☒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 May ~~13, 2021~~6, 2022 was ~~1,555,175.~~3,095,616.


	March 31, 2021			September 30, 2020			March 31, 2022			September 30, 2021
	(Unaudited)						(Unaudited)
Assets
Cash	$	11,928		$	8,984		$	6,190		$	4,664
Trade receivables, net		21,962			20,121
Inventories, net		61,826			64,525
Trade receivables, net of allowance for doubtful accounts of approximately $34,000 at March 31, 2022 and $61,000 at September 30, 2021								22,204			21,559
Inventories, net of reserves of approximately $1.7 million at March 31, 2022, and approximately $1.8 million at September 30, 2021								79,364			70,747
Prepaid expenses and other current assets		1,254			1,778			2,064			1,640
Debtor in possession assets		200			520			—			180
Total current assets		97,170			95,928			109,822			98,790
Property and equipment, net		31,660			30,376
Property and equipment, net of accumulated depreciation of approximately $23.1 million at March 31, 2022, and approximately $20.6 million at September 30, 2021								40,585			35,632
Right of use asset - operating leases		28,378			30,894			28,415			30,466
Deposits and other assets		459			223			798			682
Deferred taxes		—			1,021
Intangible assets, net		850			1,063
Intangible assets, net of accumulated amortization of approximately $2.7 million at March 31, 2022, and approximately $2.2 million at September 30, 2021								4,201			4,697
Goodwill		37,754			37,754			41,471			41,471
Total assets	$	196,271		$	197,259		$	225,292		$	211,738
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable	$	10,661		$	9,117		$	14,597		$	10,644
Accrued liabilities		12,260			14,822			12,117			17,048
Income taxes payable		3,498			736			728			876
Current portion of lease obligations - operating leases		7,104			7,176			7,311			7,202
Current portion of long-term debt		9,878			11,986			20,032			16,055
Current portion of notes payable related parties		—			1,297			2,000			2,000
Debtor-in-possession liabilities		11,842			12,228			—			11,135
Total current liabilities		55,243			57,362			56,785			64,960
Long-term debt, net of current portion		52,979			63,390			39,359			37,559
Lease obligation long term - operating leases		25,782			28,101			27,158			29,343
Notes payable related parties, net of current portion		4,000			4,000			2,000			2,000
Deferred taxes		312			—			5,053			2,796
Other non-current obligations		405			734
Total liabilities		138,721			153,587			130,355			136,658
Commitments and contingencies
Stockholders' equity:
Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized, 315,790 and 214,244 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively		—			—
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively, with a liquidation preference of $0.30 per share outstanding		—			—
Common stock, $0.001 par value, 200,000,000 shares authorized, 1,555,175 and 1,589,101 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively		2			2
Series B convertible preferred stock, $0.001 par value, 1,000,000 shares authorized, 0 and 315,790 shares issued and outstanding at March 31, 2022 and September 30, 2021, respectively								0			0
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 47,840 shares issued and outstanding at March 31, 2022 and September 30, 2021, respectively, with a liquidation preference of $0.30 per share outstanding								0			0
Common stock, $0.001 par value, 10,000,000 shares authorized, 3,095,616 and 1,582,334 shares issued and outstanding at March 31, 2022 and September 30, 2021, respectively								2			2
Paid in capital		64,759			64,472			65,321			65,284
Treasury stock common 533,011 shares as of March 31, 2021 and 499,805 shares as of September 30, 2020		(4,481	)		(4,098	)
Treasury stock Series E preferred 50,000 shares as of March 31, 2021 and of September 30, 2020		(7	)		(7	)
Accumulated deficit		(2,282	)		(16,429	)
Treasury stock common 600,188 shares as of March 31, 2022 and 534,520 shares as of September 30, 2021, respectively								(6,603	)		(4,519	)
Treasury stock Series E preferred 50,000 shares as of March 31, 2022 and of September 30, 2021, respectively								(7	)		(7	)
Retained earnings								36,672			14,768
Equity attributable to Live stockholders		57,991			43,940			95,385			75,528
Non-controlling interest		(441	)		(268	)		(448	)		(448	)
Total stockholders' equity		57,550			43,672			94,937			75,080
Total liabilities and stockholders' equity	$	196,271		$	197,259		$	225,292		$	211,738

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

	For the Three Months Ended March 31,						For the Six Months Ended March 31,
	2021			2020			2021			2020			For the Three Months Ended March 31,						For the Six Months Ended March 31,
Revenues	$	70,890		$	46,431		$	133,344		$	88,432
Cost of revenues		44,400			28,655			84,585			54,030
													2022			2021			2022			2021
Revenue													$	69,706		$	70,890		$	144,864		$	133,344
Cost of revenue														44,753			44,400			92,295			84,585
Gross profit		26,490			17,776			48,759			34,402			24,953			26,490			52,569			48,759

Operating expenses:
General and administrative expenses		12,565			11,701			24,844			22,510			13,154			12,565			27,311			24,844
Sales and marketing expenses		2,800			3,007			5,499			5,337			3,350			2,800			6,402			5,499
Total operating expenses		15,365			14,708			30,343			27,847			16,504			15,365			33,713			30,343
Operating income		11,125			3,068			18,416			6,555			8,449			11,125			18,856			18,416
Other (expense) income:
Other income (expense):
Interest expense, net		(1,649	)		(1,270	)		(3,119	)		(2,627	)		(858	)		(1,649	)		(1,875	)		(3,119	)
Gain on lease settlement, net		—			837			—			223
Gain on Payroll Protection Program loan forgiveness		1,382			—			1,382			—			0			1,382			0			1,382
Gain on disposal of fixed assets		(129	)		—			—			—
Loss on debt extinguishment														(363	)		0			(363	)		0
Loss on disposal of fixed assets														(1	)		0			(1	)		0
Gain on bankruptcy settlement		1,115			—			1,115			—			11,362			1,115			11,352			1,115
Other income (expense)		79			(125	)		858			(306	)		292			(50	)		418			858
Total other (expense) income, net		798			(558	)		236			(2,710	)
Total other income, net														10,432			798			9,531			236
Income before provision for income taxes		11,923			2,510			18,652			3,845			18,881			11,923			28,387			18,652
Provision for income taxes		3,228			629			4,678			979			3,523			3,228			6,483			4,678
Net income		8,695			1,881			13,974			2,866			15,358			8,695			21,904			13,974
Net loss attributable to non-controlling interest		39			—			173			—
Net income attributable to non-controlling interest														—			39			—			173
Net income attributable to Live stockholders	$	8,734		$	1,881		$	14,147		$	2,866		$	15,358		$	8,734		$	21,904		$	14,147

Income per share:
Basic	$	5.62		$	1.07		$	9.22		$	1.61		$	4.90		$	5.62		$	6.96		$	9.22
Diluted	$	2.66		$	0.54		$	4.34		$	0.82		$	4.84		$	2.66		$	6.87		$	4.34

Weighted average common shares outstanding:
Basic		1,555,175			1,752,908			1,534,287			1,779,706			3,134,540			1,555,175			3,148,059			1,534,287
Diluted		3,284,133			3,462,115			3,263,245			3,488,913			3,172,881			3,284,133			3,187,124			3,263,245

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

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

	For the Six Months Ended March 31,
	2021			2020			For the Six Months Ended March 31,
OPERATING ACTIVITIES:
							2022			2021
Operating Activities:
Net income	$	13,974		$	2,866		$	21,904		$	13,974
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,420			2,477			3,045			3,420
Gain on lease settlement, net		—			(223	)
Gain or loss on disposal of property and equipment		(23	)		106			1			(23	)
Gain on Payroll Protection Program loan forgiveness		(1,382	)		—			0			(1,382	)
Gain on bankruptcy settlement		(1,115	)		—			(11,501	)		(1,115	)
Amortization of debt issuance cost		612			212			(112	)		612
Stock based compensation expense		287			48			37			287
Warrant extension fair value adjustment		—			368
Amortization of right-to-use assets		125			463
Amortization of right-of-use assets								55			125
Change in reserve for uncollectible accounts		658			421			27			658
Change in reserve for obsolete inventory		964			(139	)		146			964
Change in deferred income taxes		1,334			839
Change in other		(148	)		(218	)
Changes in assets and liabilities:
Trade receivables		(2,499	)		117			(698	)		(2,499	)
Inventories		1,935			4,691			(8,658	)		1,935
Income taxes		2,763			88
Income taxes payable/receivable								(148	)		2,763
Prepaid expenses and other current assets		529			1,228			(422	)		529
Change in deferred income taxes								2,257			1,334
Deposits and other assets		(235	)		128			(116	)		(235	)
Accounts payable		2,594			(5,918	)		3,911			2,594
Accrued liabilities		(2,882	)		(983	)		(4,500	)		(2,882	)
Change in other								23			(148	)
Net cash provided by operating activities		20,911			6,571			5,251			20,911

INVESTING ACTIVITIES:
Purchase of intangible assets		—			(4	)
Lonesome Oak acquisition		—			(550	)
Investing Activities:
Purchase of property and equipment		(5,469	)		(1,858	)		(7,503	)		(5,469	)
Net cash provided by (used in) investing activities		(5,469	)		(2,412	)
Net cash used in investing activities								(7,503	)		(5,469	)

FINANCING ACTIVITIES:
Financing Activities:
Net borrowings (payments) under revolver loans		(4,554	)		2,640			4,887			(4,554	)
Purchase of series E preferred treasury stock		—			(3	)
Proceeds from issuance of notes payable		2,258			5,000			9,000			2,258
Purchase of common treasury stock		(383	)		(759	)		(2,084	)		(383	)
Payments on related party notes payable		(2,000	)		—			—			(2,000	)
Debtor-in-possession cash		112			(187	)		75			112
Payments on financing leases								(80	)		—
Payments on notes payable		(7,931	)		(12,035	)		(8,020	)		(7,931	)
Net cash used in financing activities		(12,498	)		(5,344	)
Net cash provided by (used in) financing activities								3,778			(12,498	)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		2,944			(1,185	)
CASH AND CASH EQUIVALENTS, beginning of period		8,984			2,681
CASH AND CASH EQUIVALENTS, end of period	$	11,928		$	1,496
Increase in cash								1,526			2,944
Cash, beginning of period								4,664			8,984
Cash, end of period							$	6,190		$	11,928

Supplemental cash flow disclosures:
Interest paid	$	2,516		$	1,187		$	1,823		$	2,516
Income taxes paid	$	369		$	—		$	4,458		$	369

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

Series B
Preferred Stock

Series E
Preferred Stock

Common Stock

Series E
Preferred
Stock

Common
Stock

Shares

Amount

Shares

Amount

Shares

Amount

Paid-In
Capital

Treasury
Stock

Treasury
Stock

Accumulated
Deficit

Non-controlling Interest

Total
Equity

Balance, December 31, 2020

214,244

$
—

47,840

$
—

1,555,175

$
2

$
64,489

$
(7
)

$
(4,481
)

$
(11,016
)

$
(402
)

$
48,585

Stock based compensation

—

—

—

—

—

—

270

—

—

—

—

270

Warrant exercise

101,546

—

—

—

—

—

—

—

—

—

—

Net income

—

—

—

—

—

—

—

—

—

8,734

(39
)

8,695

Balance, March 31, 2021

315,790

$
—

47,840

$
—

1,555,175

$
2

$
64,759

$
(7
)

$
(4,481
)

$
(2,282
)

$
(441
)

$
57,550

	Series B Preferred Stock				Series E Preferred Stock				Common Stock							Series E Preferred Stock			Common Stock
	Shares		Amount		Shares		Amount		Shares			Amount		Paid-In Capital		Treasury Stock			Treasury Stock			Accumulated Deficit			Total Equity			Series B Preferred Stock				Series E Preferred Stock				Common Stock							Series E Preferred Stock			Common Stock
Balance, December 31, 2019		214,244	$	—		47,840	$	—		1,784,310		$	2	$	64,219	$	(7	)	$	(2,781	)	$	(26,370	)	$	35,063
																												Shares		Amount		Shares		Amount		Shares			Amount		Paid-In Capital		Treasury Stock			Treasury Stock			Accumulated Deficit			Non-controlling Interest			Total Equity
Balance, September 30, 2020																													214,244	$	—		47,840	$	—		1,589,101		$	2	$	64,472	$	(7	)	$	(4,098	)	$	(16,429	)	$	(268	)	$	43,672
Stock based compensation		—		—		—		—		—			—		19		—			—			—			19			—		—		—		—		—			—		17		—			—			—						17
Warrant extension fair value adjustment		—		—		—		—		—			—		102		—			—			—			102
Warrant exercise																													101,546		—		—		—		—			—		—		—			—			—						—
Purchase of common treasury stock		—		—		—		—		(64,868	)		—		—		—			(416	)		—			(416	)		—		—		—		—		(33,926	)		—		—		—			(383	)		—						(383	)
Net income		—		—		—		—		—			—		—		—			—			1,881			1,881			—		—		—		—		—			—		—		—			—			5,413			(134	)		5,279
Balance, March 31, 2020		214,244	$	—		47,840	$	—		1,719,442		$	2	$	64,340	$	(7	)	$	(3,197	)	$	(24,489	)	$	36,649
Balance, December 31, 2020																													315,790		—		47,840		—		1,555,175			2		64,489		(7	)		(4,481	)		(11,016	)		(402	)		48,585
Stock based compensation																													—		—		—		—		—			—		270		—			—			—						270
Net income																													—		—		—		—		—			—		—		—			—			8,734			(39	)		8,695
Balance, March 31, 2021																													315,790	$	—		47,840	$	—		1,555,175		$	2	$	64,759	$	(7	)	$	(4,481	)	$	(2,282	)	$	(441	)	$	57,550

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

Series B
Preferred Stock

Series E
Preferred Stock

Common Stock

Series E
Preferred
Stock

Common
Stock

Shares

Amount

Shares

Amount

Shares

Amount

Paid-In
Capital

Treasury
Stock

Treasury
Stock

Accumulated
Deficit

Non-controlling Interest

Total
Equity

Balance, September 30, 2020

214,244

$
—

47,840

$
—

1,589,101

$
2

$
64,472

$
(7
)

$
(4,098
)

$
(16,429
)

$
(268
)

$
43,672

Stock based compensation

—

—

—

—

—

—

287

—

—

—

—

287

Warrant exercise

101,546

—

—

—

—

—

—

—

—

—

—

Purchase of common treasury stock

—

—

—

—

(33,926
)

—

—

—

(383
)

—

—

(383
)
Net income

—

—

—

—

—

—

—

—

—

14,147

(173
)

13,974

Balance, March 31, 2021

315,790

$
—

47,840

$
—

1,555,175

$
2

$
64,759

$
(7
)

$
(4,481
)

$
(2,282
)

$
(441
)

$
57,550

Series B
Preferred Stock

Series E
Preferred Stock

Common Stock

Series E
Preferred
Stock

Common
Stock

Shares

Amount

Shares

Amount

Shares

Amount

Paid-In
Capital

Treasury
Stock

Treasury
Stock

Accumulated
Deficit

Total
Equity

Balance, September 30, 2019

214,244

$
—

77,840

$
—

1,826,009

$
2

$
63,924

$
(4
)

$
(2,438
)

$
(27,355
)

$
34,129

Stock based compensation

—

—

—

—

—

—

48

—

—

—

48

Warrant extension fair value adjustment

—

—

—

—

—

—

368

—

—

—

368

Purchase of common treasury stock

—

—

—

—

(106,567
)

—

—

—

(759
)

—

(759
)
Purchase of Series E preferred stock

—

—

(30,000
)

—

—

—

—

(3
)

—

—

(3
)
Net income

—

—

—

—

—

—

—

—

—

2,866

2,866

Balance, March 31, 2020

214,244

$
—

47,840

$
—

1,719,442

$
2

$
64,340

$
(7
)

$
(3,197
)

$
(24,489
)

$
36,649

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

The accompanying unaudited condensed consolidated financial statements include the accounts of Live Ventures Incorporated, a Nevada corporation, and its subsidiaries (collectively, “Live Ventures” or the “Company”). ~~Commencing in fiscal year 2015, the Company began~~Live Ventures is a diversified holding company with a strategic shift in its business plan away from providing online marketing solutions for small and medium sized business to acquiring profitable companies in various industries that have demonstrated a strong historyfocus on value-oriented acquisitions of ~~earnings power. The Company continues to actively develop, revise and evaluate its products, services and its marketing strategies in its businesses.~~domestic middle-market companies. The Company has ~~three~~ four operating segments: Retail, Flooring Manufacturing, Steel Manufacturing, and ~~Steel Manufacturing. Included in the~~Corporate and Other. The Retail ~~segment:~~segment includes (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~~The Flooring Manufacturing segment isincluded 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~~The Steel Manufacturing Segment isincludes 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~~were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, ~~they~~the financial statements 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 six months ended March 31, ~~2021~~2022 are not necessarily indicative of the results to be expected for the fiscal year ending September 30, ~~2021. This~~2022. The financial information included in these statements should be read in conjunction with the consolidated financial statements and related notes thereto as of September 30, ~~2020~~2021 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,~~December 28, 2021 (the ~~“2020~~“2021 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, 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~~The global outbreak of COVID-19 (Coronavirus) ~~which~~has resulted in changes in global supply of certain products. The outbreak or pandemic has continued to create significant uncertainties. The pandemic continues to ~~create challenges~~have an unprecedented impact on the U.S. economy as federal, state, and local governments react to this public health crisis. These significant uncertainties 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~~impacts include, but are not limited to, ~~the potential~~an adverse effect ofon the ~~pandemic on~~economy; the Company’s supply chain ~~partners,~~partners; its employees and ~~customers,~~customers; customer sentiment in ~~general,~~general; and traffic within shopping centers, and, where applicable, malls, containing its stores. ~~Recommendations and/~~As the pandemic continues, consumer fear about becoming ill, as well as recommendations or mandates from federal, state, and local authorities to avoid large gatherings of people or self-quarantine, ~~have previously~~are continuing to increase; this has already affected, and may continue to affect, traffic to the stores. ~~As of~~For example, by 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~~regulations. By June 30, 2020, all Vintage Stock retail locations ~~were~~had reopened, while maintaining compliance with government mandates. The Company is unable to predict if additional periods of store closures for Vintage Stock will be needed or mandated. ~~During~~For the Company’s other segments, during March and April 2020, Marquis conducted rolling layoffs for certain ~~employees,~~employees; however, ~~during~~by May 2020, most employees ~~have~~ returned to their respective locations. ~~Continued~~The 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~~a variety of responsive actions, ~~in response,~~ including but not limited to, employee furloughs, reduced store hours, store closings, expense reductions or discounting of pricing of ~~products,~~ products—all in an effort to mitigate such impacts. The extent of the ~~impact~~uncertainties and impacts of the pandemic on the Company’s business and financial results will depend largely on future developments, including the duration of the ~~spread of the outbreak~~pandemic 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,~~ spending—all of which are highly uncertain and cannot be predicted. This situation with the pandemic is continually changing ~~rapidly,~~ and additional impacts ~~may arise that~~of which the Company is not aware ~~of currently.~~may arise.

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

As of March 31, 2022, the weighted average remaining lease term is ~~12.4 years. Our~~ 8.09 years and our weighted average discount rate is ~~8.9%~~6.45%. Total cash payments for the six months ended March 31, 2022 and 2021 were approximately $4.9 million and ~~2020 were $1,705 and $3,872, respectively~~$1.7 million, respectively. Additionally, we obtained right-of-use assets in exchange for lease liabilities of approximately ~~$7,600~~$2.8 million upon commencement of operating leases during the ~~the~~ six months ended March 31, ~~2021~~.

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

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


Twelve months ended March 31,
2022	$	7,747
2023		6,382		$	9,353
2024		4,852			7,613
2025		3,566			5,738
2026		2,508			4,046
2027					2,881
Thereafter		13,175			14,571
Total		38,230			44,202
Less implied interest		(5,344	)		(9,733	)
Present value of payments	$	32,886		$	34,469

During the six months ended March 31, ~~2020,~~2022 and 2021, the Company recorded ~~a net~~0 gain ~~on lease settlement of $223 which consisted of~~or loss settlements, 0r did it record impairment charges relating to any of ~~$614 related to~~its leases.

March 31, 2021

September 30, 2020

Trade receivables, current, net:

Accounts receivable, current

$
22,024

$
20,197

Less: Reserve for doubtful accounts

(62
)

(76
)

$
21,962

$
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

$
22,024

$
20,393

Less: Reserve for doubtful accounts

(62
)

(272
)

$
21,962

$
20,121

Inventory, net

Raw materials

$
13,849

$
13,175

Work in progress

11,217

11,747

Finished goods

23,045

25,009

Merchandise

15,785

17,729

63,896

67,660

Less: Inventory reserves

(2,070
)

(3,135
)

$
61,826

$
64,525

Property and equipment, net:

Building and improvements

$
11,574

$
9,908

Transportation equipment

121

480

Machinery and equipment

31,713

27,217

Furnishings and fixtures

3,806

2,908

Office, computer equipment and other

2,712

3,445

49,926

43,958

Less: Accumulated depreciation

(18,266
)

(13,582
)

$
31,660

$
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

(2,049
)

(1,837
)

$
850

$
1,063

Accrued liabilities:

Compensation and benefits

$
2,861

$
4,178

Accrued sales and use taxes

1,590

1,251

Accrued property taxes

160

270

Accrued gift card and escheatment liability

1,561

1,534

Accrued interest payable

258

280

Accrued accounts payable and bank overdrafts

1,729

3,818

Accrued professional fees

1,910

2,191

Customer deposits

220

169

Accrued expenses - other

1,971

1,131

$
12,260

$
14,822

Long-term debt as of March 31, ~~2021~~2022 and September 30, ~~2020~~2021 consisted of the ~~following:~~following (in $000's):

March 31,  2021

September 30, 2020

Bank of America Revolver Loan

$
—

$
—

Encina Business Credit Revolver Loan

12,227

14,886

Texas Capital Bank Revolver Loan

5,486

7,115

Crossroads Financial Revolver Loan

618

883

Encina Business Credit Term Loan

1,491

1,663

Note Payable Comvest Term Loan

—

5,554

Note Payable to the Sellers of Vintage Stock

8,000

10,000

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

803

1,229

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

1,594

1,862

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

490

572

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

2,264

2,538

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

689

758

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

4,403

4,681

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

3,158

3,091

Note Payable to Extruded Fibers

1,300

2,900

Note Payable to JCM Holdings

1,918

—

Note Payable to the Sellers of Precision Marshall

2,500

2,500

Note Payable to Store Capital Acquisitions, LLC

9,226

9,243

Payroll  Protection Program

4,768

6,151

JanOne Inc. (Note 11)

—

—

Isaac Capital Group

2,000

2,000

Spriggs Investments, LLC

2,000

2,000

Sellers of Lonesome Oak

1,254

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

259

—

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

633

810

Total notes payable

67,788

82,440

Less unamortized debt issuance costs

(931
)

(1,767
)
Net amount

66,857

80,673

Less current portion

(9,878
)

(13,283
)
Long-term portion

$
56,979

$
67,390

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


Twelve months ending March 31,
2022	$	9,878
2023		15,762	$	20,162
2024		24,251		4,161
2025		2,091		3,642
2026		3,472		2,969
2027				19,048
Thereafter		12,334		10,075
Total	$	67,788
Total future maturities of long-term debt			$	60,057

On ~~July 6, 2015 (as amended)~~January 31, 2020, Marquis entered into ~~a $25,000~~an amended $25.0 million revolving credit agreement (“BofA Revolver”) with Bank of America Corporation (“BofA”). The BofA Revolver is ana five-year, 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 ~~satisfying~~meeting all loan covenants under the credit agreement with BofA.

~~The following tables summarize the BofA Revolver for the six months ended March 31, 2021 and 2020 and as~~As of March 31, ~~2021 and September 30, 2020:~~2022, the outstanding balance was approximately $3.7 million.

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~~$23.5 million and (ii) a borrowing base equal to the sum of ~~Precision’s~~ (a) ~~85%~~85% of Precision's eligible accounts receivable, plus (b) ~~85%~~85% of Precision's eligible inventory, subject to an eligible inventory sublimit that begins at ~~$14,000~~$14.0 million and declines to ~~$12,000~~$12.0 million during the term of the Loan Agreement, minus (c) customary reserves.

The ~~following tables summarize the~~ Encina Revolver Loans mature on July 14, 2023. On January 20, 2022, the Precision Marshall refinanced these loans with Fifth-Third Bank (see below). The refinanced credit facility, totaling $29 million, is comprised of $23.0 million in revolving credit, $3.5 million in machinery and equipment (“M&E”) lending, and $2.5 million for capital expenditure (“Capex”) lending.

On January 20, 2022, Precision Marshall refinanced its Encina Business Credit loans with Fifth Third Bank (see above), and the balance outstanding was repaid. The refinanced credit facility, totaling $29 million, is comprised of $23.0 million in revolving credit, $3.5 million in M&E lending, and $2.5 million for capital Capex lending. Advances under the ~~six months ended March~~new credit facility will bear interest at the 30-day SOFR plus 200 basis points for lending under the revolving facility, and 30-day SOFR plus 225 basis points for M&E and Capex lending (Effective December 31, 2021, SOFR replaced the USD LIBOR for most financial benchmarking). The refinancing of the Borrower’s existing credit facility reduces interest costs and ~~2020~~improves the availability and asliquidity of funds by approximately $3.0 million at the close. The facility terminates on January 20, 2027, unless terminated earlier in accordance with its terms. As of March 31, ~~2021~~2022, the outstanding balance on the revolving loan was approximately $14.1 million, and ~~September 30, 2020:~~the outstanding balance on the term note was approximately $3.4 million.

On November 3, 2016, Vintage Stock entered into ~~a $12,000~~an amended $12.0 million credit agreement(~~as amended on January 23, 2017, amended on September 20, 2017, June 7, 2018, September 24, 2019 and September 30, 2020~~) with Texas Capital Bank (“TCB Revolver”). The TCB Revolver is a five-year, asset-based facility that is secured by substantially all of Vintage Stock’s assets. Availability under the TCB Revolver is subject to a monthly borrowing base calculation. The TCB Revolver matures, as amended September 30, 2020, on November 3, ~~2023.~~

~~The following tables summarize the TCB Revolver for the six months ended March 31, 2021 and 2020 and as~~2023. As of March 31, ~~2021 and September 30, 2020:~~2022, the balance outstanding was approximately $8.6 million.

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 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% of inventory cost or (ii) up to 85% of net orderly liquidation value, in each case as further described in the Loan Agreement.

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. 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. ~~In addition, certain executive officers of the Borrower have agreed to provide validity guarantees.~~

On December 9, 2019, ApplianceSmart filed a voluntary petition in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of Title 11 of the United States Code. See Note 11 for a complete discussion.

During October 2020, Marquis purchased a manufacturing facility for ~~$2,500.~~$2.5 million. Marquis had previously been leasing this facility. Additionally, Marquis entered into a ~~$2,000 loan agreement with~~$2.0 million note in favor of the seller of the facility for the balance of the purchase price, which note is secured by the facility. The note bears interest at 6%, and matures in January 2030. Principal and interest payments are due monthly, and the note is fully amortized at maturity. As of March 31, 2022, the remaining principal balance was approximately $1.7 million.

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

In December 2021, Marquis funded the acquisition of $5.5 million of new equipment under note #9 of its master agreement. The note, which is secured by the ~~facility,~~equipment, matures December 2026, and is payable in ~~order to complete the purchase~~60 monthly installments of ~~the facility. The loan bears~~$92,000 beginning January 2022, bearing interest at ~~6% due monthly and matures January 2030.~~ 3.75%.

~~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 $1,382 payroll protection program loan has been forgiven and no amounts are owed.~~

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

As of March 31, 2022 and September 30, 2021, the Company had 600,188 and 534,520 shares of Treasury Stock, respectively. During the six months ended March 31, ~~2020, the Company repurchased 30,000 shares of Series E Convertible Preferred Stock for an aggregate purchase price of $3.~~

~~For the six months ended March 31,~~2022 and 2021, ~~and 2020,~~respectively, the Company purchased ~~33,926~~65,668 and ~~106,567~~33,926 shares of its common stock on the open market for ~~$383~~approximately $2.1 million and ~~$759, respectively.~~approximately $400,000, respectively.

As of September 30, 2020 the Company had 118,029 warrants 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. The Company and ICG have entered into agreements whereby if 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. During the three and six months ended March 31, 2020, the Company recorded a fair value adjustment of $102 and $368, respectively, related to the extension of warrants that expired during this period. There was no such adjustment during the three and six months ended March 31, 2021.

~~In January 2021, all of the warrants were exercised (via cashless exercise) for shares of Series B Convertible Preferred 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.~~instruments. The value of each award is amortized on a straight-line basis over the requisite service period.

The following table summarizes stock option activity for the ~~twelve months~~fiscal year ended September 30, ~~2020~~2021 and the six months ended March 31, ~~2021:~~2022:

	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
Forfeited		(81,250	)
Outstanding at September 30, 2020		119,168		$	19.07		2.71	$	—
Exercisable at September 30, 2020		95,001		$	15.50		1.55	$	—
										Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Intrinsic Value
Outstanding at September 30, 2020		119,168		$	19.07		2.71	$	—		119,168		$	15.76		2.71	$	0
Granted		1,250									7,500			40.92
Exercised		—									(28,668	)	11.25
Forfeited		—									(10,500	)	20.56
Outstanding at March 31, 2021		120,418		$	19.12		2.87	$	564
Exercisable at March 31, 2021		107,168		$	16.71		2.19	$	564
Outstanding at September 30, 2021											87,500		$	18.81		1.78	$	1,626
Exercisable at September 30, 2021											78,500		$	16.29		1.72	$	1,626

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

The Company recognized compensation expense of ~~$270~~approximately $19,000 and ~~$19~~$270,000 during the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$287~~approximately $37,000 and ~~$48~~$287,000 during the six months ended March 31, ~~2021~~2022 and ~~2020,~~2021, 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~~ and the revaluation for existing options whereby the expiration date was extended.

AtAs of March 31, ~~2021,~~2022, the Company had ~~$55 of~~0 unrecognized compensation expense ~~(net of estimated forfeitures)~~ associated with stock option ~~awards which the Company expects to recognize as compensation expense through December 2021.~~

~~The exercise price for stock options outstanding and exercisable outstanding at March 31, 2021 is as follows:~~

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

1,250

23.89

—

—

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

—

—

120,418

107,168

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

The following table depicts the Black-Scholes model valuation assumptions for the stock options granted during the six months ended March 31, 2021. There were no stock option grants during the six months ended March 31, 2020.

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

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

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


	Three Months Ended March 31,				Six Months Ended March 31,				Three Months Ended March 31,				For the Six Months Ended March 31,
	2021		2020		2021		2020		2022		2021		2022		2021
Basic
Net income	$	8,734	$	1,881	$	14,147	$	2,866	$	15,358	$	8,734	$	21,904	$	14,147
Less: preferred stock dividends		—		—		—		—		0		0		0		0
Net income applicable to common stock	$	8,734	$	1,881	$	14,147	$	2,866	$	15,358	$	8,734	$	21,904	$	14,147

Weighted average common shares outstanding		1,555,175		1,752,908		1,534,287		1,779,706		3,134,540		1,555,175		3,148,059		1,534,287
Basic earnings per share	$	5.62	$	1.07	$	9.22	$	1.61	$	4.90	$	5.62	$	6.96	$	9.22

Diluted
Net income applicable to common stock	$	8,734	$	1,881	$	14,147	$	2,866	$	15,358	$	8,734	$	21,904	$	14,147
Add: preferred stock dividends		—		—		—		—		0		0		0		0
Net income applicable for diluted earnings per share	$	8,734	$	1,881	$	14,147	$	2,866	$	15,358	$	8,734	$	21,904	$	14,147

Weighted average common shares outstanding		1,555,175		1,752,908		1,534,287		1,779,706		3,134,540		1,555,175		3,148,059		1,534,287
Add: Options		87,168		—		87,168		—		38,102		87,168		38,825		87,168
Add: Series B Preferred Stock		1,593,950		1,071,220		1,593,950		1,071,220		—		1,593,950		—		1,593,950
Add: Series B Preferred Stock Warrants		—		590,147		—		590,147
Add: Series E Preferred Stock		47,840		47,840		47,840		47,840		239		47,840		239		47,840
Assumed weighted average common shares outstanding		3,284,133		3,462,115		3,263,245		3,488,913		3,172,881		3,284,133		3,187,124		3,263,245
Diluted earnings per share	$	2.66	$	0.54	$	4.34	$	0.82	$	4.84	$	2.66	$	6.87	$	4.34

There are ~~33,250~~0 and ~~200,418~~33,250 options to purchase shares of common stock that are anti-dilutive, ~~that~~and are not included in the ~~three and~~ six months ended March 31, 2022 and 2021, diluted earnings per share computations, respectively.

As of March 31, ~~2021, Isaac Capital Group LLC (“ICG”) owned 259,902 shares~~2022, ICG beneficially owns 48.5% of ~~Series B Preferred Stock that are convertible into 1,299,510 shares of common~~the Company’s issued and outstanding capital stock. Jon Isaac, the Company's President and Chief Executive Officer, is the President and sole member of ICG, and, accordingly, has sole voting and dispositive power with respect to ~~such~~these shares. ~~ICG beneficially~~Mr. Isaac also personally owns ~~45.5%~~ of the Company’s outstanding capital stock. The holders of shares of the 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,~~ ~~193,677~~217,177 shares of common stock and holds options to purchase up to 25,000 shares of common stock at an exercise price of ~~$10.00~~$10.00 per share, all of which are currently ~~exercisable~~.exercisable.

During 2015, Marquis entered into a mezzanine loan in the amount of up to ~~$7,000~~$7.0 million (the “ICF Loan”) with Isaac Capital Fund I, LLC (“ICF”), a private lender whose managing member is Jon Isaac, ~~our~~the Company’s President and Chief Executive Officer. On July 10, 2020, (i) ICF released and discharged Marquis from all obligations under the loan, (ii) ICF assigned all of its rights and obligations under the instruments, documents, and agreements with respect to the ~~ICG~~ICF Loan to ICG, of which Jon Isaac, ~~our~~the Company’s President and Chief Executive Officer, is the sole member, and (iii) Live Ventures borrowed $2.0 million (the “ICG Loan”) from ICG using ~~substantially~~essentially the same documentation from the ICF Loan. There was no balance outstanding on the note as of the date of assignment. The ICG Loan matures on May 1, 2025 and bears interest at a rate of 12.5%. Interest is payable in arrears on the last day of each month, commencing July 31, 2020. As of March 31, ~~2021,~~2022, and September 30, ~~2020,~~2021, there was ~~$2,000~~$2.0 million 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 $~~1,000~~ 1.0 million revolving 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 March 31, ~~2021,~~2022, the Company has not drawn on the ~~revolving promissory note.~~ICG Revolver.

As discussed in Note 7, the warrants were set to expire at various times over the next two years, subject to the automatic extension discussed in Note 7. 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 ~~$50~~$75,000 and ~~$89~~$50,000 in rent and other reimbursed expenses for ~~the~~ three months ended March 31, 2022 and 2021 and ~~2020, respectively.~~ ~~JanOne paid the Company $88~~$144,000 and ~~$181~~$88,000 in rent and other reimbursed expenses for the six months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. Tony Isaac ~~and Virland Johnson are President and~~is the Chief Executive Officer, President, Secretary, and a member of the Board of Directors ~~member, and the Chief Financial Officer~~ of ~~JanOne, respectively.~~JanOne.

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 (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% per annum with interest payable monthly in arrears. Ten percent of the outstanding principal amount will be repaid annually on a quarterly basis, with the accrued and unpaid principal due on the Maturity Date. ApplianceSmart has agreed to guaranty repayment of the ApplianceSmart Note~~. The remaining $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 March 31, 2021, and September 30, 2020, there was $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 Affiliated Holdings, LLC (“VSAH”) and Vintage Stock entered into a seller financed mezzanine loan in the amount of ~~$10,000 (as amended, the “Sellers Subordinated Acquisition Note”)~~$10.0 million with the previous owners of Vintage ~~Stock, one of whom was Rodney Spriggs, the President and Chief Executive Officer of Vintage Stock, Inc.,~~Stock. The Company executed a ~~wholly-owned subsidiary of the Company. The Sellers~~promissory note (the “Sellers Subordinated Acquisition ~~Note~~Note”), which 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. Mr. Spriggs holds a 41% interest in the Sellers Subordinated Acquisition Note.~~2023. As of March 31, ~~2021,~~2022, the amount ~~owed~~ was ~~$8,000.~~fully repaid.

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 ~~Mr. Spriggs. The~~Rodney Spriggs, ~~Promissory Note~~the President and Chief Executive Officer of Vintage Stock, Inc., a wholly-owned subsidiary of the Company, that memorializes a loan by Spriggs Investments to the Company in the initial principal amount of ~~$2,000~~$2.0 million (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~~As of March 31, 2022, the ~~last day of each month, commencing July 31, 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. The Company used the proceeds from the Spriggs Loan to finance, in part, the acquisition of Precision Marshall. The Spriggs Promissory Note contains events of default and other provisions customary for a loan of this type. The Spriggs Loanowed was ~~guaranteed by Jon Isaac, Live Ventures’ President and Chief Executive Officer, and by ICG.~~$2.0 million.

On February 21, 2018, the Company received a subpoena from the ~~Securities and Exchange Commission (“SEC”)~~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~~staff of the SEC relating to the Company’s SEC investigation. On October 7, 2020, the Company received a “Wells Notice” from the ~~Staff~~staff of the SEC relating to the Company’s previously-disclosed SEC investigation. The Wells Notices relate to, among other things, the Company’s reporting of its financial performance for its fiscal year ended September 30, 2016, certain disclosures related to executive compensation, and its previous acquisition of ApplianceSmart. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. The Wells Notices informed the Company and the Executives that the SEC Staff has made a preliminary determination to recommend that the SEC file an enforcement action against the Company and each of the Executives ~~that would~~to allege certain violations of the federal securities laws. The Company and the Executives maintain that their actions were appropriate, and ~~the Company and the Executives have engaged Orrick Herrington & Sutcliffe LLP, among others, to defend themselves, and intend to~~are vigorously ~~defend~~defending against any and all allegations brought forth.

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

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

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

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

On ~~August 4, 2020, Valassis Communications, Inc. and Valassis Digital Corp. (collectively, “Valassis”~~Feb 28, 2022, the court approved ApplianceSmart’s plan for reorganization (the “Plan”) ~~filed suit against~~, discharging ApplianceSmart ~~Holdings LLC~~of certain debts according to the Plan resulting in the ~~State of Michigan, Third Judicial Circuit, Wayne County, alleging, among other things, breach of contract and account stated and seeking damages~~Company recording a gain of approximately ~~$700. This matter has since been removed~~$11.4 million, which includes a write-off or adjustment of approximately $11.5 million on the settlement of debts and other liabilities, offset by payments subject to ~~United States District Court, Eastern District~~the bankruptcy that were not included as debtor-in-possession liabilities of ~~Michigan, Southern Division.~~ approximately $149,000.

The Company ~~believes that ApplianceSmart, Inc., not ApplianceSmart Holdings LLC,~~ is the responsible party. On December 9, 2019, ApplianceSmart filed a 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

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. This matter has been stayed as a result of the Chapter 11 Case.

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 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 balance sheet as of March 31, 2021 is below. The debtor in possession assets and liabilities are primarily related to assets and liabilities incurred pre-petition and are subject to compromise.

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

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. This matter has been stayed as a result of the Chapter 11 Case.

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. 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. 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 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 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. 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. This matter has been stayed as a result of the Chapter 11 Case.

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. 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. WeThe Company currently ~~believe~~believes that the ultimate outcome of such lawsuits and proceedings will not, individually, or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows. As applicable, liabilities pertaining to these matters, that are probable and estimable, have been accrued.

~~The Company leases its office, retail and warehouse space under long-term operating leases expiring 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. As of March 31, 2021, this amount has been reduced to $405.

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

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

The following tables summarize segment information ~~for the three and six months ended March 31, 2021 and 2020:~~(in $000's):

For the Three Months Ended March 31,

For the Six Months Ended March 31,

2021

2020

2021

2020

Revenues

Retail

$
24,003

$
18,986

$
46,373

$
40,474

Flooring Manufacturing

32,972

27,301

63,194

47,668

Steel Manufacturing

13,793

—

23,528

—

Corporate & other

122

144

249

290

$
70,890

$
46,431

$
133,344

$
88,432

Gross profit

Retail

$
12,970

$
10,330

$
25,017

$
21,455

Flooring Manufacturing

10,022

7,313

18,347

12,676

Steel Manufacturing

3,380

—

5,156

—

Corporate & other

118

133

239

271

$
26,490

$
17,776

$
48,759

$
34,402

Operating income (loss)

Retail

$
5,071

$
1,331

$
9,564

$
3,195

Flooring Manufacturing

6,011

2,703

10,161

5,101

Steel Manufacturing

1,742

—

1,886

—

Corporate & other

(1,699
)

(966
)

(3,195
)

(1,741
)

$
11,125

$
3,068

$
18,416

$
6,555

Depreciation and amortization

Retail

$
391

$
479

$
738

$
949

Flooring Manufacturing

907

887

1,872

1,492

Steel Manufacturing

396

—

789

—

Corporate & other

11

27

20

37

$
1,706

$
1,392

$
3,420

$
2,477

Interest expenses

Retail

$
582

$
815

$
1,242

$
1,764

Flooring Manufacturing

648

440

1,058

830

Steel Manufacturing

288

—

556

—

Corporate & other

131

15

263

33

$
1,649

$
1,270

$
3,119

$
2,627

Net income (loss) before provision for income taxes

Retail

$
4,485

$
1,205

$
8,658

$
1,450

Flooring Manufacturing

5,171

2,111

8,893

3,991

Steel Manufacturing

2,460

—

2,296

—

Corporate & other

(193
)

(806
)

(1,195
)

(1,596
)

$
11,923

$
2,510

$
18,652

$
3,845

The Company has evaluated subsequent events through the ~~date~~filing of this ~~Quarterly Report noting~~Form 10-Q, and determined that there have been no ~~reportable events.~~events that have occurred that would require adjustments to disclosures in its condensed consolidated financial statements.

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

For a description of our significant accounting policies and an understanding of the significant factors that influenced our performance during the three and six months ended March 31, ~~2021,~~2022, this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (hereafter referred to as “MD&A”) should be read in conjunction with the condensed consolidated financial statements, including the related notes, appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2020~~2021 (the ~~“2020~~“2021 Form 10-K”).

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

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

Forward-looking statements involve risks, uncertainties, and other factors, which may cause our actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results, future performance and capital requirements and cause them to materially differ from those contained in the forward-looking statements include those identified in our ~~2020~~2021 Form 10-K under Item 1A “Risk Factors”, and Part II, Item 1A. "Risk Factors" below, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.

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

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

Under the Live Ventures brand, we seek opportunities to acquire profitable and well-managed companies. We work closely with ~~third party advisors~~consultants 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 Quarterly Report Form 10-Q) is located at www.liveventures.com. Our common stock trades on the Nasdaq Capital Market under the symbol “LIVE”.

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

Vintage Stock Holdings LLC, Vintage Stock, V-Stock, Movie Trading Company and EntertainMart (collectively, “Vintage Stock”) is an award-winning specialty entertainment retailer ~~offering~~that offers a large selection of entertainment products, including new and pre-owned movies, video games and music products, as well as ancillary products, such as books, comics, toys and collectibles, ~~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 ~~more than 60~~66 retail locations strategically positioned across Arkansas, Colorado, Idaho, Illinois, Kansas, Missouri, Nebraska, 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, offerings such as close-outs, factory overruns, discontinued models, and special-buy appliances, including open box merchandise and others.

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

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

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~~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, the Company has recently invested in additional capacity to grow several attractive lines of business, including printed carpet and yarn extrusion.

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

Precision Marshall is the North American leader in providing and manufacturing, pre-finished de-carb free tool and die steel. For ~~over 70~~nearly 75 years, Precision Marshall has served steel distributors through quick and accurate service. Precision Marshall has led the industry with exemplary availability and value-added processing that saves distributors time and processing costs.

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

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

Our ~~unaudited condensed~~ consolidated financial statements have been prepared in accordance with ~~accounting principles generally accepted in the United States of America (“GAAP”).~~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 our significant accounting policies and the means by which we develop estimates thereon, see Part II, Item 8 – Financial Statements - Notes to unaudited condensed consolidated financial statements Note 2 – summary of significant accounting policies in our 2021 10-K.

We evaluate the ~~Company’s 10-K report~~performance of our operations based on financial measures such as ~~filed on January 13, 2021.~~revenue and “Adjusted EBITDA.” Adjusted EBITDA is defined as net income (loss) before interest expense, interest income, income taxes, depreciation, amortization, stock-based compensation, and other non-cash or nonrecurring charges. We believe that Adjusted EBITDA is an important indicator of the operational strength and performance of the business, including the business’ ability to fund acquisitions and other capital expenditures, and to service its debt. Additionally, this measure is used by management to evaluate operating results and perform analytical comparisons and identify strategies to improve performance. Adjusted EBITDA is also a measure that is customarily used by financial analysts to evaluate a company's financial performance, subject to certain adjustments. Adjusted EBITDA does not represent cash flows from operations, as defined by GAAP, and should not be construed as an alternative to net income or loss and is indicative neither of our results of operations, nor of cash flows available to fund all of our cash needs. It is, however, a measurement that the Company believes is useful to investors in analyzing its operating performance. Accordingly, Adjusted EBITDA should be considered in addition to, but not as a substitute for, net income, cash flow provided by operating activities, and other measures of financial performance prepared in accordance with GAAP. Adjusted EBITDA is a non-GAAP financial measure. As companies often define non-GAAP financial measures differently, Adjusted EBITDA, as calculated by Live Ventures Incorporated, should not be compared to any similarly titled measures reported by other companies.

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

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

For the Three Months Ended March 31, 2021

For the Three Months Ended March 31, 2020

% of Total
Revenue

% of Total
Revenue

Statement of Income Data:

Revenues

$
70,890

100.0
%

$
46,431

100.0
%
Cost of revenues

44,400

62.6
%

28,655

61.7
%
Gross profit

26,490

37.4
%

17,776

38.3
%
General and administrative expenses

12,565

17.7
%

11,701

25.2
%
Sales and marketing expenses

2,800

3.9
%

3,007

6.5
%
Operating income

11,125

15.7
%

3,068

6.6
%
Interest expense, net

(1,649
)

(2.3
)%

(1,270
)

(2.7
)%
Gain on lease settlement, net

—

0.0
%

837

1.8
%
Gain on Payroll Protection Program loan forgiveness

1,382

1.9
%

—

0.0
%
Gain on disposal of fixed assets

(129
)

-0.2
%

—

0.0
%
Gain on bankruptcy settlement

1,115

1.6
%

—

0.0
%
Other income (expense)

79

0.1
%

(125
)

(0.3
)%
Income before provision for income taxes

11,923

16.8
%

2,510

5.4
%
Provision for income taxes

3,228

4.6
%

629

1.4
%
Net income

$
8,695

12.3
%

$
1,881

4.1
%


	For the Three Months Ended March 31, 2021					For the Three Months Ended March 31, 2020					For the Three Months Ended March 31, 2022					For the Three Months Ended March 31, 2021
	Net Revenue		% of Total Revenue			Net Revenue		% of Total Total Revenue			Net Revenue		% of Total Revenue			Net Revenue		% of Total Revenue
Revenue
Retail
Movies, Music, Games and Other	$	23,651		33.4	%	$	17,445		37.6	%	$	20,616		29.6	%	$	23,651		33.4	%
Appliances		352		0.5	%		1,541		3.3	%		125		0.2	%		352		0.5	%
Flooring Manufacturing		32,972		46.5	%		27,301		58.8	%		32,772		47.0	%		32,972		46.5	%
Steel Manufacturing		13,793		19.5	%		—		0.0	%		14,027		20.1	%		13,793		19.5	%
Corporate & other		122		0.2	%		144		0.3	%
Corporate and Other												2,166		3.1	%		122		0.2	%
Total Revenue	$	70,890		100.0	%	$	46,431		100.0	%	$	69,706		100.0	%	$	70,890		100.0	%

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


	For the Three Months Ended March 31, 2021					For the Three Months Ended March 31, 2020					For the Three Months Ended March 31, 2022					For the Three Months Ended March 31, 2021
	Gross Profit		Gross Profit % of Total Revenue			Gross Profit		Gross Profit % of Total Revenue			Gross Profit		Gross Profit % of Total Revenue			Gross Profit		Gross Profit % of Total Revenue
Gross Profit
Retail
Movies, Music, Games and Other	$	12,813		54.2	%	$	9,988		57.3	%	$	11,003		15.8	%	$	12,813		18.1	%
Appliances		157		44.6	%		342		22.2	%		107		0.2	%		157		0.2	%
Flooring Manufacturing		10,022		30.4	%		7,313		26.8	%		8,580		12.3	%		10,022		14.1	%
Steel Manufacturing		3,380		24.5	%		—		0.0	%		4,252		6.1	%		3,380		4.8	%
Corporate & other		118		96.7	%		133		92.4	%
Corporate and Other												1,011		1.5	%		118		0.2	%
Total Gross Profit	$	26,490		37.4	%	$	17,776		38.3	%	$	24,953		35.8	%	$	26,490		37.4	%

Revenue ~~increased by 53%~~decreased approximately $1.2 million, or 1.7%, to ~~$70,890~~approximately $70.0 million for the three months ended March 31, ~~2021~~2022, as compared to ~~$46,431~~the corresponding prior year period. The decrease is primarily attributable to decreased revenue in the Retail segment of approximately $3.3 million, offset by increased revenue in Corporate and Other of approximately $2.0 million. The decrease in revenue in the Retail segment was primarily due to additional stimulus payments and timely tax refunds received by our Retail segment customer base during Q2 2021 that allowed for more discretionary consumer spending. The increase in revenue in the Corporate and Other segment as compared to the prior year period was due to the consolidation of SW Financial in June 2021.

Cost of revenue increased by 0.8% to approximately $44.8 million for the three months ended March 31, ~~2020.~~

~~Retail:The increase in Movies, Music, Games and Other of $6,206 was primarily due the launch of new gaming systems and higher demand for home entertainment options~~2022, as ~~a result of public entertainment restrictions due~~compared to ~~COVID-19. Appliance revenue decreased $1,189 due to the closure of certain retail locations were incurring continual decreases in sales resulting from increased competition.~~

~~Flooring Manufacturing revenues increased $5,671 as a result of the development of new products and higher demand by residential consumers.~~

Steel Manufacturing revenues were $13,793 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.

~~Cost of revenue increased 55% to $44,400~~approximately $44.4 million for the three months ended March 31, ~~2021 as compared~~2021. Cost of revenue remained relatively unchanged from the prior year period. The increase is due to ~~$28,655~~inflationary pressures, and the consolidation of SW Financial in June 2021.

General and Administrative expenses increased by 4.7% to approximately $13.2 million for the three months ended March 31, ~~2020, proportionately to the increase in revenue~~.

~~General and Administrative~~ ~~remained relatively flat for the three months ended March 31, 2021~~2022, as compared to the three months ended March 31, ~~2020~~.2021, primarily due to increases in employee compensation and related costs as a result of our Retail segment opening new locations.

Selling and marketing expense ~~remained relatively flat~~increased by 19.6% to approximately $3.4 million for the three months ended March 31, ~~2021~~2022, as compared to the three months ended March 31, ~~2020~~.2021, primarily due to increased convention and trade show activity, which was largely canceled during COVID, as well as compensation associated with the Marquis sales force.

Interest expense, net, ~~increased 30%~~decreased by 48% to approximately $858,000 for the three months ended March 31, ~~2021~~2022, as compared to the three months ended March 31, ~~2020, due to a~~2021. The 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 March 31, 2020, the Company recorded a net gain on lease settlement $837 resulting from the extinguishment of the lease liability associated with the closed ApplianceSmart retail locations. There were no similar gains during the three months ended March 31, 2021.

~~During the three months ended March 31, 2021, the Company recorded a gain of $1,382~~is primarily due to the payoff of debt and related debt discount, favorable interest rates obtained from Precision's credit facility refinancing (see Note 8 of the unaudited consolidated financial statements), and the forgiveness of ~~Precision’s~~ loans received under the Paycheck Protection Program (“PPP ~~Loan. There were no similar transactions during the three months ended March 31, 2020.~~loan”).

During the three months ended March 31, 2021, the Company recorded a gain of $1,115 due to the discharge of certain payables from bankruptcy proceedings. There were no similar transactions during the three months ended March 31, 2020.

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

For the Six Months Ended March 31, 2021

For the Six Months Ended March 31, 2020

% of Total
Revenue

% of Total
Revenue

Statement of Income Data:

Revenues

$
133,344

100.0
%

$
88,432

100.0
%
Cost of revenues

84,585

63.4
%

54,030

61.1
%
Gross profit

48,759

36.6
%

34,402

38.9
%
General and administrative expenses

24,844

18.6
%

22,510

25.5
%
Sales and marketing expenses

5,499

4.1
%

5,337

6.0
%
Operating income

18,416

13.8
%

6,555

7.4
%
Interest expense, net

(3,119
)

(2.3
)%

(2,627
)

(3.0
)%
Gain on lease settlement, net

—

0.0
%

223

0.3
%
Gain on Payroll Protection Program loan forgiveness

1,382

1.0
%

—

0.0
%
Gain on bankruptcy settlement

1,115

0.8
%

—

0.0
%
Other income (expense)

858

0.6
%

(306
)

-0.3
%
Income before provision for income taxes

18,652

14.0
%

3,845

4.3
%
Provision for income taxes

4,678

3.5
%

979

1.1
%
Net income

$
13,974

10.5
%

$
2,866

3.2
%


	For the Six Months Ended March 31, 2021					For the Six Months Ended March 31, 2020					For the Six Months Ended March 31, 2022					For the Six Months Ended March 31, 2021
	Net Revenue		% of Total Revenue			Net Revenue		% of Total Total Revenue			Net Revenue		% of Total Revenue			Net Revenue		% of Total Total Revenue
Revenue
Retail
Movies, Music, Games and Other	$	45,725		34.3	%	$	37,720		42.7	%	$	46,731		32.3	%	$	45,725		34.3	%
Appliances		648		0.5	%		2,754		3.1	%		221		0.2	%		648		0.5	%
Flooring Manufacturing		63,194		47.4	%		47,668		53.9	%		65,644		45.3	%		63,194		47.4	%
Steel Manufacturing		23,528		17.6	%		—		0.0	%		26,393		18.2	%		23,528		17.6	%
Corporate & other		249		0.2	%		290		0.3	%
Corporate and Other												5,875		4.1	%		249		0.2	%
Total Revenue	$	133,344		100.0	%	$	88,432		100.0	%	$	144,864		100.0	%	$	133,344		100.0	%

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

Revenue increased ~~by 51%~~approximately $11.5 million, or 8.6%, to ~~$133,344~~$144.9 million for the six months ended March 31, ~~2021~~2022, as compared to ~~$88,432 for~~ the ~~three months ended March 31, 2020.~~

~~Retail:~~corresponding prior year period. The increase is primarily attributable to the increased revenue in Corporate and Other of approximately $5.6 million, the Steel Manufacturing Segment of approximately $2.9 million, and the Flooring Manufacturing segment of approximately $2.5 million. The increase in ~~Movies, Music, Games~~revenue for Corporate and Other is primarily due to the consolidation of ~~$8,005~~SW Financial in fiscal 2021. The increase in revenue in the Steel Manufacturing and Flooring Manufacturing segments 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 $2,106 due to the closure of certain retail locations were incurring continual decreases in sales resulting from~~ increased ~~competition.~~

~~Flooring Manufacturing revenues increased $15,526 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 $23,528 due to the acquisition of Precision Marshall during July 2020. Steel manufacturing is experiencing higher~~customer demand, as ~~distributors look~~well as the passing on of product cost increases to ~~replenish stock levels due to the stronger demand in the automotive market relating to new car platforms.~~customers.

Cost of revenue increased ~~57%~~by 9.1% to ~~$84,585~~approximately $92.3 million for the six months ended March 31, ~~2021~~2022, as compared to ~~$54,030~~approximately $84.6 million for the six months ended March 31, ~~2020, proportionately~~2021. The increase is primarily attributable to the ~~increase~~increases in ~~revenue~~.revenues.

General and Administrative ~~expense~~expenses increased ~~$2,334 or 10%,~~by 9.9% to approximately $27.3 million for the six months ended March 31, ~~2021~~2022, as compared to the six months ended March 31, ~~2020,~~2021, primarily due to ~~expenses associated with Precision which was acquired during July 2020 and higher warehouse costs at Marquis, partially offset by a decrease~~increases in employee compensation and ~~other administrative costs.~~related costs as a result of our Retail segment opening new locations.

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

Interest expense, net, ~~increased 19%~~decreased by 39.9% to approximately $1.9 million for the six months ended March 31, ~~2021~~2022, as compared to the six months ended March 31, ~~2020, due to a~~2021. The 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 six months ended March 31, 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 three months ended March 31, 2021.~~

~~During the six months ended March 31, 2021, the Company recorded a gain of $1,382~~is primarily due to the payoff of debt and related debt discount, favorable interest rates obtained from Precision's credit facility refinancing (see Note 8 of the unaudited consolidated financial statements), and the forgiveness of ~~Precision’s~~ loans received under the Paycheck Protection Program (“PPP ~~Loan. There were no similar transactions during the six months ended March 31, 2020.~~loan”).


	For the Three Months Ended March 31, 2021											For the Three Months Ended March 31, 2020											For the Three Months Ended March 31, 2022											For the Three Months Ended March 31, 2021
	Retail		Flooring Manufacturing		Steel Manufacturing		Corporate & Other			Total		Retail		Flooring Manufacturing		Steel Manufacturing		Corporate & Other			Total		Retail		Flooring Manufacturing		Steel Manufacturing		Corporate and Other			Total		Retail		Flooring Manufacturing		Steel Manufacturing		Corporate and Other			Total
Revenue	$	24,003	$	32,972	$	13,793	$	122		$	70,890	$	18,986	$	27,301	$	—	$	144		$	46,431	$	20,741	$	32,772	$	14,027	$	2,166		$	69,706	$	24,003	$	32,972	$	13,793	$	122		$	70,890
Cost of Revenue		11,033		22,950		10,413		4			44,400		8,656		19,988		—		11			28,655		9,631		24,192		9,775		1,155			44,753		11,033		22,950		10,413		4			44,400
Gross Profit		12,970		10,022		3,380		118			26,490		10,330		7,313		—		133			17,776		11,110		8,580		4,252		1,011			24,953		12,970		10,022		3,380		118			26,490
General and Administrative Expense		7,700		1,609		1,441		1,815			12,565		8,568		2,038		—		1,095			11,701		7,888		1,586		1,395		2,285			13,154		7,700		1,609		1,441		1,815			12,565
Selling and Marketing Expense		199		2,402		197		2			2,800		431		2,572		—		4			3,007		90		3,119		138		3			3,350		199		2,402		197		2			2,800
Operating Income (Loss)	$	5,071	$	6,011	$	1,742	$	(1,699	)	$	11,125	$	1,331	$	2,703	$	—	$	(966	)	$	3,068	$	3,132	$	3,875	$	2,719	$	(1,277	)	$	8,449	$	5,071	$	6,011	$	1,742	$	(1,699	)	$	11,125

Segment results for Retail include Vintage Stock and ApplianceSmart. Revenue for the three months ended March 31, ~~2021 increased $5,017~~2022 decreased by approximately $3.3 million, or ~~26%~~14%, as compared to the prior year, primarily due to additional stimulus payments and timely tax refunds received by our Retail segment customer base during the ~~launch~~second quarter of ~~new gaming systems and higher demand~~2021, that allowed for ~~home entertainment options as a result of public entertainment restrictions~~more discretionary consumer spending at our Vintage Stock locations. Additionally, sales by ApplianceSmart continued to decrease, primarily due to ~~COVID-19.~~increased competition. Cost of revenue decreased proportionately with the decrease in revenue. Operating income for the three months ended March 31, ~~2021~~2022 was ~~$5,071,~~approximately $3.1 million, as compared to operating income of ~~$1,331~~approximately $5.1 million for the prior year ~~period, primarily due to the decrease in general and administrative expense of $868 due other cost saving measures.~~period.

Segment results for Flooring Manufacturing includes Marquis. Revenue for the three months ended March 31, ~~2021 increased $5,671,~~2022 decreased by approximately $200,000, or ~~21%~~1%, as compared to the prior year period, primarily due to ~~increased sales of carpets and hard surface products related to development of new products.~~reduced customer demand. Cost of revenue for the three months ended March 31, ~~2021~~2022 increased, ~~proportionately with revenue,~~ as compared to the prior year ~~period.~~period, primarily due to increases in raw material costs. Sales and marketing expenses increased by approximately $717,000 for the three months ended March 31, 2022 primarily due to increased convention and trade show activity, as well as increased compensation associated with the Marquis sales force. Operating income for the three months ended March 31, ~~2021 increased $3,308, or 122%,~~2022 was approximately $3.9 million, as compared to operating income of approximately $6.0 million for the prior year period.

Segment results for Steel Manufacturing includes Precision Marshall. ~~The Company completed~~Revenue for the ~~acquisition of Precision Marshall in July 2020. Steel manufacturing is experiencing higher demand~~three months ended March 31, 2022 increased by approximately $234,000, or 2%, as ~~distributors look~~compared to ~~replenish stock levels~~the prior year period, primarily due to increased sales prices resulting from rising costs. Cost of revenue for the ~~stronger demand~~three months ended March 31, 2022 decreased, as compared to the prior year period, as a percentage of sales due to improved manufacturing efficiencies and increased revenue due to price increases. Operating income for the three months ended March 31, 2022 was approximately $2.7 million, as compared to operating income of approximately $1.7 in the ~~automotive market relating~~prior period. The increase in operating income is primarily due to ~~new car platforms.~~an increase in gross profit.

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

For the Six Months Ended March 31, 2021

For the Six Months Ended March 31, 2020

Retail

Flooring Manufacturing

Steel Manufacturing

Corporate & Other

Total

Retail

Flooring Manufacturing

Steel Manufacturing

Corporate & Other

Total

Revenue

$
46,373

$
63,194

$
23,528

$
249

$
133,344

$
40,474

$
47,668

$
—

$
290

$
88,432

Cost of Revenue

21,356

44,847

18,372

10

84,585

19,019

34,992

—

19

54,030

Gross Profit

25,017

18,347

5,156

239

48,759

21,455

12,676

—

271

34,402

General and
Administrative Expense

15,120

3,550

2,968

3,206

24,844

17,336

3,170

—

2,004

22,510

Selling and Marketing
Expense

333

4,636

302

228

5,499

924

4,405

—

8

5,337

Operating Income (Loss)

$
9,564

$
10,161

$
1,886

$
(3,195
)

$
18,416

$
3,195

$
5,101

$
—

$
(1,741
)

$
6,555

Segment results for Retail include Vintage Stock and ApplianceSmart. Revenue for the six months ended March 31, ~~2021~~2022 increased ~~$5,899~~by approximately $579,000, or ~~15%~~1%, as compared to the prior year, primarily due to ~~the launch of new gaming systems~~increased retail pricing and ~~higher demand for home entertainment options as a result of public entertainment restrictions~~additional locations added at Vintage Stock, offset by decreasing sales by ApplianceSmart, primarily due to ~~COVID-19.~~decreases in sales resulting from increased competition. Retail price increases were primarily due to higher product costs relating to inflationary pressures that were passed on to customers. Retail sales at our Vintage Stock locations during the six months ended March 31, 2022 were impacted by the lack of stimulus payments and timely tax refunds customers received during the six months ended March 31, 2021. Cost of revenue increased due to changes in product mix, as well as other inflationary pressures. Operating income for the six months ended March 31, ~~2021~~2022 was ~~$9,564,~~approximately $7.9 million, as compared to operating income of ~~$3,195~~approximately $9.6 million for the prior year ~~period, primarily due to the decrease in general and administrative expense of $2,216 due other cost saving measures.~~period.

Segment results for Flooring Manufacturing includes Marquis. Revenue for the six months ended March 31, ~~2021~~2022 increased ~~$15,526,~~by approximately $2.5 million, or ~~33%~~4%, as compared to the prior year period, primarily due to ~~increased~~greater demand for various grades of flooring, as well increases in sales ~~of carpets and hard surface products related~~prices. The shift in demand in flooring grades was generally toward higher priced product. Sales price increases were primarily due to ~~development of new products and the acquisition of Lonesome Oak.~~higher product costs relating to inflationary pressures that were passed on to customers. Cost of revenue for the six months ended March 31, ~~2021~~2022 increased ~~proportionately with revenue,~~primarily due to increases in raw material costs, as compared to the prior year period. Sales and marketing expenses increased by approximately $1.3 million for the six months ended March 31, 2022 primarily due to increased convention and trade show activity, as well as increased compensation associated with the Marquis sales force. Operating income for the six months ended March 31, ~~2021 increased $5,060, or 99%,~~2022 was approximately $8.5 million, as compared to operating income of approximately $10.2 million for the prior year period.

Segment results for Steel Manufacturing includes Precision Marshall. ~~The Company completed~~Revenue for the ~~acquisition of Precision Marshall in July 2020. Steel manufacturing is experiencing higher demand~~six months ended March 31, 2022 increased by $2.9 million, or 12%, as ~~distributors look~~compared to ~~replenish stock levels~~the prior year period, primarily due to increased sales prices resulting from rising costs. Cost of revenue for the ~~stronger demand~~six months ended March 31, 2022 increased moderately, as compared to the prior year period, as a percentage of sales due to improved manufacturing efficiencies and increased revenue due to price increases. Operating income for the six months ended March 31, 2022 was approximately $4.4 million, as compared to operating income of approximately $1.9 in the ~~automotive market relating~~prior period. The increase in operating income is primarily due to ~~new car platforms.~~an increase in gross profit.

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

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

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

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

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, 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 by the Company.

As of March 31, ~~2021,~~2022, we had total cash on hand of ~~$11,928~~approximately $6.2 million and ~~an additional $38,327~~approximately $31.8 million of available borrowing under our revolving credit facilities. As we continue to pursue acquisitions and other strategic transactions to expand and grow our business, we regularly monitor capital market conditions and may raise additional funds through borrowings or public or private sales of debt or equity securities. The amount, nature, and timing of any borrowings or sales of debt or equity securities will depend on our operating performance and other circumstances; our then-current commitments and obligations; the amount, nature and timing of our capital requirements; any limitations imposed by our current credit arrangements; and, overall market conditions.

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

~~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.

We had working capital of ~~$41,927~~approximately $53.0 million as of March 31, ~~2021~~2022, as compared to working capital of ~~$38,566~~approximately $33.8 million as of September 30, ~~2020.~~2021; an increase of approximately $19.2 million. The increase is primarily due to increases in cash and inventories of approximately $10.1 million, and decreases in debtor-in-possession liabilities and accrued liabilities of approximately $16.1 million, partially offset by increases in accounts payable and the current portion of long-term debt of approximately $7.9 million.

The Company’s cash, ~~and cash equivalents~~ as of March 31, ~~2021~~2022, was ~~$11,928~~approximately $6.2 million compared to ~~$8,984~~approximately $4.7 million as of September 30, ~~2020,~~2021, an increase of ~~$2,944.~~approximately $1.5 million. Net cash provided by operations was ~~$20,911~~approximately $5.3 million for the six months ended March 31, ~~2021~~2022, as compared to net cash provided by operations of ~~$6,571~~approximately $20.9 million for the six months ended March 31, ~~2020~~2021. The decrease was primarily due to ~~the Result~~purchases of ~~operations discussed above.~~inventory, as well as payments on accrued liabilities.

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

Our cash flows used in investing activities of ~~$5,469~~approximately $7.5 million for the six months ended March 31, 2022 consisted of purchases of property and equipment. Our cash flows used in investing activities of approximately $5.5 million for the six months ended March 31, 2021 consisted ~~primarily~~ of purchases of property and equipment.

Our cash flows ~~used in investing~~provided by financing activities of ~~$2,412 for~~approximately $3.8 million during the six months ended March 31, ~~2020~~2022 consisted ~~primarily~~ of proceeds from notes payable of approximately $9.0 million, and approximately $4.9 million in net proceeds under revolver loans, partially offset by payments of notes payable and financing leases of approximately $8.1 million, and purchases of ~~property and equipment~~treasury stock in the amount of ~~$1,858 and a $550 payment associated with the Lonesome Oak acquisition~~.approximately $2.1 million.

Our cash flows used in financing activities of approximately $12.5 million during the six months ended March 31, 2021 consisted of ~~$4,554 in~~payments on notes payable and related notes payable of approximately $9.9 million, net ~~payments~~borrowings under revolver loans ~~payment on notes payable~~ of ~~$9,931,~~ ~~purchase~~approximately $4.6 million, and purchases of treasury stock in the amount of ~~$383~~,approximately $383,000, partially offset by the issuance of notes payable of ~~$2,258 primarily~~approximately $2.3 million associated with the acquisition of a facility by Marquis.

Our cash flows used in financing activities during the six months ended March 31, 2020 consisted of $2,640 net borrowings under revolver loans, purchase of treasury stock of $759, payment on notes payable $12,035, proceeds on notes payable of $5,000 and cash classified as debtor-in-possession of $187.28

Currently, ~~the Company does~~we are not ~~intend to issue~~issuing common 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. Occasionally, as our Company history has demonstrated, we will issue stock and derivative instruments linked to stock for services or debt settlement.

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~~.

Vintage Stock may borrow funds for operations under the TCB Revolver subject to availability as described in Note 5 to the consolidated financial statements. The following tables summarize the TCB Revolver for the period:

Marquis may borrow funds for operations under the BofA Revolver subject to availability as described in Note 5 to the consolidated financial statements. The following tables summarize the BofA Revolver for the period:

~~Precision may borrow funds for operations under the Encina Revolver subject to availability as described in Note 5 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~~loans; or other forms of financing. Any financing obtained by us may further dilute or otherwise impair the ownership interest of our existing stockholders.

ITEM 3.QUANTITATIVE AND ~~QUALITATI~~VEQUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

~~Changes~~disclosure due to material weaknesses in ~~Internal Control Over Financial Reporting. There were no changes in the Company’s~~ internal control over financial reporting ~~during~~further described below.

Despite the ~~quarter~~identified material weaknesses, management concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, the financial position, results of operations and cash flows for the periods disclosed in conformity with GAAP. Frazier & Deeter, LLC, the Company’s independent registered public accounting firm, has issued an unqualified opinion on our consolidated financial statements as of and for the year ended ~~March 31, 2021 that have materially affected, or are reasonably likely~~September 30, 2021. They were not engaged to ~~materially affect, the Company’s~~perform, and did not perform, an audit of internal control over financial reporting. These material weaknesses had no impact on our consolidated financial statements in prior years.

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

The Company’s management, including the Company’s CEO and 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~~errors and all fraud. A control system, regardless of how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be met. These inherent limitations include the following: judgements in decision-making can be faulty, and control and process breakdowns can occur because of simple errors or mistakes, controls can be circumvented by individuals, acting alone or in collusion with each other, or by management ~~override, the~~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~~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 March 31, ~~2021~~.2022. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) of 2013 regarding Internal Control – Integrated Framework. Based on our assessment using those criteria, our management concluded that our internal controls over financial reporting ~~were~~was ineffective as of March 31, ~~2021~~.2022. Management noted the following deficiencies that management believes to be material weaknesses:

In response to the above identified weaknesses in our internal control over financial reporting, we plan to ~~work on documenting in writing~~improve the documentation of our internal control policies and procedures and develop an internal testing plan to document our evaluation of effectiveness of ~~the~~our internal controls. We expect to conclude these remediation initiatives during the fiscal year ended September 30, ~~2021.~~2022. We continue to evaluate testing of our internal control policies and procedures, including assessing internal and external resources that may be available to complete these tasks, but do not know when these tasks will be completed.

A material weakness (within the meaning of PCAOB Auditing Standard No. 5)2201) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A ""significant ~~deficiency~~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~~There were no changes in our ~~registered public accounting firm regarding~~ internal control over financial ~~reporting. Management’s report was not subject~~reporting that occurred during the quarter ended March 31, 2022 that have materially affected, or are reasonably likely to ~~attestation by~~materially affect, 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~~.internal control over financial reporting.

Please refer to ~~‘‘Item~~“Item 3. Legal ~~Proceedings’’~~Proceedings” in our 2021 Annual Report on Form 10-K ~~for the year ended September 30, 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, 13b2-1, 13b2-2; Section 14(a) of the Exchange Act and Rule 14a-3; and Section 17(a) of the Securities Act of 1933. The SEC seeks permanent injunctions against the Defendants, officer-and-director bars, disgorgement of profits, and civil penalties. The foregoing is only a general summary of the SEC Complaint, which may be accessed on the SEC’s website at https://www.sec.gov/litigation/litreleases/2021/lr25155.htm.

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

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

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

~~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.~~ None.

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

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

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


Nevada	85-0206668
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

325 E. Warm Springs Road, Suite 102 Las Vegas, Nevada	89119
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	LIVE	The ~~NASDAQ~~ Nasdaq Stock Market LLC (The ~~NASDAQ~~Nasdaq Capital Market)


		Page
	PART I

	FINANCIAL INFORMATION	3

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets as of March 31, ~~2021~~2022 (Unaudited) and September 30, ~~2020~~2021	3

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

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

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Six Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	6

	Notes to the Condensed Consolidated Financial Statements (Unaudited)	87

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2319

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3330

Item 4.	Controls and Procedures	3330

	PART II

	OTHER INFORMATION	3432

Item 1.	Legal Proceedings	3432

Item 1A.	Risk Factors	3432

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3432

Item 3.	Defaults upon Senior Securities	3432

Item 4.	Mine Safety Disclosures	3433

Item 5.	Other Information	3433

Item 6.	Exhibits	3534

SIGNATURES		3635


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

	During the six months ended March 31,
	2021			2020
Cumulative borrowing during the period	$	62,263		$	60,479
Cumulative repayment during the period		66,973			55,035
Maximum borrowed during the period		—			11,347
Weighted average interest for the period		0.00	%		3.52	%


	March 31, 2021			September 30, 2020
Total availability	$	29,207		$	21,732
Total outstanding		—			—


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


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


	March 31, 2022		September 30, 2021
Accrued liabilities:
Accrued payroll	$	3,175	$	4,765
Accrued sales and use taxes		1,196		1,692
Accrued property and other taxes		172		293
Accrued gift card and escheatment liability		1,768		1,593
Accrued interest payable		175		372
Accrued accounts payable and bank overdrafts		943		503
Accrued professional fees		2,808		4,937
Customer deposits		316		241
Accrued expenses — other		1,564		2,652
Total accrued liabilities	$	12,117	$	17,048

	March 31, 2021			September 30, 2020
Trade receivables, current, net:
Accounts receivable, current	$	22,024		$	20,197
Less: Reserve for doubtful accounts		(62	)		(76	)
	$	21,962		$	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	$	22,024		$	20,393
Less: Reserve for doubtful accounts		(62	)		(272	)
	$	21,962		$	20,121
Inventory, net
Raw materials	$	13,849		$	13,175
Work in progress		11,217			11,747
Finished goods		23,045			25,009
Merchandise		15,785			17,729
		63,896			67,660
Less: Inventory reserves		(2,070	)		(3,135	)
	$	61,826		$	64,525
Property and equipment, net:
Building and improvements	$	11,574		$	9,908
Transportation equipment		121			480
Machinery and equipment		31,713			27,217
Furnishings and fixtures		3,806			2,908
Office, computer equipment and other		2,712			3,445
		49,926			43,958
Less: Accumulated depreciation		(18,266	)		(13,582	)
	$	31,660		$	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		(2,049	)		(1,837	)
	$	850		$	1,063
Accrued liabilities:
Compensation and benefits	$	2,861		$	4,178
Accrued sales and use taxes		1,590			1,251
Accrued property taxes		160			270
Accrued gift card and escheatment liability		1,561			1,534
Accrued interest payable		258			280
Accrued accounts payable and bank overdrafts		1,729			3,818
Accrued professional fees		1,910			2,191
Customer deposits		220			169
Accrued expenses - other		1,971			1,131
	$	12,260		$	14,822


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


	March 31, 2022			September 30, 2021
Isaac Capital Group LLC	$	2,000		$	2,000
Spriggs Investments, LLC		2,000			2,000
Total notes payable - related parties		4,000			4,000
Less current portion		(2,000	)		(2,000	)
Total long-term portion, related parties	$	2,000		$	2,000

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
	1,250		23.89		—		—
	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		—		—
	120,418				107,168


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

~~Risk-free interest rate~~		~~1.15%~~
~~Expected life of the options~~		~~6 years~~
~~Expected volatility~~		~~99%~~
~~Expected dividend yield~~		0%

	Six months ended March 31, 2021
Revenues	$	648
Cost of revenues		360
Gross profit		288

Operating expenses:
General and administrative expenses		408
Total operating expenses		408
Operating income		(120	)
Other (expense) income:
Interest expense, net		(83	)
Accounts payable settlement		44
Other income (expense)		279
Total other (expense) income, net		240
Income before provision for income taxes		120

Beginning balance, September 30, 2020	$	206
Warranties issued/accrued		—
Warranty settlements		(35	)
Ending balance, March 31, 2021	$	171


Beginning balance, September 30, 2021	$	105
Warranties issued/accrued		0
Warranty settlements		0
Ending balance, March 31, 2022	$	105

	For the Three Months Ended March 31, 2021						For the Three Months Ended March 31, 2020
				% of Total Revenue						% of Total Revenue
Statement of Income Data:
Revenues	$	70,890			100.0	%	$	46,431			100.0	%
Cost of revenues		44,400			62.6	%		28,655			61.7	%
Gross profit		26,490			37.4	%		17,776			38.3	%
General and administrative expenses		12,565			17.7	%		11,701			25.2	%
Sales and marketing expenses		2,800			3.9	%		3,007			6.5	%
Operating income		11,125			15.7	%		3,068			6.6	%
Interest expense, net		(1,649	)		(2.3	)%		(1,270	)		(2.7	)%
Gain on lease settlement, net		—			0.0	%		837			1.8	%
Gain on Payroll Protection Program loan forgiveness		1,382			1.9	%		—			0.0	%
Gain on disposal of fixed assets		(129	)		-0.2	%		—			0.0	%
Gain on bankruptcy settlement		1,115			1.6	%		—			0.0	%
Other income (expense)		79			0.1	%		(125	)		(0.3	)%
Income before provision for income taxes		11,923			16.8	%		2,510			5.4	%
Provision for income taxes		3,228			4.6	%		629			1.4	%
Net income	$	8,695			12.3	%	$	1,881			4.1	%


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

Selected Data:
Revenue	$	69,706		$	70,890
Cost of revenue		44,753			44,400
General and administrative expenses		13,154			12,565
Sales and marketing expenses		3,350			2,800
Interest expense, net		(858	)		(1,649	)
Provision for income taxes		3,523			3,228
Net income	$	15,358		$	8,695

Adjusted EBITDA (a)
Retail business	$	3,610		$	5,456
Flooring Manufacturing business		4,579			6,726
Steel Manufacturing business		2,828			2,034
Corporate and Other		(762	)		(894	)
Total Adjusted EBITDA	$	10,255		$	13,322

Adjusted EBITDA as a percentage of revenue
Retail business		17.4	%		22.7	%
Flooring Manufacturing business		14.0	%		20.4	%
Steel Manufacturing business		20.2	%		14.7	%
Corporate and Other		-35.2	%		-732.8	%
Consolidated adjusted EBITDA as a percentage of revenue		14.7	%		18.8	%


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

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

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

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


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


†	~~Indicates a management contract or compensatory plan or arrangement.~~


	Live Ventures Incorporated

Dated: May ~~17, 2021~~11, 2022	/s/ Jon Isaac
	President and Chief Executive Officer
	(Principal Executive Officer)

Dated: May ~~17, 2021~~11, 2022	/s/ ~~Virland A. Johnson~~David Verret
	Chief Financial Officer
	(Principal Financial Officer)