3,487

8.3
%
Interest Expense, net

(1,470
)

(2.4
)%

(1,357
)

(3.2
)%
Impairment charges

—

0.0
%

(1,207
)

-2.9
%
Gain on disposal of fixed assets

129

0.3
%

—

0.0
%
Other Income (expense)

779

1.2
%

(181
)

(0.4
)%
Net Income before Income Taxes

6,729

10.8
%

742

1.8
%
Provision for Income Taxes

1,450

2.3
%

195

0.5
%
Net Income before Income Taxes

5,279

8.5
%

547

1.3
%
Net loss attributable to non-controlling interest

134

0.2
%

—

0.0
%
Net income attributable to Live stockholders

$
5,413

8.7
%

$
547

1.3
%


	Three Months Ended December 31, 2020					Three Months Ended December 31, 2019					For the Three Months Ended June 30,2021					For the Three Months Ended June 30,2020
	Net Revenue		% of Total Revenue			Net Revenue		% of Total Total Revenue			Net Revenue		% of Total Revenue			Net Revenue		% of Total Revenue
Revenue
Retail
Movies, Music, Games and Other	$	22,074		35.3	%	$	20,275		48.3	%	$	21,491		31.1	%	$	13,563		31.9	%
Appliances		296		0.5	%		1,213		2.9	%		228		0.3	%		696		1.6	%
Flooring Manufacturing		30,222		48.4	%		20,367		48.5	%		34,234		49.5	%		28,079		66.1	%
Steel Manufacturing		9,735		15.6	%		—		0.0	%		13,018		18.8	%		—		0.0	%
Corporate and other		127		0.2	%		146		0.3	%
Corporate & other												124		0.2	%		134		0.3	%
Total Revenue	$	62,454		100.0	%	$	42,001		100.0	%	$	69,095		100.0	%	$	42,472		100.0	%

The following table sets forth gross profit earned by segment and gross profit as a percentage of total revenue for each segment:


	Three Months Ended December 31, 2020					Three Months Ended December 31, 2019					For the Three Months Ended June 30,2021					For the Three Months Ended June 30,2020
	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	$	11,916		19.1	%	$	10,893		25.9	%	$	11,580		53.9	%	$	7,867		58.0	%
Appliances		131		0.2	%		227		0.5	%		104		45.6	%		142		20.4	%
Flooring Manufacturing		8,325		13.3	%		5,368		12.8	%		9,857		28.8	%		8,579		30.6	%
Steel Manufacturing		1,776		2.8	%		—		0.0	%		3,409		26.2	%		—		0.0	%
Corporate and other		121		0.2	%		138		0.3	%
Corporate & other												116		93.5	%		125		93.3	%
Total Gross Profit	$	22,269		35.7	%	$	16,626		39.6	%	$	25,066		36.3	%	$	16,713		39.4	%

Revenue increased ~~$20,453 or 49%~~by 63% to ~~$62,454~~$69,095 for ~~three months ended December 31, 2020 as compared to~~ the three months ended ~~December 31, 2019 of $42,001.~~June 30, 2021 as compared to $42,472 for the three months ended June 30, 2020.

~~Retail~~: Retail:The increase in Movies, Music, Games, and Other of ~~$1,799~~$7,928 was primarily due the launch of new gaming systems and higher demand for home entertainment options as a result of public entertainment restrictions due to COVID-19. Appliance revenue decreased ~~$917~~ $468due to the closure of certain retail locations were incurring continual decreases in sales resulting from increased competition.

Flooring Manufacturing revenues increased ~~$9,855~~$6,155 as a result of the development of new products and ~~the acquisition of Lonesome Oak in January 2020.~~higher demand by residential consumers.

Steel Manufacturing revenues were ~~$9,735~~$13,018 due to the acquisition of Precision Marshall during July 2020. Steel manufacturing is experiencing higher demand as distributors look to replenish stock levels due to the stronger demand in the automotive market relating to new car platforms. In addition to higher demand, raw material prices and consumable costs have increased and have successfully been passed on to the market.

Cost of revenue increased ~~$14,810, or 58%~~71% to $44,029 for the three months ended ~~December 31,~~June 30, 2021 as compared to $25,759 for the three months ended June 30, 2020, proportionately to the increase in revenue.

General and Administrative increased 68% to $13,794 for the three months ended June 30, 2021 as compared to the three months ended ~~December 31, 2019, primarily~~June 30, 2020 due ~~primarily to~~ the an increase in ~~revenue.~~employee compensation, increase in sales tax expense and expenses associated with Precision Marshall's corporate activity. Precision Marshall was acquired during July 2020.

~~General~~Selling and ~~Administrative~~marketing expense increased ~~$1,470 or 14%,~~22% to $3,040 for the three months ended ~~December 31, 2020~~June 30, 2021 as compared to the three months ended ~~December 31, 2019, primarily due to expenses~~June 30, 2020 increased compensation associated with ~~Precision which was acquired during July 2020 and higher warehouse costs at~~the Marquis ~~partially offset by a decrease in compensation and other administrative costs.~~sales force.

~~Selling and marketing~~Interest expense, ~~remained relatively flat~~net decreased 19% for the three months ended ~~December 31, 2020~~June 30, 2021 as compared to the three months ended ~~December 31, 2019.~~

~~Interest expense, net remained relatively flat for the three months ended December 31,~~June 30, 2020, ~~as compared to the three months ended December 31, 2019,~~ due to a decrease in certain interest rates and the continued efforts to repay certain debt obligations, offset by debt incurred as part of the Precision acquisition during July 2020.

During the three months ended ~~December 31, 2019,~~June 30, 2021, the Company ~~incurred $1,207~~recorded a gain of ~~impairment charges related~~$4,768 due to the ~~decision to close additional ApplianceSmart retail locations. These locations physically closed during the three months ended March 31, 2020.~~forgiveness of Marquis' PPP Loan. There were no similar transactions during the three months ended ~~December 31,~~June 30, 2020.

During the three months ended ~~December 31, 2020,~~June 30, 2021, the Company ~~incurred~~recorded a ~~$129~~ gain ~~related~~of $650 due to the ~~disposal~~discharge of ~~equipment.~~certain payables from bankruptcy proceedings. There were no similar transactions during the three months ended ~~December 31, 2019.~~June 30, 2020.

~~Other~~The following table sets forth certain statement of income ~~(expense)~~items and as a percentage of revenue, for the periods indicated:

The following table sets forth gross profit earned by segment and gross profit as a percentage of total revenue for each segment:

Revenue increased by 55% to $202,439 for the ~~three~~nine months ended December 31, 2020, the Company’s other income of $779 is primarily related to the settlement of certain lease liabilities and other payables. During the three months ended December 31, 2019, the Company’s other expense of $181 is primarily related to the warrant extension fair value adjustment.

~~Provision for income taxes was $1,450, for the three months ended December 31, 2020~~June 30, 2021 as compared to ~~$195~~$130,904 for the ~~three~~nine months ended ~~December 31, 2019~~June 30, 2020.

Retail:The increase in Movies, Music, Games and Other of $15,933 was primarily due to the ~~variance in net income.~~

Three Months Ended December 31, 2020

Three Months Ended December 31, 2019

Retail

Flooring Manufacturing

Steel Manufacturing

Corporate & Other

Total

Retail

Flooring Manufacturing

Steel Manufacturing

Corporate & Other

Total

Revenue

$
22,370

$
30,222

$
9,735

$
127

$
62,454

$
21,488

$
20,367

$
—

$
146

$
42,001

Cost of Revenue

10,323

21,897

7,959

6

40,185

10,368

14,999

—

8

25,375

Gross Profit

12,047

8,325

1,776

121

22,269

11,120

5,368

—

138

16,626

General and Administrative
Expense

7,420

1,941

1,527

1,391

12,279

8,768

1,132

—

909

10,809

Selling and Marketing
Expense

134

2,234

105

226

2,698

494

1,833

—

4

2,330

Operating Income (Loss)

$
4,493

$
4,150

$
144

$
(1,496
)

$
7,291

$
1,859

$
2,403

$
—

$
(775
)

$
3,487

~~Segment results for Retail include Vintage Stock~~new gaming systems and ApplianceSmart. Revenue for the three months ended December 31, 2020 remained relatively flat, as compared to the prior year, primarily due to the closure of certain ApplianceSmart retail locations during 2019, offset by higher demand for home entertainment options as a result of public entertainment restrictions due to COVID-19. Appliance revenue decreased $2,574 due to the closure of certain retail locations were incurring continual decreases in sales resulting from increased competition.

Flooring Manufacturing revenues increased $21,681 as a result of the development of new products, higher demand from residential consumers and the acquisition of Lonesome Oak in January 2020.

Steel Manufacturing revenues were $36,546 due to the acquisition of Precision Marshall during July 2020. Steel manufacturing is experiencing higher demand as distributors look to replenish stock levels due to the stronger demand in the automotive market relating to new car platforms. In addition to higher demand, raw material prices and consumable costs have increased and have successfully been passed on to the market.

Cost of revenue increased 61% to $128,614 for the nine months ended June 30, 2021 as compared to $79,789 for the nine months ended June 30, 2020, proportionately to the increase in revenue.

General and Administrative expense increased $7,907 or 26%, for the nine months ended June 30, 2021 as compared to the nine months ended June 30, 2020, primarily due to expenses associated with Precision which was acquired during July 2020 and higher warehouse costs at Marquis, and an increase in other administrative costs.

Selling and marketing expense remained relatively flat for the nine months ended June 30, 2021 as compared to the nine months ended June 30, 2020.

Interest expense, net increased 7% for the nine months ended June 30, 2021 as compared to the nine months ended June 30, 2020, due to a decrease in certain interest rates and the continued efforts to repay certain debt obligations, offset by debt incurred as part of the Precision acquisition during July 2020.

During the nine months ended June 30, 2020, the Company recorded a net gain on lease settlement of $223 which consisted of impairment charges of $614 related to the decision to close additional ApplianceSmart retail locations resulting in a decrease to the associated right of use asset related to these leases, offset by a gain on lease settlement of $837 resulting from the extinguishment of the lease liability associated with the closed retail locations. There were no similar gains during the nine months ended June 30, 2021.

During the nine months ended June 30, 2021, the Company recorded a gain of $6,150 due to the forgiveness of the PPP Loans. There were no similar transactions during the nine months ended June 30, 2020.

During the nine months ended June 30, 2021, the Company recorded a gain of $1,765 due to the discharge of certain payables from bankruptcy proceedings. There were no similar transactions during the nine months ended June 30, 2020.

Segment results for Retail include Vintage Stock and ApplianceSmart. Revenue for the three months ended June 30, 2021 increased $7,460 or 52%, as compared to the prior year, primarily due to the launch of new gaming systems and higher demand for home entertainment options as a result of public entertainment restrictions due to COVID-19. Cost of revenue increased proportionately with the increase in revenue. Operating income for the three months ended ~~December 31, 2020~~June 30, 2021 was ~~$4,493,~~$3,860, as compared to operating income of ~~$1,859~~$2,285 the prior year ~~period, primarily due to the decrease in general and administrative expense of $1,348 due to the closure of certain ApplianceSmart retail locations during 2019 and other cost saving measures.~~period.

Segment results for Flooring Manufacturing includes Marquis. Revenue for the three months ended ~~December 31, 2020~~June 30, 2021 increased ~~$9,855,~~$6,155, or ~~48%~~22%, as compared to the prior year period, due to increased sales of carpets and hard surface products related to development of new ~~products and the acquisition of Lonesome Oak.~~products. Cost of revenue for the three months ended ~~December 31, 2020~~June 30, 2021 increased proportionately with revenue, as compared to the prior year period. Operating income remained relatively flat for the three months ended ~~December 31, 2020 increased $1,747, or 73%, as compared to the prior year period.~~June 30, 2021.

Segment results for Steel Manufacturing includes Precision Marshall. The Company completed the acquisition of Precision Marshall in July 2020. Steel manufacturing is experiencing higher demand as distributors look to replenish stock levels due to the stronger demand in the automotive market relating to new car platforms. In addition to higher demand, raw material prices and consumable costs have increased and have successfully been passed on to the market. Precision Marshall had experienced a more challenging work environment to hire qualified hourly workers but has been successful in ramping up staffing needs to meet the higher demand.

Segment results for Corporate and Other includes our directory services business. Revenues and operating income 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.

Segment results for Retail include Vintage Stock and ApplianceSmart. Revenue for the nine months ended June 30, 2021 increased $13,359 or 24%, as compared to the prior year, primarily due to the launch of new gaming systems and higher demand for home entertainment options as a result of public entertainment restrictions due to COVID-19. Cost of revenue increased proportionately with the increase in revenue. Operating income for the nine months ended June 30, 2021 was $13,424, as compared to operating income of $5,481 the prior year period.

Segment results for Flooring Manufacturing includes Marquis. Revenue for the nine months ended June 30, 2021 increased $21,681, or 29%, as compared to the prior year period, due to increased sales of carpets and hard surface products related to development of new products and the acquisition of Lonesome Oak. Cost of revenue for the nine months ended June 30, 2021 increased proportionately with revenue, as compared to the prior year period. Operating income for the nine months ended June 30, 2021 increased $4,777, or 51%, as compared to the prior year period.

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 fund our operations, pay our scheduled loan payments, repurchase shares under our share buyback program, if any, 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 have the following three asset-based revolver lines of credit: (i) Texas Capital Bank Revolver Loan (“TCB Revolver”) utilized by Vintage Stock, (ii) Bank of America Revolver Loan (“BofA Revolver”) utilized by Marquis, and (iii) Encina Revolver Loan (“Encina Revolver”) utilized by Precision Marshall. Additionally, we have an unsecured revolving line of credit with Isaac Capital Group (“ICG Revolver”) ~~utilized~~available for use by the Company.

As of ~~December 31, 2020,~~June 30, 2021, we had total cash on hand of ~~$7,232~~$10,565 and an additional ~~$32,811~~$37,707 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.

We had working capital of ~~$38,324~~$36,794 as of ~~December 31, 2020~~June 30, 2021 as compared to working capital of $38,566 as of September 30, 2020. Such changes in working capital were primarily attributable to the increase in short term lease obligations due to the adoption of the new lease accounting standard, an increase in the current portion of debt, a decrease in trade receivables and net debtor in possession liabilities.

The Company’s cash and cash equivalents as of ~~December 31, 2020~~June 30, 2021 was ~~$7,232~~$10,565 compared to $8,984 as of September 30, 2020, ~~a decrease~~an increase of ~~$1,752.~~$1,581. Net cash provided by operations was ~~$8,668~~$32,199 for the ~~three~~nine months ended ~~December 31, 2020~~June 30, 2021 as compared to net cash provided by operations of ~~$2,999~~$18,075 for the ~~same period in 2019~~nine months ended June 30, 2020 primarily due to the Result of operations discussed above.

Our primary source of cash inflows is from customer receipts from sales on account, factor accounts receivable proceeds 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 ~~$3,258~~$14,470 for the ~~three~~nine months ended ~~December 31,~~June 30, 2021 consisted primarily of purchases of property and equipment and the investment in SW Financial. Our cash flows used in investing activities of $2,992 for the nine months ended June 30, 2020 consisted primarily of purchases of property and ~~equipment. Our cash flows used in investing activities~~equipment of ~~$645 for~~$2,357 and a $550 payment associated with the ~~three months ended December 31, 2019 consisted primarily of purchases of property and equipment.~~Lonesome Oak acquisition.

Our cash flows used in financing activities during the ~~three~~nine months ended ~~December 31, 2020~~June 30, 2021 consisted of ~~$3,289~~$3,247 in net payments under revolver loans, payment on notes payable of ~~$5,712,~~$15,059, purchase of treasury stock of $409, partially offset by the issuance of notes payable of ~~$2,130~~$2,258 primarily associated with the acquisition of a facility by Marquis.

Our cash flows used in financing activities during the ~~three~~nine months ended ~~December 31, 2019~~June 30, 2020 consisted of ~~$972~~$5,169 net payments under revolver loans, purchase of treasury stock ~~$343,~~$1,433, payment on notes payable ~~$2,042~~$15,152, proceeds on notes payable of $9,768 and cash classified as ~~debtor in possession~~debtor-in-possession of ~~$173.~~$86.

Currently, the Company does not intend to issue shares of its common stock 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.

We utilize cash on hand and cash generated from operations and have funds available to us under our revolving loan facilities to cover normal and seasonal fluctuations in cash flows and to support our various growth initiatives. Our cash and cash equivalents are carried at cost and consist primarily of demand deposits with commercial banks. Our term debt facilities are not revolving credit facilities and require scheduled payments of principal and ~~interest~~.interest.

Vintage Stock may borrow funds for operations under the TCB Revolver subject to availability as described in Note 56 to the consolidated financial statements. The following tables summarize the TCB Revolver for the period:


	During the three months ended December 31,						During the nine months ended June 30,
	2020			2019			2021			2020
Cumulative borrowing during the period	$	20,700		$	18,626		$	68,892		$	46,792
Cumulative repayment during the period		22,281			19,709			68,510			51,063
Maximum borrowed during the period		8,930			11,798			8,930			11,798
Weighted average interest for the period		2.40	%		4.13	%		2.38	%		3.59	%


	December 31, 2020			September 30, 2020			June 30, 2021			September 30, 2020
Total availability	$	6,466		$	5,520		$	4,503		$	5,520
Total outstanding		5,534			7,115			7,497			7,115

Marquis may borrow funds for operations under the BofA Revolver subject to availability as described in Note 56 to the consolidated financial statements. The following tables summarize the BofA Revolver for the period:


	During the three months ended December 31,						During the nine months ended June 30,
	2020			2019			2021			2020
Cumulative borrowing during the period	$	33,126		$	24,344		$	99,137		$	85,563
Cumulative repayment during the period		35,790			23,817			102,854			87,919
Maximum borrowed during the period		11,347			2,083			—			11,347
Weighted average interest for the period		0.00	%		3.66	%		0.00	%		2.87	%


	December 31, 2020			September 30, 2020			June 30, 2021			September 30, 2020
Total availability	$	24,924		$	21,732		$	26,765		$	21,732
Total outstanding		—			—			—			—

Precision may borrow funds for operations under the Encina Revolver subject to availability as described in Note 56 to the consolidated financial statements.

We may require additional debt financing and/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 may further dilute or otherwise impair the ownership interest of our existing stockholders.

~~At December 31, 2020, we had no off-balance sheet arrangements, commitments, or guarantees that require additional disclosure or measurement.~~

As of ~~December 31, 2020,~~June 30, 2021, 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.

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 and principal financial officer, 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 31, 2020,~~June 30, 2021, 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.

Changes in Internal Control Over Financial Reporting. There were no changes in the Company’s internal control over financial reporting during the quarter ended ~~December 31, 2020~~June 30, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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 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 error 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, ~~2020~~.2021. 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 ineffective as of ~~December 31, 2020~~.June 30, 2021. 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 work on documenting in writing our internal control policies and procedures and develop an internal testing plan to document our evaluation of

effectiveness of the internal controls. We expect to conclude these remediation initiatives during the fiscal year ended September 30, 2021. 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. 5) 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.

This quarterly report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this quarterly ~~report~~.report.

Please refer to ‘‘Item 3. Legal Proceedings’’ in our Annual Report on Form 10-K for the year ended September 30, 2020 for information regarding material pending legal proceedings. ~~There~~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, Rule 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 Defendants strongly dispute and deny the allegations and intend to vigorously defend themselves against the claims.

On August 4, 2020, Valassis filed suit against ApplianceSmart Holdings in the State of Michigan, Third Judicial Circuit, Wayne County, alleging, among other things, breach of contract and account stated and seeking damages of approximately $700. On June 21, 2021, ApplianceSmart Holdings and Valassis entered into a Confidential Settlement Agreement and Release pursuant to which, among other things, ApplianceSmart Holdings caused $10,000 to be paid to Valassis in exchange for dismissal of this litigation with prejudice. In addition, Valassis released ApplianceSmart Holdings, ApplianceSmart, the Company and all of their respective subsidiaries and affiliates from all other claims Valassis may have, including in connection with the Chapter 11 Case.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. However, in light of the SEC Complaint, the Company provides the following additional risk factor, which supplements the risk factors previously disclosed by the Company in Part I, Item 1A, Risk Factors, of the 2020 10-K.

Our previously disclosed SEC investigation has resulted in the filing by the SEC of the SEC Complaint and at least one shareholder derivative class action, which could divert management's focus, and/or result in substantial litigation expense. Adverse developments in our ongoing proceeding and/or future legal proceedings could have a material adverse effect on our business, reputation, financial condition, results of operations or stock price.

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. 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. 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. On August 2, 2021, the SEC Complaint was filed and, on August 13, 2021, the Sieggreen Class Action was filed.

We may be subject to additional investigations, arbitration proceedings, audits, regulatory inquiries and similar actions, including matters related to intellectual property, employment, securities laws, disclosures, tax, accounting, class action and product liability, as well as regulatory and other claims related to our business and our industry, which we refer to collectively as legal proceedings. We cannot predict the outcome of any particular proceeding, or whether ongoing investigations, will be resolved favorably or ultimately result in charges or material damages, fines or other penalties, enforcement actions, bars against serving as an officer or director, or practicing before the SEC, or civil or criminal proceedings against us or members of our senior management.

Legal proceedings in general, and securities and class action litigation and regulatory investigations in particular, can be expensive and disruptive. Our insurance, to the extent maintained, may not cover all claims that may be asserted against us and we are unable to predict how long the legal proceedings to which we are currently subject will continue. An unfavorable outcome of any legal proceeding may have an adverse impact on our business, financial condition and results of operations, prospects, or our stock price. Any proceeding could negatively impact our reputation among our stakeholders. Furthermore, publicity surrounding ongoing legal proceedings, even if resolved favorably for us, could result in additional legal proceedings against us, as well as damage our image.

On February 20, 2018, the Company announced a $10 million common stock repurchase program. ~~In October 2020, the Board approved an extension of the term of the~~The Company did not repurchase ~~plan from February 15, 2021 to June 1, 2021.~~ ~~Below are the purchases~~any common stock under this program during the ~~three months~~quarter ended ~~December 31, 2020:~~June 30, 2021. As of June 30, 2021, the Company has approximately $6.8 million available for repurchases under this program.

32Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective August 13, 2021, the Company and Michael J. Stein, the Company’s Senior Vice President & GeneralCounsel, agreed to a mutual separation of Mr. Stein’s employment from all positions he held at the Company and its subsidiaries. The last day of Mr. Stein’s employment will be November 12, 2021, or such earlier date as mutually agreed by the Company and Mr. Stein.

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

Exhibit
Number

Exhibit Description

Form

File
Number

Exhibit
Number

Filing Date

  3.1

Amended and Restated Articles of Incorporation

8-K

000-24217

3.1

08/15/07

  3.2

Certificate of Change

8-K

001-333937

3.1

09/07/10

  3.3

Certificate of Correction

8-K

001-333937

3.1

03/11/13

  3.4

Certificate of Change

10-Q

001-333937

3.1

02/14/14

  3.5

Articles of Merger

8-K

001-333937

3.1.4

10/08/15

  3.6

Certificate of Change

8-K

001-333937

3.1.5

11/25/16

  3.7

Certificate of Designation for Series B Convertible Preferred Stock filed with Secretary of State for the State of Nevada on December 23, 2016, and effective as of December 27, 2016

10-K

001-333937

3.1.6

12/29/16

  3.8

Bylaws of Live Ventures Incorporated

10-Q

001-33937

3.8

08/14/18

31.1*

Certification of the President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 202

31.2*

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 202

32.1*

Certification of the President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*

Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Ex. 101.INS*

XBRL Instance Document

Ex. 101.SCH*

XBRL Taxonomy Extension Schema Document

Ex. 101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

Ex. 101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

Ex. 101.LAB*

XBRL Taxonomy Extension Label Linkbase Document

Ex. 101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

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 31, 2020~~June 30, 2021 (Unaudited) and September 30, 2020	3

	Condensed Consolidated Statements of Income (Unaudited) for the Three and Nine Months ~~December 31,~~Ended June 30, 2021 and 2020 ~~and 2019~~	4

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~Three~~Nine Months Ended ~~December 31,~~June 30, 2021 and 2020 ~~and 2019~~	5

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended ~~December 31,~~June 30, 2021 and 2020 ~~and 2019~~	6

	Notes to the Condensed Consolidated Financial Statements (Unaudited)	78

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2324

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3035

Item 4.	Controls and Procedures	3035

	PART II

	OTHER INFORMATION	3137

Item 1.	Legal Proceedings	3137

Item 1A.	Risk Factors	3137

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3138

Item 3.	Defaults upon Senior Securities	3238

Item 4.	Mine Safety Disclosures	3238

Item 5.	Other Information	3238

Item 6.	Exhibits	3339

SIGNATURES		3440

Series B Convertible Preferred
Outstanding and Exercisable
Number of Warrants		Exercise Price
	54,396	$	16.60
	17,857		16.80
	12,383		24.30
	33,393		28.50
	118,029


Non-vested Shares	Number of Shares			Average Grant-Date Fair Value
Non-vested at September 30, 2020		24,167		$	33.10
Granted		2,500		$	23.89
Vested		(12,167	)	$	39.78
Non-vested at June 30, 2021		14,500		$	40.60


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

	Series B Preferred Stock				Series E Preferred Stock				Common Stock							Series E Preferred Stock			Common Stock
	Shares		Amount		Shares		Amount		Shares			Amount		Paid-In Capital		Treasury Stock			Treasury Stock			Accumulated Deficit			Non-controlling interest			Total Equity
Balance, September 30, 2020		214,244	$	—		47,480	$	—		1,589,101		$	2	$	64,472	$	(7	)	$	(4,098	)	$	(16,429	)	$	(268	)	$	43,672
Stock based compensation		—		—		—		—		—			—		17		—			—			—			—			17
Purchase of common treasury stock		—		—		—		—		(33,926	)		—		—		—			(383	)		—			—			(383	)
Net income (loss)		—		—		—		—		—			—		—		—			—			5,413			(134	)		5,279
Balance, December 31, 2020		214,244	$	—		47,480	$	—		1,555,175		$	2	$	64,489	$	(7	)	$	(4,481	)	$	(11,016	)	$	(402	)	$	48,585


~~Note 4:~~	~~Balance Sheet Detail Information~~•	on the Execution Date, the Purchaser acquired 24.9% of the Units in exchange for, among other consideration described in the Purchase Agreement, an initial payment to the Seller of approximately $1,700 and a non-refundable deposit to the Seller in the amount of approximately $4,200;


	•	the remaining 75.1% of the Units (the “Remaining Units”) were deposited into escrow with the Seller’s legal counsel; and


	•	an additional $1,000 will be paid to the Seller upon FINRA’s approval of the change in control of SW Financial, but no later than December 31, 2021.


Risk-free interest rate		1.10%
Expected life of the options		6 years
Expected volatility		97%
Expected dividend yield		0%


Beginning balance, September 30, 2020	$	206
Warranties issued/accrued		0
Warranty settlements		(61	)
Ending balance, June 30, 2021	$	145

	Three Months Ended December 31, 2020						Three Months Ended December 31, 2019
				% of Total Revenue						% of Total Revenue
Statement of Income Data:
Revenue	$	62,454			100.0	%	$	42,001			100.0	%
Cost of Revenue		40,185			64.3	%		25,375			60.4	%
Gross Profit		22,269			35.7	%		16,626			39.6	%
General and Administrative Expense		12,279			19.7	%		10,809			25.7	%
Selling and Marketing Expense		2,699			4.3	%		2,330			5.5	%
Operating Income		7,291			11.7	%		3,487			8.3	%
Interest Expense, net		(1,470	)		(2.4	)%		(1,357	)		(3.2	)%
Impairment charges		—			0.0	%		(1,207	)		-2.9	%
Gain on disposal of fixed assets		129			0.3	%		—			0.0	%
Other Income (expense)		779			1.2	%		(181	)		(0.4	)%
Net Income before Income Taxes		6,729			10.8	%		742			1.8	%
Provision for Income Taxes		1,450			2.3	%		195			0.5	%
Net Income before Income Taxes		5,279			8.5	%		547			1.3	%
Net loss attributable to non-controlling interest		134			0.2	%		—			0.0	%
Net income attributable to Live stockholders	$	5,413			8.7	%	$	547			1.3	%


	For the Nine Months Ended June 30,2021						For the Nine Months Ended June 30,2020
				% of Total Revenue						% of Total Revenue
Statement of Income Data:
Revenues	$	202,439			100.0	%	$	130,904			100.0	%
Cost of revenues		128,614			63.5	%		79,789			61.0	%
Gross profit		73,825			36.5	%		51,115			39.0	%
General and administrative expenses		38,638			19.1	%		30,731			23.5	%
Sales and marketing expenses		8,539			4.2	%		7,839			6.0	%
Operating income		26,648			13.2	%		12,545			9.6	%
Interest expense, net		(4,057	)		(2.0	)%		(3,782	)		(2.9	)%
Gain on lease settlement, net		—			0.0	%		223			0.2	%
Gain on Payroll Protection Program loan forgiveness		6,150			3.0	%		—			0.0	%
Gain on bankruptcy settlement		1,765			0.9	%		—			0.0	%
Other income (expense)		782			0.4	%		(133	)		-0.1	%
Income before provision for income taxes		31,288			15.5	%		8,853			6.8	%
Provision for income taxes		7,381			3.6	%		2,402			1.8	%
Net income	$	23,907			11.8	%	$	6,451			4.9	%

Period	Number of Shares		Average Purchase Price Paid		Number of Share Purchases as Part of a Publicly Announced Plan or Program		Maximum Amount that May be Purchased Under the Announced Plan or Program
October 2020		16,489	$	10.51		16,489	$	8,384,250
November 2020		11,029		11.27		11,029		8,257,891
December 2020		6,408		11.49		6,408		8,183,301
		33,926				33,926


	Live Ventures Incorporated

Dated: August 16, 2021	/s/ Jon Isaac
~~Dated: February 16, 2021~~	~~/s/ Jon Isaac~~
	President and Chief Executive Officer
	(Principal Executive Officer)

Dated: August 16, 2021
~~Dated: February 16, 2021~~	/s/ Virland A. Johnson
	Chief Financial Officer
	(Principal Financial Officer)